Agricultural Development Policy: a contemporary Agenda (pdf, 6.09 MB, EN)

Agricultural Development Policy: a contemporary Agenda (pdf, 6.09 MB, EN)
AGRICULTURAL DEVELOPMENT POLICY: A CONTEMPORARY AGENDA
Second Edition, June 2015
Agricultural development policy:
a contemporary agenda
Published by
Acknowledgements
Thank you to those who have helped the study so far through their comments and advice, in particular Peter
Bazeley, Regina Birner, Jon Brooks, Theo Rauch and Michael Hoevel, as well as Heike Hoeffler, Ingo Melchers
and other members of the GIZ agricultural policy team.
The views in this paper, however, are not necessarily theirs, nor do they necessarily represent those of the
Overseas Development Institute or GIZ.
The views in this paper do not necessarily represent the views of the German Federal Ministry for Economic
Cooperation and Development (BMZ).
Steve Wiggins
Corresponding author: [email protected]
Overseas Development Institute
203 Blackfriars Road, London, SE1 8NJ
Tel: +44 (0)20 7922 0300
Fax: +44 (0)20 7922 0399
www.odi.org.uk
2
AGRICULTURAL DEVELOPMENT POLICY: A CONTEMPORARY AGENDA
Agricultural development policy:
a contemporary agenda
Steve Wiggins, John Farrington, Natasha Grist, Giles Henley, Sharada Keats, Anna Locke, Christine Okali and
Colin Poulton
Overseas Development Institute
Second Edition, June 2015
3
Contents
Acknowledgements2
Tables, figures & boxes
6
Foreword
7
Abbreviations8
Executive summary
Consensus vs. debates and uncertainties
10
11
1 Introduction
12
1.1 Aims
13
1.2 Background 14
Changing ideas about agricultural development 14
Revival of interest in agriculture
16
Current concerns in agricultural development 17
Guide to what follows
18
1.3 Approach and structure of report
A framework for organising ideas
2 Policies for agricultural development: consensus vs. debate and uncertainty 2.1 B
road consensus on the basis of agricultural development: an enabling environment
and rural public goods
19
19
20
21
A favourable climate for rural investment
21
Supplying rural public goods for farmers
22
2.2 Further consensus: food security and nutrition
24
Food insecurity and malnutrition: similar but distinct concerns 25
Policy issues: how can agriculture make a contribution?
28
2.3 Major debates and uncertainties
30
Agricultural and rural transition
30
Developing rural markets
42
Agricultural technology
53
Gender and agricultural development
58
Meeting the challenges of environmental sustainability and climate change
64
3 Policy choice
72
3.1 The challenge of agricultural policy-making and implementation
74
3.2 Political choice and values
75
3.3 Policy coherence, co-ordination and effective aid
79
4 Final reflections
82
References84
4
AGRICULTURAL DEVELOPMENT POLICY: A CONTEMPORARY AGENDA
Appendix A: Implications: theory, knowledge and skills for a contemporary
agricultural policy advisor
92
I. Key variables affecting agricultural development: demography and migration, food
consumption and the rural non-farm economy
95
II. Basic economics, especially that needed to understand of the Washington Consensus
and its limitations
95
III. Applications of economics to agriculture: market failures, marketing and value chains,
agricultural technology and land 95
IV. Political economy and public administration
96
V. The environment including climate change
97
Appendix B: Reviewing policy literature
102
Log of documents reviewed
105
AfDB, 2010. Agricultural Sector Strategy 2010–2014
105
ADB, 2007. Rural Poverty Reduction and Inclusive Growth 106
BMZ, 2011. Rural development and its contribution to food security 107
CGIAR, 2011. Strategy and Results Framework for the CGIAR
108
Chicago Council on Global Affairs, 2009. Renewing American Leadership in the Fight
against Global Hunger and Poverty
109
CIDA, 2010. IncreasWing Food Security: CIDA’s Food Security Strategy
112
CPAN, 2012. Agricultural Policy Guide
113
EC, 2010. Food Security Thematic Programme 2011–2013
115
FAO, 2012. Save and Grow, Policies and Institutions
116
G8, 2010. ‘L’Aquila’ Joint Statement on Global Food Security 117
GIZ, 2009-2012. Position papers on agriculture and rural development
118
HLPE, 2011. Price volatility and food security
120
IFAD, 2010. Rural Poverty Report 2011
122
IFPRI, 2012. Strategies and Priorities for African Agriculture
123
Interagency report to the G20, 2012. Agricultural Productivity and Bridging the Gap
for Small Family Farms
124
Interagency Report to the G20, 2011. Price Volatility in Food and Agricultural Markets
125
Multiple agencies, 2010. Scaling up Nutrition: A framework for Action 128
OECD, 2012. Agricultural Policies for Poverty Reduction
129
UK Government, 2011. Foresight Report on the Future of Food and Farming
131
UN HLTF, 2010. Updated Comprehensive Framework for Action
134
United States Government, 2010. Feed the Future Guidelines 137
WFP, 2009. Hunger and Markets 138
Wise & Murphy 2012. Resolving the Food Crisis: Assessing Global Policy Reforms Since 2007
139
World Bank, 2007. WDR 2008: Agriculture for Development
141
5
Tables, figures & boxes
6
TABLE 1.1 Direct, indirect, and total nominal protection rates by region, 1960–1984 16
TABLE 1.2 Consensus vs. debate and uncertainty in the key functions of the state
19
TABLE 2.1 Returns to spending on agriculture in India, 1970 to 1993
22
FIGURE 2.2 Changing returns to government spending in India 23
FIGURE 2.3 Causes of child malnutrition
26
FIGURE 2.4 A shares of gdp and labour in agriculture, 1990 to 2005 average
31
FIGURE 2.5 Share of Population living in urban areas
32
TABLE 2.6 Transactions cost Advantages of Small and Large Farms
36
BOX 2.7 Transformation and transition: England, France and Thailand
38
BOX 2.8 Women’s contribution to agricultural production
59
FIGURE 2.9 Gender gaps in agricultural productivity, after accounting for plot size and regions
60
TABLE 2.10 Ten Policy Priorities for Narrowing the Gender Gap in African Agriculture
61
TABLE 2.11 Key environmental issues in agriculture
65
FIGURE 2.12 Projected changes in agricultural production in 2080 due to climate change
66
FIGURE 2.13 Overlapping concerns: food production, adaptation and mitigation
70
FIGURE 3.1 State Incentives and Agricultural Policy
73
TABLE 4.1 Theory, knowledge and skills for a policy advisor, by topic reviewed
92
TABLE 4.2 Theory, knowledge and skills for a policy advisor, combined
98
TABLE 4.3 Documents reviewed for this report
103
AGRICULTURAL DEVELOPMENT POLICY: A CONTEMPORARY AGENDA
Foreword
Agriculture feeds the world. At the same time,
agriculture is often the most important economic
sector in rural areas. If agricultural development
is promoted, it can provide employment and
income for people living in rural areas and
thus, provide good future prospects for rural
areas. However, in many parts of the world
agriculture also causes deforestation, biodiversity
loss, overuse of water resources and a serious
reduction of soil fertility. Therefore, agriculture
will only be able to feed future generations of a
growing world population, when the production
base is used sustainably and more resource
conserving than today. In addition, agricultural
production must adapt to climate change.
Agriculture provides enormous potential for
combating poverty and hunger. This potential is still
underutilised in many countries. At the same time,
agriculture must respect planetary boundaries. So
what does it mean for development policy to aim for
an agricultural sector that is “people-centred” and
at the same time “planet-sensitive”? Which advice
can we give to donors, implementing agencies and
partner governments, so that they reach this aim?
The background paper “Agricultural Development
Policy: a contemporary agenda “, which was first
written in May 2013 by Steve Wiggins and his
team from the Overseas Development Institute,
triggered surprisingly lively debates at various
presentations. Old and new positions on the
content were reflected, and new perspectives were
gained. The range of new insights gained during
the various discussions of the paper called for a
second edition of the agricultural policy background
paper. I thank the authors for their efforts and
am pleased to now present this second edition.
For the development of sustainable agriculture there
are no blueprints. Each country has its own potential
and is facing specific challenges. Regardless that
each country has to define its own pathway of
rural development and food and nutrition security,
there are some key issues which every country
has to face. Rural transformation processes,
the development of markets, the importance of
technology, the role of women in agriculture and
the challenge of resource conservation and climate
change: these are fundamental questions that
affect every single country – but no “one-size-fitsall” approach exists. The debate about these issues
is characterised by professional uncertainty and
politically divergent views. But above all these,
there exist key messages of consensus, which
are supported by a broad number of experts.
Agriculture is key to achieve food and nutrition
security. To enable agriculture to fulfil this
function, governments have to create favourable
conditions for private investments in rural areas.
In addition, governments themselves have to
provide rural public goods - especially physical
infrastructure, water and sanitation, education
and health, agricultural research and extension.
This study highlights controversial issues but
also presents areas of broad agreement and
consensus. It provides an informative basis for
both the continuation of professional and political
debates as well as for concrete implementation
of development cooperation via capacity
development. Both are necessary in order to meet
some of the main future tasks for humankind:
a world without hunger, sustainable agriculture
and long-term prospects for rural areas.
Dr. Stefan Schmitz
Director,
Commissioner for the “One World – No Hunger“
Initiative
German Federal Ministry for Economic Cooperation
and Development BMZ
7
Abbreviations
ADB
AFDB
AGRA
BDS
BMZ
CAADP
CBD
CCAFS
CDC
CDKN
CFS
CGE
CGIAR
CIDA
CPAN
CPRC
CSO
DFID
EC
EITI
EU
FAO
G20
G8
GATT
GCARD
GDP
GIZ
GAP
GMO
HLPE
HLTF
HYV
8
Asian Development Bank
African Development Bank
Alliance for a Green Revolution in Africa
Business development services
Bundesministerium für wirtschafliche Zusammenarbeit und Endwicklung
(German Federal Ministry for Economic Cooperation and Development)
The Comprehensive Africa Agriculture Development Programme
United Nations Convention on Biological Diversity
CGIAR Research Program on Climate Change, Agriculture and Food Security
Center for Disease Control and Prevention
The Climate Development Knowledge Network
The United Nations Committee on World Food Security
Computable General Equilibrium (usually describing a model)
Consultative Group of International Agricultural Research
Canadian International Development Agency
Chronic Poverty Advisory Network
Chronic Poverty Research Centre
Civil society organisation
Department for International Development, UK government
European Commission
Extractive Industry Transparency Initiative
European Union
Food and Agricultural Organisation of the United Nations
Group of Twenty
Group of Eight
General Agreement on Tariffs and Trade
Global Conference on Agricultural Research for Development
Gross Domestic Product
Deutsche Gesellschaft für Internationale Zusammenarbeit
(German Agency for International Co-operation)
Good Agricultural Practice
Genetically modified organism
The High Level Panel of Experts on Food Security and Nutrition of the Committee on
World Food Security
The UN Secretary’s General High-Level Taskforce on the Global Food Security Crisis
High Yielding Variety
AGRICULTURAL DEVELOPMENT POLICY: A CONTEMPORARY AGENDA
IAASTD
IFAD
IFI
IFPRI
IIED
ILO
IMF
IPBES
IR
LEIT
MCC
MEA
MVP
NCHS
NRA
NGO
ODA
ODI
OECD
PES
RNFE
RSPO
RTRS
SAM
SF
SIDA
SUN
TEEB
UNFCCC
UNICEF
UNSCN
US
WDR
WHO
WFP
International Assessment of Agricultural Knowledge, Science and Technology
International Fund for Agricultural Development
International financial institutions
International Food Policy Research Institute
International Institute for Environment and Development
International Labour Organisation
International Monetary Fund
Intergovernmental Platform on Biodiversity and Ecosystem Services
Inverse Ratio
Low External Input Technology
Millennium Challenge Corporation
Millennium Ecosystem Assessment
Millennium Village Programme
National Center for Health Statistics
Net Rate of Assistance
Non-governmental organisation
Official development assistance
Overseas Development Institute
Organisation for Economic Cooperation and Development
Payments for environmental services
Rural non-farm economy
Roundtable on Sustainable Palm Oil
Round Table on Responsible Soy Association
Social Accounting Matrix
Small-scale farmer, small farmer, smallholder
Swedish International Development Cooperation Agency
Scaling Up Nutrition
The Economics of Ecosystems and Biodiversity
United Nations Framework Convention on Climate Change
The United Nations Children’s Fund
United Nations Standing Committee on Nutrition
United States of America
World Development Report
World Health Organisation
World Food Programme
9
Executive summary
Ideas about the role and importance of agriculture in development have changed in line with prevailing circumstances and ideas. In the 1950s industry was seen as leading economic development, the role of agriculture being to release labour and capital to fuel industrialisation. By the mid-1960s, however, fears that food
production could not keep pace with the rapid population growth seen at that time in the developing world
brought agriculture into the spotlight with technical advances and equally impressive public investments
greatly increasing yields per hectare of grains. With the menace of food shortages fading as cereals production surged, the 1980s saw very different priorities for development, focusing on structural adjustment and
economic liberalisation with the expectation that these would accelerate agricultural growth — with little
need for additional attention to the sector.
Since 2000, however, there has been a growing sense that agriculture has been unduly neglected, especially
in Africa. Agriculture gained further attention when cereals prices spiked on world markets in 2007–08 to a
degree not seen since 1973–74. A world that had subsequently grown accustomed to ever-cheaper staples on
international markets — prices in real terms had declined by 60% since the 1960s — was shocked
(→see “section 1.2, Background”, p.14, for a full overview of the history).
It is now 30 years since the Washington Consensus came to dominate development thinking. Lessons have
been learned and circumstances have changed — of which the following can be singled out:
■■ The grip of the Washington Consensus as
orthodoxy has weakened. Analysis of Asian experiences of economic growth and development
has demonstrated the role of heterodox policies
tailored to country contexts, rather than the
rigid prescriptions of the Consensus.
Not surprisingly, the revival of interest in agriculture in the last few years has led international
agencies and bilateral donors to reassess the aims
and instruments for agricultural and rural development, food and nutrition security; and the management of renewable natural resources.
■■ The environmental costs of agricultural development may no longer be bearable, while
climate change threatens. Since the start of the
green revolution agriculture has been able to
grow while overdrawing on groundwater aquifers, polluting soils and water, and converting
forests and other habitats rich in biodiversity to
new fields. Water scarcity and the rising value of
ecosystem services mean these options cannot
continue, especially as climates are seemingly
ever less reliable and erratic.
In light of this new thinking, a contemporary
agricultural policy agenda must address three
sets of challenges: reducing poverty and hunger;
mitigate recent price volatility for staple foods on
international markets; and promote both environmental sustainability along with adaptation to,
and mitigation of, climate change (‘climate-smart
agriculture‘).
■■ Agriculture may be moving from limited demand to limited supply. Today, emerging economies in Asia, the Near East and Latin America,
increasingly urbanised with growing incomes,
are seeing relatively rapid increases in demand
for higher value foodstuffs, the price of which
has risen significantly in the new century. Furthermore, cheap oil may be coming to an end,
meaning costs of production would increase as
well as stimulating demand for biofuels.
10
AGRICULTURAL DEVELOPMENT POLICY: A CONTEMPORARY AGENDA
CONSENSUS VS. DEBATES AND UNCERTAINTIES
Much debate and uncertainty surrounds some aspects of agricultural development, but the sound and fury
that results should not obscure the consensus reached on two fundamental, if not sufficient, elements for
agricultural development. The first is an enabling rural investment climate, consisting of peace and order;
macro-economic stability with inflation contained and a competitive exchange rate; predictable, modest
and broad-based taxation, with revenues reinvested in public goods; and basic institutions such as property
rights respected. The second is that governments need to supply reliably rural public goods, including physical infrastructure (e.g. rural roads, electricity, etc.); services for human development (e.g. education, water
and sanitation, health); and agricultural research and extension.
Agriculture’s role in delivering food and nutrition
security is another area where considerable agreement exists – for instance, nutrition- and gender-sensitive approaches as well as the fortification
of staples with added minerals and vitamins, such
as Vitamin A, through plant-breeding.1
Yet many details related to agricultural policy are
still subject to debates and uncertainties. Particularly prominent issues include:
■■ agricultural and rural transitions (→see p.33)
■■ r ural market development (→see p.42)
■■ t he use of agricultural technology (→see p.53)
■■ t he role of gender (→see p.58), and
■■ e nvironmental sustainability and climate
change (→see p.64).
It is one thing to analyse technical and economic dimensions of the challenges of agricultural
development, and another to make policy and
implement it effectively and equitably. Agriculture
intersects with an unusually large and growing
range of public concerns and actors as well as often
being hampered by weak or unfocused political
direction and policy administration. Discussions
over priorities and trade-offs can thus be long and
difficult to resolve.
Combine these factors and agricultural policy-making can be difficult. Indeed, agriculture can
be seen as the ‘awkward sector’. That, however, does
not mean that policy cannot be highly effective —
witness the green revolution. One lesson is clear:
politics matter, and attempts to devise optimal
policies for agriculture that ignore political calculations are unlikely to succeed. Applying this practically has led increasingly away from the search for
‘best practice’ and towards an interest in ‘best fit’
and, more radically, towards ‘good enough’ conditions for governance. This implies identifying those
conditions that are necessary for progress, even if
they are not sufficient in themselves; and how they
can be created, even if in imperfect forms.
Policy coherence, co-ordination and effective aid
are also key — that is, ensuring that policies do
not contradict or undermine one another, and
that they are complementary and create synergies
wherever possible. The wider point is to understand
policy processes; above all the ways that debates
are framed, evidence is used, and conclusions are
drawn; the different actors and agencies who are
engaged; and of sequences and timing, recognising
windows of opportunity (→see “Appendix A”, p.92,
for a more thorough outline of the key competencies
for an agricultural policy advisor).
Moreover, policy-making is rarely determined by
ideas and evidence alone. Interest groups seek to
benefit from policy choices and, therefore, to influence them. Smallholders are rarely well organised
politically and, almost by definition, have relatively
few resources to invest in lobbying activity. Thus,
the interests of less numerous, more powerful and
less poor actors often trump those of smallholders
within the processes of policy design and/or implementation.
1 Food and incomes alone are not sufficient for better nutrition. Care of
children, health services, clean water and sanitation are equally important.
11
INTRODUCTION
1
Introduction
12
AGRICULTURAL DEVELOPMENT POLICY: A CONTEMPORARY AGENDA
1.1
AIMS
This report aims to assess and summarise the current state of thinking about policy for agricultural development in developing countries, recognising that ideas have developed rapidly in recent years, as will
be explained in the next section. It has been drafted to help GIZ think about its future work in agricultural
development, especially what kind of policy advice might be needed both for GIZ and the governments with
whom it partners.
Specific objectives are to:
A Assess the role of the public sector in delivering a contemporary agricultural development policy,
including a review of past mistakes,;
B Review the main areas of agricultural development policy and differentiate between those areas
where general consensus exists versus those where there is still debate or uncertainties. Reasons for
differences of opinion and the evidence typically cited will be documented;
C Set out thinking about policy choices (‘political economy’), co-ordination and coherence of agricultural development.
A first version of this report was published in 2013 with the
additional intention of explicitly setting out the specific
expertise that agricultural development policy advisors should
understand. Appendix A presents these considerations.
The report was discussed within BMZ, presented to the Global
Donor Platform, debated in a half-day seminar with 30 staff
of the EU DG DEVCO and finally deliberated at the EU Heads
of Agriculture and Rural Development (HARDs) Meeting
in December 2013. At the same time, the paper inspired the
editors of Rural 21 to produce the issue “Agricultural Policies
– finding the right approach“ Rural 21 Vol. 47 4/2013. In 2014,
the GIZ Sector Network Rural Development (SNRD Africa)
hosted a three-day agricultural policy learning event in Accra,
Ghana, which used the paper as its basis and the main author as
prime input provider into this excellent capacity development
activity. At all these occasions, two topics received outstanding
interest and triggered highly interesting debates: the consensus
on investing in rural public goods and the process of rural
transformation. Thus, we decided to ask the author to work on a second edition of the paper that
would expand on these two sections. Furthermore, gender in agriculture didn’t receive adequate
attention in the first version and was more adequately considered in this second edition. Finally, the
highly relevant discussion spurred by Colin Poulton from the School of Oriental and African Studies
(SOAS, London) during the Agricultural Policy Learning Event in Ghana on Policy Choices and the
Political Economy of African Agriculture lead to an overhaul of that section, too.
This second edition should serve as reference base for our policy advisory work in agriculture and
shall serve as capacity development material for forthcoming Learning Events on agricultural policy
– in Anglophone and in Francophone Africa, since this second version is also available in French.
13
INTRODUCTION
1.2
BACKGROUND
CHANGING IDEAS ABOUT AGRICULTURAL DEVELOPMENT
Since 1950, ideas about how to develop agriculture in the developing world have gone through several iterations (see Ellis & Biggs, 2001; Staatz & Eicher, 1986; and Wiggins et al., 2010 for more detail).
In the 1950s development was seen first and foremost as industrialisation, urbanisation and modernisation.
Little attention was paid to agriculture: for the most part it was seen as a ‘traditional’ sector of low productivity, with many smallholdings operated by farmers who were conservative and ignorant of modern
technologies. It was a sector that would release labour for manufacturing industry, growing in response to
demand from the emerging cities and factories. Productivity would be raised rapidly through agricultural
extension that would bring technical innovations and better management to those remaining on the land.
These ideas about the secondary nature of agriculture were challenged in the 1960s, both by experience and new thinking. Agricultural growth was
not as fast as had been hoped: innovations designed
for farmers in Europe and North America often
proved inappropriate in the developing world. It
became clear that farmers faced structural obstacles, such as inequitable land tenure; that markets
functioned less well than expected; and that infrastructure in rural areas was insufficient to support
growth.
Moreover, the transformations expected in development were slower than expected. Industrialisation in the 1950s and 1960s rarely generated
enough jobs for underemployed rural labour. It was
increasingly evident that slow-growing agriculture
threatened to undermine development, as food
became scarce at national level while rural populations remained in poverty. Nowhere were these
concerns more evident than in India where two
consecutive poor monsoons in 1965 and 1966 led
to harvest failures and a crisis of rising food prices,
urban riots and emergency imports of US cereals.
Alarm bells rang in the West as rural unrest in the
developing world fuelled rebellions that brought
socialist and pro-Soviet regimes to power, most
notably in Cuba in 1959.
At the same time, analysis of farm surveys by US
agricultural economists concluded that, contrary to
previous opinion, small farmers were efficient users
of resources: an insight summarised by Schultz’s
(1964) observation that small farmers were ‘efficient, but poor’. Smallholder development schemes
of the 1950s confirmed the potential of small farms,
as seen in the burgeoning production of coffee and
tea from small farms in Kenya, and the rapid increases in agricultural production from smallholdings created by land reforms in Korea and Taiwan
(World Bank, 1975). This prompted a reassessment
of agriculture. Far from being a follower of industrialisation, it could and should play a central in
development based on its potential functions as a
14
supplier of food and raw materials, an earner of foreign exchange, a domestic market for the produce
of other sectors, and a source of capital and surplus
labour for the growth of manufacturing and services (Johnston and Mellor, 1961).
For Schultz the resolution of the paradox of efficient smallholders who were nevertheless poor
lay in technical improvements. Coincidentally the
early 1960s saw the first fruits of efforts to breed
high-yielding, hybrid varieties of cereals that would
form the technical core of the so-called ‘Green Revolution’. Increased use of manufactured fertiliser,
water control through irrigation and drainage, and
crop protection needed to make full use of the new
seeds were, at least in theory, scale neutral and thus
eminently suitable for small farms. The harvest
failures seen in India in the mid-1960s were seen as
a Malthusian threat in developing countries that
then had very fast population growth – the fear
being that they would never be able to boost their
agriculture to keep pace. Hence India and other
countries invested heavily in the potential of the
new seeds in a desperate bid to stave off disaster:
roads and irrigation works were built; agricultural
extension energetically promoted the new seeds in
areas where they could thrive; fertiliser factories
were constructed; banks were either nationalised
or instructed to direct credit to farmers; and state
agencies promised to buy up additional cereals
produced at guaranteed prices.
AGRICULTURAL DEVELOPMENT POLICY: A CONTEMPORARY AGENDA
When cereals prices spiked in 1973/74, it seemed
that these Malthusian fears were being realised.
Alarmed leaders redoubled efforts to develop
agriculture, most notably through investing in the
Green Revolution. Internationally, budgets were
greatly increased to agricultural research centres in
order to generate the improved seeds and practices
that were at the agronomic core of this revolution.
The Green Revolution succeeded in boosting production. From the late 1960s onwards, agriculture
grew faster in the developing world than in OECD
countries. More importantly, the growth of cereals production comfortably exceeded population
growth during the 1960s and 1970s – when population growth in Asia and other parts of the developing world reached what would prove to be an
historically high rate. 2 Before the mid-1960s, plenty
of observers did not think this feat was possible,
yet the combined efforts of committed leaders and
their policy advisors, crop breeders, and an army of
workers in extension, fertiliser factories, warehousing, transport, and irrigation schemes, proved them
wrong. This was largely a story from Asia and parts
of Latin America, such as Mexico, but it also applied
sporadically in Africa for maize, even if efforts in
that continent were often not sustained.
Once the success of the Green Revolution was evident, it was clear not only that agricultural research
could indeed produce near-miracles but also that
public investment in irrigation and drainage, input
supply, extension, provision of credit and guaranteeing prices to farmers — all features of the green
revolution in Asia — could be highly effective.3
The early 1970s saw a high water mark of interest
in agriculture. World Bank researchers (Chenery
et al., 1976) rejected previous ideas that equity and
economic growth would trade off; instead they
proposed that investing in the small-scale enterprises of poor people would raise rates of economic
growth, not depress them. By far the most numerous of such small enterprises were family farms.
2 Within a decade of the Green Revolution being launched as a response
to a Malthusian trap, population growth began to slow, so that food
production accelerated just as population decelerated, making an escape
from the trap all the easier.
3 That is not to say efficient: but given the depth of crisis of Asian food
production seen in the mid-1960s, an effective response was sought, no
matter what the cost.
Yet even as interest in agriculture peaked, it became
clear that attention to matters of technology and
micro-economics of smallholder development had
led to neglect of the overall economic context and
the incentives facing farmers. Lipton (1976) was to
highlight urban bias, while others completed the
detail by identifying the implicit taxation — ‘negative protection’ — of farming (Krueger et al., 1991).
This was first and foremost seen in Africa, but bad
examples could be found in Latin America and occasionally in Asia as well. Some taxes were explicit,
above all taxes on export crops, but added to that
were implicit levies in the charges and margins
levied by monopsonistic public marketing boards,
compulsory deliveries demanded of farmers in centrally planned economies, and in the effects of price
controls on foodstuffs. In addition, the over-valuation of exchange rates when these were controlled,
as was the case in most countries before the 1980s,
and protection of domestic industry, turned the
terms of trade against agriculture.
Overall rates of negative protection were often very
high indeed, as a significant study of the extent of
negative protection discovered, see Table 1.1. For
the three African countries studied, the average
rate was more than 50%. Export crops were much
harder hit than importables, mainly food crops.
Most of the disadvantage came indirectly through
exchange rates and industrial protection, rather
than through measures directly affecting farmers.
This implicit taxation, it was argued, reduced incentives to farmers that thereby depressed output,
stymied agricultural growth, and impeded exports
of agricultural products. If agricultural growth was
disappointing, then remedying this — by ‘getting
the prices right’ — would stimulate output.
The argument that problems of agricultural development stemmed largely from government failures
became an important strand in the ‘Washington
Consensus’ on development thinking that emerged
in the late 1970s and early 1980s. This argued for
the primacy of private enterprise as a motor of
growth, with activity co-ordinated through markets: the state should be restricted to providing an
enabling environment for investment including
a stable macro-economy, and the supply of public
goods and services that would not be provided
privately. The Consensus emerged at a time when
many developing countries in Africa and Latin
America were experiencing high inflation, trade
deficits and mounting public debt. Stabilising these
macro-economies thus became the leading priority in the 1980s, with structural adjustment programmes as the means to do so.
15
INTRODUCTION
TABLE 1.1 DIRECT, INDIRECT, AND TOTAL NOMINAL PROTECTION RATES BY REGION, 1960–1984
Region
Indirect
Protection
Direct
Protection
Total
Direct Protection of
Importables
Direct Protection of Exportables
Asia: Rep. Korea, Malaysia,
Pakistan, Philippines, Sri Lanka
& Thailand
– 22.9 (a)
– 2.5
– 25.2
22.4
– 14.6
Latin America: Argentina, Brazil, Chile, Colombia & Dominican Rep.
– 21.3
– 6.4
– 27.8
13.2
– 6.4
Mediterranean: Egypt, Morocco, Portugal & Turkey
– 18.9
– 6.4
– 25.2
3.2
– 11.8
Sub-Saharan Africa: Côte
d’Ivoire, Ghana & Zambia
– 28.6
–23.0
– 51.6
17.6
–20.5
Source: Krueger et al., 1991
Note: The period covered is generally from 1960 to 1984, but varies for some countries.
(a) In South Asia (Pakistan, Sri Lanka), the indirect nominal protection rate was –32.1%, while in East Asia (Korea, Malaysia, Philippines, Thailand) it was –18.1%.
The Consensus had little to say about individual sectors. For agriculture, it was taken that adjustment and
liberalisation would correct the high implicit taxation and lead to faster agricultural growth as incentives to
invest were restored.
Interest in agriculture declined still further in the 1990s as issues such as poverty reduction, economic
growth, the environment, gender, health and education took precedence in the development agenda (Eicher,
2003). Agricultural development was, furthermore, seen as difficult and problematic, tarnished by its association with ambitious integrated rural development programmes of the 1970s that produced disappointing
outcomes. Donor funding to agriculture diminished accordingly: agriculture received only half as much
in real terms in 2005 as in 1980, while its share of funding fell from 17% in the early 1980s to 3% in 2005
(Cabral, 2007, quoting OECD statistics).
REVIVAL OF INTEREST IN AGRICULTURE
Since 2000, however, there has been a growing sense
that agriculture has been unduly neglected. With
the first Millennium Development Goal being set at
halving poverty and hunger, attention was directed
to where the poor and hungry live: overwhelmingly
in rural areas where agriculture is usually the largest
source of livelihoods and jobs. This realisation was
strong in Africa. When African agriculture ministers
met in Maputo in 2003, they produced a declaration
that they would strive for 6% annual growth of
agriculture and would devote 10% of government
budgets to that end. That led to adoption of the
Comprehensive Africa Agriculture Development
Programme (CAADP) by the African Union.
16
Internationally, donors reassessed their support
for agriculture, declaring their intention to devote
more effort and resources to the sector. The World
Development Report for 2008 (World Bank, 2007)
reflects this thinking. It states the case for investing
in agriculture to reduce poverty, while recognising
the diversity of contexts and the consequent various
pathways — such as intensification of agriculture, diversification and out-migration — that rural households may take to escape poverty. Some private
foundations, most notably the Bill & Melinda Gates
Foundation have also taken interest.
AGRICULTURAL DEVELOPMENT POLICY: A CONTEMPORARY AGENDA
These and other initiatives were made all the more
urgent and visible when cereals prices unexpectedly
spiked on world markets in 2007–08, to a degree not
seen since 1973–74. A world that had grown accustomed to being able to buy in staples from international markets at prices that in real terms had
declined by 60% since the 1960s was shocked.
At the same time, concern has steadily mounted
over environmental degradation, resource depletion
and climate change – the fear being that agricultural growth may slow still further as environmental
limits and costs, long lags in natural systems, have to
be faced.
CURRENT CONCERNS IN AGRICULTURAL DEVELOPMENT
The history of development is one where current
wisdoms are periodically reassessed in the light of
emerging evidence and shocks, usually resulting in
substantial modifications to those wisdoms. It is now
more than 30 years since the Washington Consensus
came to dominate development thinking, so what
evidence is there to support or challenge that set of
ideas as applied to agriculture? Most of the leading
development agencies have made some statement on
agricultural policy since 2008, of which the World
Development Report for 2008 (World Bank, 2007)
is the outstanding example. For this report, policy documents published since the early 2000s by
leading donors and international organisations were
reviewed, 24 in all. Details of them can be found in
Appendix B. Although these cover a plethora of topics, four sets of issues stand out, as follows.
One, the grip of the Washington Consensus as
inviolable orthodoxy has weakened (for a general
review see Kanbur 2008 on the emergence of the
‘Washington Confusion’). Analysis of Asian experiences of economic growth and development has
demonstrated the role of heterodox policies tailored
to country contexts, rather than rigid prescriptions
(see for example, Chang, 2003, 2009). In Africa, for
example, the idea that subsidies to inputs such as
fertiliser should not be contemplated has been qualified by Dorward’s (2009) argument that they may
be justified in particular circumstances — when fertiliser is used on food crops in countries that are cut
off from world markets and where food makes up a
major share of budgets for low income households.
For agriculture, the belief that liberalisation and
macro-economic stability would stimulate growth
has been shaken by the evidence that smallholders,
above all in Africa, are using very few purchased
inputs and in some countries may even be using
less than they did a quarter century ago, even
when more productive technologies in the form of
improved seeds and fertiliser are available. Some
blame this on limited access to credit, owing to high
transactions costs between formal banks and smallholders — a form of market failure. Others point to
monopolies and imperfect competition, or to lack of
land titles as contributory factors — again, forms of
market failure. Still others see the problems as those
of erratic public policy, or simply the underlying
economics that apply when transport costs are high.
The analyses are in debate (→see “Failings in rural
markets”, p.42).
Two, agriculture may be moving from limited demand to limited supply. From the mid-1980s until
the mid-2000s agriculture across the world had been
limited by effective demand. Significant increases in
output could only be sold by accepting lower prices.
Most OECD countries reacted by supporting farm
incomes. Today, emerging economies in Asia, the
Near East and Latin America, increasingly urbanised
with growing incomes, are seeing relatively rapid increases in their demand for higher value foodstuffs,
including vegetable oils, sugar, fruit, vegetables, fish,
dairy and meat. Prices of these commodities have
risen significantly in the new century. Developing
world farmers, so long limited by lack of domestic and regional demand for increased marketed
surplus, now increasingly have large and growing
markets to supply. For those remaining on the land,
demand for what they can produce seems stronger
than at any time since the beginning of the Green
Revolution in the mid-1960s.
17
INTRODUCTION
Three, some key costs of agricultural production
have changed. From the early 1980s to the mid2000s agriculture was able to grow by using cheap
fossil fuels and fertiliser derived from them (HLPE,
2011). Since then oil prices have risen strongly then
fallen back in 2014/15, but still remain well above
those seen in the early 2000s. Higher oil prices not
only raise costs of agricultural production, but also
stimulate demand for biofuels. Several tropical
feedstocks such as sugar cane, oil palm, cassava and
sweet sorghum can compete with fossil fuels when
crude oil prices exceed US$60 a barrel. Rural wages
in Asia are rising so that farm labour is no longer
abundant and cheap (Wiggins and Keats, 2014). As
costs of producing staples in Asia rises, opportunities
for exporting to Asia from countries rich in land are
increasing.
Four, the environmental costs of agricultural
development may no longer be bearable, while climate change threatens. Since the start of the Green
Revolution agriculture has been able to grow while
overdrawing on groundwater aquifers, polluting
soils and water, and converting forests and other
habitats rich in biodiversity to new fields (HLPE,
2011). Water scarcity and the rising value of ecosystem services mean these options cannot continue.
Farming will have to become environmentally
sustainable. Meanwhile, climates are seemingly ever
less reliable and erratic, probably the first signs of
global warming affecting the weather. The search
is on for effective ways that agriculture can use to
adapt to changing and more variable climate, and to
reduce its own emissions of greenhouse gases. So far,
international climate negotiations have been slow
to acknowledge that agriculture – which currently
contributes 30% or more of greenhouse gas emissions when land conversion to fields is – is perhaps
the only economic activity that can realistically aim
for zero net emissions — owing to its ability to store
carbon in soils and plants.
Hence current concerns for agricultural development include the longstanding aims of reducing
poverty and hunger. While some notable national
successes have been seen, especially in East and
Southeast Asia, current levels of poverty and food
insecurity in much of the rest of the developing
world, still mainly in rural areas, mean there is still
much to be done. Two other elements have, however,
been added.
18
One stems from higher oil costs and rising demand
for food in fast-growing economies, the combination of which has contributed to recent volatility on
international markets for staple foods and may well
lead to higher food prices, in real terms, over the
medium term. This is generating demands for policy
options to address these issues.
The other is the longer-term challenge of making
agriculture environmentally sustainable — farming
without depleting aquifers, eroding and degrading
soils, converting valued habitats to fields, and polluting soils and water —as well as compatible with
climate change, by adapting to the probably more
erratic climate of a warmer world and by helping
limit warming by cutting emissions from farming
and capturing carbon within farming systems (‘climate-smart agriculture‘).
Agricultural policy thus has to address a wider set of
issues than in the past, and take on some formidable
challenges.
GUIDE TO WHAT FOLLOWS
The rest of this report consists
of a review of the topics identified, ordered by consensus and
points in debate and uncertainty.
Questions of policy choice and
coherence follow in chapter 3.
The report concludes with some
brief reflections.
AGRICULTURAL DEVELOPMENT POLICY: A CONTEMPORARY AGENDA
1.3
APPROACH AND STRUCTURE OF REPORT
A FRAMEWORK FOR ORGANISING IDEAS
Contemporary debates on agricultural development can be difficult to grasp for those not regularly engaged
with them. Lively discussions take place over some issues, debates that tend to capture attention, especially
when they turn on judgments about values. Similarly there are issues, often some of the most prominent
such as climate change, where considerable uncertainty surrounds processes and hence technical options.
Debates can, however, obscure some important points on which most researchers and analysts largely agree.
Hence this review has organised the topics by dividing them into points on which there is a broad consensus,
and issues on which substantial debates arise owing to uncertainty, lack of evidence, differing interpretations of evidence and different values. The selection of topics had to weigh the number selected and corresponding coverage of the field, against thve desire to focus on the seemingly more important issues. One
topic in debate was however omitted: agricultural trade policy, since another review had been commissioned
by GIZ into this area.4 Table 1.2 lists the topics covered by consensus and debates.
TABLE 1.2 CONSENSUS VS. DEBATE AND UNCERTAINTY IN THE KEY FUNCTIONS OF THE STATE
€$£
CONSENSUS
A rural investment climate or enabling environment: peace and order; macro-economic stability; basic institutions
€$£
€$£
Provision of rural public goods: roads, power, other physical infrastructure; education, health,
water, sanitation; agricultural research and extension
Food security and nutrition — while there is widespread agreement on policies, not all agricultural specialists are aware of this thinking and its implications
€$£
€$£
€$£
€$£
€$£
DEBATE AND UNCERTAINTY
Agricultural and rural transitions: the relative decline of agriculture with economic growth,
scale of farming and the viability of smallholdings, rural transitions and the fate of marginal
farms, and appropriate land policy
Developing rural markets: competing views on the difficulties smallholders face in accessing
inputs, finance and debates over responses; how smallholders can link to emerging supply
chains; whether it is worth governments, regional or global bodies trying to stabilise markets.
Agricultural technology: in particular biotechnology and high external input use versus low
external input and agro-ecological approaches
Gender and agricultural development: overcoming gender gaps in agricultural productivity
and wider issues of rural women and their empowerment.
Environmental sustainability and climate change: meeting the challenge of correcting environmental harm — soil degradation, overuse of water, loss biodiversity and forests — while
adapting to climate change and mitigating agriculture’s contribution to emissions of greenhouse gases.
4 See GIZ Sector Project Agricultural Trade and Value Chains (2013): Agricultural trade policy for rural development and
food security.
19
POLICIES FOR AGRICULTURAL DEVELOPMENT: CONSENSUS VS. DEBATE AND UNCERTAINTY
2
Policies for agricultural
development: consensus
vs. debate and uncertainty
20
AGRICULTURAL DEVELOPMENT POLICY: A CONTEMPORARY AGENDA
2.1
→
BROAD CONSENSUS ON THE BASIS OF AGRICULTURAL DEVELOPMENT: AN ENABLING ENVIRONMENT AND RURAL PUBLIC GOODS
SUMMARY:
Two powerful lessons can be seen from history: how urban bias and implicit heavy taxation of farmers
can deter investment and innovation; and how public investments can stimulate agricultural development. From these come two commonly agreed necessary conditions for agricultural development.
One is a favourable climate for investment for investment in rural areas, including peace, economic
stability and basic economic institutions such as land rights. The investment climate does not have to be
perfect: the key is to remove major disincentives to investment and innovation.
The other is investment by the state in rural public goods —those that will not be adequately supplied
by the private sector. These include the physical infrastructure of roads and power, investing in people
through education, health and clean water, and providing more technical knowledge through agricultural research and extension. Returns to public spending on these have often been high.
A FAVOURABLE CLIMATE FOR RURAL INVESTMENT
€$£
An investment climate in rural areas that favours investment and innovation may not in
itself be enough to stimulate production, but it is a necessary condition: agriculture grows
more slowly when it is effectively heavily taxed (‘negative protection’). The elements of an
enabling climate are well-known: peace and order; macro-economic stability with inflation
contained and a competitive exchange rate; property rights respected; and, predictable, modest and broad-based taxation, with revenues reinvested in public goods (Poulton et al., 2008).
Few would disagree with the importance of the
overall proposition, but in practice, the question is
how good does the climate have to be to stimulate investment; or, put otherwise, how bad can it be before
investors are deterred? Often a conducive investment
climate is defined as much by what it avoids as what
it provides. Hence it is about avoiding gross economic distortions as seen with negative protection, it is
about lifting the fear of expropriation and predatory
taxation from innovators and investors, and it about
stable public policy that allows longer-term investments to be made without fear of radical reversals in
strategies and policies.5
The investment climate does not have to be perfect, but rather it needs to avoid gross mistakes and
distortions. China is a notable example. When China
introduced reforms from 1978 onwards, the measures
taken for agriculture were significant — for instance,
the introduction of household responsibility for
production and the freedom to sell a part of produce
on markets — but they were far from comprehensive.
The investment climate was far from perfect. On the
contrary, remaining controls on markets and restrictions on renting land meant it was still a relatively
poor investment climate, but compared to what it was
before the reforms, it was greatly improved (Rodrik,
2003). The changes stimulated a remarkable accelera5 This does not prevent government from undertaking radical changes, so
long as they respect the trajectory of published strategies. Problems arise
when sudden U-turns are made, as for example when bans on imports or
exports are imposed, or industries nationalised.
tion of agricultural growth, well ahead of population
growth, that allowed China to industrialise.
China may be seen as a special case. But it is not the
only one. Ghana’s reforms of 1983 saw hyperinflation
tamed, devaluation of the Cedi to a competitive level,
and reform of the cocoa marketing board to cut the
margins between prices paid to farmers and those received by the board. This led to a remarkable acceleration of agricultural growth. For much of the decade
before 1983 agricultural growth was slow or negative:
after reforms, agriculture grew at an average rate of
around 5% a year for 25 years, one of the fastest of any
farm sector in the world (Leturque & Wiggins, 2011).
Hence debate centres on ‘good enough governance’
(Grindle, 2004, 2007) and the minimal conditions for
progress (Moore & Schmitz, 2009), largely inspired
by East Asian examples where heavy investment and
rapid economic growth have been achieved despite
clear imperfections in the investment climate and
governance. The key is not perfection, but avoiding
gross mistakes and distortions. This is encouraging.
Developing and especially low-income countries rarely have the administrative capacity, and perhaps also
the political ability, to get an ideal investment climate.
But if they can correct the worst failings, then they
should be rewarded.
21
POLICIES FOR AGRICULTURAL DEVELOPMENT: CONSENSUS VS. DEBATE AND UNCERTAINTY
SUPPLYING RURAL PUBLIC GOODS FOR FARMERS
Agriculture needs public goods: that is, goods and services that private firms will not
provide in adequate quantity because they cannot readily exclude non-payers from the
benefits. These include physical infrastructure such as rural roads, electricity, perhaps
large-scale irrigation and drainage where applicable; human development such as education, water and sanitation, health6; and public knowledge through agricultural research
and extension.
Spending on public goods in rural areas pays off: that can be seen from studies of returns during the Green
Revolution. For example, Fan et al. (2000) report the following estimates of returns to public spending on
agriculture in India during the time the Green Revolution was being rolled out:
TABLE 2.1 RETURNS TO SPENDING ON AGRICULTURE IN INDIA, 1970 TO 1993
Sector Returns in Rupee per
Rupee Spending
Numbers of Poor Reduced
per Million Rupees
Research & development
13.45
84.5
Roads
5.31
123.8
Education
1.39
41.0
Irrigation
1.36
9.7
Anti-poverty programmes
1.09
17.8
Soil & water conservation
0.96
22.6
Health
0.84
25.5
Power
0.26
3.8
Source: Fan et al. 2000 data, presented in Fan et al. 2007
6 Strictly speaking some of these investments in people are not public goods, since a private provider can exclude those not paying for the services. They
are better seen as merit goods: those where private perceptions of the benefits may be lower than public perceptions and left to the market, would see
underuse of these services — to the medium and long-term detriment of society.
As this table shows, there were very high returns
to agricultural research and roads, and good
returns to education and irrigation. India was not
exceptional. Similar analyses for China, Vietnam,
Thailand and Uganda (Fan et al., 2007) show similar
trends, albeit with some differences in returns to
different public goods across the countries. They
conclude:
Agricultural research, education, and
rural infrastructure are the three most
effective types of public spending for
promoting agricultural growth and
reducing poverty.
(Fan et al., 2007)
22
Similar studies estimating returns to public
spending arrive at another striking conclusion:
while spending on public goods usually pays off,
spending on private goods generally does not (Fan
& Rao, 2003). In Latin America, de Ferranti et al.
(2005) complain that between 1985 and 2000, for
nine countries in the region, more than 54% of
public spending in rural areas was on private goods
and transfers. At the margin, a 1% increase in share
of rural spending on public goods led to a 0.23%
increase in farm output, compared to just 0.06%
return to 1% more total spending with no change in
composition. Great gains it seems can be had from
switching funding from private to public goods in
rural Latin America.
AGRICULTURAL DEVELOPMENT POLICY: A CONTEMPORARY AGENDA
FIGURE 2.2 CHANGING RETURNS TO GOVERNMENT SPENDING IN INDIA
Returns: Rs per Rupee Spent
9
8
7
6
1960s
1970s
1980s
1990s
5
4
3
2
1
Su Cred
bs it
idi
es
P
Su ow
bs er
idi
es
Fe
r
Su tilis
bs er
idi
es
Irr
ig
Su atio
bs n
idi
es
Ir
In riga
ve tio
stm n
en
t
Ag
ric
.R
on
Ed
u
ca
ti
ds
Ro
a
&D
0
Source: Dorward et al. 2004, using data provided by Fan
Although these findings may be generally applicable, exceptions may exist. In the early stages of
development, subsidising inputs may be a way to
overcome the combination of farmers’ lack of capital and failures in credit markets that can make inputs unaffordable. These returns, however, may be
short-lived, as Indian experience shows (see Figure
2.2). During the 1960s subsidies on irrigation, credit
and fertiliser had appreciable impacts on rural
poverty while those on power had notably lower returns. However, the former’s benefits fell over time
and by the 1990s they also had little impact.
→ Further reading:
Fan, Shenggen, Joanna Brzeska & Ghada Shields, 2007,
‘Investment Priorities for Economic Growth and Poverty Reduction’, 2020 Focus Brief on the World’s Poor and
Hungry People. Washington, DC: IFPRI
Leturque, Henri & Steve Wiggins, 2011, Ghana’s
sustained agricultural growth: Putting underused
resources to work, Report, London: Overseas Development Institute
23
POLICIES FOR AGRICULTURAL DEVELOPMENT: CONSENSUS VS. DEBATE AND UNCERTAINTY
2.2
FURTHER CONSENSUS: FOOD SECURITY AND NUTRITION
Food insecurity and malnutrition remain major problems in the developing world. Some
795 million persons in the developing world, 15% of the total, are estimated to be undernourished7 as of 2014–16 (FAO, 2015). Amongst children under five years old, 29% are
stunted8 and 18% are underweight9 (UNICEF, 2012). Micro-nutrient deficiencies are even
more widespread, with perhaps as many as two billion persons affected, primarily suffering from a lack of vitamin A, iodine, iron and zinc (UN SCN, 2004).
→
SUMMARY:
Food and nutrition insecurity are major problems
in the developing world: almost 800 million people are undernourished, 29% of children under
five years are stunted, and as many as two billion
people suffer from deficiencies of vitamins and
minerals.
Progress on reducing undernutrition has been
slow, but the remedies being broadly clear: reducing poverty, investing in public health, water and
sanitation, schooling for girls through secondary
level, education in better child feeding, provision
of micronutrients and therapeutic feeding.
Agricultural development can play a key role,
through producing food at lower cost and price;
by providing rising incomes to farmers and
labourers; and through its multipliers that help
create more jobs and incomes in the local rural
economy. Diverse farming can be even more
effective at improving nutrition, by encouraging
more fruits, vegetables and small livestock to
be produced — often on home gardens. Giving
special attention to women farmers can help
correct gendered disadvantages and put food and
incomes in the hands of the prime carers and
feeders of children. Advances in plant breeding
can fortify common staples such as cassava and
rice with additional vitamin A.
A new nutritional problem, that of overweight
and obesity, is however rising rapidly in the
developing world. Less is known about how to
respond to this, although encouraging diets rich
in fruits and vegetables, with limited intakes of
fat, sugar and salt is part of
the answer.
789
Progress on reducing these problems has been slow.
The first Millennium Development Goal includes
the target of halving the incidence of hunger between 1990 and 2015. Progress on reducing undernourishment and child malnutrition has fallen
behind this target.10 Moreover, progress has been
uneven: most of the developing world reductions in
prevalence of undernourishment come from Asia
and Latin America, with much less improvement in
7 Undernourishment implies individuals not getting enough energy in
their diet sufficient to lead a healthy and active life.
8 Defined by height for age: children who are two standard deviations or
more below the median for their age are considered stunted.
9 Defined by weight for age: children who are two standard deviations or
more below the median for their age are considered underweight.
10 The World Food Summit of 1996 set a more ambitious target, that of
halving the numbers of undernourished by 2015. As can be seen, progress
towards this target has been very slow and there is no chance that it will
be hit by 2015.
24
Africa and the Near East. By 2008 barely one third
of the progress needed in reducing the prevalence
of children underweight between 1990 and 2015
had been achieved. East Asia and Latin America
have either achieved or are likely to hit their targets; Southern Asia and sub-Saharan Africa are well
behind their schedules.
AGRICULTURAL DEVELOPMENT POLICY: A CONTEMPORARY AGENDA
FOOD INSECURITY AND MALNUTRITION: SIMILAR BUT DISTINCT CONCERNS
Food insecurity relates to not having enough food
to live normally; or as a widely-accepted definition
adopted at the World Food Summit in 1996 more
formally states:
Food security exists when all people at
all times have physical and economic
access to sufficient, safe and nutritious
food to meet their dietary needs and
food preferences for an active and
healthy life. (FAO, 1996)
Food security thus concerns the welfare of individuals; rather than national self-sufficiency in food
production.
Undernutrition11 also applies to individuals: it
exists when an individual’s physical and mental
development and functioning are impaired owing
to lack of nutrients, or the ability to make use of
them, or both.
While these conditions often overlap, there are
differences. People who are food secure can be
undernourished, since despite having access to
sufficient food they are unable to make use of this,
largely owing to ill health, as will be explained. It
is also possible to be food insecure without being
hungry: some of those who suffer from deficiencies
in micro-nutrients may not be hungry.
Two frameworks are commonly used to guide
thinking about malnutrition and food insecurity.
UNICEF devised a much-used schema to explain
the causes of child malnutrition, mortality and disability, see Figure 3.1. This identifies two immediate
determinants of child malnutrition: inadequate
diet and disease. These in turn originate from three
underlying factors: insufficient access to food; inadequate care; and poor water, sanitation and health
services. Nutrition is thus the outcome of multiple
factors interacting in complex systems. The key
point here is that food insecurity is only one of the
factors leading to undernutrition.
Undernutrition is defined as the outcome of insufficient food intake and
repeated infectious diseases. It includes
being underweight for one’s age, too
short for one’s age (stunted), dangerously thin for one’s height (wasted)
and deficient in vitamins and minerals
(micronutrient malnutrition).
(UNICEF website)
11 Malnutrition is commonly used but has wider implications than
undernutrition: while the latter refers to conditions that result from too
little intake of nutrients, malnutrition can include problems of excess
consumption and consequent overweight, obesity and diet-related diseases such as heart attacks, strokes and some forms of diabetes.
Obesity and its consequences are rapidly becoming more common in
the developing world, especially in middle-income countries. These
countries thus face a ‘double burden of malnutrition’. This topic has not
been discussed here, partly since there is to date little to report on policy;
effective ways to address the problems are not known.
25
POLICIES FOR AGRICULTURAL DEVELOPMENT: CONSENSUS VS. DEBATE AND UNCERTAINTY
FIGURE 2.3 CAUSES OF CHILD MALNUTRITION
Child malnutrition,
death and disability
Outcomes
Immediate
causes
Underlying
causes at
household/family level
Inadequate
dietary intake
Insufficient access
to food
Disease
Inadequate
maternal and childcare practices
Quantity and quality of actual resources human, economic and organizational and the way they are controlled
Basic causes
at societal
level
Political, cultural, religious,
economic and social systems,
including women’s status,
limit the utilization of
potential resources
Poor water/
sanitation and
inadequate health
services
Inadequate and/or
inappropriate knowledge and
discriminatory attitudes limit
household access
to actual resources
Potential resources: environment,
technology, people
Source: The State of the World’s Children, reproduced in Pelletier 2002
The other commonly used framework comes from
FAO (2008) to explain the causes of food insecurity.
This proposes that people will only be food secure
when: sufficient food is available; people have
access to it; it is well utilised; and when availability
and access are reliable. Availability is influenced by
the production of food, modified by movement and
trade. Access results from the combination of the
price of staple food compared to incomes, including
implicit incomes from own production, and other
entitlements such as gifts, loans and transfers from
government.
Food utilisation comprises those factors that intervene between having food and this translating into
adequate nutrition: it includes the way that food is
26
distributed within households, how it is prepared,
care of infants and their feeding, and the health of
those consuming it. By adding this dimension, the
FAO framework captures the additional factors that
lead to undernutrition in the UNICEF framework.
The 2007–08 spike in cereals prices on world markets was feared to have set back the food security
and nutrition of vulnerable people in the developing world by reducing their access to food. This has
given more urgency to efforts to combat hunger. A
prominent example is the 2010 Scaling up Nutrition initiative signed by 95 international agencies,
bilateral donors, NGOs and research organisations,
plus seven private enterprises. This aims to accelerate investments to reduce malnutrition, with im-
AGRICULTURAL DEVELOPMENT POLICY: A CONTEMPORARY AGENDA
mediate priorities to scale up thirteen direct interventions to address malnutrition that are known to
be effective and which offer high returns — including infant feeding and hygiene, increasing intake of
vitamins and minerals, and therapeutic feeding for
malnourished children with special foods.
These measures largely focus on behavioural
change communications and medical interventions to alleviate directly malnutrition, especially
from deficiencies of micro-nutrients. The initiative
admits the need for wider action across sectors,
including agriculture, health, social protection, education, water and sanitation; however, it suggests
that it may take time to see these underlying factors
improve nutrition. This may be unduly pessimistic:
a recent evaluation of a wide-ranging nutrition
programme in rural Bangladesh suggests that
significant progress on the fundamental causes of
malnutrition can be made in the short run (Smith
et al., 2011).
Agriculture’s role in reducing hunger
Agricultural development can contribute strongly
to better food security and nutrition, through the
following pathways:12
■■ Agriculture makes food available. Increased
food supplies will at some point push down the
prices of food, thereby improving the entitlement and access to food by people with limited
incomes;
■■ Agriculture provides incomes to farmers and
those working the land as labourers. These
incomes may be taken directly in food produced
on farm or also allow access to food in markets;
and,
■■ Agriculture generates links to other activities,
such as those in the supply chain where increases in farm output generate additional activity,
jobs and incomes for workers. Similarly, as farmers and labourers spend incomes earned from
farming, those providing goods and services for
rural communities also see additional activity,
jobs and incomes. Hence the access to food of
others outside of farming may also increase as
agriculture grows.
Other connections may be significant in given
circumstances, including:
■■ The extent to which income from agriculture
is spent on food, especially higher-value foods,
rich in vitamins and minerals, as well as on
health, water and sanitation — all factors that
may affect the nutrition of household members
and especially infants;
■■ Impacts of agriculture on women’s status within
the household and the ability of mothers and
carers to allocate income to food and care;
■■ Demands of farming on women’s time and
hence on the time they have to feed and care for
their children;
■■ The impact of farm work on energy of field
workers: hard labour may create high demands
for energy that cannot be met from limited
access to food; and,
■■ Agriculture’s impact on health, both on field
workers who may be exposed to hazards such
as crop chemicals, and to others whose environment may be impaired by agriculture — as,
for example, when irrigation canals become
habitats for disease vectors such as mosquitoes
and worms.
All told, agriculture has a key role to play in improving nutrition. In broad terms, when agricultural growth exceeds population growth, nutrition
tends to improve — largely, it is thought, through
rising incomes and downward pressure on food
prices. But as the UNICEF framework shows,
agriculture is only one determinant of three major
influences: if nutrition is to improve, then progress
also needs to be made on those factors affecting
care and health. Although difficult to produce a
precise estimate, cross-country econometric studies suggest that agriculture has contributed about
one third of reductions to child stunting seen since
1970 (Smith & Haddad, 2014). Other important
factors included clean water and sanitation, female
schooling and improved health of females.
12 This draws partly on Gillespie et al. 2012 who set out seven ways that
agriculture can affect nutrition in India.
27
POLICIES FOR AGRICULTURAL DEVELOPMENT: CONSENSUS VS. DEBATE AND UNCERTAINTY
Rising concern over obesity
While undernutrition in the developing world is
(slowly) diminishing, the problem of overweight
and obese people13 is rapidly increasing, despite
previously being seen mainly in high-income
countries. Between 1980 and 2008, the numbers
of those overweight in the developing world more
than tripled, from 250 million to 904 million, with
overall prevalence rising from 15% to 27% of adults
(Stevens et al., 2012). In 2014 it was estimated that
more than one billion adults in the developing
world were overweight: close to twice the numbers
in high-income countries (Wiggins & Keats, 2014).
The health implications for the developing world
are alarming. Overweight and obese people are
more susceptible to cardiovascular disease, diabetes
type two, and some cancers (WHO, 2013). Excess
weight is rising as a risk factor for health across
the world: in 1990 the leading risk was childhood
underweight, mainly seen in the developing world,
yet by 2010 this had fallen to the eighth highest. In
contrast, raised body mass index (BMI) rose from
tenth to sixth most serious risk factor (Lim et al.,
2012). In some developing regions — including
southern and central Latin America, the Caribbean,
the Middle East and North Africa and Oceania —
raised BMI has become the first or second highest
risk factor.
Across the world the prevalence of people overweight and obese has been rising for decades. In no
country has the trend been arrested. This threatens
a heavy burden to individuals in illness, disability
and early death, as well as economic costs in lost
production and increased healthcare.
The causes of overweight and obesity in the developing world are the same as those seen in high-income countries (Kearney, 2010; Hawkes; 2006, 2007;
Lang & Rayner, 2007; Mazzocchi et al., 2012; Swinburn et al., 2011). Rising incomes and urbanisation
have led to more sedentary lives. Diets previously
based heavily on starchy staples have changed to
more diverse diets with increasing consumption
of foods rich in energy, fats, sugar and salt (Popkin,
2003). The falling real cost of food and especially of
many processed foods, the increasing availability
of snack and fast foods, advertising of energy-dense
foods, and aspirations to consume these conveyed
by film, TV and other media have all contributed.
13 An adult is defined as overweight if their Body Mass Index of 25 or
more, and obese if 30 or more.
28
POLICY ISSUES: HOW CAN AGRICULTURE
MAKE A CONTRIBUTION?
How can agriculture most contribute to reducing
hunger? One way is by ensuring that the positive
links in generating incomes, and producing more
food and pushing down prices, seen in the pathways above, work strongly. For this, broad-based
agricultural development is indicated: growth in
which most small-scale farmers can participate.
This means combinations of the following conditions:
■■ Technical innovations that are sparing in their
need for capital, but demand labour and skilful
application to local circumstances;
■■ Access to inputs, technical advice, credit and
insurance for small farmers on terms similar to
those enjoyed by larger-scale operations;
■■ Ready physical access for small farmers to
facilities necessary for marketing, for example
processing plants, cool stores and tanks, and
storage; and,
■■ Road access that allows trucks to reach smallholder farms and communities at reasonable cost.
Meeting these conditions takes the discussion back
to basic preconditions for agricultural development, above adequate investment in rural public
goods. It also involves finding ways to overcome
failings in rural markets for inputs and finance that
restrict access for smallholders or drive up the costs
(→see “Failings in rural markets”, p.42).
The pattern of agricultural development can also
be made more sensitive to nutrition. Three things
stand out. One is reducing female disadvantages in
farming, such as in poor access to inputs, seasonal
credit and technical assistance, thereby increasing
women’s returns from their farming, and through
this giving them more opportunity to spend on the
nutrition and care of their children — and themselves.
Second is to promote home gardens and livestock
keeping on a small-scale to encourage more diverse
diets and help tackle the alarmingly widespread
occurrence of micro-nutrient deficiencies. Coupled
with education and behaviour change communications about diet, care and hygiene, home gardens
have proved their effectiveness in reducing malnutrition.
AGRICULTURAL DEVELOPMENT POLICY: A CONTEMPORARY AGENDA
Third is, where possible, to fortify staples with
added minerals and vitamins such as Vitamin A
through plant breeding. So far only one example
has been replicated on any scale: the orange-fleshed
sweet potato that has additional beta carotene, a
precursor of Vitamin A. Golden rice, which also has
enhanced beta carotene, may become an option in
the near future.
Finally, those engaged in agricultural development should recognise the importance of care and
health in improving nutrition. Agriculture alone
will make limited inroads on the high burden of
malnutrition: combined with complementary actions to empower women, encourage better care of
children, primary health services and clean water
and sanitation, much can be done. An evaluation of
a programme to reduce malnutrition amongst the
very poorest in rural Bangladesh (Smith et al., 2011)
showed that while promotion of agriculture and
fisheries, and of mother and child healthcare, each
reduced the incidence of stunting amongst infants
aged six to 24 months by 1.4 percentage points between 2006 and 2010, in combination they reduced
stunting by 7.9 percentage points.
For the emerging problem of obesity, policies need
to provide public education and information on
diet and exercise, regulate advertising of unhealthy
foods to children, and consider taxing unhealthy
options while subsidising healthy options such as
fruits and vegetables. That said, no country has yet
proved a package of measures that has halted the
increased prevalence of obesity. In part that may
be because measures taken, mainly in high-income countries that have longer experience of the
problem, have been few and rather timid. Political
leaders have been reluctant to press consumers
on their diets, or to alienate food manufacturers
and retailers. That may change as the scale of the
problem becomes apparent. Mexico, for example,
has introduced since late 2013 a battery of measures
to control a national epidemic of diabetes: bans on
TV advertising of energy-rich food and drinks at
family viewing time, plus taxes on sugary drinks
and energy-dense food. Mexico’s experience will be
closely evaluated.
→ Further reading:
Haddad, Lawrence, Harold Alderman, Simon Appleton,
Lina Song & Yisehac Yohannes, 2003, ‘Reducing Child
Malnutrition: How Far Does Income Growth Take Us?’
World Bank Economic Review, 17 (1), 107–131
Smith, Lisa C., Faheem Kahn, Timothy R. Frankenberger & Abdul Wadud, 2011, ‘Admissible Evidence in
the Court of Development Evaluation? The Impact of
CARE’s SHOUHARDO Project on Child Stunting in
Bangladesh’, IDS Working Paper 2011 (376), October
2011, Brighton: Institute of Development Studies
SUN, 2010, Scaling Up Nutrition. A framework for
action http://scalingupnutrition.org/wp-content/uploads/pdf/SUN_Framework.pdf
Wiggins, Steve & Sharada Keats, 2013, Smallholder
agriculture’s contribution to better nutrition, Report
for the Hunger Alliance, March 2013, London: Overseas
Development Institute
Wiggins, Steve and Sharada Keats, 2014, Future diets:
Under- and over-nutrition in developing countries,
in Commonwealth Health Partnerships 2014, London:
Commonwealth Secretariat. http://www.commonwealthhealth.org/commonwealth-health-partnerships/
commonwealth-health-partnerships-2014/
Wiggins, Steve & Sharada Keats with Euna Han, Satoru
Shimokawa, Joel Alberto Vargas Hernández & Rafael
Moreira Claro, 2015, The rising cost of a healthy diet.
Changing relative prices of foods in high-income and
emerging economies, Report, London: Overseas Development Institute
29
POLICIES FOR AGRICULTURAL DEVELOPMENT: CONSENSUS VS. DEBATE AND UNCERTAINTY
2.3
MAJOR DEBATES AND UNCERTAINTIES
Much of the detail of agricultural policy, however, is subject to debates and uncertainties. This report
discusses a particularly prominent set of these issues: agricultural and rural transitions (→see below); the
prospects for small-scale farms (→see p.37); land tenure and rights (→see p.40); rural market development
(→see p.42); the use of agricultural technology (→see p.53); the role of gender in agiculture (→see p.58); and
environmental sustainability and climate change (→see p.64). While such a long list may suggest that much
of agricultural policy is in doubt, that might overstate matters. In fact, experiences such as those of China
and Ghana
€$£ suggest that so long as basic elements are in place, agricultural growth is likely. Moreover, tricky
as the debates and uncertainties may be when considering the wide range of developing countries, when
looking at individual countries with their particular characteristics, some uncertainties may not apply so
choices may be fewer and clearer.
AGRICULTURAL AND RURAL TRANSITIONS
Development involves major changes to the structures of economies as they move from being
agrarian to industrial, as well as to the economic and social geography of countries as they
become urbanised with most of the population and economic activity no longer being in
rural areas, but in towns and cities. Agriculture thus goes through a transition, during which
its relative importance declines and it (eventually) releases resources, above all labour, for employment in industry and services. Rural areas in general also see a transition during which
first their share of population falls, then eventually their absolute population also falls.
This section outlines these changes and examines their implications for agriculture, including what they may
imply for scale of farming and land tenure.
→
SUMMARY:
Low-income countries are in transition from
agrarian and rural to urban societies, marked by
urbanisation, the growth of the rural non-farm
economy, and increasing migration out of rural
households. Agriculture continues to grow, but
sees its relative importance decline, while it releases resources, above all labour, for employment
in industry and services. To do so, agricultural
productivity has to rise considerably if it is to
grow sufficiently, transfer resources, and provide
a decent income to farm households – a demanding challenge.
In the past, small-scale farms have shown advantages over larger farms, but this may be changing
given the increasing demands from supply chains
for quality and certification of produce. This
could lead to smallholders being excluded from
markets for higher-value produce unless they can
link to changing markets (→see p.42) and technology (→see p.53).
30
Even if smallholders can remain competitive,
with time their numbers will fall as some move to
better-paid work in manufacturing and services.
Two very different transitions could emerge as
a result: in one, land is rapidly concentrated in
the hands of large-scale commercial farms; in the
other, land concentrates, but much more slowly,
and generally in the hands of family farms that
accumulate land from neighbours who move to
better-paid work in manufacturing and services
and progressively lend, rent or sell their land.
Debates on land rights and tenure focus on the
extent to which different forms of tenure protect
rights, encourage investment and offer security
in specific communities – ranging from longstanding collective tenure to more formal registration of rights, surveying and land demarcation
for freehold tenure. Land redistribution may be
favoured for equity, or sometimes for efficiency,
but it is politically sensitive and administratively
demanding and may achieve little if complementary support is not provided. Changes to land
policy should be formulated with widespread
participation and with stronger governance.
AGRICULTURAL DEVELOPMENT POLICY: A CONTEMPORARY AGENDA
Development and transformations
As economies grow the shares contributed by economic sectors change, as does the location of activity (Breisinger et al., 2011; Herrendorf et al., 2013; Timmer, 2009). Typical patterns show that:
■■ Agriculture’s share of output falls since manufacturing and services grow more quickly. That does not
mean that agricultural output declines – on the contrary, it almost always grows, only not as rapidly as
other sectors;
■■ Agriculture’s share of labour also falls as employment in manufacturing and services rises rapidly. In the
early stages of development total numbers working in agriculture continue to rise. Only when countries
reach middle-income levels does the farm labour force decline absolutely; and,
■■ An increasing share of output, and employment, can be found in urban areas, since most manufacturing
and services are located in towns and cities.
Cross-country comparisons confirm the relationship between economic growth and the declining relative
importance of agricultural output and labour, see Figure 2.4.
FIGURE 2.4 SHARES OF GDP AND LABOUR IN AGRICULTURE, 1990 TO 2005 AVERAGE
Share of labor and GDP in agriculture
1.0
NPL
BDI
ETH
0.8
MWI
NER
MOZ
TCD
GIN
MLIUGA TZA
MDG
LAO
ZMB
KHM
CHN
SDN
TGO
GHA
ZAR
BDI
BEN
0.2
0
90
ZWE
IND
China 1961–2003
CMR
THA
BGD
LAO
YEM
CIV
IDN
TUR
BOL
UGA
TZA
GTM
Nigeria 1961–2003
RWA
LKA
Brazil 1961–2003
MLI
GHA KHM
PHL
MAR
NPL
NER
BEN
EGY
HND
TJK TGO
NGA
PRY
CMR
SDN NGA
PER
TJK
TCD
MDG
SYR
PNG
SLV
PRY IRN
MOZ
UZB
BFA
MWI
UZB
ECU
TUN
AZE
VNM
DZA
HND
KEN
CIV
BGD
COL
SYR
MEX
MYS POL
PAK
IND
IRN GTM
YEM
GIN
LKA
PHL
DOM
BLR EGY ROM
BRA
SEN
COL
ZWE CHN UKR
CHL
MAR
ROM
TUN TUR
IDN
AZE
HUN
ZMB
SLV
BOL BLR
ZAF
MYS
ARG
BGR DZA
VEN
UKR
SVK CHL CZE
ECU
DOM
AGO
BGR PER THA
BRA
MEX
SVK
ARG
POLHUNVEN
ZAF
CZE
PAK
ETH
0.4
PNG
AGO
KEN
SEN
VNM
ZAR
0.6
Share of labor in agriculture (1990–2005, average)
Share of GDP from agriculture (1990–2005, average)
Trajectories of the share of labor in agriculture, 1961–2003
BFA
RWA
150
245
400
670
1100
1800
3000
4900
8100
GDP per capita, constant 2000 US$ (log scale)
Source: Figure 1.2, World Bank 2007
Urbanisation increases with average incomes, with particularly rapid increases in early development,
as incomes rise towards an average of US$5,000 a head, see Figure 2.5.
31
POLICIES FOR AGRICULTURAL DEVELOPMENT: CONSENSUS VS. DEBATE AND UNCERTAINTY
FIGURE 2.5 SHARE OF POPULATION LIVING IN URBAN AREAS
Agglomeration index
1.0
Egypt, Arab Rep. of
Japan
United States
Korea, Rep. of
0.8
0.6
Brazil
India
South Africa
Norway
0.4
China
0.2
Ethiopia
0
0
5
10
15
20
25
30
GDP per capita (PPP, constant 2000 US$, thousands)
35
40
45
Source: Figure 1.7, World Bank 2009
Note: Sizes of circle represents population of country. PPP = purchasing power parity. Because definitions of urban vary
by country, the WDR 2009 team created an agglomeration index that can be applied across all countries. The index defines a locality as urban if it has 50,000 or more inhabitants, or if it has a population density of 150 or more persons per
square kilometre, and travel time to a settlement of 50,000 or more persons is less an hour.
Why do such shifts take place? Agriculture declines
in relative importance because people spend proportionately less on food as they become better off: that
is, the income elasticity of demand for most foods is
relatively inelastic.14 Hence demand for food and other
farm produce expands more slowly than the growth
of the economy, thereby tending to limit the growth
of agriculture. The limit is not absolute, since farming
may expand by producing for export, but in practice
few countries have such large agricultural exports
that they completely overcome the limits of the slow
growth of domestic demand.
Urbanisation arises because most manufacturing
plants and services are located in in urban areas, largely owing to economies of agglomeration (Henderson
et al., 2001; Henderson, 2013; Quigley, 2008).15 Partly
these arise from lower transport costs among firms
and between firms and their customers when they
locate in the same place. But perhaps more important
in making cities attractive to manufacturing and services are the external economies that arise when firms
cluster, including:
14 Some foods have lower income elasticity of demand than others. Staples typically have highly inelastic demand, while animal foods have slightly
inelastic demand. This explains why, when consumer incomes increase,
the composition of demand for food shifts from staples towards animal
produce, fats, sugar, fruit and vegetables. Most of the growth of agricultural
output thus comes increasingly from these higher value items.
15 Although the advantages of urban location for most industry has
long been appreciated, since 2000 development studies have come to
recognise the potential of cities to drive economic growth.
32
■■ Suppliers of intermediate goods and services to
factories and offices can specialise and reduce unit
costs;
■■ Transactions costs fall and complementarities
apply in factor markets. In labour markets, it is
easier to match supply and demand in a large and
diverse labour pool. Moreover, in large labour markets, workers have incentives to train and acquire
skills, while employers have incentives to invest in
machines and equipment to put such skills to use.16
Markets for business premises and (used) machinery benefit from being larger in urban areas;
■■ Education, knowledge and mimicry. Both firms
and workers tend to imitate and learn from one
another when they locate in the same place and
interact, both formally and informally. Hence
innovations tend to spawn additional innovations,
while learning by managers, technical specialists
and workers leads to productivity gains; and,
■■ When many firms, employers and customers live
close together the variability of supply and demand
can be cushioned across large numbers, allowing
firms to stock lower inventories. (Quigley, 2008)
16 Since the level of worker skill does not always match the expectations
of employers who have installed advanced equipment, some less skilled
workers get to work with more capital than might be imagined.
AGRICULTURAL DEVELOPMENT POLICY: A CONTEMPORARY AGENDA
External agglomeration economies have grown
with technical progress. They not only help explain why manufacturing and service firms tend
to choose urban locations, but also why firms in
the same sector tend to cluster in cities and their
surrounding regions, as seen in the information industries of Silicon Valley of California, automotive
trade in Baden-Württemberg, and cycling industries of northern Italy.
The advantages of agglomeration for manufacturing and services are overwhelming. While cities can
be congested and polluted, and space commands
high rents, for many activities these costs are minor
compared to the benefits. Agriculture and other
primary activities are exceptions since they are tied
to land, water and mineral deposits.
Agriculture’s role in transformation
Agricultural development can help facilitate
structural change. It does so primarily by producing food for urban consumers and raw materials
for industries. It helps industry if agricultural
productivity rises and the unit cost of food falls
since this moderates demand for wages. When as
often applies in low-income countries, agriculture
is a key export sector, it assists by earning foreign
exchange that allows nascent industry to import
machinery and raw materials. A growing industrial and service economy needs workers, so while
agriculture develops it also needs to release labour.
Capital to begin industrial development may also
come from agriculture, in the form of savings from
farm households, or from some form of taxation of
agriculture.
These functions, first set out by Johnston & Mellor
in 1961, mean that agriculture has to raise productivity considerably if it is to grow sufficiently, transfer resources, and provide a decent income to farm
households. That may look a difficult challenge, but
given that productivity of both labour and land in
agriculture is often very low in developing countries, and technical improvements are known, it is
possible — as was seen in the Asian Green Revolution.17
17 When Johnston & Mellor set out their ideas in 1961, it was far from
clear that these changes would be possible in the developing world of
the time. Pessimism at the time was strongest about the prospects for
Asia: then very poor, with fast growing populations adding to what were
already seen as over-populated countries (Myrdal, 1968). The Green Revolution, however, answered those who harboured Malthusian doubts. By
the 1970s it was clear that agriculture could grow and raise productivity
to support Asia’s industrialisation.
Scale of production: small- or large-scale
farming?
A key question, however, concerns scale of production: can agricultural productivity be increased,
output raised and labour and capital released to
other sectors when most farms are small? The
overwhelming majority of farms in the developing
world, fully 95% of them, are small-scale family
farms operating less than five hectares (Lowder et
al., 2014). Moreover, in most developing countries
the average holding size still tends to fall with each
decadal census.18
In the history of development, small-scale farms19
(smallholdings) have figured prominently. Results
of surveys of smallholdings by US agricultural
economists such as David Hopper and Sol Tax in
the 1950s and 1960s reported that their resource
allocation was efficient. This ran contrary to received wisdom among some agriculturalists who
saw smallholders as ‘traditional’, ‘conservative’ or
‘backward’. The new insights were crystallised by T.
W. Schultz (1964) in the highly influential ‘Transforming traditional agriculture’ that argued that
small-scale farmers were ‘efficient, but poor’. For
Schultz, then, increasing the incomes of smallholders was not a matter of instructing conservative
farmers to manage better their farms, but instead
required improved technology. Similarly, a decade
later World Bank economists argued that small
farms, in common with other small-scale and often
informal enterprises, should be the focus of public
development efforts, since given the right conditions and support these would grow faster than
larger-scale formal concerns – with the great added
benefit that the distribution of gains would accrue
to the poor. ‘Redistribution with Growth’ (Chenery
et al., 1974) set out this thinking.
18 In marked contrast, in most high-income countries the average farm
sizes have been rising for 50 or more years.
19 In what follows the terms small-scale farms, small farms, smallholdings and peasant farms are used interchangeably. Although a precise
definition of a small farm is elusive, the concept is straightforward: the
term refers to family-operated farms, where the majority of the labour
used for most of the time comes from the household — at peak times,
additional help will be recruited; and where the size of the holding
expressed in area or numbers of stock kept, is small. For land, this might
be 10 hectares or less of rainfed holding — but that area would shrink
were it irrigated, and expand if the rainfed area were of marginal quality.
FAO, however, compile their statistics on SF by taking a limit of just two
hectares.
33
POLICIES FOR AGRICULTURAL DEVELOPMENT: CONSENSUS VS. DEBATE AND UNCERTAINTY
At the same time, another reason to favour small
family farms emerged: politically, the revolutions
in China (1949) and Cuba (1959), plus the failed insurrection in Indonesia (1965), were seen as rooted
in the gross inequities of unequal agrarian societies
where landlords monopolised the land and extracted rents from the peasantry. If radical communist
revolutions were to be countered, then capitalism
would have to reform land regimes to alleviate
the rural discontent that fed them. Hence the USA
more or less forced land redistribution in South Korea, Japan and Taiwan in the 1950s (Mennen, 2009),
and encouraged — with variable success — countries in Latin America to redistribute land.
Theories were backed by practice. In the 1950s, the
colonial government of Kenya decided to reverse
their previous agricultural policies of treating areas
left in the hands of indigenous African farmers as
labour reserves for the large farms of the ‘White
Highlands’, and instead to promote the development of the small African farms. The result was a
remarkable expansion of small-scale cultivation
of crops such as coffee and tea. Meanwhile, in the
countries of East Asia where land had been reformed, considerable growth of farm output was
seen.
Hence by the late 1960s, both theory and practice
suggested that small-scale farming was not an
obstacle to increased productivity and production.
This coincided with the start of the Green Revolution. As the new seeds, with irrigation, fertiliser
and supporting policies, were rolled out across the
irrigated lands of Asia, and in some parts of Latin America, programmes were designed to reach
smallholders. If they did not have access to inputs,
credit, output markets, technical advice, then
the state would arrange the necessary services to
ensure that the technology could be taken up by
small-scale farmers. By the end of the 1970s, these
hopes had been realised: millions of smallholders in
areas suitable for the new varieties had adopted the
seed, plus the fertiliser and agrochemicals, and seen
their yields rise. For instance, India, a country that
some feared could never produce enough staples for
its population, found itself buying up the additional
output and storing tens of millions of tonnes of
grain.
The efficiency of small-scale farms in land use: the
inverse ratio of size and yields
The success of the Green Revolution suggested
that economies of scale in cereals production were
limited or absent. Repeated observations from surveys at the time showed an ‘inverse ratio’ between
size of farm and yields per hectare (Cornia, 1985;
Eastwood & Lipton, 2004): that is, the highest yields
were seen on the smallest farms. The most common explanation is that small-scale farmers apply
labour to their farms more intensively than larger
farms, since their household labour is cheaper to
employ, more diligent and harder-working than
hired labour on larger farms. Household labour
can be readily available, flexible in time and effort
to suit the varying and unpredictable demands of
the farm, as seen, for example, in planting times,
control of pests and diseases, and harvesting.
Household labour is self-supervising and motivated
to carry out operations diligently, as well as to work
long hours when needed. In contrast, larger farms
depending mainly on hired labour incur (transaction) costs in recruiting and supervising labour to
ensure that hired hands work carefully and for the
time agreed.
Small-scale farming may have other advantages,
since farmers operating small plots may have considerable detailed knowledge of their soils, topography, drainage, etc. allowing them to work the land
appropriately. 20 Thus for unmechanised farming
where labour is a key input, diseconomies of scale
may apply: smallholders have benefited from their
small scale.
Additional arguments in favour of smallholder
development
Efficiency is not the only possible advantage of
smallholder development. Being operated mainly
by household labour, smallholders may be better
able to resist temporary slumps in prices, since
household labour may be prepared to accept lower
implicit returns to their labour at times when a
commercial farmer would simply go bankrupt.
Small-scale family farms have historically often
survived harsh economic conditions.
20 Only recently has this become possible on mechanised, large-scale
scale farms, since robotics has allowed ‘precision farming’ where machinery varies its operations according to very small differences in fields.
34
AGRICULTURAL DEVELOPMENT POLICY: A CONTEMPORARY AGENDA
For reducing poverty, developing small farms may
be preferred to larger holdings. Most poverty is rural; most of the poor are engaged in farming, many
of them on small farms either as operators or as occasional labourers. Promoting small farms should
therefore mean additional earnings directly to the
poor. Smallholders, moreover, tend to use more
labour per hectare than larger farms, partly owing
to the low transactions costs of using household
labour, but also because when hiring in additional
labour at peak times, transactions costs of recruiting extended family and neighbours can be low. 21
Hence focusing efforts on improving small-scale
farming is expected to create more jobs, pushing up
the rural unskilled wage rate to the benefit of the
poor and landless. In addition, when smallholders
spend additional agricultural incomes, they tend
to spend much of this on locally produced goods
and services: furniture, entertainment, house improvements, etc. Hence the multiplier effect on the
local economy is expected to be higher than from
incomes accruing to larger-scale and more wealthy
farmers.
For all these reasons, by the 1980s the received wisdom and the general practice was that agricultural
development should take place with smallholders
as the principal subjects and actors.
Have changing circumstances switched advantages from small to large farms?
Many observers still see advantages in small-scale
farming in low-income countries, see for example
the 2008 World Development Report on Agriculture
in Development (World Bank, 2007). Others, however, have their doubts about the advantages of smallscale farms. They argue that circumstances have
changed from when the Green Revolution began,
above all in the technical efficiency of large farms,
access to technology and the demands of supply
chain managers. They also wonder if it is possible
to offer smallholders the support seen during the
Asian Green Revolution and wonder whether there
may not be better ways to reduce rural poverty
than by smallholder development (see Ashley &
Maxwell, 2001; Byerlee et al., 2009; Ellis, 2005).
In more detail, the sceptics’ argument is that new
technical advances such as precision farming mean
that yields on large-scale farms can be higher
than on small farms. These technologies are not
scale neutral: they require capital, as well as highly
skilled technical specialists. Examples can be found
in Brazil, Chile and Argentina. In the last named,
farm pools — ‘pools de siembra’ — now see just 30
companies farming 2.44M ha. The pools involve
companies leasing land, hiring in machinery, and
recruiting good agronomists to undertake farming
in blocks of 10,000 hectares of more. Landowners
are happy to let the companies take over their land,
since they reportedly earn more from this than by
self-cultivation (Byerlee & Deininger, 2012).
Access to technology is changing. Forty years ago
during the Green Revolution, the new seeds were
developed by international and national research
stations operated publicly. Today the bulk of the
world’s agricultural research budgets are in the
hands of private companies, and it is in their
laboratories and test plots that many advances in
biotechnology take place. Small-scale farmers may
not be able to afford the seeds and chemicals in
which these advances are embodied, and may also
lack knowledge and management capacity to make
full use of them.
Perhaps the strongest argument of all lies in the
increasing demands of modern agricultural supply chains. Increasingly, the chains are organised
by supermarkets — especially in middle-income
and rapidly growing economies. Their demands for
quality, uniformity, timely delivery and above all
for certification and traceability threaten to exclude
smallholders who cannot meet these standards,
leaving them to sell their produce through secondary channels at lower prices (Reardon & Berdegué,
2002).
Indeed, this argument may be widened to one
about transactions costs, since the lower transactions costs in labour hiring is one of the key explanations of the inverse ratio of yields to farm size.
Hence while smallholders may have advantages in
labour, in local knowledge and in self-provisioning,
when it comes to interactions with markets for
inputs, finance, technical assistance and marketing, larger farms have the edge, as the summary in
Table 2.6 below from Poulton et al. (2010) outlines.
21 Many agrarian societies have forms of labour exchange to amass
labour at peak times, and to reduce drudgery. Given their collective and
reciprocal nature, such labour groups are self-supervising.
35
POLICIES FOR AGRICULTURAL DEVELOPMENT: CONSENSUS VS. DEBATE AND UNCERTAINTY
TABLE 2.6 TRANSACTIONS COST ADVANTAGES OF SMALL AND LARGE FARMS
Small-scale farmers have advantages in:
Large-scale farms have advantages in:
Unskilled labour supervision, motivation, etc.
Skilled labour
Local knowledge
Market knowledge
Food purchases & risk (subsistence)
Technical knowledge
Inputs purchase
Finance & capital
Land
Output markets
Product traceability & quality assurance
Risk management
Source: Adapted from Poulton et al. 2010
All told, these considerations have led some to
argue that small family farms are simply not up the
challenges of contemporary agricultural development. Considering Africa, Collier (2008) puts it as
follows:
And reluctant peasants are right: their
mode of production is ill suited to modern agricultural production, in which
scale is helpful. In modern agriculture,
technology is fast-evolving, investment
is lumpy, the private provision of transportation infrastructure is necessary to
counter the lack of its public provision,
consumer food fashions are fast-changing and best met by integrated marketing chains, and regulatory standards
are rising toward the holy grail of the
traceability of produce back to its
source.… Large organizations are better
suited to cope with investment, marketing chains, and regulation. (Collier,
2008, p. 71-72).
36
His ideas are shared by some investors. The land
deals seen since 2008, in which companies look
for land in Africa and Central and Southeast Asia
to cultivate food crops to be exported back to the
investing countries (von Braun and Meinzen-Dick,
2009), almost always contemplate production on
very large-scale farms, rather than through contracting from small farms.
Sceptics also argue that the amount of public
support offered by the state to smallholders at
the time of the Green Revolution by many Asian
states — including public distribution of inputs,
subsidised interest rates through public banks,
guaranteed purchase of marketed surplus at floor
prices — is unthinkable today since liberal economic thinking came to prominence in the 1980s. That
may not be so strong an argument: policy thinking
and policies can change. Several African countries
have defied conventional wisdom and the pressures
of the IFIs to reintroduce fertiliser subsidies in the
second half of the 2000s, most notably Malawi.
The final argument is one of the most through-provoking. Much of the sympathy for smallholder
development stems from the expectation that the
poverty impacts will be stronger than other forms
of development. But is this necessarily so? From
Senegal comes an account of the replacement of
small by larger holdings as producers of export
vegetables — a change that has come largely from
the increasing demands for GLOBALG.A.P. (Good
Agricultural Practice) certification by European supermarkets, a standard that few smallholders could
attain and document. As estates have taken over
the export market, fewer smallholders have been
contracted to produce vegetables. But since the
estates employ many hired labourers, an increasing
AGRICULTURAL DEVELOPMENT POLICY: A CONTEMPORARY AGENDA
number of households now have jobs in the export
supply chains, many of them poor households, so
that the overall welfare effect seems highly positive: more jobs and more incomes mainly for poor
rural households (Maertens & Swinnen, 2009).
While this case turns on the high labour intensity
of the export vegetable farms, they are not necessarily an isolated case: similar accounts of high use
of labour come from export fruit farms in Chile.
Small versus large farms: policy
Much of the debate about smallholder development
turns on the extent to which smallholders can
link to changing markets and technology. Sceptics
believe that the demands of new technology and
the emerging supply chains will exclude most small
farms. Optimists hope that institutional innovations — such as contract farming and collective
action by smallholders can overcome these transactions costs so that at least some smallholders can
stay competitive with larger farms. This will be
addressed in the next major section, on developing
rural markets.
Rural transitions: when will small-scale farms
decline?
If in development agriculture contributes a smaller
share of economic output, and reduces its share of
labour, then many of those working in agriculture
in the developing world today will not be doing so
in the future. How, then, will they leave farming
— and will this happen in the near or more distant
future?
Two very different transitions are possible. In one,
loosely based on the experience of England during
the 18th century, land is rapidly concentrated in
the hands of large-scale commercial farms that
are able to make full use of their access to capital
and knowledge. In the other, based loosely on the
French experience of the 18th and 19th centuries,
most smallholdings continue to farm with a gradual reduction in the area cultivated as some households gradually switch their labour from farming
to non-farm enterprises and migration. Land does
eventually concentrate, but much more slowly, and
generally in the hands of family farms that accumulate land from neighbours who no longer farm
their own land.
The English model has been highly influential since
it was (one of22) the first modern agrarian revolutions, taking place (slightly) before the Industrial
Revolution. It is has thus been easy to assume that
radical agrarian change was necessary for the
industrial counterpart, since without the assumed
efficiency of the large farms created by enclosures,
labour could not have been released for the new
factories. It is far from clear that this was the case.
22 Flanders may have a better claim for being the first than England. As
with skills in textiles and drainage, England was to profit from learning
new technologies from the Low Countries.
37
POLICIES FOR AGRICULTURAL DEVELOPMENT: CONSENSUS VS. DEBATE AND UNCERTAINTY
Box 2.7 sets out some English and French history and compares this to the contemporary case of Thailand.
Box 2.7 Transformation and transition: England, France and Thailand
Early experiences of the transition from agrarian to
industrial differ considerably in the speed with which
labour left farming and agricultural land was consolidated into large holdings. The comparison between
England and France is striking. In 1700, 55% of the
English population were engaged in farming, similar to
the 63% of the French population that were so engaged.
But by 1850, the share had fallen sharply in England to
22%, while in France the reduction had been far less,
falling to 55%.
England saw enclosures of common land and consolidation of holdings that led to the creation of larger
farms and estates, while most small-scale farmers lost
their rights to arable land and commons. Although
some of the small farmers who lost their land found
work in the expanding factories, not all did. Until
the second half of the 19th century a landless rural
population depended often precariously on paid labour
on large farms and estates, living in poverty. Indeed,
many emigrated to North America, Australia and New
Zealand in search of land and livelihoods.
France, on the other hand, remained a land of small
family farms. In 1880 only 4% of French farms were
more than 40 hectares, occupying just 29% of French
agricultural land: compared to 75% of agricultural land
in the UK being in holdings of this size or larger. Smallscale farmers left the land in France over a much longer
period than England.
The difference between England and France can be
attributed in large part to land rights. From the 13th
century onwards the peasantry of France became used
to farming their own plots on their own account. They
may have had to pay some dues to the local nobility
and taxes to the King, but they were increasingly independent. After the Revolution, Napoleon’s reforms saw
their rights to land confirmed. They were never at risk
of being expropriated.
Many farm households have diversified into non-farm
jobs, although some farmers have specialised and
intensified production, helping Thailand become a
leading exporter in cassava chips, rubber, pineapple,
and shrimp.
Rural poverty has fallen from more than 60% in the
early 1960s to barely more than 10% in the new century. The benefits of agricultural growth have been widespread. Food prices have been halved, hunger has been
much reduced, and child malnutrition has been cut.
23
England was different. From the Norman conquest
onwards, the nobles considered themselves owners of
the land. When, in Tudor times, raising sheep for their
wool became highly profitable, landowners had little
compunction in enclosing the medieval open fields
where their serfs cultivated arable crops, and turning
them into sheep pastures. The later triumph of Parliament, packed with landowners, over the monarchy led
in the 18th and early 19th centuries to a further round
of enclosures that saw commons and wastes taken in
by landowners, to the disadvantage of any remaining
small-scale farmers.
It became necessary in England to justify expropriation of the land by an appeal to modernity, efficiency
and progress. Hence essays were soon written, from the
early 17th century onwards, claiming that agricultural
progress in England was down to the pioneering efforts
of the landed gentry who experimented and perfected
better farming that could be imitated by all. This was
a considerable exaggeration. But it suited Britain’s
land-grabbers to create this account of history. 23
Modern Asian experience shows a gentler transition
than the English example. Thailand has since 1960
developed its agriculture to allow the transformation
of a formerly agrarian to an urbanised economy based
around manufacturing.
To support the industrialisation that began in the
1960s, agriculture had both to feed the cities as well as
to earn foreign exchange through export of rice. It was
able to do so during the 1960s and 1970s by putting
underused land and labour to work. Subsequently,
as manufacturing grew and the land frontier closed,
farming began to shed labour. Yet agriculture continued to grow through greater use of capital with higher
productivity of land and labour.
All this has been achieved while most of the land has
remained in small-scale family farms. In 1960 the average size of holding was 3.5 hectares: by 2000 the average had fallen slightly to 3.2 hectares. Of 5.8 million
holdings registered in the 2003 agricultural census,
only 249,000 were more than 10 hectares: Thailand
reported all its farms that year to be ‘family farms’.
During the 2000s Thailand’s rural population has
started to fall, so farms will probably soon consolidate
and grow larger. But the transition has been made,
quite successfully so, without mass dispossession of
smallholders. Thailand is far from alone in this: indeed,
smallholdings have dominated the land in most countries of South, Southeast and East Asia throughout the
Green and Industrial Revolutions seen.
Sources: England: Overton 2011, Allen 2009. France: O’Brien 1996. Thailand: Leturque & Wiggins 2011
23 In the late 19th and early 20th centuries, some British settlers were busy grabbing land in Africa and Southeast Asia, so this version of history could
readily be used to justify seizing land from local users such as the Maasai of Kenya.
38
AGRICULTURAL DEVELOPMENT POLICY: A CONTEMPORARY AGENDA
Rural social differences: the fate of marginal
farmers
Even in relatively egalitarian rural societies, such as
those seen in much of sub-Saharan Africa, marked
differences still exist between households in access
to land, livestock and other forms of wealth. Options to specialise in farming are not necessarily
evenly distributed. What then happens to those
households whose lack of assets, or their location
on marginal land or remote from cities makes it
difficult for them to get a decent living from agriculture?
Such farm households will not necessarily abandon
their farms in the short run, even if they are insufficient in size, productivity or location to provide
the household with a living. Most likely they will
farm what little land they have, using most of it
to grow staples, vegetables, perhaps produce some
milk, eggs, and chicken — all largely for household
consumption. As and when incomes rise from
off-farm work, these households may progressively
lend, rent and eventually sell their land to family
and neighbours who are full-time farmers.
Since most of these farm households will continue
to farm their land for their own subsistence, they
need agricultural policies that will allow them to
do this better, within their limited means. It may
mean, for example, extension services to produce
food crops with little labour and capital, producing
at intermediate yields — not optimal, but that can
make all the difference between producing staples
sufficient for a quarter or half a year leaving a long
hungry season, and producing enough to cover
most or all months.
Policy for benign agricultural transitions
If agrarian transitions are to be gentle, where people voluntarily leave farming for better prospects
rather than being forced off their land, then three
things have to be in place.
One, smallholders who specialise in farming need
to be able to raise production and productivity.
They have to be able to obtain better inputs, technical knowledge, financial services and information
about markets. Rural markets do not typically work
well for smallholders in providing inputs and finance. Hence finding the institutional innovations
that will overcome the failings of rural markets
becomes a priority for agricultural (and rural) development (→see “Developing rural markets”, p.42).
Two, land markets need to function for efficiency
and equity. At issue are small-scale transfers of land
between those smallholders specialising in farming
and those who do not, being unable or unwilling
to cultivate all their land. Such transfers are often
likely to be of use rights rather than outright sale –
through loans, share-cropping and rentals. Tenure
policy needs to facilitate these exchanges by arrangements that give both parties confidence in the
deal agreed, with legal recognition of the exchange.
At the same time, the land rights of disadvantaged
land users who may lose their land need to be recognised. More will be said about land policy later in
this section.
Three, rural people need to be in condition to take
up non-farm jobs. That means provision of schooling, healthcare and clean water so that young
adults have the capabilities to take up jobs off the
land, albeit perhaps with additional training for
which schooling is a precondition.
Land Policy
Background
As economies are transformed and the transition
from rural and agrarian to urban and industrial
economies takes place, access to land ideally needs
to be flexible enough to allow economic efficiency
while at the same time being socially equitable.
How to do this has long engaged attention in development thinking.
Development agency engagement with land reform
and land policy has changed over time. Land redistribution was an integral part of deep agrarian
reforms in the 1940s and 1950s in East Asia, and
the 1960s and 1970s in Latin America. Although
the main motivation was political, to head off rural
revolt, economically it was expected that redistribution of land from landlords to tenants and farmworkers would lead to greater production, owing in
large part to the higher intensity of farming seen
on small plots (→see “The efficiency of small-scale
farms in land use”, p.34). However, the controversial
political nature, administrative difficulties and
disappointments — in Latin America rather than
East Asia — with outcomes of such interventions
has subsequently led to many governments and
donors avoiding land redistribution. When, usually
in cases where land is distributed very unequally,
proposed mechanisms to redistribute land are
recommended, they now usually try to work with
land markets where land is publicly bought for
redistribution.
39
POLICIES FOR AGRICULTURAL DEVELOPMENT: CONSENSUS VS. DEBATE AND UNCERTAINTY
More recently the focus of attention has switched
to land tenure and security of rights to land. Secure
land rights provide the incentive to invest, innovate
and conserve the land. Clearly defined and predictable tenure should facilitate transfers of land
to those who can use it most productively (Besley
and Ghatak, 2009, 2010). Secure rights expressed by
legal title allow title holders to use it as collateral
when seeking credit (de Soto, 2000). Early attempts
to establish secure tenure focused on formal surveying, mapping, registration and titling of plots.
This has proved both costly and time-consuming,
so that more recently the search has been for lower-cost and more rapid ways to improve security of
tenure.
Policy issues
Land tenure and the role of land titling
The dominant discussion in land policy revolves
around the different land tenure systems that
best ensure security of tenure and the role of land
titling within this. Previously there were quite
marked differences in donor policy approaches and
interventions in the land sector: the international
finance institutions, particularly the World Bank,
promoted individual property rights; while the UN
‘family’ and civil society organisations (CSOs) recognised that secure land rights could be achieved
through other forms of tenure.
Currently the emphasis is increasingly on secure,
equitable access to land under different legal
systems and diverse national and local situations,
looking at the legality and legitimacy of different
institutional arrangements and the role of recorded rights and deeds (World Bank, 2003; EU, 2004;
DFID, 2007; French Development Cooperation,
2008; FAO, 2007; SIDA, 2007). It is recognised that
formal land titling may be neither necessary nor
sufficient to ensure security of rights and their
subsequent benefits, depending on how land rights
are recognised and enforced in particular contexts
(World Bank, 2003; EU, 2004; DFID, 2004; Rodrik,
2000). Informal land rights may be secure when
locally recognised and enforced.
It is possible that land titling when economic conditions do not favour farming may “induce distress
sales of land causing landlessness for many, land
concentration and accumulation for few, resulting
in increased poverty and inequality” (EU, 2004). Despite some risks, titling can be particularly useful
when land markets become active with investors
from outside the local community seeking land;
when farming opportunities require substantial
amounts of capital; and when urban encroachment
40
on to farms in peri-urban areas is taking place.
Land tenure may be important after conflict, when
the ability to deal quickly with property claims can
help recovery and reconstruction.
Where titling is pursued, several issues need to be
borne in mind. One concerns the degree of formality of procedures. Land titling may be on the basis
of formal mapping. This may involve use of remote
sensing, backed up by on-the-ground surveying
and the establishment of computerised geographical information and land information systems.
This can pose technical challenges for developing
countries where the resources and capacity to
implement and maintain such systems usually do
not exist. An alternative is to have local communities define plot boundaries, and to agree on who in
the community has what rights to land within the
locality. Drawing on local knowledge and legitimacy of community decisions can make for more
rapid, lower-cost registration of rights. Ethiopia and
Rwanda provide recent examples of this. That said,
extending titling from individuals to communities
can sometimes crystallise latent conflicts that have
so far been negotiated and managed informally, so
needs to be undertaken with care.
Administrative procedures and any fees for registration need to be commensurate with the means
of smallholders. If they are too daunting, then
informal land deals will prevail over formal deals. 24
Gender is another important consideration. In the
past title has often been awarded to a male household head. More recently programmes are likely to
emphasise joint legal title between husband and
wife and changes to inheritance laws to ensure
transfer of full title to the wife if the husband dies.
This reflects the recognition of women’s role in agriculture (→see “Key issues for women in agriculture”,
p.60) but that women usually lack formal titles to
the land they use, and furthermore often lose their
rights if they become widowed or divorced (World
Bank, 2003). Legislation, however, may not significantly alter the denial of women’s land rights in
practice as local social customs prevail (International Land Coalition, 2006). Attention needs to be
given to working with local communities to build
support for the defence of widow’s rights to land.
24 The World Bank and the Millennium Challenge Corporation have proposed that registered land should be taxed, both to increase the financial
resources of local authorities, as well as acting as an incentive for the
more productive use of land.
AGRICULTURAL DEVELOPMENT POLICY: A CONTEMPORARY AGENDA
Governing large-scale investment
The need for good governance in the land sector
was raised in the EU’s 2004 Land Policy Guidelines and has subsequently become an increasing
interest (FAO, 2007; French Development Cooperation, 2008; Deininger and Selod, 2011). Discussion
of land governance brings to the fore not only how
institutions can title and register land, but also
how they take decisions on land: who participates
in land decisions and how different interests in
competing social and economic functions of land
are reconciled.
The surge in large-scale investors, both public and
private, seeking land after the 2007/08 price spike
has provoked interest in how to ensure that land
allocated to investors is not expropriated from
existing users without consultation or adequate
compensation. Two sets of guides to good practice
have been promoted internationally, namely:
■■ FAO Voluntary Guidelines. In May 2012, the
UN Committee on World Food Security (CFS)
endorsed the FAO Voluntary Guidelines on the
Responsible Governance of Tenure of Land,
Fisheries and Forests in the Context of National
Food Security aimed largely at governments.
These lay out the principles on which governments should operate, advising on the laws,
procedures and tools available to ensure that
land tenure reflects concerns over security and
equitable distribution. Non-state actors (including business enterprises) are also deemed
to have a responsibility to respect human rights
and legitimate tenure rights; and,
■■ Principles of Responsible Agricultural Investment. Another initiative, spearheaded by the
World Bank (World Bank et al., 2010), sets out
principles for voluntary guidelines for investors
in agricultural projects. These have not been
endorsed by the CFS, and objections have been
voiced by CSOs that the starting point of the
guidelines is in favour of international investment in land rather than alternative mechanisms focusing more generally on smallholder
productivity and food security.
Customary and formal water rights may conflict,
with the legal system often weighted in favour of
investors or government agencies. The characteristics of water, being ‘mobile, fluid and fugitive’
(Meinzen-Dick, 2000), raise particular challenges
with squaring rights held in different forms and by
different entities.
→ Further reading:
Besley, T. and Ghatak, M. 2010 ‘Property Rights and
Development’. In D. Rodrik and M. Rosenzweig (eds)
Handbook of Development Economics, Vol. 5.,
4525–4595. The Netherlands: North-Holland
Byerlee, Derek, Alain de Janvry & Elisabeth Sadoulet,
2009, Agriculture for Development: Toward a New Paradigm, Annual Review of Resource Economics, 2009(1):
15–31
Hazell, Peter, Colin Poulton, Steve Wiggins & Andrew
Dorward, 2010, ‘The Future of Small Farms: Trajectories and Policy Priorities’, World Development, 38 (10)
1349–1361
Meinzen Dick R., 2000, ‘Legal Pluralism and Dynamic
Property Rights’ CAPRi Working Paper no. 22. International Food Policy Research Institute, Washington, DC
Timmer, C. Peter, 2009, A World without Agriculture.
The Structural Transformation in Historical Perspective, Washington DC: AEI Press Publisher for the
American Enterprise Institute
Wiggins, S., J. Kirsten & L. Llambí, 2010, ‘The future of
small farms’, World Development, 38, (10), 1341–1348
World Bank, 2007, Agriculture for Development, World
Development Report 2008, World Bank, Washington
DC — Overview
World Bank, 2009, Reshaping Economic Geography,
World Development Report 2009, World Bank, Washington DC — Overview
An emerging issue in large-scale investment is the
link between land and water rights, driven by concerns about increasing scarcity of water and implicit water acquisition within large-scale land deals. In
large-scale land deals involving irrigation, investors
usually try to secure long-term water rights as part
of the deal. This may deprive other users of water,
including smallholder farmers, pastoralists and
fishermen, whose livelihoods depend on customary
access to water (Skinner & Cotula, 2011).
41
POLICIES FOR AGRICULTURAL DEVELOPMENT: CONSENSUS VS. DEBATE AND UNCERTAINTY
DEVELOPING RURAL MARKETS
In liberalised economies, markets play a critical role in co-ordinating economic activity,
allocating resources, and facilitating investment and innovation by enterprises — whether they be small family farms or large private corporations. The neo-liberal ideal would
be that markets work well without public interventions. In practice markets can fail and
public action is needed. This section looks at how to remedy failings in rural markets
and how to raise competitiveness in value chains. It also looks at stabilising international
markets, given the interest prompted by the 2007/08 food price spike.
→
SUMMARY:
Markets play a critical role in co-ordinating economic activity, allocating resources, and facilitating
investment and innovation by enterprises, but in practice some rural markets often require public
intervention to work well – above all those for inputs, credit and other financial services – especially in
rural Africa.
Improving rural markets can occur by replacing private supply with direct government provision to
farmers; however, costs can be high and driven by political goals. The alternative is to promote collective
and private institutional innovations (e.g. contracting, farmer associations, training input dealers backed
by inventory credit) – promoted by agri-businesses and NGOs, and sometimes encouraged by some seed
funding from governments and donors.
Increasingly some agricultural and food supply chains are coming to be dominated by supermarkets,
processors and exporters who bring logistical expertise, but often demand more of farmers. Can smallholders be supported to participate in these complex yet lucrative chains, or whether they will be marginalised and excluded? Or should the priorities lie in better roads, communications, and storage instead
to help the largely informal channels in which smallholders operate?
The 2007/8 spike in global cereals prices and subsequent higher volatility (at least until 2012) has seen the
issue of stabilising international prices prioritised in policy discussions. However, views diverge on effective and necessary action: from market reform or greater government regulation all the way to more
radical and far-reaching calls for fairer global systems of trade, governance and support to farmers.
Failings in rural markets
Background and introduction: a pervasive and
significant problem
Rural markets, above all for inputs, credit and other
financial services often do not work well, especially
in rural Africa. Farmers often find external inputs
such as improved seed and manufactured fertiliser
either hard to find, or only on sale at high prices —
higher than might be expected from costs of production and distribution. Moreover, most farmers
have little chance of obtaining formal credit from
banks to buy them, and hence can only buy to the
limited extent that they have cash to hand. Consequently, external inputs that might raise yields
and farm incomes are not applied to the degree that
might be expected.
These failures may be so severe as to constitute
poverty traps. If small farmers are too poor to afford to buy inputs needed to increase their
42
production, and cannot obtain credit to overcome
their lack of liquidity, then they cannot raise
production, and hence remain poor, even when
the technical means to produce and earn more are
known (Sachs et al., 2004; CPRC, 2008). It is far from
clear that such traps are common or widespread.
Plenty of cases can be seen of small farmers who
have managed to produce and sell more despite
having little or no access to formal credit or insurance, where external inputs have been hard to
obtain, and where traders enjoy some market power (see cases in Wiggins, 2000, for examples). That
does not mean that farmers could not sometimes
make good use of credit, insurance and inputs were
they easier to obtain, but suggests that their limited
supply may not be a severe or impossible obstacle.
Unfortunately these problems tend to apply most
strongly to smallholders: larger farmers and formal
private enterprises can often bypass local markets,
obtaining formal credit and inputs in large cities
where markets often work better.
AGRICULTURAL DEVELOPMENT POLICY: A CONTEMPORARY AGENDA
Failures of markets, governments or underlying
economics?
When rural markets work imperfectly, the causes
are not always self-evident. Difficulties may result
from the market failures that will be discussed
shortly, or from government failures, or simply
from the underlying economics of farming.
Frequent, abrupt and unexpected changes in government policy can make agricultural investments
risky (Jayne et al., 2002), as can fears that profits
may be expropriated by state officials or local
political leaders if investments pay off. Looking at
grain markets in eastern and southern Africa, Jayne
et al. (2002) argue that lack of investment in grain
production, transport and storage in the 1990s was
the consequence of policy instability, as seen, for
example, in export bans or the announcement of
public imports of grain that are then delayed or
much reduced from the quantities announced.
Underuse of inputs and finance by farmers or
under-investment in supply chains may simply reflect the underlying economics of production and
trading. Some proposed improvements that involve
investing in external inputs may not in fact be
justified. Technical packages designed by agronomists for farmers may not be as appropriate to field
conditions as agronomists believe, the economic
returns may not justify the added investment, and
the risks of a poor harvest owing to bad weather
may be too high to chance investing in the package.
Similarly, farmers may not use bank credit, not
because they cannot obtain it, but simply because
interest rates are too high — as may apply when
treasury bills pay handsome returns to bank assets.
The underlying economics may result in low output
prices as well. Post-harvest losses are reported to
be high not just between field and farm, but also
downstream in supply chains (World Bank et al.,
2011). In some cases these losses may be 20% or
more, so they would significantly lower prices
offered to farmers. Prices offered to farmers will
be lower when trading is costly, as it may be when
charges are high for transport, storage, credit and
payment of taxes formal and informal (bribes)
when moving produce. Transport costs in some
parts of Africa are notably higher than in other
comparable areas of the world (Gollin & Rogerson, 2010; Livingston et al., 2011), in part owing to
cartels amongst transport operators and informal
costs of passing through border controls and internal barriers along highways. Similarly the risks
that traders run when information is scarce can be
underestimated: few notice when a trader makes a
long but wasted journey to find produce that is not
there, or when the (uncertain) price received in the
central market turns out to be less than that paid in
the village. Taking these factors into account, some
studies show the margins earned by rural traders to
be modest (see, for example, Fafchamps et al., 2003;
Mutabazi et al., 2010).
Nevertheless some rural markets may fail owing
largely to high transactions costs — the costs of
getting reliable information on products and the
other party to deals. For example, when input dealers lacking information can only guess at farmers’
demand, when bankers or insurance companies
know little of the competence and character of
farmers seeking credit or insurance, then transactions costs rise; thereby inflating overall costs and
leading to less use of inputs, credit and insurance
and at higher prices than is optimal.
A further potential problem from lack of information may arise with investments in agricultural
supply chains. Processors, wholesalers and retailers
will only invest in processing plants and storage
if they can be sure they can obtain supplies from
farmers: farmers will only produce surpluses if
they can be sure that these will be bought — with
both parties needing additional reassurance that
prices will not be turned against them as one side
or other uses market power to extract a rent. Such
assurances can be difficult to create when would-be
investors know little about farmers, and when the
farmers for their part know little about the potential investors. These co-ordination failures could
thus significantly depress investment in agricultural supply chains (Kydd, 2002; Poulton et al., 2006).
Another frequently alleged market failure is that
of monopoly power of local traders, input dealers
and informal lenders able to extract rents from
lack of competition in the market. Barrett (2008),
for example, reviewing the participation of small
farmers in markets in eastern and southern Africa
found several reports of imperfect competition,
including in rice trading in Madagascar. Evidence
for monopoly power, however, is neither abundant
nor uncontested. Other studies, such as Fafchamps
et al. (2003) mentioned above report little monopoly
power of traders.
43
POLICIES FOR AGRICULTURAL DEVELOPMENT: CONSENSUS VS. DEBATE AND UNCERTAINTY
Gender and market failings
When markets fail owing to high transactions costs
and co-ordination failures, women farmers are
likely to suffer more than men. Transactions costs
tend to be higher for women since they usually
have less education than men, and they have weaker social networks outside the village — and indeed,
they may be unable to travel far from their homes.
Hence women farmers often use even less improved
seed, manufactured fertiliser and agrochemicals
than male farmers — and consequently obtain lower yields (→see “Failings in rural markets”, p.42).
Hence finding ways to improve the working of rural markets is likely to be disproportionately useful
to women farmers.
Failings in markets: policy issues
Appropriate policy needs to respond to the particular problems seen in local circumstances. Where
there are significant government failures, the
remedy lies in better governance, in ensuring an
enabling rural investment climate. When the full
cost and risks of farming and trading are high, the
solutions will lie in better information for farmers
and traders, in technology generation that is better
matched to farmers’ circumstances, in better transport infrastructure and in reforms to transport
regulations.
Where there are failures in markets arising from
high transactions costs, two very different potential responses arise. When markets fail, one option
is to replace private provision through markets by
direct provision by government to supply inputs,
finance and marketing directly to farmers. Asian
governments during the Green Revolution often
intervened strongly in markets to ensure that
farmers could get the inputs, credit, advice and
marketing services that would allow them to take
up the new technologies. So did many governments
in Africa in the 1970s and early 1980s, through
marketing boards and other public enterprises that
typically organised supply for particular products.
While such public measures can be effective — the
grain marketing boards in Africa often succeeded
in boosting greatly the production of maize — the
costs were often high and often ruinously expensive in Africa. That led to marketing boards being
closed down, or having their operations cut back
and reformed in the 1980s and 1990s.
44
Despite the costs seen in the past, some countries
in Africa are once again intervening to ensure that
inputs reach farmers, most notably through fertiliser subsidies. The apparent success of the fertiliser
subsidy in producing bumper harvests in Malawi
since 2005 has encouraged this.
The alternative approach to remedying market
failures is to look for institutional innovations to
overcome the problems. These include contract
farming where buyers provide farmers with inputs
in advance and promise to collect surpluses; input
dealer training backed by inventory credit; and
collective action through farmer associations to
obtain inputs, credit and marketing in bulk. While
governments may back up such initiatives, and
NGOs may foster them, these responses have the
great virtue of having little or no public cost. They
can also often be tried locally, at small scale. Consequently across Africa there are a plethora of such
initiatives: some promoted by agri-businesses and
processors seeking reliable supplies from farmers;
others initiated by NGOs, trying to make sure that
farmers on low incomes are linked to the markets
they need; and yet others originating with groups
of farmers themselves organising to make the links
they need.
AGRICULTURAL DEVELOPMENT POLICY: A CONTEMPORARY AGENDA
Competitiveness and supply chains
Background and introduction
Agricultural and food value chains25 in developing
countries have been changing significantly as increasing amounts of produce are delivered through
supermarkets. Their customers want dependable
supplies of good quality and safe produce, often in
portions that are easy to prepare and cook — which
usually means produce of standard size, weight and
appearance. Some consumers, especially those in
high-income countries to which some developing
world smallholders export, also expect the supermarket to source food ethically, so that children are
not employed in the food chain and workers and
growers are paid a fair and living wage. Others want
their food to be organic.
These demands, combined with advances in
logistics, have seen food chains cover increasingly long distances with a considerable increase in
international trade in fresh food. To ensure that
any sourced produce lives up to the expectations
of consumers, the supermarkets have increasingly adopted standards that are privately set and
enforced. These cover not only characteristics that
can be readily verified by inspection of produce,
but also ‘credence’ characteristics — that cannot
be observed in the produce itself — that include
how the crop was grown or the animal raised. To
ensure compliance with these latter characteristics, as well as to show due diligence, supermarkets
have adopted standards, of which GLOBALG.A.P.
is one of the most prominent, to ensure produce
has the required characteristics and can be tracked
from supermarket shelf through the chain to the
original farmer. The search for control over quality
and attributes of produce has tended to encourage
vertical integration in the food chains, with fewer
points at which title to produce changes hands.
This includes the growth of contracting, with
increasingly sophisticated contracts (Humphrey,
2009; Jaffee et al., 2011; Reardon et al., 2009).
While these requirements apply most strongly to
exported produce, urban consumers in developing
countries who shop in supermarkets still expect
reasonable quality food of consistent standard and
dependable supply. Hence suppliers of domestic supermarkets may not (yet) have to meet demands for
certification and traceability, but they do have to be
able to meet the standards expected and deliver to
schedule.
Generally the greatest changes are seen in supply
chains for high-value produce such as fresh fruit
and vegetables, fish, meat and dairy. Given that consumers are prepared to pay well for such produce,
then investments in these chains should pay off.
The same may apply less when dealing with staple
foods, where the priority may be to keep costs low
in the value chains.
Debate: emerging value chains
Five sets of questions have been prompted by
these developments, as follows:
■■ How far and how quickly will the new chains
spread within the developing world? What
are the conditions for their replication and
expansion?
■■ What are the prospects for smallholders to
supply these chains? Can they meet the stringent conditions set by those governing the
chains, or will they be excluded?
■■ S
hould farmers and especially smallholders
try to join these chains? Are there gains to
farmers from participation, or are they being
squeezed by the market power of the supermarkets and their agents?
■■ Can the logistics and processes of value
chains for higher-value produce be useful for
staple crops as well?
■■ How can socially responsible standards be
achieved within the chains? What can be
done to ensure that the changes represent a
race to higher standards, the top, rather than
to the bottom?
The evidence and issues surrounding these questions are discussed in the following pages.
25 The terms ‘value chain’ and ‘supply chain’ are often used interchangeably, although some distinguish between a supply chain as the chain of
actors who supply a specific product to a particular retailer, while the
value chain may refer to several similar supply chains dealing the same
product with not only those who handle the product considered, but also
those who supply services to the chain, and those who set regulations
and policies that affect the chain.
45
POLICIES FOR AGRICULTURAL DEVELOPMENT: CONSENSUS VS. DEBATE AND UNCERTAINTY
Expansion of new chains
How quickly are supermarkets capturing the marketing chains, particularly large domestic channels
that deliver food to households of modest means?
Three waves of concentration have been seen: the
first in South America, East Asia, Central Europe,
Turkey, and South Africa where supermarkets now
sell 40–60% of food marketed; the second, 5–10
years behind, includes Central America, Mexico,
Southeast Asia, Southern Africa where supermarkets have a 20–40% share; and the third, in the rest
of South Asia and Africa where they have under
20% of food sales. But even in the last category, the
growth of supermarkets has sometimes been very
rapid, as seen in China.
Some of the chains are global multinationals,
others are regional multinationals (e.g. Shoprite in
sub-Saharan Africa), and yet others are national
food retailers. Joint ventures between these categories create other combinations.
Generally supermarkets begin with dry goods, groceries and the like, and make slower headway with
fresh, perishable and wet goods where local stores
and markets still attract consumers. They may first
sell to the prosperous, but they move to serve ordinary consumers fairly quickly. Spatially they begin
in capital cities, and then spread to secondary cities
and even small rural centres (Reardon, 2007).
The process of expansion may, however, be somewhat uneven and unpredictable. For example,
supermarket chains were established as major food
retailers in Bogotá, Colombia in the early 1990s.
Yet a recent survey finds that they supply predominantly middle- and upper-class households:
they do not supply in the barrios populares where
working-class, poor and vulnerable households live.
Here food is sold in corner stores and open markets,
the supermarket managers admitting that they
cannot compete on price for these markets. These
outlets are serviced by supply chains that look remarkably traditional with multiple intermediaries,
wholesale markets, and original supplies sourced
from small-scale farms (Guarin, forthcoming) — a
chain that at first sight looks inefficient compared
to the advanced logistics seen in some supermarket-controlled chains, but which apparently is
unbeatable on price.
Factors favouring the rise of supermarkets include increased incomes, urbanisation and income
inequality (Traill, 2006). The advance of supermarkets will probably thus continue to be rapid where
they have gained a significant foothold: that is, in
the industrialising and middle income countries
of East and South-East Asia and Latin America. In
other regions, and above all in Africa and South
Asia, however, the advance may be quite slow and
hence the implications for small-scale farms may
be limited in the near future.
Smallholders’ prospects
It is clear that the demands of some supermarkets,
especially when the consumer lives in high-income
countries, are difficult to meet for many small-scale
farmers. Certification demanded when exporting
to Europe, for example, can be costly for smallholders: meeting GlobalG.A.P. requirements for documentation that allows export to leading European
supermarket chains can cost a farmer US$580
(Ashraf et al., 2008, for Kenya) — an enormous
overhead for a small farm. Consequently since this
requirement was introduced, increasingly vegetable
exports from Kenya come from larger holdings who
can afford this overhead. The same has been seen in
Senegal, where vegetable exports once supplied by
contracted small farmers are now grown by estates
(Ashraf et al., 2008; Maertens & Swinnen, 2009).
Demands for quality can entail farmers having
to make investments to meet the standards, for
example, dairy farmers generally having to sell to
supermarkets through a cold chain.
Even when certification is not necessary, as when
provisioning domestic supermarket chains, transactions costs are higher for procurement managers dealing with smallholders. If they can source
from larger farms in bulk lots, they will do so. But
supermarkets will deal with small farmers where
and when:
■■ f arming is dominated by smallholders who are
the only suppliers;
■■ there are risks in contracting large growers since
they have other outlets for their produce — as
might apply when the supermarket is domestic
and large farms have the option to export their
produce;
■■ t he crop in question needs much labour and
careful attention, so hand labour is needed to
achieve high quality; and,
■■ when transactions costs are kept low by smallholders grouping together in associations or
co-operatives to sell in bulk (Reardon et al., 2010).
46
AGRICULTURAL DEVELOPMENT POLICY: A CONTEMPORARY AGENDA
Part of the answer, moreover, depends on what
is meant by ‘smallholder’: within this category
there can be great variations in access to land and
other assets. Supermarkets will engage with small
suppliers under the conditions mentioned, but they
may not be the more marginal small farms: on the
contrary, procurement managers will deal first and
foremost with those smallholders who have the
capacity and means to deliver reliably and to standard — and those are unlikely to be the marginal
farmers (Shepherd, 2009).
Do smallholders gain from supplying to supermarkets?
Farmers who supply the emerging marketing
chains may benefit from higher prices, owing to
payments for higher quality and from access to
markets for higher-value produce. They may also
gain when procurement managers offer contracts
that provide inputs in advance and technical assistance that allow farmers to invest, innovate and
increase their production.
But do farmers gain? There is less evidence on this
than might be imagined. Reports on contract farming schemes often report that farmers have indeed
gained, see for example Warning & Key (2002) for
the case of groundnut farmers from Senegal, but
there are two reservations to the favourable reports.
One is that failed contract farming schemes are
rarely documented, while contracted farmers who
left the scheme because there were insufficient
net benefits may not be observed, so that there is
a survivor bias to reviews. The other is that while
contracted small farmers may have higher incomes
than their neighbours, it is quite likely that they
were always better off in that they had more assets
or higher skills than their neighbours (Barrett et al.,
2012).
A general answer to this question is thus elusive.
Furthermore, there are concerns that incorporation
in the emerging value chains may mean that farmers are exploited, either absolutely in that buyers
have the market power to push down prices paid,
or relatively in that most of the additional value
created in the chain is captured by retailers and
large wholesalers, and not by farmers — even when
the last have to meet higher standards. In similar
vein, there are fears that small farmers may lose
autonomy as they become more closely integrated
into the chains.
Evidence is partial: much of the argument relies
on assumptions, either that modernisation must
lead to gains or that globalisation expressed in the
emerging agricultural value chains will treat the
small, the weak and poor unfairly. More evidence,
with adequate recognition of the need for careful
controls when comparisons are made, is needed.
Can value chains for staples be upgraded to the
advantage of farmers?
Much of the interest in value chains has looked
at how smallholders can be linked to chains for
high-value produce which have seen the most
changes, not in chains for staple foods. Three ideas
may explain the lack of attention to supply chains
for staples.
One, some question how competitive small-scale
farmers, especially in Africa, can be for staples. In
the production of some cash crops African smallholders have advantages in access to near-ideal
agro-ecological conditions that produce high yields
or high-quality produce, as seen for tea and coffee.
Small farms also have advantages in crops that
require intensive use of labour, since mechanisation is costly, difficult or results in a lower-quality
product, as applies with cotton (Poulton et al.,
2006). When it comes to producing staples, African
smallholders suffer from high costs of capital and
transport, and from failings in rural markets that
limit their access to inputs and the finance to buy
them in sufficient quantity. This is why along the
coasts of Africa local production often struggles to
compete with imported grains.
Two, since staples are less differentiated by quality,
and many domestic consumers look primarily at
cost before quality, then it may difficult to recoup
investments in supply chains for staples.
Three, some evidence suggests that margins in
staples value chains are quite low (Fafchamps et al.,
2003), suggesting that it may be difficult to improve
on current arrangements.
But this may be pessimistic. Linking Local Learners
is a programme started by Pride Africa to create
new supply chains that links agents in the field
with produce buyers in the main cities of East
Africa, using mobile phones and computers. This
potentially allows more effective arbitrage, with
the buyer communicating more directly with producers their requirements and hence cutting out
intermediaries. The programme has been running
since 2008 with promising results to date (Lightfoot
& Scheuermeier, 2012).
47
POLICIES FOR AGRICULTURAL DEVELOPMENT: CONSENSUS VS. DEBATE AND UNCERTAINTY
How can acceptable standards be set and maintained in agricultural value chains?
Concerns arise that in a globalised world competing supply chains will be tempted to cut costs to
gain advantage, and that they may do so by driving
down the costs of labour, by exploiting the environment and by avoiding taxes — thereby creating a
‘race to the bottom’. To this may be added concerns
over corruption and the appropriation of land and
water, as seen in current concerns over land deals.
So the question arises of how to prevent this, in
other words how to establish minimum standards
for treatment of labour, environmental sustainability and of contribution to the public domain.
Complete answers have yet to be found, but at least
three lines of action seek to ensure that private enterprise acts within the limits that society expects.
One is that individual developing countries set
standards in law, or in strong regulations and codes
of conduct that firms will be expected to follow.
Another is that OECD countries set criteria for
imports from developing countries that are linked
to incentives for importers. For example, the EU Renewable Energy Directive sets targets for renewable
fuels that apply to biofuels: if imported biofuel is to
contribute to the target, then it must be shown to
have been produced in ways that respect environmental and social standards.
A third approach is thorugh voluntary, private
initiatives whereby companies active in a particular
value chain form voluntary roundtables to agree
standards and to certify that that particular firms
are complying with them. This is the approach
adopted by the initiatives such as the Roundtable
on Sustainable Palm Oil (RSPO), the Roundtable
on Responsible Soy (RTRS) and Bonsucro (formerly
Better Sugarcane Initiative). Voluntary certification
has proved a practical and cost-effective way of
delivering credible assurance that products come
from sustainably managed sources even when
supply chains are long and complex, as applies in
the forest sector.
Competitiveness and value chains: policy issues
In some parts of the developing world the emergence of new supply chains has been rapid with
potentially strong impacts on the livelihoods of
farmers and above all small-scale farmers. Varying
degrees of certainty attach to the evidence pre-
48
sented above in relation to five principal questions.
Much of what takes place is specific to particular
crops, ecosystems, and pre-existing agricultural
structures above all land tenure. Hence patterns are
likely to be diverse: understanding changes, the implications to small and poor farmers, and devising
policy options will thus require detailed analysis of
cases.
But at least one general point is clear: the fate of
smallholders depends in large part on the ability
to innovate institutionally so as to allow at least
some small farms to overcome increased transactions costs from demanding standards, and to take
advantage of the emerging supply chains. Forms of
contracting and farmer co-operation will be central
to such institutional innovation.
While some contracting will take place by private
initiative, and some farmers will themselves form
associations, it is likely that in many cases additional efforts may be needed by some broker to help
organise grouping, to bring potential partners to
meet supplier farmers, to help with information,
and to facilitate negotiations. Some NGOs have long
experience of this, such as TechnoServe and SNV.
Donors can work with and through such NGOs
to invest in forming better linkages. Government
agencies may play a similar role, although this
probably needs to be through special units if they
are to have the flexibility of operations that regular
line ministries rarely have. Challenge funds may
be another way to encourage and prime private
initiatives: funds to which enterprises can apply for
funds to underwrite innovative and risky ventures.
A final reflection: the attraction of high value
chains with their increasingly sophisticated logistics should not distract from the reality that the
overwhelming amount of produce from smallholders passes through largely informal channels. Here
the needs for improvement are often quite basic:
better roads that are passable at harvest time, for
example; more local storage (and perhaps warehouse receipts); and so on (Vorley et al., 2012).
AGRICULTURAL DEVELOPMENT POLICY: A CONTEMPORARY AGENDA
Stabilising international markets
Background and introduction
Between 2007 and mid-2008 world wheat and
maize prices more than doubled, while rice prices
rose threefold. This unexpected shock, the strongest price spike seen since 1973/74, led to intense
interest in what had happened, and how international markets could be stabilised. The result has
been striking differences in views and proposals.
Different observers emphasise different factors
among those commonly held to have caused
the crisis, including drought among some major exporters, low global food stocks, increased
production of biofuel crops, the rising cost of
energy and agrochemicals, and the impacts of
speculation in agricultural commodities markets.
Higher food import costs are estimated to have
brought hunger, malnutrition and poverty to an
additional 100 million people (World Bank, 2008).
These rapid price increases prompted emergency
responses at international level, for example from
the World Food Programme and NGOs, as well as
from International Financial Institutions (IFIs) and
both bilateral and multilateral aid programmes.
These included the provision of food and funds to
strengthen safety nets and reduce consumption
deficits, but also the provision of seeds and fertiliser
to boost production.
The crisis also prompted reactions from many
developing country governments. Examples included increases in existing safety net provisions
for the vulnerable; the release of existing buffer
stocks; emergency purchase and redistribution
of food crops; efforts to import grain and sell at
subsidised prices; and bans on the export of food.
Of 81 developing countries surveyed by the FAO, 43
reduced import taxes and 25 either banned exports
or increased taxes on them. Forty-five developing
countries implemented measures to provide relief
to consumers in the face of greatly increased food
prices (G20, 2011; para 37). In some cases, trade protection almost certainly exacerbated instability on
international markets, harming countries that did
keep their borders open.
Differing interpretations of the problem have led
to different recommendations. Four sets of interpretations are presented below: first, the G20/G8
view which largely emphasises continuing reliance
on market mechanisms; second, views generated
largely within UN agencies and fora with stronger
emphasis on the limitations of markets and on
the need for intervention by the state; third, views
expressed by NGOs such as Oxfam focusing on
fairness and justice in access to food, and finally a
set of views which highlight the conflicts – potential and real – among different agencies and the gap
between rhetoric and reality.
Differing views and policy recommendations
Views from the G20
In an OECD publication prepared for the G20,
Abbott (OECD, 2012, pp. 109-168) anticipated a
return to stable, low international prices in major
foods, such as applied between 1998 and 2005s. In
most countries in most years, the main sources of
price instability (such as the size of harvest) will be
domestic. The solutions then lie in liberalised trade
so that trade can be used to stabilise supplies, hedging in futures markets, crop insurance, as well as
promoting efficient agriculture. Significant public
interventions in markets, or in trade, are neither
necessary nor desirable.
This view largely underpins the G20 recommendations of 201126 for:
(i) the promotion of a productive, efficient agriculture
in developing countries, requiring investment in
public goods, efforts to reduce market failure, and
a reversal of recent declines in the share of public
spending on agriculture;
(ii) steps to reduce measures within OECD countries
which distort trade, including a reduction in import
tariffs, export subsidies and other support which
mean that transfers from government make up
some 22% of farmers’ gross receipts in these countries27;
(iii) measures to reduce policy conflict between the
use of crops for fuel and for food, with some easing
of targets in the USA and EU for bioethanol and
biodiesel production is needed. Currently these
must be met even when the crops they rely on are
in short supply, exacerbating the tight markets and
higher prices faced by consumers requiring these
crops for food;
26 These correspond also largely with the G8 (2009) L’Aquila statement
27 These have also been partly to blame for import surges in developing
countries, which have proven de-stabilising to local production efforts.
A FAO survey of 102 countries (cited in IFAD, 2011) indicated that they
had undergone 7,000 surges in a 23-year period. Many other factors can
also cause these, such as currency fluctuations, elimination of support
to a sector, shortfalls in domestic production, and food aid, but the loss
of markets for developing countries can be dramatic. For example, in
Burkina Faso and Senegal very large increases in tomato paste imports in
the 1990s (much of it from the European Union) led to 50% declines in
local production; in Chile, a three-fold increase in vegetable oils resulted
in a 50% decline in local production; in Jamaica a doubling of imports
resulted in a two-third reduction in local production.
49
POLICIES FOR AGRICULTURAL DEVELOPMENT: CONSENSUS VS. DEBATE AND UNCERTAINTY
(iv) the establishment of small, strategically positioned emergency food resources under the WFP
(although it is recognised that these will be difficult
to manage), and the promotion of financial instruments (such as forward purchasing) so that WFP
and other non-profit agencies can respond more
fully to emergencies;
(v) support for the World Bank’s Global World Food
Crisis Response Programme and to the IMF’s concessional lending to developing countries for shortterm and emergency support;
(vi) measures for the management of volatility in the
long run, including new forms of crop insurance
based on weather indices, and warehouse receipts
for those selling surplus grain; and
(vii) the establishment of an international Agricultural Market Information System.
The UN Agencies’ view
The views contained in various reports by UN
Agencies and fora (e.g. WFP, 2009; IFAD, 2011; CFS,
2011; FAO, 2011a) broadly coincide with those of
the G20 and G8, but with subtle differences. More
emphasis is put on public investment in promoting
production of food in developing countries, and
in public management of food stocks so as to be
prepared for price spikes; with less emphasis on
international trade as a means of accessing food, or
on insurance to compensate for losses.
They see the 2007/08 price spike as the first of
many, more frequent, spikes against a rising overall
trend in prices. Against this background, CFS (2011)
argued that periodic food crises (1950s, 1970s, and
2000s) have followed periods of low agricultural
investment, after which a price spike then triggers
a renewed round of higher investment. The same
report believes rising prices may result from increasing shortage of resources (water, suitable land),
so signalling the end of a long period of cheap food
and increasing the likelihood of spikes.
On the controversial question of speculation in
agricultural commodity markets, WFP (2009)
weighs the varying evidence to conclude that speculation probably did not force prices up in 2007/08.
CFS (2011) also recognises that the evidence of
speculation is inconclusive, but notes risks of the
formation of price bubbles, and of the exclusion
of genuine commercial buyers from commodities
markets who cannot compete with speculators.
FAO therefore recommends greater transparency
in transactions and tighter regulation, at least as a
precautionary measure.
NGO views
NGOs also have their own views on the causes of
the 2007/08 price spike. Oxfam’s Growing a Better
Future report (2011) sets out starkly the inequities it
perceives: while annual subsidies to OECD farmers amount to almost US$250bn, with a further
US$20bn of subsidies to biofuel, only US$10bn goes
to official development assistance to agriculture
(Oxfam, 2011, fig. 24). The result is a food system
biased against developing countries so that they
bear the brunt of price spikes. The report identifies
three necessary steps to prevent food price spikes in
future and to work toward ‘food justice’:
■■ a ‘new global governance’28 (p. 5) must make the
reduction of hunger a top priority for governments, supported by investment in jobs, climate
adaptation and disaster risk reduction. Trade,
food aid, financial markets and finance for climate change all need revised governance at the
international level;
■■ future agriculture should be based on smallholder farming in developing countries and less
on supporting production in the North; and,
■■ a new ecological future must mobilise investments, shift the behaviour of businesses and
consumers and reach new global agreements for
the equitable distribution of scarce resources.
28 Details of how such governance will be implemented are not provided
50
AGRICULTURAL DEVELOPMENT POLICY: A CONTEMPORARY AGENDA
Oxfam believes that markets will not work adequately until the behaviour and power of large
agro-industrial corporations are tamed. In the
meantime, international markets for food are not
to be relied upon to meet food shortages: biofuel29
targets will work in favour of industrial farming but
against the interests of low-income producers and
consumers, and ‘land-grabbing’ by corporations in
Africa and elsewhere will continue. Savings from
reducing food wastage in the North should be used
to help consumers in the South, while reduced subsidies for OECD agriculture should release funds to
support small farmers in the South.30
Other views
Wise and Murphy (2012) see in the 2007/08 price
spike a paradigm shift, caused by the deepening
integration of agricultural, energy and financial
markets in a resource-constrained world made
more vulnerable by climate change. They argue
that powerful multinational firms dominate these
markets, benefit from current policies, while heavily influencing national and global policies. Their
influence leaves international institutions promoting market-friendly reforms but reluctant to impose
the concomitant regulations required to ensure
well-functioning food and agricultural markets.
They believe that G20/G8 responses have been lukewarm, citing lack of urgency on the funding side,
since only US$6.1 billion of the G8’s pledged US$22
billion over three years represents new money,
pledges that were threatened by cutbacks owing to
austerity measures. They also query the seriousness
of G20 statements concerning reduction of support
to OECD farmers.31
They recommend that the weaknesses of international markets be addressed and renewed attention
be given to agricultural development with priority
to the needs of small-scale farmers and women, as
well as to environmental issues, including climate
change. They worry that G20/G8 setting of production targets at the global level encourages an expansion in industrial agriculture and the consolidation
of land holdings, including land grabs, and ignores
environmental constraints and equity. They call
for less biofuel production, limiting speculation on
commodity markets to guard against future price
surges, and determined measures to prevent land
grabs by “financial speculation and land-banking by
sovereign wealth funds.”
Commenting on both the UN Agencies’ and G20/
G8 recommendations, Wise and Murphy (2012) see
reactions to the 2007/08 food crisis as marking an
important departure from liberalisation which had
underpinned the economic reforms of the 1980s
onwards. Liberalised markets have failed to deliver
food security, leading to fresh recognition of the role
of the state, not just in facilitating and regulating
markets, but also in ‘country-led’ agricultural development programmes, and in providing and prioritising public investment.
29 Oxfam argues that carbon emissions are better controlled by reduced
clearing of forest than by promoting ‘bloated biofuel industries’ (p. 7).
30 It is not clear how savings from food wastage will be transferred to
producers and consumers in the South.
31 They also question the leadership of the G20 on food security, which
has limited reforms proposed elsewhere in the international system by
the UN Agencies. The UN Committee on World Food Security (CFS),
established in 1974, is formally recognised as the appropriate body to
co-ordinate the global response to food crises, because of its mandate
and its inclusive, multi-stakeholder structure. Yet in practice the G20 has
systematically constrained the reform agenda.
51
POLICIES FOR AGRICULTURAL DEVELOPMENT: CONSENSUS VS. DEBATE AND UNCERTAINTY
Conclusions
By 2015 radical proposals for increased public
stocks and restrictions on trading on commodity
markets had been resisted. International prices
have come down considerably, almost to the levels
in real terms seen before the spike, owing in large
part to a strong increase in cereals production by
farmers, not least in the developing world. Prices
have also become less volatile since 2012. It seems
that actions to encourage supply response have
worked and that further intervention in markets
was probably not necessary.
Getting rural markets, and especially those for
inputs and finance, to work is central to developing
smallholder agriculture. If that cannot be done,
smallholders will be disadvantaged, unable to
invest and innovate fully; thereby stymieing any
hopes for broad-based agricultural development
that strongly reduces rural poverty.
Remedying current failings may require renewed
active public intervention through marketing
boards, but given the likely costs, and the fear that
this will inhibit the development of private providers of inputs, credit and services to farmers, this
option is unattractive.
More promising are initiatives to develop innovations in institutions to overcome market failings.
These usually involve closer links from smallholders to firms in the agricultural supply chains, either
individually as contracted growers or as associations grouping smallholders for economies of
scale in transactions with larger firms. Many such
initiatives currently exist: the challenge is to learn
from them, and then replicate successful models
more widely.
After the shock of the price spike for cereals on
world markets, much attention was paid to the
functioning of global markets. Radical proposals
for public intervention in markets were set aside.
Instead this shock has led to renewed interest in
agriculture, with more public investment. To judge
by the strong supply response seen since 2008, these
investments have probably paid off. With the focus
no longer on international markets, more attention
can be directed to improving the functioning of
rural markets within developing countries.
→ Further reading:
On rural markets:
Poulton, C., Kydd, J., and Dorward A., 2006, ‘Overcoming Market Constraints on Pro-Poor Agricultural
Growth in Sub-Saharan Africa’, Development Policy
Review, 24(3): 243–277
Udry, Christopher, 2010, The Economics of Agriculture in Africa: Notes Toward a Research Program,
Department of Economics, Yale University, April, 2010,
Unpublished MS. Forthcoming African Journal of Agricultural & Resource Economics: http://www.econ.yale.
edu/~cru2//papers.html
On agricultural supply chains:
Campbell, Ruth, 2010, ‘Implementation best practices
for value chain development projects’, MicroREPORT
#167, September 2010, Washington DC: USAID
Shepherd, Andrew W., 2007, Approaches to linking
producers to markets. A review of experiences to date,
Agricultural Management, Marketing & Finance
Occasional Paper 13, Rome: Food And Agriculture
Organization of the United Nations
Vorley, Bill & Felicity Proctor, 2008, Inclusive Business
in Agrifood Markets: Evidence and Action. A report
based on proceedings of an international conference
held in Beijing, March 5–6, 2008, Regoverning Markets.
Small-scale producers in modern agrifood markets
Vorley, Bill, Ethel del Pozo-Vergnes & Anna Barnett,
2012, Small producer agency in the globalised market:
Making choices in a changing world, IIED, London;
HIVOS, The Hague
Woodhill, Jim, Joost Guijt, Lucia Wegner & Monika
Sopov, 2012, From islands of success to seas of change:
a report on scaling inclusive agri-food markets, Centre
for Development Innovation, Wageningen UR (University & Research Centre). Wageningen NL
On stabilising international markets:
Abbott, P C (2012) Stabilisation Policies in Developing
Countries after the 2007-8 Food Crisis. Chapter 4 in
OECD (2012)
CFS (2011) UN Committee on World Food Security.
Report of the high-level panel on nutrition and food
security: Price volatility and food security Rome: FAO
G20 (2011) Report on price volatility in food and agricultural markets: policy responses
Oxfam (2011) Growing a better future. Food justice in a
resource-constrained world. Oxford:Oxfam
Wise, T.A. and Murphy S, 2012. Resolving the Food
Crisis: Assessing Global Policy Reforms Since 2007,
Medford, MA: Global Development and Environment
Institute and Institute for Agriculture and Trade Policy
52
AGRICULTURAL DEVELOPMENT POLICY: A CONTEMPORARY AGENDA
€$£
AGRICULTURAL TECHNOLOGY
Background and introduction
For millennia, farmers’ selection of better-performing plant varieties and animal species
determined how much food could be produced, and how large a human population
could be supported. The institutionalisation of agricultural research in the last 150
years increased the pace of innovation. Major advances in developing countries since
the 1960s undoubtedly prevented famine. Innovation has become even more rapid with
advances in genetic technology. Genetic ‘markers’ have permitted much faster progress
in conventional plant breeding, but also the creation of Genetically Modified Organisms
(GMOs – also known as transgenics). These products, and many genetic processes, are patentable, and private
companies have come to dominate this branch of research.
→
SUMMARY:
Improvements to agricultural technology have been a powerful driver of growth, however not without
debate. Some argue that it will be necessary to use high-yield varieties, manufactured and other external
inputs and transgenic varieties (especially in areas currently marginal for farming) to achieve sufficient
production for future populations. Others insist that low external input (LEI) approaches will be needed if farming is to stay within environmental limits and that further research of the potential risks of
transgenics is needed.
In some farming systems there may well be scope for combining approaches from biotechnology and
agro-ecology to achieve complementary effects. For example, better management of soil and water will
make high-yielding varieties and fertiliser more effective. Much will depend on the specific needs of
particular farming systems in their localities; however, a broad range of technical options is likely to be
needed in a future world of changing and more uncertain climate (→see Meeting the challenges of environmental sustainability and climate change, p. 64).
The pace, opportunities, and concerns surrounding
these new forms of research differ substantially
from what has gone before. This, against a background of rapidly rising population and increased
pressure on natural resources and the environment,
creates new policy challenges.
ed cities (IFPRI, 2011).
Strongly held values concerning technology
options have also emerged. These started with concerns over the environmental impact of pesticides
in the 1960s, and more recently include positions
on the environment more broadly, climate change,
energy, transgenics, patenting, and the respective
roles of high-yielding versus low external input
approaches.
Three, technology will have to be safer, more humane, resource-sparing and less polluting.
Factors influencing the choice of technology
Developing countries face four sets of factors in
their future technology choices. One, by 2050 global population will rise to about nine billion people
from 7.3 billion in 2011. This, plus higher incomes,
will increase the demand for food by 70–100% by
2050. Technologies will have to be developed to allow 0.3bn fewer rural people to feed much expand-
Two, technologies will have to mitigate some of the
effects of likely climate change, including changes
in rainfall, temperature and sea level, implying
changed incidence of pests and diseases.
Four, technology will need to meet the expectations
that people have, with some conflict between those
seeing it as instrumental in responding to specific
imperatives, and others seeing technical choices
as also being central to major societal decisions on
welfare and equity.
A challenge for the future is to assess the likely
trade-offs involved in new technology and identify
what needs to be done to minimise any potential
negatives.
53
POLICIES FOR AGRICULTURAL DEVELOPMENT: CONSENSUS VS. DEBATE AND UNCERTAINTY
The Green Revolution: for and against
This term was first used to describe the high-yielding rice and wheat varieties resulting from research
funded by the Rockefeller and Ford foundations in
the 1960s. These were fertiliser-responsive, with
short, stiff straw capable of supporting the heavier
heads. Similar high-yielding varieties (HYVs) have
since been developed for other major food crops, including sorghum, millet, maize, cassava and beans,
principally under the Future Harvest Centres that
make up the CGIAR Consortium of International
Agricultural Research Centres.
The Green Revolution has boosted production of
cereals. By 1970, about 20% of the wheat area and
30% of the rice area in Asia were planted to HYVs,
rising to around 70% by 1990. Average yields of rice
and wheat virtually doubled. Instead of predicted
famine, cereal and calorie availability per person
increased by nearly 30% between 1970 and 1995,
and wheat and rice became cheaper, making agriculture the engine of significant poverty reduction
in Asia (Hazell, 2009). Latin America also experienced significant gains, but in sub-Saharan Africa,
poor infrastructure, high transport costs, limited
scope for irrigation, and adverse pricing policies
have caused results to be limited.
Against production gains, can be set environmental
degradation, higher income inequality, and inequitable asset distribution that have all been associated
with the Green Revolution.
Environmental damage: Apart from the loss of biodiversity following the adoption of HYVs, inappropriate use of fertilisers and pesticides has polluted
waterways, poisoned agricultural workers, and
killed beneficial insects and wildlife. Poor irrigation
has led to salt build-up in some areas and, in others,
a lowering of aquifers which may take decades to
replenish. Policy reforms and improved practices
and technologies, such as pest-resistant varieties,
biological pest control, precision farming and crop
diversification are helping to rectify these problems. On the other hand, Asian cereal production
doubled between 1970 and 1995, yet land under
cereals increased by only 4%, thereby sparing forest
and environmentally fragile lands from the plough.
54
Inequalities attributable to farm size: Large farms
were the main adopters because of their better
access to water, fertilisers, seeds and credit. Small
farmers were harmed where landlords tried to increase rents or where mechanisation was promoted
unnecessarily. Small farmers did eventually adopt
HYVs and enjoyed many of the benefits.
Inequalities attributable to resource endowments:
The Green Revolution spread only in irrigated and
high-potential rainfed areas, and many villages or
regions without access to sufficient water were left
out, though these benefited from job opportunities
and cheaper food.
Lessons from the Green Revolution indicate the
conditions that must be in place for future technology change to maximise positives and minimise negatives: (1) technology should ideally be
scale-neutral; (2) land ownership and tenancy
rights must be secure; (3) input, credit, and product
markets need to be efficient; and (4) policies must
encourage equity (no subsidies on mechanisation)
and sustainability (strict controls on pumping).
These conditions go well beyond the technology
itself, and have to be addressed through wider government policy.
AGRICULTURAL DEVELOPMENT POLICY: A CONTEMPORARY AGENDA
Low external input technologies
Many of those seeking societal change that goes
beyond increased yields, to embrace for example
social capital, equity and sustainability, favour low
external input technologies (LEIT). Tripp (2006)
draws on an extensive review of literature and on
the results of three field studies that examined
farmers’ practices in areas where major, successful
LEIT projects had been carried out: soil and water
conservation and fertility management in Honduras; micro-catchment management in Kenya, and
Integrated Pest Management in Sri Lanka. Four
questions are addressed, as follows:
Who uses the technology? Far from being small
farmers, in all three field studies, farmers taking up
LEIT were predominantly from the higher-income
strata. Many poorer rural households earn a minority of their incomes from agricultural activities and
have neither the labour to devote to careful crop
management nor the time to learn new techniques.
How much labour does LEIT use? Many technologies require too much labour to warrant farmer
interest (e.g. alley cropping in 1980s Africa). But
for some, high initial labour requirements are an
investment which allows later labour inputs to be
reduced, as with farmers in Sri Lanka taking on
Integrated Pest Management. Nor does this demonstrate that LEIT will appeal more to households
having only family labour: in all three country
cases, more than half the labour requirement was
hired for key tasks.
How do LEIT technologies spread? LEIT is supposed to be a product of local innovation relying on
local resources, and so should spread easily among
neighbouring farmers. However, evidence of
uptake of the technologies by non-project farmers
was very limited. LEIT did not generally lower the
use of external inputs. In fact, it appears to provide
an environment in which a profitable fertiliser
response is more assured, and sample farmers were
more likely to use it.
Does LEIT help to build human and social capital?
The evidence from the long-term consequences
of LEIT projects shows little evidence of this. Even
with the emphasis on experimentation in Honduras, only one-fifth of the participants experimented
post-project.
There seems to be little evidence that LEIT and
associated participatory processes so far can form
the basis for robust farmer organisation, or, more
generally, for rural poverty reduction. Instead, a
range of technologies should be promoted, based
on: a better understanding of what (locally) influences the adoption of technologies; improving
information to farmers on technologies; and, above
all, strengthening farmers’ organisations to make
demands on technology systems.
On the other hand, LEIT have to date received less
attention from public agricultural research than
higher input technologies, and almost no attention
from private research. As seems likely in the future
that the cost of external inputs based on scarcer
fossil fuels and minerals rises, and as the need to
avoid pollution similarly increases, it may be that
more research seeks lower external input technologies than in the past.
Towards ‘greening’ of agriculture?
The spread of agriculture has led to clearance of
forest and wetland, soil erosion and degradation.
Certain types of intensification have resulted in
salination and drawdown of groundwater, pollution from chemical runoff, and loss of biodiversity. Policies are needed to redress such harm, to
meet the challenges of a changing climate, and to
mitigate agriculture’s considerable contribution to
global warming.
Improved methods exist, but need local adaptation,
and getting farmers to adopt them will be challenging. Policy options for conservation and climate
adaptation and mitigation include regulation,
incentives, information and education.
The following are on the policy agenda: stiffer
regulation on conversion of valued habitats; tighter
restrictions on groundwater pumping; incentives
to internalise external costs and benefits, including
taxes on greenhouse gas emissions and charges for
water; but also, payments for environment services
such as conservation of forest, biodiversity and for
carbon capture, and tax breaks on the development
of renewable energy sources. In some cases, there
may be scope for markets in carbon and water,
although this can easily be overplayed.
55
POLICIES FOR AGRICULTURAL DEVELOPMENT: CONSENSUS VS. DEBATE AND UNCERTAINTY
Improved agricultural practices can help, such as
root zone irrigation, optimal timing and placing of
fertiliser, conservation tillage to minimise soil disturbance and agro-forestry to capture carbon and
recycle nutrients. But major policy steps will also be
needed, for instance to reduce unsustainable depletion of groundwater in some parts of Asia.
However, new policy will not be adequately defined
by applying blueprints: long-term experience with
agriculture suggests that promoting learning and
adaptation is the key to sustainability. On farms the
world over, techniques are modified, often by incremental changes. These arise partly from scientific
and industrial innovations that open new possibilities; partly from responses to changes in local
soil conditions and climate; but also in reaction
to changing availability of labour, access to credit, and demand from buyers in the supply chain.
Consequently few farmers today farm the way their
grandparents did. Reviewing a century or more of
farming in Victoria, Australia — ‘a brown land of
long dry spells’ — Cary (1992) shows how farmers
have learned from experience, as have the agricultural researchers and advisors who work with
them, so that recommended ways to cultivate have
changed substantially several times. He comments
that “we are never likely to have a single management system for cropping that endures forever”.
GMOs and the future
Genetic modification occurs naturally as species
evolve, and, through varietal selection, is an approach used by farmers to improve their crops and
livestock since the dawn of agriculture. Scientific advances allow genetic manipulation within
species, but also the transfer of genes across species
– producing ‘transgenics’ or genetically modified
organisms (GMOs). Transgenics are patentable,
causing private sector crop research investment to
outstrip public research and development.
The attraction of GMOs lies in their capacity for
higher yields, drought tolerance or resistance to
pests and diseases, but many see in them as dangers to health and to the environment through, for
example, their escape into wild relatives. Nevertheless, around 10% of global crop areas were under
transgenics by 2010, principally in the USA and
Latin America.
The only transgenic widely adopted by smallholders in developing countries has been Bt32 cotton for
insect resistance, with 7.3 million hectares planted
in 2006, mainly in India and China. Yields were
higher and pesticide use lower than with conventional varieties, though some farmers in India
initially experienced a loss (associated with highly-publicised farmer suicides), largely because of the
use of poorly adapted varieties.
Transgenic food crops have advanced more slowly,
but almost 50% of the white maize grown in South
Africa (mainly by large-scale farmers) is now under
transgenics, and China allows cultivation and use
of publicly developed transgenic vegetables. Transgenic rice, eggplant, mustard, cassava, banana,
sweet potato, lentil, and lupin have been approved
for field-testing in one or more countries. Types of
‘Golden’ rice, with enhanced beta carotene content for vitamin A, but also high pest and disease
resistance, and salt and flood tolerance are under
advanced field testing in China.
Africa has benefited the least from genetic modification, in part because locally important food crops
such as sorghum and cassava have attracted little
attention from commercial biotechnology firms.
However, it has the potential to reduce the impact
of intractable problems such as Striga (a devastating
parasitic weed).
Apart from lack of commercial interest, four other
reasons contribute to slow progress in developing
transgenic food staples. Risks – continuing concerns about possible food safety and environmental
risks – have slowed release in many countries. More
evidence is needed, as are efforts to inform the public, so that perceptions of risks are not excessively
negative. Weak regulatory capacity slows approval
processes and encourages unofficial introduction
of unauthorised varieties, and so can fuel public
distrust. Limited access to patented technologies
due to the cost of accessing materials and processes now makes them unaffordable for many in the
public sector. Added to this is a perception that
farmer-selected varieties should not be appropriated and patented commercially. Complexity of trade
in transgenics: the costs of segregating the storage
32 Cotton genetically engineered to produce Bacillus thuringiensis toxins
which are effective against certain insect pests.
56
AGRICULTURAL DEVELOPMENT POLICY: A CONTEMPORARY AGENDA
and shipments of transgenics from conventional
varieties, and obtaining shipping clearance for
transgenics, are likely to slow their uptake.
Development agencies should consider funding
the development of safe transgenics with pro-poor
traits and underwriting the high initial costs for
their testing and release.
Technology generation and dissemination: policy
issues and conclusions
Given the projected increases in global population
and demand for food, higher will be needed for the
future. Advances in genetics will speed up plant
and livestock breeding, and, although regulatory processes need to be strengthened, and there
remains a pressing need for further evidence on
potential risks, it seems likely that transgenics will
have a role to play, spreading to less-favoured areas
according to the pace of publicly funded research.
→ Further reading:
Evenson, Robert E. & Douglas Gollin, 2003, ‘Assessing
the Impact of the Green Revolution, 1960 to 2000’,
Science 300 (2): 758–762
Holmén, Hans, 2003, ‘A green revolution for Africa –
does it need to be so controversial?’, Working Paper
No. 4 / 2003, Torino, Italy: International Centre For
Economic Research
Pretty, J., 2008, ‘Agricultural sustainability: concepts,
principles and evidence’, Philosophical Transactions
of the Royal Society B: Biological Sciences, 363(1491),
447–465
At the same time demands for environmentally
sustainable agriculture that economises on the use
of external inputs to avoid exacerbating resource
scarcity and that avoids pollution, is likely to see
development of lower external input agriculture
using principles of agro-ecology to sustain and
enhance yields.
Although some may object on ecological principles,
in some farming systems there may well be scope
for combining approaches from biotechnology and
agro-ecology to achieve complementary effects. For
example, better management of soil and water will
make high-yielding varieties and fertiliser more
effective. Much will depend on the specific needs
of particular farming systems in their localities.
A broad range of technical options is likely to be
needed in a future world of changing and more
uncertain climate.
57
POLICIES FOR AGRICULTURAL DEVELOPMENT: CONSENSUS VS. DEBATE AND UNCERTAINTY
GENDER AND AGRICULTURAL DEVELOPMENT
Background and introduction
Interest in gender and agricultural development is longstanding, dating back at least as
far as 1970 when Esther Boserup published ‘Woman’s Role in Economic Development’. Subsequently interest has grown, marked by a series of UN World Conferences on Women –
starting in Mexico in 1975, then Copenhagen 1980, Nairobi 1985 and Beijing 1995 – since
when there have been meetings every five years to review progress on the agreed Beijing
Declaration and the Platform for Action. When in 2000 the Millennium Development
Goals were set for 2015, the third Goal was “to promote gender equality and empower
women’, with the target to ‘Eliminate gender disparity in primary and secondary education, preferably by
2005, and in all levels of education, no later than 2015.”33
→
SUMMARY:
Many women in developing countries engage in
agriculture and food supply chains as farmers, labourers, traders and processors. Women, however, are often at a disadvantage compared to men:
typically having less access to land and water,
less education and formal skills, less time to farm
owing to domestic duties, fewer contacts with
the world beyond the village, and less influence
over use of household resources. Consequently
women are likely to produce less from their plots
and livestock, not because they are worse farmers, but because they lack inputs and technical
knowledge.
Women may also be disadvantaged when dealing
with buyers in supply chains. They are often paid
Many women in developing countries are engaged
in agriculture — see Box 2.8 — and associated supply chains: tilling their own and household plots,
raising livestock, trading produce, or working as
labourers on farms, estates, packing sheds and processing plants. Their role and the policy questions
it raises have thus become increasingly important,
especially since the early 2000s when interest in
agricultural development, above all in Africa, has
revived.
33 Indicators for this target have been specified as:
• Ratio of girls to boys in primary, secondary and tertiary education
• Ratio of literate females to males 15–24 years old
• Share of women in wage employment in the non-agricultural sector
• Proportion of seats held by women in national parliament
They not only include indicators of education, but also desired
consequences of more female education.
58
less than men as farm labourers, offered lower
paid jobs and suffer worse treatment.
Closing gender gaps in agriculture requires:
strengthening women’s rights to land; giving
them better access to inputs, equipment, technical knowledge through appropriate extension,
and market information; raising their education
and skills; and providing care centres for children. Rural women also have a strong interest in
access to services such as education, health, water
and sanitation as well as improved living conditions.
Practical steps exist to address this gap, although
gender empowerment can be more elusive and
over-simplified gender analysis should be avoided.
AGRICULTURAL DEVELOPMENT POLICY: A CONTEMPORARY AGENDA
Box 2.8 Women’s contribution to agricultural production
It is common to read that women in developing countries, and especially in Africa, produce most of the
food. For example:
Women produce between 60 and 80 percent of the food in most developing countries and are responsible for half of the world’s food production. (FAO, 1997)
In truth, it is difficult to know how accurate these estimates are. Not only are reliable data lacking on
production from women’s plots; but also, and more importantly, much farm output results from joint
male and female effort, so that to attribute the share to one or other sex is difficult.
But getting the exact figure right perhaps does not matter: the point is that women are heavily engaged
in agriculture in many developing countries, as estimates of use of their labour indicate:
Of those women in the least developed countries who report being economically active, 79% of them
report agriculture as their primary economic activity. Overall, 48% of the economically active women in
the world report that their primary activity is agriculture. (Doss, 2011, drawing on FAOSTAT statistics)
As Doss (2011) argues, what matters is not so much to establish the precise female contribution to farming, as to understand the limitations they face as farmers and, indeed, to understand gender roles and
relations in agriculture.
Source: Doss, 2011
Most women as farmers differ from most men in
several significant aspects, since compared to men
often they have:
■■ Less access to land and water, while their rights
to such resources are often informal and less
secure than men’s rights, leaving most women
farmers more vulnerable to expropriation of
their land;
■■ Less education, lower levels of literacy and
numeracy, and sometimes less knowledge of
national languages than men;
■■ Fewer contacts with the world beyond the
village, in particular with input suppliers, banks
and other financial institutions, providers
of technical services, traders, processors and
retailers;
■■ Less influence on decisions over use of household labour, choice of crops on collective fields,
and spending of cash incomes. They are also
likely to have less access to farm inputs such as
manure and fertiliser, equipment, and draught
animal power that the household possesses; and,
■■ Less time to farm since most women are expected to clean, cook, fetch water and fuel, and care
for children.
The consequences are clear: where women farm on
their own account, they are disadvantaged in access
to land, inputs and labour. They are less likely to
obtain new technical ideas through formal channels of extension or input dealer advice, and are less
likely to have the literacy and numeracy that may
be needed to apply new techniques. Hence women are likely to produce less from their plots and
livestock, not because they are worse farmers, but
because they lack inputs and technical knowledge.
They may also be disadvantaged when dealing with
buyers in supply chains, especially the more formal
buyers found in the higher-value chains.
Moreover, women as farm labourers are often paid
less than men for the same work, or only offered
lower paid jobs while men take up positions as
skilled workers or supervisors. They may also suffer
worse treatment at work and may be more vulnerable to abuse.
In sum, women in agriculture are likely to earn less
than men do, either because their own production
is limited, or because they cannot sell into high-value chains, or because they are paid less as labourers.
59
POLICIES FOR AGRICULTURAL DEVELOPMENT: CONSENSUS VS. DEBATE AND UNCERTAINTY
countries in Africa, shows how women obtain between 17% (southern Nigeria) and 66% (Niger) less
than men from comparable plots.
This in itself would be cause for concern, but it
matters especially given women’s roles as mothers.
They are the prime feeders of children and have a
major influence on the nutrition of infants during
their early years. When women have more income
or have more say over the spending of household
income, they tend to spend disproportionately on
their children who consequently eat, grow and
develop better (see, for example, Alkire et al., 2012;
CGIAR, 2013).
Hence, if women had equal access to the means
to farm, yields on women’s plots should rise by
20% to 30% according to one estimate, an increase
sufficient to reduce the number of hungry people
worldwide by 150 million (USAID, 2012).
Closing this gender gap requires actions across
a wide range of fields, summarised in Table 2.10
(World Bank and ONE 2014). While some options
are relatively straightforward, given the political
will and associated funding, and hence have been
tested and proved, others are potential actions for
which tested models do not yet exist. Several of the
latter proposals concern providing women with
access to credit. As discussed in Section 2.3
(→see “Developing rural markets”, p. 42), failings in
rural markets are especially severe for financial
services, so that closing this gender gap requires
progress on a challenging agenda. It also shows,
however, that addressing some of these issues will
benefit men as well as women.
Key issues for women in agriculture
Closing gender gaps in rights to land and water,
livestock, access to inputs and credit, agricultural
extension
Studies consistently show how women are disadvantaged compared to men in access to natural
resources, inputs, finance and technical knowledge (Doss et al., 2013; FAO, 2011; World Bank and
ONE, 2014). The consequences are stark differences
in the productivity of fields managed by women
compared to those managed by men. For example,
emerging findings from the Integrated Surveys on
Agriculture (ISA) modules now recorded in Living
Standards Measurement Studies (LSMS) for six
FIGURE 2.9 GENDER GAPS IN AGRICULTURAL PRODUCTIVITY, AFTER ACCOUNTING FOR PLOT SIZE
AND REGIONS
Difference after accounting for plot size and regions
24%*
25%*
Ethiopia
Malawi
66%*
Niger
46%*
Nigeria North
17%
23%*
Nigeria South
Tanzania
33%*
Uganda
0
10
20
Source: World Bank and ONE, 2014, Figure 1
Note: * denotes statistical significance at the 1% level.
60
30
40
50
60
70
AGRICULTURAL DEVELOPMENT POLICY: A CONTEMPORARY AGENDA
TABLE 2.10 TEN POLICY PRIORITIES FOR NARROWING THE GENDER GAP IN AFRICAN AGRICULTURE
Key Driver
Policy Priority
Policy Option — untested, emerging options in italics
Land
1. S trengthen women’s land
rights.
Formalise land rights through registration to increase women’s tenure security.
Expand co-titling and individual titling for women.
Reform family and inheritance law to protect women’s rights.
Labour
Non-Labour
Inputs
2. I mprove women’s access to
hired labour.
Offer women farmers financing to hire farm labour.
3. Enhance women’s use of tools
and equipment that reduce the
amount of labour they require
on the farm.
Provide women farmers with financing or discounts for hiring
or purchasing machinery.
4. P
rovide community-based
child-care centres.
Provide community-based child-care centres.
5. Encourage women farmers to
use more, and higher-quality,
fertiliser.
Provide women farmers with financing or price discounts
aligned with their cash flow to encourage the purchase of
fertiliser.
Task agents with helping women farmers to find labour.
Certify small bags of fertiliser for use by women.
Information
6. Increase women’s use of improved seeds.
Provide flexible financing for seeds.
7. T
ailor extension services to
women’s needs, and leverage
social networks to spread
agricultural knowledge.
Train extension agents to target female farmers and be more
responsive to their agricultural information needs.
Help women better identify and obtain good-quality seed.
Bring agricultural training and advice to women’s doorsteps
through farmer field schools and mobile phone applications.
Identify female volunteer farm advisors to spread information
within women’s social networks.
Access to
Markets
Human Capital
8. P
romote women’s cultivation
of high-value/cash crops.
Promote women’s cultivation of high-value/cash crops.
9. F
acilitate women’s access to
and effective participation in
markets.
Provide market services through information and communications technologies (ICT).
10. R
aise education levels of
adult female farmers.
Raise education levels of adult female farmers.
Channel existing groups to access market opportunities.
Source: World Bank and ONE, 2014, Table 1
The same report argues for creating challenge
funds to pilot programmes to support women
farmers, as well as to collect data that breaks down
statistics by gender so that impacts can be more
readily measured.
61
POLICIES FOR AGRICULTURAL DEVELOPMENT: CONSENSUS VS. DEBATE AND UNCERTAINTY
The wider picture: living conditions for rural
women and empowerment
Agriculture is only one dimension affecting the
lives of rural women. Rural women have a strong
interest in access to services such as education,
health, water and sanitation and in their quality.
This is partly because most rural women lag behind
men in formal education, and partly because better
health in the family particularly benefits women as mothers and carers. Electricity and clean
stoves might be added, given their potential to save
time and improve living conditions for women
and girls as housekeepers. Indeed, a 2014 flagship
report from UN Women (2014), Gender Equality
& Sustainable Development, stresses that simple,
practical advances in access to water, sanitation,
electricity and clean stoves could make big differences to the lives of many rural women and girls.
Provision of better rural services is relatively
straightforward given political will and funds
because proven models exist. Since 1990 some
improvements have been seen. More children are
going to school, and the differences between girls
and boys have narrowed. For example, the ratio
of girls to boys enrolled in secondary school — an
important indicator of change, given that secondary schooling affects women’s marriage, health,
fertility and status — increased from 84% to 97%
from 1990 to 2012 across the developing world
(World Development Indicators, World Bank).
Access to safe water and to improved sanitation
has increased since 1990, although plenty remains
to be done before all have safe drinking water and
a decent toilet. As an overall measure of improved
living conditions and better health services, in
low-income countries the under-five mortality rate
has been cut from 166 per 1,000 live births to 1990
to 81 per 1,000 in 2012 (UN, 2014).
Whether such advances amount to significantly
greater empowerment is, however, more difficult to
determine, as Okali and Keats (2015) observe:
62
Although … some women, somewhere
might have benefitted from the changes identified, it is not possible to say
whether any progress identified now
will be sustainable, or, possibly more
important, ‘transformatory’ for women
and gender relations. … In searching for
evidence of ‘good practices’, ‘economic
empowerment’, or ‘successful interventions’, neither the terms nor the criteria
to assess them are straightforward.
(Okali and Keats, 2015)
Changes in relations within households are difficult
to observe. A Women’s Empowerment in Agriculture Index has been devised, but only recently
(piloted in 2011) and then only in selected regions
of three countries (Alkire et al., 2012). So neither
baselines nor trends exist.
Instrumentalist views of gender equity may obscure the goal of deeper change in gender relations:
…a privileging of instrumentalist meanings of empowerment associated with
efficiency and growth are crowding out
more socially transformative meanings
associated with rights and collective
action…
(Eyben and Napier-Moore, 2009)
AGRICULTURAL DEVELOPMENT POLICY: A CONTEMPORARY AGENDA
They may also divert effort away from political
mobilisation for change:
In contrast to indigenous notions of
empowerment that promised transformation through mobilization and collective action, this alien ‘empowerment’ is
individualist, instrumental, neo-liberal.
It peddles in gender myths that sustain
an image of the ‘good woman’ as the
deserving object of development assistance. (Cornwall and Anyidoho, 2010)
The dangers of too narrow a view of gender can be
seen in overly simplified gendered analysis where,
for example, programmes for gender equality target
female-headed households and unwittingly give
less attention to the many more rural women who
live in male-headed households. The idea of the
unitary household where members interact fairly
and selflessly has long been recognised as obscuring potential conflicts within the household (for
example, Hunt, 1991). But in this realisation lies the
opposite danger of assuming that joint ownership
and decision-making between men and women
will always privilege men and leave women at a
disadvantage. This, for example, has spawned the
notion that micro-credits for women will often be
captured by the men with whom they live, leaving
the women with debt and no benefit. Reality, of
course, is a great deal more varied (Kabeer, 2001). In
addition, an exclusive focus on women can overlook
the importance of changes in male roles and their
implications for gender relations (Chant, 2003).
Policy issues and conclusions
The disadvantages that women face as farmers are
both inefficient and unfair. The responses proposed
in Table 2.10 do not require dramatic changes in
gender relations: they are more a matter of taking
women seriously as farmers capable of raising their
productivity given appropriate support. Several of
the measures form part of the agenda of making
rural markets work better for smallholders (→see
“Rural transitions: when will small-scale farms
decline?”, p.37). Reducing the obstacles faced in
getting access to inputs, credit, technical knowledge and output markets benefits not just women
but also male farmers who lack resources, contacts
and capacity. Other measures, such as community
childcare, are specific to women. As is the practical
agenda put forward by UN Women for water, sanitation, electricity and clean stoves.
These practical steps include both straightforward
measures that require little more than political will
and funding (e.g. electrification) as well as challenges where finding replicable models will require
trials, with careful monitoring of the results — as
applies to overcoming failings in rural markets,
above all rural finance.
Debates over whether gender equality and empowerment are achieved by incremental measures
to improve women’s lives, or whether more direct
action is needed to transform gender relations,
remain intriguing but unresolved.
→ Further reading:
FAO, 2011, Women in agriculture. Closing the gender
gap for development, in The state of food and agriculture 2010/11., Rome: Food and Agriculture Organization of the United Nations
World Bank & ONE, 2014, Levelling the field. Improving
opportunities for women farmers in Africa, Washington DC: World Bank, and London: ONE
Quisumbing, A.R., Meinzen-Dick, R., Raney, T.L., Croppenstedt, A., Behrman, J.A. and Peterman, A. (2014)
(Eds), Gender in Agriculture: Closing the Knowledge
Gap, New York: Springer
63
POLICIES FOR AGRICULTURAL DEVELOPMENT: CONSENSUS VS. DEBATE AND UNCERTAINTY
MEETING THE CHALLENGES OF ENVIRONMENTAL SUSTAINABILITY AND CLIMATE CHANGE
Background: unsustainable agriculture and a changing climate
Remarkable success has been seen since the late 1960s in some parts of the developing
world, most notably Asia, in raising agricultural production ahead of population growth.
Yet this has been achieved at a cost to the environment. Intensive cultivation typical of the
Green Revolution has seen overuse of fertiliser and agrochemicals leading to polluting runoff into watercourses. Irrigation water has been overused and misused: the proliferation of
tubewells has drawn down groundwater levels, while some large-scale irrigation schemes
have suffered from salination owing to poor drainage. Monocultures of improved cereals,
using just a few specialised varieties of maize, rice and wheat, have reduced agricultural biodiversity.
→
SUMMARY:
Intensification of agriculture over the last fifty
more years may have raised production ahead of
population growth, but it has come at a cost to the
environment. Moreover, continuing greenhouse
gas emissions means that the climate is warming
and will continue to do so for most of this century.
Rising temperatures will also cause more extreme
and variable weather patterns, change incidence of
pests and diseases, and threaten low-lying coastal
lands due to sea level rises.
In some cases, it is in the interests of farmers to
adopt new practices to address the costs of environmental damage. In others, needed responses
raise trickier questions of collective action, externalities, and lengthy time horizons, made more
acute by uncertainty over processes that play out
in complex natural systems.
Although intensification of staples production in
Green Revolution areas may have limited land
expansion, agriculture has expanded in parts of
Southeast Asia with abundant tropical forest and in
much of Africa and Latin America at the expense
of valuable habitats such as tropical forest, peat
and wetlands. Reduced fallowing with inadequate
soil management has encouraged soil erosion and
degradation as nutrients are lost and soil structures
worsen (European Report on Development, 2012;
MEA, 2005; Rosegrant et al., 2007; TEEB, 2009; UN
ADB, 2012).
The effects of environmental harm caused by agriculture can be seen at three levels: those that affect
farming itself directly and in the short run; those
externalities that affect other sectors, in some cases
with processes that take time to feed through environmental systems; and those that deplete stocks of
resources for future use, see Table 2.11.
64
Given uncertainty, some advocate the precautionary principle, but others see this as unduly
limiting. Climate change poses special challenges
for agricultural policy. While technically agricultural emissions can be reduced, it is more difficult
to find ways to reward farmers for doing so, while
monitoring and verifying that they continue to
mitigate emissions.
‘Climate-smart’ agriculture in future may see
more diverse uses of landscapes not just for economic, but also for social and ecological benefits.
More research is needed on processes within both
local and global ecosystems. The many current
experiments undertaken by NGOs and farmers to change practices need documenting and
evaluating..Ways must also be found to monitor,
report and verify changed practices of small-scale
farmers so that incentives can be paid to them and
assistance be provided to those most vulnerable to
climate change.
Business as usual in our globally interconnected food system will not bring
us food security and environmental
sustainability. Several converging
threats — from climate change, population growth and unsustainable use
of resources — are steadily intensifying
pressure on humanity and world governments to transform the way food is
produced, distributed and consumed. –
Commission on Sustainable Agriculture
and Climate Change
(Beddington et al., 2011, p.3)
AGRICULTURAL DEVELOPMENT POLICY: A CONTEMPORARY AGENDA
TABLE 2.11 KEY ENVIRONMENTAL ISSUES IN AGRICULTURE
Effect on agriculture
Water use and management
Soil and nutrient management
Biodiversity, land use change
and ecosystem functions
Depletion of water stocks
though over-extraction,
seen in lower aquifer
levels and reduced surface
flows
Loss of soil, organic matter and nutrients through
erosion and leaching
Loss of agro-ecosystem resilience to disease and pests,
and changing climate
Reduced nutrient cycling,
soil formation when plant
biodiversity is reduced
Salination of soils from
poor drainage
Externalities
Scarcity
Large water withdrawals
leading to scarcity for other users, both human use
in cities and for industry,
as well as in downstream
ecosystems
Environmental harm cannot continue unabated
and especially if agricultural production has to increase by 70% to meet demand for food by 9 billion
expected in 2050 (FAO projection), and if agriculture is to be a prime pathway out of poverty in low
income countries (IFAD, 2011). Irrigation water
will have to be used more efficiently, both to allow
greater areas to be watered as well as to release
water for use by industry and cities. If water is to be
used by humans, pollution of water courses needs
to be reduced. If ecosystem services are to be maintained, most of the remaining tropical forest, peat
and wetlands need to be conserved. Agricultural
biodiversity needs to be encouraged, not reduced,
if agriculture is to be resilient to pests, diseases and
changing climate. If most additional increases in
agricultural output are to come from higher yields,
then soils must be improved rather than degraded.
Siltation of water through
soil erosion
Loss of key ecosystems such
as tropical forest
Eutrophication due to
excessive fertiliser use
Loss of livelihoods for forest
dwellers
Reduced quality of
groundwater and surface
water harms aquatic
life, drinking water for
humans and animals
Harmed functioning of
regional and global eco- systems
Shrinking global stock of
high potential land
Loss of ecosystem services
such as nutrient recycling,
local and regional climates
Reduced reserves of
natural gas and minerals
used in fertiliser production
Loss of amenity, cultural
heritage
Loss of potential services
from lost species
Moreover, continuing greenhouse gas emissions
(GHG) means that the climate is warming and will
continue to do so for most of this century.
The climate dice are now loaded to a
degree that the perceptive person (old
enough to remember the climate of
1951–1980) should be able to recognize the existence of climate change.
(Hansen et al., 2011, p. 11)
65
POLICIES FOR AGRICULTURAL DEVELOPMENT: CONSENSUS VS. DEBATE AND UNCERTAINTY
Warming will not only raise temperatures, but also
change rainfall patterns and the incidence of pests
and diseases. For agriculture, the main impacts of
global warming (modified from Hoffman, 2011)
include:
■■ Higher temperatures affecting the growth and
health of plants, animals and farmers;
■■ Changed rainfall that will reduce the potential
of some currently high production areas and
irrigation systems, while raising that of other
areas;
■■ Increased variability of weather with longer
spells of high heat, dry weather and more frequent storms;
■■ Changed distribution of pests and diseases
exposing crops, livestock and farmers to greater
hazards;
■■ Rise in sea levels leading to more damage from
coastal storms and saltwater incursions into
low-lying coastal areas including aquaculture
ponds; and,
■■ Higher concentrations of carbon dioxide that
may raise productivity of some crops for a time.
Climate change will probably lead both to changes
that take place slowly, in some cases with possible
and unknown thresholds that may be passed, as
well as more frequent extreme events (CDKN, 2012).
Although predicting change is difficult, given the
complexity of the physical processes underway,
global agricultural yields in 2050 could decrease by
20–30% overall, even if some parts of the temperate world could see yield increases. Variability in
yields will harm tropical regions and developing
countries (see Figure 2.12). In Africa alone, climate
change could expose between 75 and 250 million
more people to increased water stress by 2020
(World Bank, 2009).
Agriculture is not just a subject of climate change;
it also contributes to global warming through
farming-related greenhouse gas emissions. Indeed,
agriculture accounts for about 13–15% of GHG
emissions mainly from nitrogen oxide from fertiliser and methane expelled from ruminant livestock
and flooded paddy fields. This figure increases to
30% or more if deforestation and other land use
changes associated with agriculture are taken into
account.
Hence, faced by a changing climate, agriculture
needs both to adapt to such changes as well as to
mitigate emissions arising from agriculture. This,
of course, needs to be done while at the same time
making agriculture environmentally sustainable.
FIGURE 2.12 PROJECTED CHANGES IN AGRICULTURAL PRODUCTION IN 2080 DUE TO CLIMATE CHANGE
Source: Beddington et al., 2011
66
AGRICULTURAL DEVELOPMENT POLICY: A CONTEMPORARY AGENDA
Policy options
Regulation
In some cases most environmental harm affects
those farmers responsible for causing it, so that it
is in their own interests to adopt better practices.
Public policy in such cases may be largely provision
of information on the problems and responses, as
may apply when farmers use more fertiliser and
pesticides than they need (IFAD, 2011; FAO, 2012).
Regulations on use of resources have the advantage of making it clear to all what is prohibited
and where the limits lie. They may also have low
public costs. They are particularly indicated where
thresholds may be crossed when economic incentives are used, as users unwittingly push natural
systems too far. Thresholds may see systems switch
to new states getting out of which is difficult, costly
or even impossible.
But many of the issues associated with both environmental harm and climate change raise trickier
policy questions. Collective action is one. Farmers
on irrigation schemes can suffer heavy losses to
salination, but getting all scheme users to agree to
invest in adequate drainage and to use irrigation
water carefully can be difficult. Externalities are
another problem: the farmer who installs a tubewell may help lower the aquifer raising costs to
many other users, but gains net benefit. Climate
change is the biggest externality of all, where the
actions of millions across the world impose costs on
others. Perhaps even more important with climate
are the time horizons involved: actions today will
create costs in the future, leading to difficult choices between immediate benefits and future costs.
Finally, to complicate matters still further, the full
cost of climate and environmental change are often
uncertain. This tempts policy-makers, citizens and
farmers to discount potential future costs.
These complications mean that governments need
to act both individually and in agreement with
each other to deal current and future environmental issues, above all climate change, which
transcend national boundaries and very probably
will affect future generations. Potential responses
include regulation, economic incentives and the
creation of new markets.
The chief problem is policing and enforcing regulations, especially where the causes arise from the
actions of many actors spread over the landscape
— as often applies with agriculture. For example,
it is one thing to regulate the use of groundwater,
but another to check and enforce compliance by
the thousands of farmers who may be abstracting
water from an aquifer.
Economic incentives
Some inputs or resources may be subsidised,
leading farmers to use them excessively, resulting
in waste and high pollution. Subsidised irrigation,
energy and fertilisers are examples. Increasing
prices to reflect market values can lead to lower use
and subsequently less waste, and also tilt practices
towards diversified cropping systems which require
fewer inputs (World Bank, 2007).
An ideal corrective for externalities, taxes and subsidies may be used to ensure that individual actors
pay for any harm they do to others through taxes
— or where they generate benefits for others, they
receive a subsidy. Payments for Environmental Services are a prominent example of the latter. Farmers are paid to manage their land to supply ecosystem services such as clean water and biodiversity.
Such schemes include payments for afforestation
and forest conservation in developing countries
such as China, Costa Rica and Mexico, as well as soil
conservation in the USA.
Incentives are attractive since they do not involve
compulsion, and allow producers to respond flexibly and efficiently to the incentives. Setting values
for ecosystem services can be difficult, however. Assessing responses to taxes and subsidies is not easy
either. Some schemes, such as paying for environmental services, may be difficult to monitor, report
and verify compliance (Power, 2010)
67
POLICIES FOR AGRICULTURAL DEVELOPMENT: CONSENSUS VS. DEBATE AND UNCERTAINTY
Creating markets
Where externalities apply, assigning property
rights can lead to a market being created where different parties can then bargain to arrive at an optimal outcome. A prime example is carbon emissions.
If all potential emitters are given a quota for emissions, the quotas summing to a sustainable level of
emissions, then carbon can be traded: bought in by
those with heavy emissions, sold by those with low
emissions, with offsets entering the markets from
those with forests and other assets where carbon is
stored. When those emitting are large industries,
located at just a few observable points — think large
power stations — such schemes may work: when
emitters and storers are many and scattered across
the land, then monitoring, reporting and verifying
emissions and storage can be difficult.
Some object fundamentally to the use of economic incentives and markets. They fear that largely
public goods become private commodities that
will then be traded to the advantage of the rich at
the expense of the poor, in which the rich do not
have to modify their behaviour while the poor do.
Concern has been most vocal for water — access to
which is often seen as a right — and carbon, where
initiatives to create markets are most advanced.
Uncertainties and values
It is hard to design policy when environmental processes and their eventual outcomes are imperfectly
understood and so uncertain: biodiversity, services
from ecosystems and climate change all fall in
this category. How much disruption ecosystems
can tolerate to maintain critical population limits
and functions, and how much disruption specific
practices inflict is often unclear, making a ranking
of practices by their sustainability difficult (Phalan,
Balmford, Green & Scharlemann, 2011).
Given uncertainty, some argue for the precautionary principle of not taking the risk of what might
turn out to be environmentally disastrous — especially if some threshold is inadvertently breached.
Others see this as too cautious, imposing high costs
on society to avert what may be very small risks.
Differing opinions on the values of systems also
affect these debates. Some view ecosystems as the
sum of their functions and services, and feel that as
long as a specific function can be sustained by some
means, it does not matter if the ecosystem is perturbed — which might, for example, mean the loss
of a species or an attractive landscape. Others rank
the features inherent to ecosystems more highly on
grounds of cultural heritage, uniqueness or aesthet-
68
ics, arguing that ecosystems should be preserved
for their own sake. Linked to this are questions surrounding what to measure for ecosystem services
and how. Which key species or features of ecosystems indicate overall health (MEA, 2005)?
For agriculture, a key uncertainty is how alternative agricultures may perform when adopted
widely. Can proposed ecologically-friendly practices deliver adequate amounts of food, now and
in the future? Some argue that less intense farming can produce all the food needed since yields
are comparable with conventional, higher-input
farming (Pretty, 2007). Others are less convinced,
criticising the methods of studies that show ecological agriculture meeting production goals (Phalan,
Balmford, Green & Scharlemann, 2011). For those
who believe that environmental sustainability
may conflict with production goals, technologies
urgently have to be developed to deliver high yields
while economising on inputs (FAO, 2012).
Uncertainty over the productive potential of various practices, and over biodiversity loss and ecosystem degradation, fuels a further debate on whether
policy should take a ‘land sparing’ or ‘land sharing’
approach. Land sparing proponents advocate intensifying agricultural practices in a confined area,
leaving more land available for habitat. Land-sharing proponents advocate practicing agriculture on
a wider scale, but incorporating wildlife-friendly
practices into farming systems (Foresight, 2011).
Mitigation of emissions from agriculture
Climate change poses special challenges for agricultural policy. One is that of how to mitigate
(reduce) GHG emissions from farming. Technically
emissions from agricultural land and livestock may
be curbed by the following measures:
■■ Improved management of crops and water to
reduce nitrogen oxides from fertiliser and methane from flooded fields;
■■ Switch meat production from ruminant to
non-ruminant livestock to cut methane emissions; and,
■■ Use agro-forestry and no-till farming to capture
carbon in soils and trees.
In addition, less transport and processing in food
chains, and less waste of food by (well-off) consumers could also stem emissions within the food
system as a whole.
AGRICULTURAL DEVELOPMENT POLICY: A CONTEMPORARY AGENDA
More research is needed on how emissions can
best, and most economically, be reduced. Rewarding farmers and herders for lower emissions from
their lands and herds poses additional challenges:
monitoring, reporting and verifying what they
have done is difficult. Assuming, of course, that the
political will exists to pay for mitigation in the first
place (Tubiello, 2011). The dream would be to find
farming systems that not only emit less and store
more carbon, but which also raise productivity
and returns to farming. Where, as applies in much
of Africa, current farming has low productivity of
both land and labour, advances in agro-forestry
may just produce such win-win systems. But that
would probably not apply to the highly-intensively farmed lands from which much of Asia’s farm
output comes.
Adaptation and resilience to future change
Regardless of how successful mitigation of emissions may be, it is almost certain that the world will
see further warming this century; and consequently changing climates. Hence agriculture will need
to adapt. That much is certain: the detail, however,
is much less well known.
The consequences of climate change for any given
farming system are known only in the broadest
terms: warmer climate, more variability, higher sea
levels — often whether more or less rain will fall is
not known. How best to adapt is not known either.
With so many uncertainties, a resilience approach
has emerged, where changes may involve on-farm
adaptation, generation of off-farm activities and
seasonal migration to allow flexible responses to
changed and more variable weather. Anticipation
of weather may be improved by better forecasts.
New forms of insurance, such as payments based
on rainfall indices rather than actual damage, have
been piloted with some promise.
So far, not much has been done to prepare for
adaptation, although governments and donors are
well aware that action will be needed. In areas of
dryland farming, as applies across much of Africa,
fears of increased droughts may boost efforts for
irrigation and better management of soil moisture.
Wider impacts of climate change on food supply
chains are equally uncertain. Climate change may
also see more people leave agriculture and look for
jobs in urban areas. Less thought has been given to
such effects than to those on farming itself.
‘Climate-smart agriculture’ and the triple win
Policy-makers concerned over climate change talk
of ‘climate-smart agriculture’ (Lipper, 2014; Grist,
2015). They envisage an agriculture that is not only
productive but also responsive and proactive to
climate change, both in adaptation and mitigation
(Figure 2.13), by incorporating new or enhanced
practices on farms. Meetings of donors and international organisations interested in agricultural development in the 2010s have embraced the concept.
To date, agriculture has not however been given
much attention in mainstream climate change negotiations, for example at the level of the UNFCCC,
hampering access to sufficient climate finance.
Some suggest that an approach to climate-smart
landscapes might acknowledge agriculture’s place
within the wider landscape. A diversity of land use
approaches might be used to provide resilience,
managing land uses at the landscape scale for
social, economic and ecological benefits (Scherr,
2012). This approach also responds to concerns
that environmental issues such as biodiversity loss
and land degradation might be eclipsed by climate
change concerns (MEA, 2005). Practices for sustainable agriculture may be the best way to respond
to climate change: transforming of the high-input
specialised farming into a landscape ‘mosaic of sustainable agricultural production methods’ (IFAD,
2011; Hoffman, 2011).
69
POLICIES FOR AGRICULTURAL DEVELOPMENT: CONSENSUS VS. DEBATE AND UNCERTAINTY
FIGURE 2.13 OVERLAPPING CONCERNS: FOOD PRODUCTION, ADAPTATION AND MITIGATION
Food production
E.g expansion of agricultural land,
increased use of mechanization,
fertilizer and other inputs
E.g improved
irrigation
infrastructure,
weather
forecasting
E.g diversification
of crop, livestock and
fisheries varieties,
improved on-farm
and off-farm food
storage
Adaptation
Source: Campbell et al., 2011
70
E.g use of
single yielding
variety
Agricultural practices
that benefit food
production, adaptation
and mitigation. E.g
restoration of degraded
land, improvement of
soil-macro-, and
micro-nutrients
E.g on-farm
production and use
of biofuels
E.g reforestation,
decreased livestock
production,
agroforestry options
that have low food
benefits
Mitigation
AGRICULTURAL DEVELOPMENT POLICY: A CONTEMPORARY AGENDA
Environmental challenges for agriculture: policy
issues and conclusions
Although most stakeholders in agriculture are
aware that business cannot proceed as usual and
that agriculture has to become environmentally
sustainable and climate-smart, uncertainty surrounds some of the main problems and potential
responses.
Three priorities are evident:
■■ More research is needed on processes within
both local ecosystems and within world ecosystems to reduce uncertainty and provide a better
understanding of the challenges faced;
■■ Equally more needs to be done to find viable responses. Some of this requires new research, but
more could be done to document the many trial
experiences around the world where NGOs and
farmers have experimented with changed practices for sustainability and resilience. A particular need is to find ways to monitor, report and
verify changed practices of small-scale farmers
so that incentives can be paid to encourage sustainable, climate-smart practices; and,
■■ Developing specific programmes and policies to
assist populations and sectors most vulnerable
to climate changes and food insecurity. This
includes creating and supporting safety nets,
including establishing emergency food reserves
and financing to deliver rapid humanitarian
responses, and generally to help vulnerable populations in all countries become food secure.
[Adapted from Commission on Sustainable Agriculture and Climate Change (March 2012)]
More broadly, sustainable agriculture should be
part of food systems that supply safe, nutritious
food; that eradicate malnutrition; and that encourage healthy diets without obesity. These goals, of
course, are not so easily met. But it has to be possible to improve on current systems where more than
800 million are undernourished, while many more
are overweight and obese leaving them vulnerable
to disease, disability and premature death — and
all within food systems that are environmentally
unsustainable. Complete answers may be elusive,
but enough is clear to see some improvements if
sufficient political will to act can be mustered.
→ Further reading:
Beddington J, Asaduzzaman M, Fernandez A, Clark M,
Guillou M, Jahn M, Erda L, Mamo T, Van Bo N, Nobre
CA, Scholes R, Sharma R, Wakhungu J. 2011. Achieving
food security in the face of climate change: Summary
for policy makers from the Commission on Sustainable Agriculture and Climate Change. CGIAR Research
Program on Climate Change, Agriculture and Food
Security (CCAFS). Copenhagen, Denmark. Available
online at: www.ccafs.cgiar.org/commission
World Bank, 2009, World Development Report 2010,
Development and Climate Change, Washington D.C.:
World Bank
Foresight, 2011, ‘The Future of Food and Farming:
Challenges and choices for global sustainability’. Final
Project Report. London: The Government Office for
Science
Pretty et al., 2010, ‘The Top 100 questions of importance to the future of global agriculture’ International
Journal of Agricultural Sustainability, 8 (4) pp.219-236
Power, A. G., 2010, ‘Ecosystem services and agriculture:
tradeoffs and synergies.’ Philosophical Transactions
of the Royal Society of London. Series B, Biological
sciences, 365(1554), 2959–71
TEEB. 2009, ‘The economics of ecosystems and biodiversity for national and international policy makers. The Economics of Ecosystems and Biodiversity
summary report: Responding to the value of nature’.
Available online at: www.teebweb.org
Lipper, Leslie, Philip Thornton, Bruce M. Campbell,
Tobias Baedeker, Ademola Braimoh, Martin Bwalya,
Patrick Caron, et al. “Climate-Smart Agriculture for
Food Security.” Nature Clim. Change 4, no. 12 (December 2014): 1068–72
United Nations & Asian Development Bank, 2012,
Green Growth, Resources and Resilience. Environmental Sustainability in Asia and the Pacific, Bangkok &
Manila
Rosegrant, Mark, Claudia Ringler, Siwa Msangi, Tingju
Zhu, Timothy Sulser, Rowena Valmonte-Santos, Stanley Wood, 2007, ‘Agriculture and food security in Asia:
the role of agricultural research and knowledge in a
changing environment’, SAT eJournal, ejournal.icrisat.
org, December 2007, 4 (1)
Grist, Natahsa, 2015, Climate Change, Food Security
and Agriculture, Evidence on Demand Topic Guide,
London: Overseas Development Institute http://dx.doi.
org/10.12774/eod_tg.april2015.gristn
71
POLICY CHOICE
3
Policy choice
72
AGRICULTURAL DEVELOPMENT POLICY: A CONTEMPORARY AGENDA
Nowadays, ‘conventional’ questions of development assistance, such as macroeconomic
policy choices, investment priorities, and trade reforms, compete with, and are cast within,
a broader set of concerns about governance, regulation, corruption, and the institutional
foundations of policy. (Adam & Dercon, 2009)
It is one thing to analyse technical and economic dimensions of the challenges of agricultural development;
another to make policy and to implement it effectively and equitably. This would apply to any sector, but
it may be all the more important for agriculture where choices made across the world often defy technical
justification and have had strong repercussions on agricultural performance.
This section, therefore, reviews some of the major
findings of political economy literature on agricultural policy-making. Political economy may be
defined as “the social science that deals with political science and economics as a unified subject; the
study of the interrelationships between political
and economic processes”34.
In practice, this often translates into the study of
“how political forces affect the choice of economic
policies, especially as to distributional conflicts and
political institutions” 35.
This latter definition assumes that the “causality”
in “the interrelationships between political and
economic processes” is primarily one-way, i.e. from
politics to economic policies, as in Figure 3.1. However, political economy analysis also considers how
the structure of the economy and the limitations of
budgets shape and constrain politics.
FIGURE 3.1
STATE INCENTIVES AND AGRICULTURAL POLICY
Political
System
Incentives for
State Action
Policy
Outcomes
Agricultural
Performance
Figure 3.1 illustrates a major pathway through
which political forces affect agricultural performance, especially in economies where agricultural
production is dominated by smallholders who are
heavily dependent on the provision of public goods
and services if they are to raise their productivity
and access markets on beneficial terms. Political
will – either to invest in the direct provision of such
services or to promote the co-ordination of private
investments so that they are delivered – is often
treated as something of a “black box”, the contents
of which are very important but not understood.
However, analysis of political systems can shed
light on why some states are motivated to deliver
supportive policies and services to farmers and
others are not.
A second major pathway through which political
forces affect agricultural performance is via the
direct engagement of interest groups on processes
of policy formation. Both of these pathways are
considered below.
Source:
http://www.future-agricultures.org/projects/peapa
34 http://www.thefreedictionary.com/political+economy
35 http://en.wikipedia.org/wiki/Political_economy
73
POLICY CHOICE
3.1
THE CHALLENGE OF AGRICULTURAL POLICY-MAKING AND IMPLEMENTATION
Agriculture intersects with an unusually large and growing range of public concerns. In low-income countries agriculture employs much of the workforce, produces one quarter or more of GDP, often generates
most exports, and is central to economic growth. Many of those working on farms are poor and hungry,
since labour productivity in agriculture is often low. Because farming operates over large areas, regional and
environmental matters become agricultural issues. Consequently, a wide range of objectives are commonly
invested in agricultural and rural development: economic growth and export earnings; poverty alleviation, employment, equality, gender fairness, food and nutrition security; environmental conservation; and
regional equity. Discussions over priorities and trade-offs can thus be long and difficult to resolve.
Agriculture is moreover largely carried out by
private enterprises, mainly in the form of small,
family-operated farms. They face difficulties when
interacting with other actors in the supply chain,
especially in finance and insurance, owing to high
costs of information that raise transactions costs
(→see “Failings in rural markets”, p.42). In short,
these are market failures that are not simple to
remedy.
Faced by these challenges, political direction and
administration for agricultural policy can be weak
and unfocused. Politically, in many developing
countries and especially in low-income countries,
rural populations are not well organised to promote
their interests. Only rural elites commonly have
influence, with the danger that they seek from the
state private goods for their personal benefit or for
their immediate clients, rather than demanding
effective delivery of public goods that would have
broader benefit. Administratively, responsibilities
for providing the public goods and services to support agriculture are spread over several ministries
and agencies of which the ministry of agriculture
is only one. Some of the more important and costly
public goods, such as rural roads, education, health
and clean water, are provided by other ministries.
Combine these factors and it is easy to see that agricultural policy-making can be difficult, with considerable scope for inconsistent and contradictory
policy. This, however, does not mean that policy
cannot be highly effective. When, in the mid-1960s,
it seemed that only the application of new agricultural technology would save Asia from Malthusian
famine, public administrations in the region put
together programmes that met the challenge. What
made the difference at the time? Leaders gave their
full support to implementing the Green Revolution
and granted the budgets necessary.
74
AGRICULTURAL DEVELOPMENT POLICY: A CONTEMPORARY AGENDA
3.2
POLITICAL CHOICE AND VALUES
Surprising choices in agricultural policy
The record of agricultural policy-making presents paradoxes. In developing countries where so many are
engaged in farming and where agriculture makes up a significant share of output, governments have often
taxed agriculture heavily — and especially those activities in which they have the strongest comparative advantage, such as export crops. Such policies have often slowed down agricultural growth and rural poverty
alleviation, and given the importance of agriculture, they have put a brake on overall national development.
Yet the political logic of these policies is also evident: where will the state obtain resources, if not from taxing
farming? Moreover, of all the groups in society able to express their discontent with taxation, unorganised
smallholders are often the least powerful group.
Some developing countries have been aware of the
potential harm of heavy taxing of agriculture. The
temptation is then to compensate farmers by offering subsidies on inputs and finance. All too often
larger farmers, richer and more politically powerful, have benefited disproportionately from these.
In some cases subsidies have distorted factor prices,
and led to inappropriate technical change; as for
example, when subsidies to capital investment on
farms has led to mechanisation in countries where
there is abundant landless rural labour.
Meanwhile in OECD countries where farmers are
few and farming contributes only a small share of
GDP, support to agriculture has been lavish. While
low farm incomes are usually the justification for
the support, this has often been linked to levels of
production through price supports, so that most
of it has ended up in the hands of larger farmers
who do not have low incomes. Generous support to
OECD farming has stimulated production to levels
where governments have intervened to prevent this
from depressing domestic prices, with subsidies to
exports being the most contentious measure used.
Subsidised exports have then pushed down world
prices for commodities such as beef and dairy,
thereby reducing the prices on domestic markets
for developing world producers.
Given that these choices would be unlikely if efficiency were the criterion used, it is clear that they
follow a political logic rather than an economic one.
So how might such political choices be understood?
Understanding agricultural policy choices36
Political choices are made by those who have power; hence policy choices are often seen as resulting
from the balance of power exercised by groups in
society. These may variously be leaders and ruling
elites that (for the moment) control the state, the
agencies of government (‘the bureaucracy’), private
enterprises lobbying individually or in groups,
other substantial economic interest groups such
as landlords, and citizens organised by ethnicity,
religion, political preference or economic interest in
associations, parties and movements.
Analysis may be as simple as examining the power
of the different groups and explaining choices as
representing the interests of the most powerful
groups. Hence, for example, the heavy support for
agriculture in OECD countries may be attributed
to the formation of well-organised farm lobbies
that focus on agricultural policy with little opposition, since consumer interests are more diverse
and less well focused even if there are many more
consumers than farmers. In developing countries
the reverse conditions often apply: urban consumers are able to make their voices heard, even if
only through urban rioting, while the many more
farmers are too dispersed across the countryside
and lack resources to organise to advance their
interests.
But such analysis rapidly reaches its limits. One
objection is that while powerful groups may decide
policy, they do not always decide in favour of their
own short-term interests or those of their supporters. They may recognise that advantages seized in
the short term may be at the expense of longerterm goals. This applies especially with economic
growth and development, where long-term prosperity is likely to be gained by investment and
hence by curtailing consumption in the short term.
Leaders may also recognise that short-term advantage may be at the expense of longer-term political
and social stability. A key question then concerns
the conditions under which political leaders will be
both able and incentivised to pursue longer term
and genuinely “national” goals (see below).
36 This section draws on the work of Bates 1989, Berry 1993a & 1993b,
Binswanger & Deininger 1997, Birner & Resnick 2010, Booth & Therkildsen 2012, Henley & van Donge 2012, Mahoney 2001, Moore 1966.
75
POLICY CHOICE
A second objection is that analysis needs to go
deeper to understand how groups form and become powerful. A host of factors may influence
this, ranging from the nature of the main economic activities — can they be carried out by small
enterprises, or do they require the co-ordination
of larger groups? — to economic and social inequalities, institutions such as property rights, the
influence of ideas and the personal power of leaders
who capture the popular imagination. Moreover,
the very exercise of power itself will influence the
distribution of power in the future, so that history
may be path dependent, in which decisions made
at critical moments come to influence power and
hence affect further rounds of decisions for decades. Property rights and the degree to which they
confer assets and economic advantage unequally
between owners of land, water and mineral rights
and those who lacking access end up working as
employees of the owners, often play a critical role
in accounts that see the present as highly dependent on decisions taken in the past.37
It is no surprise, then, that attempts to explain
choices veer between the poles of having simple
theories that may offer powerful insights, but
which are often too crude to capture the reality; or,
alternatively, explaining choices in particular circumstances taking account of all factors that apply,
but since they are often so many, no generalised insight is possible. No single theory has emerged from
history or political science that offers a simplified
understanding of political choice.
Frameworks that indicate the (many) factors that
may lead to policy choices are seemingly the current limits of generalised understanding.
Influencing political choices: the search for
good governance
Faced by these complexities, it may be better to
accept that universal explanations may be impossible and to direct attention to dealing with current
realities. Hence some look to identify models of
government that are likely to produce political
choices that avoid conflict, economic crises and
gross social inequality; and that instead lead to
reasonably equitable and sustainable economic and
social development. This has led to much interest in
‘good governance’ as a foundation for development:
what it may be and how it may be achieved.
37 A striking example of how this applies can be found in a recent analysis of the political economy of Bolivia where decisions taken in the late
sixteenth century by the Viceroy Toledo sitting in Lima are traced through
as having a major influence on Bolivia in the later twentieth century
(Laserna, 2005).
76
Getting good governance calls for
improvements that touch virtually all
aspects of the public sector—from institutions that set the rules of the game
for economic and political interaction,
to decision-making structures that determine priorities among public problems and allocate resources to respond
to them, to organizations that manage
administrative systems and deliver
goods and services to citizens, to human
resources that staff government bureaucracies, to the interface of officials
and citizens in political and bureaucratic arenas. (Grindle, 2004, p. 525–526)
Good governance can be shown to lead to better development outcomes, but since it embraces so many
aspects of government this should not be surprising. The problem, as Grindle (2004, 2007) explains,
is that practice can be reduced to the unhelpful
compilation of long lists of conditions that constitute good governance; that then become the basis
of advice to developing countries, or even conditions for the supply of aid and development finance.
Yet historically the successful development of
Southeast and East Asian states has been achieved
despite having considerable shortcomings in their
governance (Chang, 2003); as of course did many
OECD countries at the time they industrialised.
This has led to a search for the more modest conditions of ‘good enough’ governance: those which are
necessary and sufficient to drive economic growth
and development. Yet even this may be elusive,
since it seems that what has worked in particular
cases has been so embedded in local circumstances
— Grindle (2007) indicates five different archetypes
of polities — that it is far from clear that institutions, forms of government, political processes and
so on can be transferred from one context to another. Principles may be clear, but then the question of
how they may be adapted to other contexts remains to be defined — and answers may be neither
straightforward nor simple to identify.
AGRICULTURAL DEVELOPMENT POLICY: A CONTEMPORARY AGENDA
A focus of much political economy literature (for
example, Khan, 2000; Drazen, 2008,; North et al.,
2009; Acemoglu and Robinson, 2013) is the distribution of ‘rents’38 through the official and unofficial actions of those in control of the state. On
the one hand, politicians may ensure that rents
benefit their supporters – voters, financial backers
and other opinion formers – in exchange for their
support. On the other hand, if the distribution of
rents is too skewed towards particular groups, it
may provoke political instability. Both North et al.
(2009) and Acemoglu and Robinson (2013) emphasise that in many societies political and economic
power is highly concentrated. Thus, political power
is used to generate economic rents for a small
elite, which in turn can be used to reinforce their
control over political power, as few others have the
resources necessary to challenge them. Under such
circumstances, the prospects for pro-poor policy
are limited, whatever official pronouncements say.
Poor groups will benefit primarily as a by-product
of policies designed first and foremost to benefit
the elite. Things will change only as the existing
elite perceive the need for some sort of support
from non-elite groups: typically in times of crisis
(when their legitimacy is called into question) and/
or at times of heightened competition between
nations or amongst elite groups within a nation. At
these junctures, the non-elite groups may demand
a greater say in decision making and/or greater
checks and balances over the exercise of power,
thereby gradually stimulating a more open policy
process and more egalitarian policy outcomes over
time. In this analysis, good governance is as much
the product of the development process as a driver
of it. These insights can be applied at sectoral level
as well as to national development processes.
Finding opportunities for reform
In the foregoing analysis, substantive change in
institutions and/or policy may only be possible
infrequently, when political conditions are such
that significant reforms can be enacted. Typically
‘windows of opportunity’ for reform open when
crises are sufficient to convince leaders and citizens
that significant changes are needed. Fiscal crises,
since they affect the ability of the state to act, can
be particularly powerful stimuli to change.39
Perhaps more important than recognising that
reforms are only possible under infrequent conditions are the questions of what may then allow
reforms to be undertaken when the windows open.
What political groupings may then be able to influence choices? For agricultural and rural development it is taken as more or less axiomatic that it is
desirable to have the rural majority organised for a
more effective voice. However, this is obviously difficult and it may not even be sufficient. Some farmer groupings that have considerable control over
the rural vote have been able to extract subsidies
from political leaders with scant regard to whether
or not these may be the best use of public funds to
support agricultural development: India is the most
prominent example.
Another question is what evidence may be useful to
inform public debates on those occasions when major changes are possible. That has led to an interest
in encouraging and funding the establishment of
local think-tanks to generate such evidence.
Democratisation and agricultural policy in
Africa
Heavy taxation of African agriculture to satisfy
urban interests, sustained by a combination of
political repression and selective subsidies to rural
elites, was a common characteristic of the two decades prior to structural adjustment in Africa (Bates,
1981), which was also characterised by autocratic
political systems. With a return to democratisation
since the 1990s, one may expect the interests of the
rural electorate – the majority in many countries
– to command more attention from politicians.
However, whether this translates into policy that is
more supportive of smallholder agriculture depends in part on what voters exchange their votes
for. Ethnic allegiance and patron-client linkages
remain strong, whilst few grass-roots organisations
advocating sound policy and investment for the
agricultural sector yet exist.
38 Rents are here defined as the super-normal returns (in excess of
opportunity costs) that an individual or firm obtains from a particular
activity as a result of a particular policy intervention.
39 Historically in Europe when kings and princes needed finances to
cover the costs of wars or ambitious constructions, they sometimes then
had to admit more democracy to gain approval for new taxes.
77
POLICY CHOICE
Meanwhile, on the supply side, politicians want
to be seen to deliver quick and tangible benefits
to voters – consistent with established patterns
of patronage politics – so input subsidies have
emerged as a popular policy intervention. Whilst
there is some evidence that voters learn over time
to prioritise a track record for growth over electoral
handouts, the incentives for politicians to invest in
key agricultural public goods (for example, research
and extension systems and state capacity for better
policy-making and implementation) often remain
weak (Poulton, 2014). There are two main reasons
for this:
■■ Firstly, public goods are, by their nature, open to
all, or at least to many. By contrast, the logic of
a political system characterised by clientelism
(Kitschelt and Wilkinson, 2007) is to differentiate between supporters and opponents in the
delivery of services and benefits, so as to provide
incentives for loyalty to the government.
■■ Secondly, whilst investment in public goods is
widely accepted as being the most efficient way
of stimulating economic (including agricultural) growth, the pay-off to such investment –
whether infrastructural or institutional – tends
to be medium-term. Voters may not perceive
many of the ultimate benefits within one electoral cycle. Where fierce political competition
causes governments to focus myopically on
achieving re-election in 4-5 years, investment in
public goods may seem like a luxury that they
cannot afford.
By contrast, a small number of African countries,
including Ethiopia and Rwanda, appear to exhibit
dynamics that have more in common with twentieth century East Asian states than with the dynamics just described. Here power was obtained by
force, and discipline can be exerted to control the
competition for rents within the governing elite.
At the same time, credible threats from outside
that elite, with latent support within the rural
population, mean that the government perceives
that it has to deliver broad-based growth, including smallholder agricultural growth, in order to
acquire legitimacy and maintain power. Given
restrictions on political competition, medium-term
78
performance is thus a greater preoccupation for
these governments that the exigencies of winning
the next election. These conditions are conducive
to investment in agricultural public goods – for
example, large-scale programmes for soil and water
conservation, and extension services – and also
stimulate a focus on policy outcomes and learning,
things that are conspicuously lacking in many African countries (Booth and Golooba-Mutebi, 2014;
Berhanu and Poulton, 2014).
Conclusions on political choice
One lesson is clear from this: that politics matter,
that attempts to devise optimal policies for agriculture that ignore political calculations are unlikely
to succeed. Beyond that, the search for explanation
of policy choice, for better governance, windows of
opportunity and the groupings and evidence that
may contribute to better policy-making has produced a wealth of interesting accounts, some principles, but few lessons that have general application.
Yet if this work at least directs donors and international NGOs to take politics and policy choice into
account, to recognise their importance, then it has
perhaps served a useful purpose.
AGRICULTURAL DEVELOPMENT POLICY: A CONTEMPORARY AGENDA
3.3
POLICY COHERENCE, CO-ORDINATION AND EFFECTIVE AID
Policy coherence, that is ensuring that policies do not contradict or undermine one another and that as far
as possible policies are complementary and create synergies, has become a major concern in agricultural
policy-making. The best-known dimension of coherence is consistency between aid and other policies, such
as those governing trade, security, immigration, (domestic) agriculture and fisheries. Civil society has long
campaigned over cases where policies of the European Union (EU) and the member states for trade, domestic
agriculture and fisheries have undermined development efforts.
Other dimensions include the internal consistency of aid programmes of development partners,
across different sectors and issues, and between
countries; co-ordination across aid programmes
of different development partners; and alignment
of aid programmes with the national policies and
programmes of developing countries. Efforts to
improve these have been formally recognised in the
Paris Declaration (2005) that set out five principles,
namely: country ownership of development strategies; alignment of development partners behind
these objectives and local systems; harmonisation,
co-ordination and simplification of donor procedures; a focus on results and their measurement;
and mutual accountability of developing countries
and their partners for these results.40
At national level, the drive for more focused plans
that development partners can finance has seen
the use of instruments such as Poverty Reduction Strategies, Sector Wide Approaches (SWAp),
National Donor Partnership Strategies and Joint
Assistance Plans, as well as a set of Fragile State
Principles all intended to strengthen the planning
and co-ordination capacities of partner states.
Progress on coherence and challenges for policy-making
A 2011 review of the issues of policy coherence for
agricultural development (Wiggins et al., 2011)
reached the following conclusions:
1. T
he main concern in policy coherence, both for
development agencies and for governments of
developing countries, is conflict between aid
and non-aid policies — where the main inconsistency is between trade and aid policies;
2. While progress on some of the Paris Principles
has been achieved, how much further efforts
to follow the Paris principles would contribute
much to aid effectiveness was in doubt. At first
sight, aid-funded programmes for agricultural
and rural development appeared to be aligned
with national priorities. Yet that was only so
formally, since national strategies tend not to
make choices and set priorities, but rather set
all-embracing goals that would allow all kinds
40 These were reinforced in 2008 by the Accra Agenda for Action that
aims for greater predictability of donor commitments, use of country
systems to deliver aid, switching from donor conditions to those of the
country and untying aid from donor country procurement.
of programmes and policies to be part of the
strategy. Country ownership of aid programmes
was thus limited.
3. In the absence of clearer priority setting, development policies and programmes proliferate. Competition, duplication and overlapping
result, exacerbated by the tendency for new
policies and programmes to emerge while older
ones are rarely retired. Fundamental issues
affecting agricultural development can thus
be obscured by less important concerns, with
resources dissipated. Moreover, when agriculture lacks a sharp focus it may lose out when
competing for budgets with public spending for
sectors with clear priorities.
Two factors may explain this. One is the relative
complexity of agricultural development set out
above. With so many potential objectives, opinions based on values can differ over priorities,
while additional debates, largely technical judgments, exist over the means to achieve them.
Fragmented, contested and changing policy can
result.
Two, politically, rural interests typically often
lose out to those of urban voters, while administratively, responsibility for agricultural and
rural development is usually split across several
agencies. The ministry of agriculture is just one,
and usually lacks the prestige, power and budget
to direct the other agencies. Public agencies,
moreover, lack capacity, especially in agriculture in Africa, where the cuts made in the 1980s
and 1990s under structural adjustment led to
loss of key staff. Low capacity then limits the
ability to carry out the analyses that might help
make strategic choices. It also reduces the ability
to deliver services, make investments, and operate public infrastructure.
79
POLICY CHOICE
4. The last point should, however, not be overplayed. Cases reviewed show successes where
the common element is the way in which
stakeholders have been brought together to
form interest groups determined enough to see
agreed programmes through to a successful outcome. Interest groups coalesced around crises or
strong opportunities and prospered when tangible gains were apparent, preferably with some
in the short run. Such interest groups were more
effective when they only included those with a
significant stake in the outcomes. Participation
has to be limited if costs of co-ordination are to
be kept down. Continuity of aims, purpose and
resources marked success, for which leadership
and short-term gains helped.
Implications for co-ordination and policymaking
These findings reinforce the importance of recognising the political dimensions of policy choice,
and the corresponding limits to formal planning
as a technical exercise. The Paris Principles can be
applied narrowly, with a focus on the letter rather
than the spirit of the declaration. The result can
be plethora of formal documents, with matching
committees and stakeholder forums that do not
necessarily contribute much to outcomes, since
they are not always linked to the forums in which
key decisions are taken.
The road to better practice may be neither clear
nor certain, but there are signposts. To begin, it is
unlikely that co-ordination alone will make a difference. Capacity building in the form of training
is not enough. What is often lacking is a countervailing constituency, made up of the rural majority
on low incomes, to self-serving elites and narrow
interests that demands effective delivery of goods
and services. In the long run, the ability of rural
civil society to hold leaders and public agencies
accountable has to be built. Building coalitions of
stakeholders around identified issues helps.
The implication is that processes matter, some of
which will take time to come to fruition, and hence
patience and a vision of the longer run goals are
necessary. Development agencies need to engage
with such processes when appropriate, recognising
where some support to allow deliberation or to
generate evidence can make a difference. It means
having field staff who recognise these issues, as well
as being prepared to make long-term commitments
to working with local partners.
Competitive elections within patronage-driven po-
80
litical systems generate immense pressures for politicians to deliver tangible, short-term benefits to
voters. One key function of donor agencies should
be to make the case for longer-term investment
in public goods, even using their control of funds
and relative insulation from domestic political
pressures to prioritise such investments, especially
where alliances with local technocrats can enhance their effectiveness. In this regard, increasing
political and bureaucratic pressures to demonstrate
(short-term) impact of aid programmes within
donor nations threaten to undermine the ability of
donor support to the agricultural sector to perform
this role.
Development agencies may be able to improve
agricultural policy-making by helping resolve
differences of values and reducing uncertainty
over technical issues. Competing values can be
addressed through debate and dialogue: seeking
to bring stakeholders with differing perspectives
together to establish common ground and to see
where compromises can be made.
For technical uncertainty, more study and analysis
is indicated. While there may be few shortcuts to
better understanding, one of the simpler and less
costly ways to gain knowledge is through learning
from experience by evaluation, documentation and
dissemination. It is surprising just how few development interventions are evaluated and published:
the costs are relatively low compared to the potential technical benefits. In political systems where
elite groups retain power through the distribution
of patronage and are as yet not held particularly
accountable for performance, domestic political
demand for such information may be limited. Aid
may be valued by politicians as much for the funding per se as for the outcomes that it delivers (van
de Walle, 2001). Indeed, the supply of such information may encourage civil society groups to demand
wider accountability of government performance.
The tension between learning and accountability is
also apparent within donor countries: whilst there
has been a resurgence in academic interest in evaluation for learning purposes in recent years, current
political pressures seem to be more about accountability. This may lead to the hiding of mistakes,
rather than learning from them (Korten, 1980), and
undermine the potential developmental benefits
with which this paragraph opened.
AGRICULTURAL DEVELOPMENT POLICY: A CONTEMPORARY AGENDA
Nor should one argue that all uncertainties can be
resolved before programmes are implemented. The
complexity the natural and human systems in rural
areas means that that outcomes may not always be
those expected. Implementing plans as though they
were blueprints may not always be appropriate:
room has to be creating for learning and making
corresponding adjustments, for seeing implementation as a process (Korten, 1980).
Coherence and co-ordination: policy issues and
conclusions
This discussion reflects recent thinking, but also
retraces ideas that came to the fore in the 1970s
and 1980s, as the limits to formal planning both
national and for projects became evident (Maxwell, 1996). Planning has for several decades been
relegated behind attempts to improve overall public
performance. These include the ideas that make up
the ‘New Public Management’41 where policy-making and service delivery are separated, as well as
recognising that finance allocations — budgeting —
are central to public decision-making.
→ Further reading:
Binswanger, Hans & Klaus Deininger, 1997, ‘Explaining
agricultural and agrarian policies in developing countries’, Journal of Economic Literature, 35, 1958–2005
Birner, R., & Resnick, D. (2010). The Political Economy of Policies for Smallholder Agriculture. World
Development, 38(10), 1442–1452. doi:10.1016/j.worlddev.2010.06.001
Grindle, Merilee, 2007, Good Enough Governance Revisited, Development Policy Review, 25 (5): 553–574
Poulton, C. (2014). ‘Democratisation and the Political
Incentives for Agricultural Policy in Africa’, Development Policy Review, 32(s2): s101–s122, plus other
papers in this special issue (all open access)
What may be the hallmarks of good contemporary
practice? Two points stand out, as follows:
■■ Pay as much attention to political and administrative concerns as to technical and financial
analyses; and
■■ Recognise the difference between those things
that can be implemented using blueprints since
there is agreement on both ends and means,
and those where uncertainties apply to either
ends or means and hence learning processes are
indicated.
41 See Hood 1991, Lawton & Rose 1994
81
FINAL REFLECTIONS
4
Final reflections
82
AGRICULTURAL DEVELOPMENT POLICY: A CONTEMPORARY AGENDA
By way of a conclusion to this review, while agricultural — and indeed, rural — development presents many
and varied challenges, they should not be seen as especially difficult. As with all development challenges,
agricultural development can seem daunting, an enterprise more likely to fail than succeed. That would be
an exaggeration: matters need to be kept in perspective.
Worldwide, food supply has increased ahead of population growth since 1970, and much of the increase
has come from developing countries. Poverty and food insecurity, problems that almost always are more
acute in rural areas, have fallen considerably in many countries. Several Asian countries have largely passed
through the transition from being rural and agrarian to urban and industrial with broadly-distributed
welfare gains. If many of the success stories do come from Asia, then bear in mind that in the 1960s most of
Asia was (very) low income. Asian achievements are not the consequences of having a head start, or other exceptionally favourable circumstances: on the contrary, in the late 1960s prospects for most Asian countries
looked bleak.
History suggests that countries able to remedy serious failings in their investment climate, to invest in rural
public goods and to make some progress on getting rural markets to function are likely to succeed. Much
of what needs to be done, moreover, is technically straightforward: proven methods exist for managing
exchange rates or building rural roads. The challenge in these cases lies not in finding technical solutions,
but in getting a political consensus that gives these measures sufficient priority and budgets. More is understood today about policy choice and the nature of political coalitions for agricultural and rural development;
however, the insights do not translate into a set of mechanical steps.
The exceptions to the straightforwardness of most actions lie in the domains of getting rural markets to
function better and in tackling the challenges of environment sustainability and climate change. Here the
need is to experiment, to learn from trials and pilots, and hence to find workable solutions that can apply
more widely. Technical specialists and researchers can assist this process by documenting experiences, evaluating them and disseminating promising results.
83
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APPENDIX A: IMPLICATIONS: THEORY, KNOWLEDGE AND SKILLS FOR A CONTEMPORARY AGRICULTURAL POLICY ADVISOR
Appendix A: Implications:
theory, knowledge and skills for a
contemporary agricultural policy
advisor
From the topics reviewed in this report, what would an agricultural policy advisor need to be able to engage
with debates? These elements have been divided into three groups: theory; knowledge or evidence; and technical skills. More general skills and competences, such as the ability to communicate clearly have not been
listed, since these would apply to any and all of the topics: it is taken that advisors will have general abilities
in analysis and communication.
Table 4.1 sets out the key requirements for each topic. Entries in italics are those items that might be useful,
but which are no considered essential.
TABLE 4.1 THEORY, KNOWLEDGE AND SKILLS FOR A POLICY ADVISOR, BY TOPIC REVIEWED
Topic
Theory and knowledge
Skills
Consensus:
rural investment
climate & rural
public goods
Theory: public goods and other market failures; New Public Management
Measures of protection:
Nominal rate of protection; Net rate of assistance; Producer subsidy
equivalent
Development history:
■■ Policies followed during the Green Revolution in Asia
■■ Negative protection/net rate of assistance to agriculture
(Policy analysis matrix)
■■ Washington Consensus — and structural adjustment and liberalisation as its expression
■■ Understanding change in rural areas: migration and rural-urban
links; urbanisation; the dynamics of rural poverty
■■ Familiar with World Development Report 2008
Food Security and
Nutrition
Theory:
Rural transitions
Demography: population growth and urban-rural division. Trends
in the last 40 years, patterns, explanations. Demographic transition
and the demographic dividend
■■ UNICEF, FAO and SUN frameworks for considering the causes
of food and nutrition insecurity
Migration: patterns typically seen, explanations, consequences
Decentralisation: arguments for, typical experiences
Rural non-farm economy: nature, patterns seen, drivers, policies
likely to stimulate
92
Modelling economies:
SAM and CGE models
AGRICULTURAL DEVELOPMENT POLICY: A CONTEMPORARY AGENDA
Agricultural technology
Theory:
■■ Technical change, impacts on use and hence returns to factors,
drivers of technical change (induced innovations, for example)
■■ Farmer adoption of technology, including typical factors inhibiting adoption, and differential adoption by different scales and
types of farm
■■ Returns to agricultural research
Changing demand for food, transitions from staples to increasing
consumption of fats, animal produce
Biotechnology: basics of traditional plant breeding and recent
advances such as tissue culture, marker-assisted breeding, and
transgenics
Public concern over novel science such as transgenics
Low external input and agro-ecological techniques
Land
Theory: property rights, as part of the theory of institutions
Tenure systems: their strengths and weaknesses, experience of
land titling programmes
Water rights and their links to land rights
Legal frameworks for land
Large-scale land deals and the voluntary guidelines of FAO and the
World Bank
Small and large
farms
Theory: market failures owing to transactions costs in land, capital,
labour markets
Gross margins for crops
and livestock enterprises
The inverse ratio of yields and farm size: evidence, explanations,
criticisms
Value chain concepts
and analysisv
Emerging supply chains and the demands they place on farmers
Failings in rural
markets
Theory: New Institutional Economics, Institutional approaches that draw on transactions costs to examine the feasibility of
institutional arrangements and collective action, including contract
farming and agricultural co-operatives)
Value chain concepts
and analysis
Gender in agriculture
History:
■■ Marketing boards in Africa
■■ Measures used in Asia to encourage the Green Revolution
Competitiveness
and value chains
Theory: transactions costs and institutional responses to these:
contract farming, farmer co-operation
Value chain concepts
analysis
Emerging supply chains: drivers and characteristics
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APPENDIX A: IMPLICATIONS: THEORY, KNOWLEDGE AND SKILLS FOR A CONTEMPORARY AGRICULTURAL POLICY ADVISOR
Market stabilisation
Theory:
■■ Analysis of markets, including welfare implications (producer
and consumer surplus), interactions of national and international markets, concepts of instability in agricultural markets
such as cobweb models of price formation
Import and export parity
price calculations
Ability to read econometrics
■■ Trade and analysis of effects of different trade policies
■■ Transmission of prices from world to national markets
■■ Risk and uncertainty in agriculture, farmers reactions to this
History: agricultural insurance, including pervasive moral hazard
with public schemes
Recent innovations: weather-based insurance, catastrophe bonds,
contingent lines of credit
Use of futures markets to reduce risks and uncertainty
(For advisors dealing with international issues: trade agreements;
international commodities trading practices.)
Climate change
Theory: risk, uncertainty and resilience
Expected impacts of climate change on agriculture
Ways that agriculture can mitigate climate change
Options for agriculture adapting to climate change
International initiatives, including UNFCCC, to mitigate and adapt
to climate change, including financing
Environmental
sustainability
Theory: ecosystems and their functions, tracing impacts from
agriculture on different parts of ecosystems
Biodiversity at different scales
International initiatives for conserving biodiversity such as CBD,
platforms for discussing issues such as IPBES, TEEB
Environmental policies: regulation, incentives such as payment for
environmental services, creation of markets
Political economy
and policy choice
Theory:
Logical frameworks
■■ Contemporary political economy, including distribution of
rents, interest groups, governance
■■ New Public Management
■■ Learning processes and blueprints
History: critiques of planning and the recognition of the limits to
formal planning
Aid architecture: Paris Declaration, Accra Agenda for Action; project and programme aid, budget support
This not surprisingly produces a long list, although given some overlaps and duplications items can be combined and condensed into the list presented as Table 4.2 that divides the field into five areas, as follows.
94
AGRICULTURAL DEVELOPMENT POLICY: A CONTEMPORARY AGENDA
I. KEY VARIABLES AFFECTING AGRICULTURAL
DEVELOPMENT: DEMOGRAPHY AND MIGRATION, FOOD CONSUMPTION AND THE RURAL
NON-FARM ECONOMY
Future demand for food, both volume and composition, will be influenced by population size,
age composition and rural/urban distribution,
together with increased incomes. By 2050 the world
will have a much expanded urban population,
but a smaller rural population both relatively and
absolutely. Patterns of migration will determine
which rural areas lose most population, who is left
behind in agriculture (with what resources and
decision-taking powers), what volume of funds
are remitted, and for what purposes, and so on. In
the better-case scenarios, remittances are invested
in agriculture, to spur investment in the types of
mechanical, chemical and biological technologies
necessary for producing additional food. In the
worse cases, those left behind have limited labour,
funds for investment and decision-making power,
so that the locus of responsibility for producing
food surpluses will pass increasingly to those
households committed to making farming their
main livelihood. Hence, it is important to understand the dynamics of rural poverty: how some
households will escape poverty, and the forces that
may threaten others with entering poverty.
Historically, much agricultural policy has been
made in isolation from factors such as migration.
For those focused on poverty (such as GIZ advisors), this is no longer adequate: advisors need to
ask whether rural-urban linkages of several kinds
(including migration) can be made conducive to
better outcomes. They need to consider what can be
done to support the rural poor (and not the better
off) in seizing the opportunities offered by migration. At other levels, it may involve advising on how
remittances can be spent, on the design of skill sets
for those left behind, on working out enterprise
options for them: for instance, can livestock still be
kept when the most able-bodied have left, and if so,
what livestock options are there?
II. BASIC ECONOMICS, ESPECIALLY THAT
NEEDED TO UNDERSTAND OF THE WASHINGTON CONSENSUS AND ITS LIMITATIONS
Advisors need to know the economics of markets
and production. They need to know the basics of
macro-economics including public finances, inflation and trade. They should also be familiar with
growth economics, including the role of technology, investment and factor accumulation, human
capital and institutions.
The design and delivery of public goods, plus measures to correct market failure, are among the most
important roles of the state. As above with the benefits of migration, the precise form of public good,
and its mode of delivery, can help or hinder poverty
reduction. The routing of public roads is a case in
point, as is the extent to which local labour can be
brought into the construction of infrastructure
through, for example, public works programmes.
These considerations also include the balance of
explicit or implicit taxes and subsidies as between
rural and urban areas. Historically, ‘urban bias’ has
meant that rural areas in general, and agriculture
in particular, have been disadvantaged. Advisors
need to understand both the principles involved
in analysis of this kind, but also to understand the
skills commonly used to calculate rates of protection or subsidy.
III. APPLICATIONS OF ECONOMICS TO AGRICULTURE: MARKET FAILURES, MARKETING
AND VALUE CHAINS, AGRICULTURAL TECHNOLOGY AND LAND
Market failures
Advisors need to be familiar with arguments and
evidence demonstrating that small farms often
have higher yields per hectare than do large; as well
arguments that this advantage may disappear when
for marketing, or to access to inputs, they have to
interact with large, formal enterprises in the supply
chain. It may also disappear as the acquisition of
agricultural goods by supermarkets spreads, given
the conditions they impose. Some of these potential
disadvantages can be overcome by collective action
such as farmer associations and by such mechanisms as contract farming.
Advisors thus need to understand transactions
and other information costs, the role of economic
institutions as rules of the game, and theories of
collective action.
They also need to be familiar with the role played
by state marketing boards. Where markets are
poorly developed they can play a useful role, but, if
allowed to dominate, they can ‘crowd out’ private
sector development. In some instances they have
been used by politicians to set prices with which
the private sector cannot compete, which is potentially highly destabilising.
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APPENDIX A: IMPLICATIONS: THEORY, KNOWLEDGE AND SKILLS FOR A CONTEMPORARY AGRICULTURAL POLICY ADVISOR
Marketing and value chains
An understanding will be needed of concepts such
as consumer and producer surplus, of interactions
between national and international markets, and
of instability in agricultural markets. Trade policy
analysis is a further area of importance: advisors
need to be familiar with the range of trade-related
policies, and their likely implications for different
categories of farmers. Advisors dealing specifically
with international trading agreements may need to
focus particularly on arrangements permitted or
prohibited by WTO and regional trade agreements.
As farmers become more engaged in markets (and
using new farm technologies) they are likely to find
themselves exposed to greater risk. Advisors need
to understand concepts of risk and uncertainty,
how these are perceived by farmers, and how these
perceptions will impact on willingness to engage
in markets or adopt new technologies. Ways of
reducing perceived risk and uncertainty matter
for farmers who want to step up their agriculture
performance.
Many of these issues lend themselves to econometric analysis. Some basic understanding of econometric techniques is thus desirable. Advisors need
to note the overriding importance of (a) asking
the right questions – what do econometric models
predict for different sets of base conditions? How
are sub-sets such as labour-scarce households likely
to be affected? etc. and (b) challenging econometricians to explain and justify the assumptions
they have made in constructing and applying their
models. They need to beware that the jargon of
econometrics can hide questionable arguments.
Agricultural technology
Views on agricultural technology are polarised
and strongly value-driven. At one extreme, there
are those who see the need for a new Green Revolution, mimicking many aspects of the old one.
On the other are those who feel that ow external
input technologies (LEIT) would deliver adequate
productivity increases in ways which better respect
a range of environmental and societal values. To
feed a rapidly growing urban population with (by
2050) an absolute decline in rural population will
require some form of high-yielding technology, in
particular forms which are more resource-sparing
and environmentally friendly.
Advisors will to understand the returns to factors
of production, drivers of technical change, returns
to agricultural research, and the propensity to
96
adopt technology according to scale and type of
farm. They will need to know something of the basics of plant breeding, and recent advances such as
tissue culture, marker-assisted breeding, and transgenics. In particular they will need to understand
the grounds for public concern over transgenics in
order, where appropriate, to support the gathering
of evidence in relation to these concerns. They need
also to be aware of advances in agro-ecological
techniques.
Land
Access to land and its ownership and the implications for equity and efficiency has long been studied. In the 1960s and 1970s debates centred around
land redistribution, and the rationale and productivity of sharecropping. Land has again come to the
forefront with the sale or lease by several land-rich
countries of large areas to multinationals for the
production of export crops, some seeing this as a
key revenue-earner, but others as a threat to the
rights of small farmers over land.
Advisors need to understand the theory of property
rights (especially in relation to institutional theory
more generally). They will need relevant local
knowledge of legal frameworks in relation to land
and water — water rights at times may diverge from
rights over land lying above underground water.
They need to know understand tenure systems,
including the experience of recent titling programmes. They will need to be familiar with recent
large-scale land deals and with how well the voluntary guidelines of the World Bank and FAO work in
practice.
IV. POLITICAL ECONOMY AND PUBLIC ADMINISTRATION
Advisors need to appreciate the political dimensions of policy choice, with some familiarity with
the ideas discussed in contemporary political
economy. Advisors need to understand the political
dimensions of policy-making including the roles of:
ideas and evidence vs. interests; rent distribution as
a means of securing political support; institutions
such as property rights; leaders, other actors and
interest groups; and of timing and opportunities.
Given the importance of values in some policy
debates, especially over priorities and the means
seen as legitimate to achieve them, advisors need to
understand the motivations of key actors, ranging
from the pressures from agribusiness to influence
markets and obtain subsidies, to politicians who
need to weight the implications for power and
AGRICULTURAL DEVELOPMENT POLICY: A CONTEMPORARY AGENDA
stability, to the ideals of equity and justice found
among NGOs. Such understanding is probably
best developed from cases that show how different
agricultural strategies came to be undertaken in
particular circumstances.
Advisors should gain an understanding of the
strength of political incentives facing national
political leaderships in their country or countries of
interest to devise policies and to promote public investments that support smallholder farmers. How
critical are such policies to their chances of re-election, given the multiple ways that political support
can be sought, and/or what might be the impact on
medium-term political stability if the interests of
large numbers of rural citizens are neglected?
They also need to know the arguments over governance and how it may be improved, including the
limitations of orthodox prescriptions for general
“good governance” in contexts where political
coalitions are held together by practices that are
corrupt and/or illegal. In public administration,
advisors need to know the theory and practice of
New Public Management that has been so influential: its strengths and limitations. The same applies
also to decentralisation (and its variants, such as
deconcentration) where the search for effective and
equitable models continues.
They need to understand the limits to formal planning and the importance of engaging with local
processes of debate and decision-making. They
need to recognise the strengths and weaknesses of
‘blueprint’ planning and of learning processes. For
debates that turn on technical uncertainty, more
study and analysis is indicated. While there may be
few shortcuts to better understanding, one of the
simpler and less costly ways to gain knowledge is
through learning from experience by monitoring
and evaluation of sector performance, concise documentation and dissemination of results.
Technically they need to know of the frameworks
under which aid programmes operate, including the Paris Declaration and the Accra Agenda
for Action, sector-wide programming, and programme-based approaches (PBA) or budget support.
V. THE ENVIRONMENT INCLUDING CLIMATE
CHANGE
Advisors need to appreciate technical choices and
their implications for scarcity of resources, pollution, biodiversity and emissions of greenhouse
gases. Although high-yielding technologies will be
needed to feed a rapidly growing population, these
will differ from those produced in the heyday of the
Green Revolution by being less demanding of complementary resources, especially those based on
fossil fuels, and more friendly to the environment.
High-yielding technologies may be combined these
with the soil and water conservation principles of
LEIT.
Advisors need to understand concepts of risk,
uncertainty and resilience as applied to agriculture,
and with biodiversity at different scales. An appreciation of ecosystems and their functioning will
be needed to be aware of the potential impacts of
agriculture on different parts of ecosystems.
With climate change, advisors need to appreciate
potential impacts of climate change on agriculture,
including the capacity of agriculture for adaptation,
and of agriculture on climate change where scope
for mitigation exists. They need to be familiar with
the provisions of international initiatives, including the UNFCCC, to mitigate and adapt to climate
change. The same applies to initiatives for conserving biodiversity, including CBD, and to platforms
for discussing issues, such as IPBES and TEEB.
They will need to be familiar with environmental
policies at national level including regulatory provisions, the creation of markets (such as for carbon)
and payments for environmental services.
→ Further reading:
Hoeffler, Heike (2014): Capacity development for agricultural policy advice. Rural 21 (04/2014), (http://www.
rural21.com/uploads/media/rural2013_04-S28-31.pdf)
In skills, it will be important to identify how and
how far conventional tools such as the Logical
Framework can be adapted to respond flexibly to
changing circumstances.
97
APPENDIX A: IMPLICATIONS: THEORY, KNOWLEDGE AND SKILLS FOR A CONTEMPORARY AGRICULTURAL POLICY ADVISOR
TABLE 4.2 THEORY, KNOWLEDGE AND SKILLS FOR A POLICY ADVISOR, COMBINED
Theory
Context for agricultural development
Economics
Public goods and other market failures
New Public Management
Agricultural economics & marketing
Market failures owing to transactions costs in land, capital, labour markets
New Institutional Economics
The inverse ratio of yields and farm size: evidence, explanations, criticisms
Analysis of markets, including welfare implications (producer and consumer surplus), interactions of national and international markets, instability in agricultural markets including cobweb models of price formation
Trade and analysis of effects of different trade policies
Transmission of prices from world to national markets
Risk and uncertainty in agriculture, farmers’ reactions to this
Technical change, impacts on use and hence returns to factors, drivers of technical change (induced innovations, for example)
Farmer adoption of technology, including typical factors inhibiting adoption, and differential adoption by
different scales and types of farm
Property rights (links to theory of institutions)
98
AGRICULTURAL DEVELOPMENT POLICY: A CONTEMPORARY AGENDA
Knowledge: past and present experience
Skills
Demography: population growth and urban-rural division.; trends in the last 40
years, patterns, explanations; demographic transition and the demographic dividend
Migration: patterns typically seen, explanations, consequences
Changing demand for food, transitions from staples to increasing consumption of
fats, animal produce
Rural non-farm economy: nature, patterns seen, drivers, policies likely to stimulate
Washington Consensus — and structural adjustment and liberalisation as its expression
Measures of protection: Nominal rate of protection; net rate of assistance; producer subsidy
equivalent, (Policy analysis matrix)
World Development Report 2008
Gross margins for crops and livestock enterprises
Negative protection/net rate of assistance to agriculture
Marketing boards and parastatals in Africa
Policies followed during the Green Revolution in Asia
Institutional responses to high transactions costs: contract farming
Collective action: farmer associations and co-operatives
Gender in agriculture
Value chain concepts and analysis
Emerging supply chains: characteristics, drivers, demands they place on farmers
Import and export parity price calculations
Agricultural insurance, including pervasive moral hazard with public schemes
Ability to read econometrics
Recent innovations: weather-based insurance, catastrophe binds, contingent lines
of credit
Use of futures markets to reduce risks and uncertainty
(For advisors dealing with international issues: trade agreements; international commodities trading practices.)
Biotechnology: basics of traditional plant breeding and recent advances such as
tissue culture, marker-assisted breeding, and transgenics
Returns to agricultural research
Public concern over novel science such as transgenics
Low external input and agro-ecological techniques
Tenure systems: their strengths and weaknesses, experience of land titling programmes
Water rights and their links to land rights
Legal frameworks for land
Large-scale land deals and the voluntary guidelines of FAO and the World Bank
99
APPENDIX A: IMPLICATIONS: THEORY, KNOWLEDGE AND SKILLS FOR A CONTEMPORARY AGRICULTURAL POLICY ADVISOR
Theory
Public policy & administration
Political economy
Climate change & the
environment
Risk, uncertainty and resilience
New Public Management
Ecosystems and their functions, tracing impacts from agriculture on different parts of ecosystems
Biodiversity at different scales
100
AGRICULTURAL DEVELOPMENT POLICY: A CONTEMPORARY AGENDA
Knowledge: past and present experience
Skills
Contemporary political economy; governance
Logical frameworks
Critiques of formal planning and its limits; recognising differences of task and environment and hence the ability to plan in detail and in advance, versus the need to
learn and adapt: blueprints and learning processes
Public sector budgeting
Decentralisation: theory and typical experiences
Paris Declaration, Accra Agenda for Action, projects and programmes, sector wider
approaches, budget support
Expected impacts of climate change on agriculture
Ways that agriculture can mitigate climate change
Options for agriculture adapting to climate change
International initiatives, including the UNFCCC, to mitigate and adapt to climate
change, including financing
International initiatives for conserving biodiversity such as CBD, platforms for discussing issues such as IPBES, TEEB
Environmental policies: regulation, incentives such as payment for environmental
services, creation of markets
101
APPENDIX B: REVIEWING POLICY LITERATURE
Appendix B:
Reviewing policy literature
The revival of interest in agriculture in the last
few years has not surprisingly led international
agencies and bilateral donors to reassess the aims
and instruments for agricultural development and
associated fields of rural development, food and nutrition security, rural poverty and the management
of renewable natural resources. Most of the leading
development agencies have made some statement
on agricultural policy since 2008, of which the
World Development Report for 2008 (World Bank,
2007) is the outstanding example. Given the existence of these documents, plus much research and
analysis that lies behind new thinking, there was
little point in carrying out new analysis. Instead
recent thinking on agricultural development policy
has been reviewed by drawing on these documents,
complemented by existing knowledge of the literature.
More than 35 reports and position papers published
during the last ten years by leading donors were inspected, covering development co-operation, policy
positions, strategy, occasional papers and submissions to international debates. The most relevant of
these documents — 24 in total, listed in Table 4.3 —
were reviewed against eleven areas of interest. More
details of the topics covered in these documents
and their policy positions have been logged in the
last section of this appendix.
102
Government, 2010; CIDA, 2010). Raising small farm
productivity is seen as a key issue for growth, food
security and poverty alleviation.
The role of agriculture as a key driver of economic growth in rural economies is often reiterated.
Attention is also given to the rural non-farm
economy in several documents which emphasise
the need to ensure smooth processes of agricultural
transition as important pathways out of poverty for
households (e.g. IFAD, 2011; ADB, 2007).
Many documents highlight the need for a conducive macroeconomic climate or enabling environment, to enable smallholders as well as the private
sector in general to operate effectively, and drive
further investment (e.g. US Government, 2010;
ADB, 2007).
Most documents underline the role of government
in provision of rural public goods. This includes
major infrastructure investments such as roads,
research, education, health, financial services and
institutions to oversee markets (IFAD, 2011; US
Government, 2010; AfDB, 2010; WFP, 2009).
Common narratives and themes seen in these
documents
Environmental constraints and sustainability
are mentioned widely. Raising smallholder output
whilst limiting environmental degradation is a
common theme: see, for example, the Foresight
Report on the Future of Food and Farming (Foresight, 2011) and FAO’s Sustainable Crop Production
Intensification (FAO, 2012).
A common narrative stresses the changing context for agriculture: of how increased population,
changing diets, environmental degradation and
climate change are placing pressure on agricultural
production. Several documents also highlight increased volatility and higher prices since 2007/08 as
a likely feature of the future. These changes provide
the context for calls for increased investment in
agricultural development and growth, which many
of the documents see as a priority on the global
agenda (e.g. FAO et al., 2011; HLPE, 2011; World
Bank, 2007).
Climate change has come into prominence. Most
papers recognise the potential of agriculture to
mitigate greenhouse gas emissions, as well as the
threat that climate change poses to agriculture
and vulnerable rural populations (e.g. BMZ, 2011;
CGIAR, 2011; World Bank, 2007). Climate change
adaptation is seen as important for future funding
(e.g. AfDB, 2010). The role of technological advances
to raise yields and resilience in the face of climate
change is an area where more work is needed by
developing country governments and international
research partnerships.
The importance of small farms and policies to
stimulate their development is generally recognised, with some agencies placing these at the
centre of their concerns (FAO et al., 2012; US
Most documents reaffirm the importance of
agricultural research and technological advances to meet future challenges. The relative decline
in spending on public agricultural research since
AGRICULTURAL DEVELOPMENT POLICY: A CONTEMPORARY AGENDA
the 1980s is given as a reason for a slow-down
in yield increases. Recent relevant institutional
developments and initiatives including the CGIAR
evaluation and reform process, the outcome of the
IAASTD review and the 2011 GCARD conference,
have been influential in mobilising support for
development-orientated research (e.g. HLPE, 2011;
CIDA, 2010).
TABLE 4.3 DOCUMENTS REVIEWED FOR THIS REPORT
No.
Authors, year of publishing and brief title
1
AfDB, 2010. Agricultural Sector Strategy 2010-2014
2
ADB, 2007. Rural Poverty Reduction and Inclusive Growth
3
BMZ, 2011. Rural development and its contribution to food security
4
CGIAR, 2011. Strategy and Results Framework for the CGIAR
5
Chicago Council on Global Affairs, 2009. Renewing American Leadership in the Fight against Global Hunger
and Poverty
6
CIDA, 2010. Increasing Food Security: CIDA’s Food Security Strategy
7
CPAN, 2012. Agricultural Policy Guide.
8
EC, 2010. Food Security Thematic Programme 2011–2013
9
FAO, 2012. Save and Grow, Policies and Institutions
10
G8, 2010. ‘L’Aquila’ Joint Statement on Global Food Security
11
GIZ, 2009-2012. Various position papers on agriculture and rural development
12
HLPE, 2011. Price volatility and food security
13
IFAD, 2010. Rural Poverty Report 2011
14
IFPRI, 2012. Strategies and Priorities for African Agriculture
15
Interagency report to the G20, 2012. Agricultural Productivity and Bridging the Gap for Small Family Farms
16
Interagency Report to the G20, 2011.
17
Multiple agencies, 2010. Scaling up Nutrition: A framework for Action
18
OECD, 2012. Agricultural Policies for Poverty Reduction
19
UK Government, 2011. Foresight Report on the Future of Food and Farming
20
UN HLTF, 2010. Updated Comprehensive Framework for Action
21
United States Government, 2010. Feed the Future Guidelines
22
WFP, 2009. Hunger and Markets
23
Wise and Murphy, 2012. Resolving the Food Crisis: Assessing Global Policy Reforms Since 2007
24
World Bank, 2007. WDR 2008: Agriculture for Development
These documents revealed some renewed and emerging areas on interest in agriculture and development.
103
APPENDIX B: REVIEWING POLICY LITERATURE
Trade policies and price stabilisation are commonly referred to. Statements on the need to
reduce export restrictions and import taxes during
times of high global prices are common, and some
documents discuss the need for LDCs to exercise
flexibility in their trade policies and take advantage
of preferential access agreements. Several papers
raise the need for reform of agricultural support in
OECD countries (FAO et al., 2012; HLPE, 2011; GIZ,
2009).
Several documents highlight nutrition and the case
for greater investment into nutrition research and
targeted nutritional interventions (e.g. EC, 2010;
SUN, 2010; UN HLTF, 2010).
Social safety nets are commonly recommended
as tools which governments should use in lieu of
general price subsidies in order to protect the food
security of the most poor and vulnerable. They are
generally touted as a beneficial and low-cost way of
mitigating risks. Safety nets are central to another
piece of work by ODI for GIZ, namely social protection in relation to robust food and nutrition systems, and so are referred to only occasionally here.
104
Improving conditions for emergency response,
including food shipments, is urged in several documents (e.g. HLTF, 2010). Particular concerns include
buffering prices that relief agencies pay for food,
and ensuring efficient procurement and transportation.
Changes in consumer choices and their diets are
highlighted by a few reports as a way to reduce
pressure for more production. These build on
reports of projections of the extra land and input
requirements to feed rising populations at Western
levels (e.g. Wise and Murphy, 2012; Foresight, 2011).
Numerous reports highlight the importance of
ensuring women’s access to both productive inputs
(especially land), new technology and extension
services (e.g. UN HLTF, 2010; G8, 2010; Chicago
Council on Global Affairs, 2009).
AGRICULTURAL DEVELOPMENT POLICY: A CONTEMPORARY AGENDA
LOG OF DOCUMENTS REVIEWED
NB: Cells shaded in pale gold indicates that the report does not discuss this issue, or does so only in passing.
Text in italics indicates direct quotes from the documents.
AFDB, 2010. AGRICULTURAL SECTOR STRATEGY 2010–2014
African Development Bank, 2010, Agricultural Sector Strategy 2010–2014. Available at
http://www.afdb.org/fileadmin/uploads/afdb/Documents/Policy-Documents/Agriculture%20Sector%20
Strategy%2010-14.pdf
AIM: Sets out the AfDB strategy in agriculture, reaffirming the importance of the sector, esp. since 2007/08.
Identifies two pillars in particular which are important: agricultural infrastructure and renewable natural
resource management (CAADP Pillars I &II).
Enabling environment
Yes. Mentioned briefly as a crosscutting issue
Provision of rural public
goods
Cites its experience points to a need for government to play a central role in the
provision of investment in rural infrastructure; improving market chains and assisting
adaptation to CC (p.8)
Rural transitions
Small-scale versus largescale farms
No - but an emphasis on smallholders for targeting for yield improvements
Land rights
Yes. Land titling and registration are mentioned as important constraints; requiring
reform and implementation
Rural market failures
Trade openness and protection
Cites the importance of increasing access to local and regional markets.
Competitiveness and value
chains
Stabilising markets
Technology
Generally supportive of new technologies, including new varieties and GM crops.
Environmentally sustainable farming
Strong emphasis (one of the two pillars) but does not define in detail
Responding to climate
change
Mentioned as an activity to fund
Other concerns
Strong focus upon Gender and its importance for food security
105
APPENDIX B: REVIEWING POLICY LITERATURE
ADB, 2007. RURAL POVERTY REDUCTION AND INCLUSIVE GROWTH
Asian Development Bank, 2007, Rural Poverty Reduction and Inclusive Growth. Report of the Working
Group on Rural Poverty (September 2007). Available at http://www.adb.org/documents/rural-poverty-reduction-and-inclusive-growth
Enabling environment
Yes. ‘The importance of a sound policy environment should not be underestimated.
Rural development is facilitated by policies that encourage private sector roles and
investment in markets for agricultural inputs and products, and RNFEs.’
Only mention of the importance of improving investment climate in MICs (e.g.
through PPPs).
Provision of rural public goods
Yes. Important role for government in the provision of infrastructure (p. 7).
Rural transitions
Yes. Mentions the need to expand the RNFE, and explicitly help workers make
the transition from farm to non-farm activities, especially for areas with low-agro
productivity potential and poor market access. Includes a paragraph on the need to
invest in rural towns (including infrastructure, BDS).
Small-scale versus large-scale
farms
Land rights
Short mention on the need to improve tenure security, capacity for land registration and protection of tenure rights (p. 9).
Rural market failures
Yes. Highlights the need to provide credit, due to the importance of credit across a
number of areas. Highlights the current weaknesses of rural finance institutions in
Asia.
Trade openness and protection
Competitiveness and value
chains
Stabilising markets
Technology
Very little. Just emphasis on the need for technology breakthroughs which reach
the rural poor.
Environmentally sustainable
farming
Passing mention of the need to improve sustainable agricultural productivity.
Responding to climate change
Very little. just acknowledges need to adapt to climate change in agriculture.
Other concerns
106
AGRICULTURAL DEVELOPMENT POLICY: A CONTEMPORARY AGENDA
BMZ, 2011. RURAL DEVELOPMENT AND ITS CONTRIBUTION TO FOOD SECURITY
German Federal Ministry for Economic Cooperation and Development, 2011, Rural Development and its
Contribution to Food Security, BMZ Strategy Paper 1|2011 (March 2011). Available at: http://www.bmz.de/
en/publications/topics/rural_development/index.html
AIM: Sets out a framework for approaching development in rural areas and identifies the strategic direction
for German official development cooperation.
Enabling environment
Mention of this with regards to both the political and institutional level (introduction and 2.4) and passing mention (Chapter 2) on the need for a business and
investment climate.
Provision of rural public goods
Referred to as provision of social services and technical infrastructure.
Rural transitions
Brief acknowledgement of the need to ease these.
Small-scale versus large-scale
farms
Land rights
Yes. Remarks on the need to improve land laws and establish land and water rights
are seen as an essential foundation for income generation and food production.
Rural market failures
Trade openness and protection
Competitiveness and value
chains
Stabilising markets
Technology
Brief mention of communication technologies as being potentially important.
Environmentally sustainable
farming
Brief mention in as much as the sustainable use of natural resources (which is heavily emphasised) covers this.
Responding to climate change
Agriculture has an important role in contributing to Climate change mitigation. At
the same time, rural populations are particularly at risk from climate change.
Other concerns
Important role of rural social services (Social security, community based insurance).
107
APPENDIX B: REVIEWING POLICY LITERATURE
CGIAR, 2011. STRATEGY AND RESULTS FRAMEWORK FOR THE CGIAR
Consultative Group on International Agricultural Research, 2011. Strategy and Results Framework for the
CGIAR, (February 2011). Available at http://www.cgiar.org/our-research/
AIM: Sets out CGIAR’s views of global trends, challenges and direction for research following its review
Enabling environment
Outlines the importance of providing ‘contextual factors’ other than productivity
growth for poverty alleviation: access to input and output markets; credit and insurance
and other areas of service delivery.
Provision of rural public
goods
The thrust of the discussion is on research as a public good.
Rural transitions
Little mention, but raises the view that with greater urbanisation, there is a need for
more and better trade and efficient use of agricultural resources.
Small-scale versus largescale farms
Not detailed. While there is a clear need to focus upon smallholders to meet poverty
reduction goals of CGIAR research, however to meet global food security there is a parallel need to continue to raise productivity in subtropical Asian lowlands (rice); double
rice/wheat systems in Pakistan, Nepal and Southern China; temperate maize rain-fed
cropping in North America; rain fed wheat in Europe; and, maize systems in the Pampas
and Cerrado. (While this does not specifically mention the smallholder/ large-scale
farms, some of these areas are likely to have large scale farmers.)
Land rights
Rural market failures
Trade openness and protection
Competitiveness and value
chains
Stabilising markets
108
Technology
Some mention, esp. under reducing ‘Reducing Poverty’ (p. 45). ‘New Technologies
themselves are a blunt instrument for reducing poverty’. Rather underlying factors
constraining technology adoption are also those closely associated with poverty.
Environmentally sustainable farming
Yes-mainly in the context of sustainable use of natural resources. Includes a useful
discussion on the framing of environmental issues, e.g. the attempt to analyse in a comprehensive manner (integrated natural resource management), but increasing trend to
analyse at landscape level, instead of at the production system level (p. 55).
Responding to climate
change
Yes. Discusses both the need of agriculture to adapt to CC changes (including those due
to emissions having occurred in previous decade). Highlights the regional nature of CC
effects, and needs to respond according to these changes.
Other concerns
The discussion includes a more in-depth discussion on the specific cropping systems
which are needed in order to address the needs of poor smallholders: including root
crops; dryland cereals; legumes; agro-forestry, ruminant livestock.
AGRICULTURAL DEVELOPMENT POLICY: A CONTEMPORARY AGENDA
CHICAGO COUNCIL ON GLOBAL AFFAIRS, 2009. RENEWING AMERICAN LEADERSHIP IN THE FIGHT AGAINST GLOBAL HUNGER AND POVERTY
Chicago Council on Global Affairs, 2009. Renewing
American Leadership in the Fight against Global
Hunger and Poverty: The Chicago Initiative on
Global Agricultural Development, Chicago Council
on Global Affairs
Report Issued by an Independent Leaders Group on
Global Agricultural Development, Catherine Bertini
& Dan Glickman co-chairs, Chicago, Illinois
AIM: This report is about renewing an effort to
boost agricultural development for the benefit of the
poor in SS Africa and S Asia, an effort for which the
USA needs to take the lead.
Of greatest concern is the extreme plight of the
approximately 600 million people who live on less
than $1 per day in rural areas of Sub-Saharan Africa
and South Asia and depend on agriculture for their
livelihoods.
The solution to their plight lies in a sustained, longterm effort to increase agricultural productivity on
smallholder farms. Yet over the past two decades
there has been a steady decline in the world’s support for the research, education and extension, and
rural infrastructure improvements that are needed
Enabling environment
to help smallholder farmers improve their crop
yields and gain access to agricultural markets.
Report is the result of the work of a technical committee of a dozen, chaired by Robert Thompson
from Illinois.
Stresses the need to revive production:
The problem is basically one of low farm productivity, so that’s what needs changing.
The source of these problems is not fluctuating food
prices on the world market, but low productivity on
the farm. The production growth needed will have
to come from improved farm policies, technologies,
and techniques, including those that address the
effects of climate change. (p.16)
How did it get this way? Well, we known that education, investment and technology work.
Rural hunger and poverty decline dramatically
when education, investment, and new technologies
give farmers better ways to be productive. (p.16)
Focuses on US contribution to this:
R5: Improve U.S. policies currently seen as harmful to agricultural development abroad.
ACTION 5a. Improve America’s food aid policies.
ACTION 5b. Repeal current restrictions on agricultural development assistance that
might lead to more agricultural production for export in poor countries in possible competition with U.S. exports.
ACTION 5c. Review USAID’s long-standing objection to any use of targeted subsidies
(such as vouchers) to reduce the cost to poor farmers of key inputs such as improved
seeds and fertilisers.
ACTION 5d. Revive international negotiations aimed at reducing trade-distorting policies, including trade-distorting agricultural subsidies.
ACTION 5e. Adopt biofuels policies that place greater emphasis on market forces and on
the use of non-food feedstock.
And complement US efforts with international changes:
R4: Improve the national and international institutions that deliver agricultural development assistance
Restore USAID’s leadership and ability to plan and implement agricultural development.
Improve Congressional ability to participate in this. Better co-ordination across US agencies concerned with food and agricultural development. Better functioning of international agencies, above all the FAO.
109
APPENDIX B: REVIEWING POLICY LITERATURE
Provision of rural public
goods
R1: Increase support for agricultural education and extension at all levels in Sub-Saharan Africa and South Asia.
Includes funding students from the two regions to study agriculture in the USA,
support for local education, partnerships of US universities with those in the regions,
forming an agricultural cadre within the Peace Corps, and encouraging primary schooling of rural boys and girls through school feeding.
R3: Increase support for rural and agricultural infrastructure, especially in Sub-Saharan Africa.
More World Bank funding for infrastructure in transport corridors, clean energy, water,
irrigation and farm-to-market roads.
Faster spending of MCC funds on infrastructure.
Rural transitions
Small-scale versus largescale farms
Land rights
Rural market failures
Trade openness and protection:
R2: Increase support for agricultural research in Sub-Saharan Africa and South Asia
Fund scientists in NARS, link US expertise to them, fund the CGIAR, and create a competitive fund to reward innovations of use to poor farmers in the region.
Recommends the CGIIAR best bets for agricultural research:
The Consultative Group on International Agricultural Research (CGIAR) and the International Food Policy Research Institute (IFPRI) have identified several examples of
‘best bets’ for large-scale research investments, ranging between US$10 million and
US$150 million each over five years. These programs are focused on three strategic
areas: food for the people, environment for the people, and innovation for the people.
Key opportunities include:
Competitiveness and value
chains
Stabilising markets
Technology
R2: Increase support for agricultural research in Sub-Saharan Africa and South Asia
Fund scientists in NARS, link US expertise to them, fund the CGIAR, and create a competitive fund to reward innovations of use to poor farmers in the region.
Recommends the CGIIAR best bets for agricultural research:
The Consultative Group on International Agricultural Research (CGIAR) and the International Food Policy Research Institute (IFPRI) have identified several examples of
‘best bets’ for large-scale research investments, ranging between US$10 million and
US$150 million each over five years. These programs are focused on three strategic
areas: food for the people, environment for the people, and innovation for the people.
Key opportunities include:
110
AGRICULTURAL DEVELOPMENT POLICY: A CONTEMPORARY AGENDA
Technology
Estimated
investment:
People reached:
1.WW Revitalizing Yield Growth in the
Intensive Cereal Systems of Asia
US$150M
over 5 years,
3 billion
2. Increasing Fish Production in Sub-Saharan Africa and South Asia
US$73.5M
32 million
3. Controlling Wheat Rust
US$37.5M
2.88 billion
4. Developing a Disseminating a Vaccine
for East Coast Fever in Cattle
US$10.5M
20 million, with additional indirect effects
on many more
5. Developing and Disseminating
Drought-Resistant Maize in Africa
US$100M
320 million, with
additional indirect
effects on many more
6. Scaling Up Bio-fortification
US$125M
up to 672 million
7. Increasing Carbon Sequestration and
the Livelihoods of Forest People
US$45M
48 million
8. Conducting Climate Change and Adap- US$127.5M
tation Research
1.18 billion
9. Combining Organic and Inorganic Nutrients for Increased Crop Productivity
US$55M
400 million
10. Promoting Sustainable Groundwater
Use in Agriculture
US$24M
261 million
11. Expanding the Exchange of Genetic
Resources
US$15M
global impact, with a
focus on developing
countries
12. Improving Small Farmer Access to
Trade, Market, and Value Chain Systems
US$10.5M
45 million
13. Ensuring Women’s Participation in
Agriculture
US$30M
200 million
14. Connecting Agriculture and Health
US$75M
global
Source: IFPRI 2008.
Environmentally sustainable farming
Responding to climate
change
Other concerns
111
APPENDIX B: REVIEWING POLICY LITERATURE
CIDA, 2010. INCREASWING FOOD SECURITY: CIDA’S FOOD SECURITY STRATEGY
Canadian International Development Agency, 2010, Increasing Food Security: CIDA’s Food Security Strategy.
Available at http://www.acdi-cida.gc.ca/acdi-cida/acdi-cida.nsf/eng/NAD-31210472-LHX
AIM: CIDA identifies ‘Sustainable Agricultural Development as a path to build up food security. This involves (committing more resources, strengthening the ‘enabling environment (this is not defined) for sustainable rural development, development of integrated value chains, integration of the agricultural market,
strengthening accountability mechanisms in governments and ministries.
Enabling environment
Yes. Creating an enabling environment for sustainable rural development is a core
part of CIDA’s strategy.
Provision of rural public goods
Rural transitions
Brief acknowledgement of the need to ease rural transitions.
Small-scale versus large-scale
farms
Land rights
Rural market failures
Trade openness and
protection
Competitiveness and value
chains
Yes. Brief mention of the importance of integrated value chains.
Stabilising markets
Technology
112
Environmentally sustainable
farming
Yes. Promoting this is a core part of the CIDA strategy.
Responding to climate change
Identified as a challenge.
Other concerns
Supports greater investment in research at the international level, especially
through the CGIAR.
AGRICULTURAL DEVELOPMENT POLICY: A CONTEMPORARY AGENDA
CPAN, 2012. AGRICULTURAL POLICY GUIDE
Chronic Poverty Advisory Network (CPAN), 2012, Agricultural Policy Guide: Meeting the Challenges of a
new pro-poor agricultural paradigm: the role of agricultural policies and programmes. London: Chronic
Poverty Advisory Network at Overseas Development Institute. Available online at:
https://sustainabledevelopment.un.org/getWSDoc.php?id=1535
AIM: This policy guide set outs options for agricultural policy under different settings, whose aims are to
directly benefit the chronic poor. It “makes a new case for a shift in the mainstream agricultural paradigm
towards a focus on asset accumulation and protection in the context of sustainable agriculture, as well as an
emphasis on farm workers as a major constituency for agricultural agencies.”
It also suggests an approach for a pro-poor systems innovation approach.
Enabling environment
Argues that this continues to be important for farming as well as the RNFE. Investment climate improvements, especially in removing tax and regulatory thresholds
that discourage business growth beyond the micro or small; improving security and
anti-corruption measures are all important for the development of the RNFE
Provision of rural public goods
These are very important in providing the assets that the poor rely upon to move
out of poverty. Examples cited include primary education and access to roads.
These can also be more important in contributing to higher levels of productivity
than systems emphasising high application of fertilisers
RPGs are also viewed as highly important for market integration of poor farmers.
Rural transitions
The RNFE is a very important way for the poor to move out of poverty. At the same
time, care needs to be taken to ensure that labour conditions there are regulated to
ensure that employees benefit.
Small-scale versus large-scale
farms
Discusses only in relation to the difficulties that small, resource-constrained, poor
farms face, and how traditional models of ARD and extension bypass these, as they
favour larger operations.
Land rights
Improving land rights crucial to improve the assets of the poor. Land distribution
provides a unique and unparalleled way of improving the lot of the poor (p. 24). In
the absence of this, improving renting and leasing governance can be important,
especially granting women further rights.
Rural market failures
Insurance markets are highlighted as a particular area where markets fail the poor
and where governments, microcredit agencies and other agencies can step in to
provide poor people with weather and livestock insurances.
Resource-poor farmers commonly do not benefit from private credit systems, or
from subsidised inputs such as fertiliser.
Trade openness and protection
Competitiveness and value
chains
Argues that unregulated value chains undermine the poor’s ability to move out of
poverty. More horizontal co-ordination through farmers’ organisations and similar
groups play a crucial role. Vertical co-ordination can also be an important means of
improving the positions of the poor, e.g. through contract farming (p. 54).
However, it is local and national, rather than global value chains, where poor farmers will most likely be able to participate and benefit. Further education amongst
national middle classes and other groups is therefore needed.
Examples of inclusive value chains are given, such as contract farming, although
certain contexts demand additional provisions to ensure that systems are pro-poor,
trust is established, and decent arrangements and jobs are created.
Stabilising markets
Argues that these can be beneficial in some circumstances.
113
APPENDIX B: REVIEWING POLICY LITERATURE
Technology
Argues that there is a need for a plurality of ARD systems for different contexts.
That technology has been an important part of agricultural development but the
poor have been left out of techno-centric approaches, and are likely to continue to
be, if contemporary policies do not consider their specific needs.
The GR model may work for maize models in SSA, but it clearly has its limits, and
more focus is needed on soil conservation, indigenous technology and appropriate
mechanisation. (p. 44)
Water conservation and soil fertility should be at the core of agricultural agencies’
work.
Environmentally sustainable
farming
Argues that a shift to sustainable agriculture is needed. Although this may be painful, the poorest should be protected during these transitions. At the same time, the
poorest urgently need to take up environmentally sustainable farming to reduce
the degradation of their few assets.
Responding to climate change
Identifies a clear need for the further uptake of Conservation Agriculture and
Climate-smart agriculture.
Other concerns
A cluster on labour looks at how labour markets—in which the chronically poor are
often engaged—can better operate in their interest. Areas include education and
awareness campaigns and education on child labour; development of voluntary
codes of practice for businesses, which focus on or include farm workers’ terms
and conditions of employment, rights and entitlements; legislation on minimum
wages; and public works schemes which provide a wage floor in a rural economy.
A gendered approach is needed across interventions to ensure that women are not
disadvantaged by interventions which may help, but be co-opted by men.
114
AGRICULTURAL DEVELOPMENT POLICY: A CONTEMPORARY AGENDA
EC, 2010. FOOD SECURITY THEMATIC PROGRAMME 2011–2013
European Commission, 2010, Food Security Thematic Programme: Thematic Strategy (Update) and Multiannual Indicative Programme (2011-2013). Brussels: European Commission, Document C/2010/9263
The main focus of this document is on the instruments used by the EU to address food security. It has a
strong focus on research and governance of the food security system.
Enabling environment
Provision of rural public goods
Yes, but focused on international public goods (through research). although investment in agricultural research is a major part of the strategy
Rural transitions
Small-scale versus large-scale
farms
Notes smallholder contributions to poverty reduction and growth: ‘evidence shows
that investments in the smallholder sector yield the best returns in terms of poverty
reduction and growth, priority is given to enhancing the incomes of smallholder
farmers.’
Land rights
Yes; in the context of improving governance and halting LSLA, and support for
both CFS as well as PRAI initiatives.
Rural market failures
Trade openness and protection
Competitiveness and value
chains
Only brief mention of a need to focus along the whole value chain.
Stabilising markets
Passing mention of the importance of volatility in food security.
Technology
Environmentally sustainable
farming
Mentioned in the context of strategic directions for ARD.
Responding to climate change
Yes briefly mentioned throughout, in terms of adaptation and research. Also, that
climate change is expected to hit developing countries particularly hard, due to
their locations in low latitudes.
Other concerns
A stronger focus on nutrition and social protection is aimed for under this strategy.
Nutrition is seen to have important multiplier effects, and the report notes losses
of 2–3% of GDP of growth due to poor nutrition.
115
APPENDIX B: REVIEWING POLICY LITERATURE
FAO, 2012. SAVE AND GROW, POLICIES AND INSTITUTIONS
FAO, 2012, Save and Grow. Policies and Institutions, Rome: FAO Available at:
http://www.oecd-ilibrary.org/environment/water-management_9789264162600-en
AIM: This document discusses how to bring about Sustainable Crop Production Intensification (SCPI) and
specifically what measures are needed in this area.
Enabling environment
Need for greater coherence at the macro-level. This includes reform of major IMF
instruments (Compensatory Financing Facility; Exogenous shock Facility).
Provision of rural public
goods
Little specific mention. Argues for increased smallholder research, extension, credit
and insurance mechanisms.
Rural transitions
Little mention. Only comments that farm consolidation, resulting from increased offfarm rural employment appears inevitable.
Small-scale versus largescale farms
Emphasises a need to focus research on smallholders, and especially those farming
marginal areas.
Land rights
Highlights a need to provide stable property rights in order to encourage long-term
sustainable land practices. However, emphasises the security that can be provided
through customary property rights.
Rural market failures
Argues for the internalising of environmental externalities especially
Trade openness and protection
Competitiveness and value
chains
Value chains: Highlights concerns that concentration of market power in different
points in the chain reduces incomes for other smaller parties in the chain.
Discusses the need to create comparative advantages for smallholders when these
are disfavoured, or to reduce the transactions costs associated with large numbers of
sellers (e.g. through producer coops).
Stabilising markets
Discussion on the need for market-smart subsidies. Also, ‘stabilisation of output
prices is an increasingly important condition for sustainable intensification of crop
production, given recent volatility’ p83.
Technology
Brief. Reflecting the findings of IIASTD, argues for a greater need to facilitate knowledge exchange and use of SCPI technologies. Argues that modern communication
technologies are needed for this.
Argues for broad access to IPRs and for countries to pursue policies which ensure
access to genetic resources.
116
Environmentally sustainable
farming
Suggests that a greater use of PES in the agriculture sector is needed, but does not
discuss challenges associated with this.
Responding to climate
change
Highlights the potential huge effects of CC on productivity, and the high costs (IFPRI
estimate of 7 billion to 2050) to increase productivity to offset these losses. Suggests
that there are still many unknowns regarding Mitigation, other than the need to
include this further in Sustainable Intensification.
Other concerns
Suggest special attention is needed for seed markets for SCPI (including focus on the
informal sector).
AGRICULTURAL DEVELOPMENT POLICY: A CONTEMPORARY AGENDA
G8, 2010. ‘L’AQUILA’ JOINT STATEMENT ON GLOBAL FOOD SECURITY
G8, 2010, ‘L’Aquila’ Joint Statement on Global Food Security: L’Aquila Food Security Initiative (AFSI).
http://www.g8italia2009.it/static/G8_Allegato/LAquila_Joint_Statement_on_Global_Food_Security%5B1%5D,0.pdf
AIM: Presents the joint views on the need to extend efforts on food security by major donors following the
G8 discussions.
Enabling environment
Not beyond a statement of commitment to promoting conducive business environments.
Provision of rural public goods
Rural transitions
Small-scale versus large-scale
farms
Not specifically, although highlight a focus on small farmers, women and families
and the need to integrate these into trade strategies.
Land rights
Rural market failures
Trade openness and protection
Rejection of protectionism internationally: ‘Open trade flows and efficient markets
have a positive role in strengthening food security’
Competitiveness and value
chains
Stabilising markets
Technology
Responding to climate change
Environmentally sustainable
farming
Other concerns
Yes. Brief mention on the need for coupling food security with adaptation and
mitigation measures in relation to climate change.
‘Effective food security actions must be coupled with adaptation and mitigation
measures in relation to climate change, sustainable management of water, land,
soil and other natural resources, including the protection of biodiversity’.
Link between health and education and nutrition and food security. Recognition of
the important role of cash based social protection systems, emergency feeding and
targeted nutrition in the long term.
Support for international collaboration and local implementation (supportive of
CAADP).
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APPENDIX B: REVIEWING POLICY LITERATURE
GIZ, 2009-2012. POSITION PAPERS ON AGRICULTURE AND RURAL DEVELOPMENT
GIZ information briefs available from http://www.giz.de/Themen/en/
GIZ, 2009. Agricultural Education and Extension. Information Brief. Eschborn: GIZ
GIZ, 2009. Using Genetically Modified Organisms. Briefing Note. Eschborn: GIZ
GIZ, 2009. Value Chains in Agriculture. Information Brief Eschborn: GIZ
GIZ, 2009. The WTO and Agricultural Trade. Briefing Note. Eschborn: GIZ
GIZ, 2010. Resource Saving Fertilizer Use. Briefing Note. Eschborn: GIZ
GIZ, 2010, Volatile Agricultural and Food Prices. Briefing Note. Eschborn: GIZ
GIZ, 2010. Subsidizing Agricultural Inputs. Briefing Note. Eschborn: GIZ
GIZ, 2011. Securing Land Rights. Briefing Note. Eschborn: GIZ
GIZ, 2012. Large-scale Land Acquisitions and Leases. Briefing Note. Eschborn: GIZ
GIZ, 2012. Supporting Land Reform. Briefing Note. Eschborn: GIZ
AIM: Describing important current issues in global agriculture and rural development and setting out GIZ’s
position on these.
Enabling environment
Provision of rural public goods
Paper on knowledge and extension places an emphasis on the importance of
extension services, tailoring these to the needs of recipients (including raising
demand for services); complementing private sector delivery, and making these
cost effective. The paper on agricultural research emphasises the importance of
research (targeted through CGIAR) as long as 1. Has a specific poverty alleviation
goal 2. Is complementary to other research being carried out. 3. Users are involved.
Rural transitions
Small-scale versus large-scale
farms
Land rights
Briefs on Land Rights, Land reform and large scale agriculture investments emphasise strengthening land rights especially for the poor. Strong land rights can be
built upon customary and communal land rights. Those without information and
registration are most at risk when formalising land rights.
Rural market failures
Not directly.
Trade openness and protection
Yes. Is supportive of trade policies which support rather than undermine food
security and mentions the importance of ex ante scoping of trade pacts on food
security prior to liberalisation.
Competitiveness and value
chains
This brief stresses the importance of value chains approaches. Highlights the
importance of competitiveness both in addressing poverty, and also in financing social and environmental objectives of agriculture. Emphasises starting with
potential, rather than problems in order to achieve successes, and working with the
private sector as the lead actor.
Because agricultural markets are dynamic, know-how on value chains needs to be
anchored within agribusiness communities, public authorities, rural associations as
well as universities which supply qualified graduates.
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AGRICULTURAL DEVELOPMENT POLICY: A CONTEMPORARY AGENDA
Stabilising markets
Output Prices: acknowledge that there sometimes is no direct transmission of
agricultural prices into food prices (food price rises may be higher than agricultural
price rises).
Although fluctuations are normal, these may be so great as to jeopardise production. In these cases intervention may be justified.
There is a sequence for different types of intervention, as follows:
measures which improve market functioning (better transport; communications;
private and decentralised storage);
market orientated instruments which reduce price or income risk: futures-trading,
insurance (crop loss or weather- index); and lastly,
State-based interventions should be regarded with caution (especially price
management) as it disables market signals and leads to informal markets. Strategic
stockpiling should be carefully analysed and only used on a small target population
and small scale. Arguments for Virtual Grain Reserve are not convincing for price
spikes.
Speculation may increase amplitude of spikes but rarely cause them; any regulation
should beware of removing liquidity from the markets (this applies to minimum
holding periods, trader exclusion, and extra-commodity trade transactions).
Position paper on fertiliser subsidies reports evidence that these can be effective
in raising yields, and leading to growth outside the agricultural sector — especially
from experience in Africa and Latin America — but can be costly and unsustainable
in the long run. Argues that:
The return of nutrients to fields must be ensured. Fertilisation needs to be adapted
to local soil conditions, whereafter they are important to maintain/ enhance productivity.
There are no blueprints for the design of subsidy programmes. Lessons learned
comprise:
incorporate subsidies into a strategy which targets the entire agricultural sector;
any subsidies should be market-based, incentivising the private sector and lowering
entry barriers, promoting competition, and driving up quality;
target groups must be involved in the design; and,
an exit strategy is needed. In the long run, the State should extract itself over the
long run.
Technology
Yes. Paper on GIZ’s position on GMO’s acknowledges the achievements that the
use of GMOs can bring, but views that their importance for reducing poverty is
of subsidiary importance when compared to the increased use of conventional
technologies. This assessment may change in the future if GM technologies make
varieties available in areas facing considerable constraints (e.g. drought, salinity).
Certain preconditions are necessary. Approaches should be problem-solving based
rather than focusing upon technical solutions. In general, improving access to high
quality seed is important. Varieties developed must be freely available to all as a
public good. Functional systems for biosafety must be in place.
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APPENDIX B: REVIEWING POLICY LITERATURE
Environmentally sustainable
farming
Application of fertilisers: many contexts need both organic and inorganic fertilisers; inorganic fertilisers especially need to be targeted and programmes need
to incorporate training of farmers and advisors on use, not just provide cheap
fertilisers. Programmes need to be economical (and take into account labour costs
associated with organic fertilisers).
Responding to climate change
Paper on climate change and agriculture emphasises a focus upon adaptation without losing sight of mitigation potential. Within planned adaptation, GIZ supports
differentiated responses based upon agro-climatic conditions. Supported measures
are based upon ‘no regret’ strategy, to benefit farmers under all scenarios.
On mitigation, agriculture should be linked to carbon markets, reducing high costs
of access.
Other concerns
HLPE, 2011. PRICE VOLATILITY AND FOOD SECURITY
HLPE, 2011, Price volatility and food security, A report by the High Level Panel of Experts on Food Security
and Nutrition of the Committee on World Food Security, Rome 2011.
Three perspectives on food price spikes:
■■ Perfect storm, the confluence of several unusual factors
■■ The bottom of a cycle of agricultural investment that takes progress for granted until there’s a crisis after
which funds pile in and we get growth again; and,
■■ A time of transition from an era of cheap oil and exploitation of natural resources with no account of
external costs.
Enabling environment
Provision of rural public goods
Stable and sustainable long-term investment in agriculture is a necessary condition
for addressing the challenges in food security.
Rural transitions
Small-scale versus large-scale
farms
Land rights
Rural market failures
Trade openness and protection
Competitiveness and value
chains
120
Trade rules were set up in context of access for exporters in a world of surplus, not
of access for importers when supplies are scarce. Need a rules-based system, but
one that reflects the new reality, thinking of restrictions on export bans. Special
exemptions from WTO disciplines should be granted to LIC.
AGRICULTURAL DEVELOPMENT POLICY: A CONTEMPORARY AGENDA
Stabilising markets
Price transmission from world to domestic markets has been uneven. In any country, local volatility stems from domestic and external factors. Analyses need to be
specific to domestic markets when looking for policy responses.
Volatility is heterogeneous, affected by food preferences, access to world markets,
agro-ecology, policy capacity, etc. Hence touted responses such as social safety
nets or weather insurance will work in some cases, but not everywhere.
A typology of countries might help, especially looking at low income, food insecure
countries.
Higher stocks would prevent spikes, but getting international agreement on levels,
management and so on is difficult.
a. The current context is different from the past, therefore, it is recommended
that the CFS continues to explore forms of international cooperation regarding
world food stocks and food security including the establishment of guidelines
for the efficient management of such stocks.
b. Better and transparent information systems are essential for policy decisions
and management of stocks. The (AMIS) system proposed by the Inter-agency
Report for the G20 is welcomed.
Speculation may be controversial, but the exchanges should be more tightly regulated and more transparency demanded, as a precautionary measure.
This implies that tighter regulation is warranted, at least as a precautionary measure. Increasing transparency, by requiring exchange trading and clearing of most
agricultural commodity contracts, and setting lower limits for non-commercial
actors could be the first set of measures taken by the countries that house major
commodity exchanges.
a.
Technology
A
ction regarding transparency in futures markets and tighter regulation of
speculation is necessary.
b. A
significant global expansion in funding for agricultural research and development is recommended. Strengthening the current reform process of the
CGIAR and support for national research systems will contribute to long-term
solutions to fwood insecurity, especially in the context of land degradation,
water scarcity and climate change.
Environmentally sustainable
farming
Responding to climate change
Other concerns
Need to address:
■■
Demand for meat
■■
Biofuels
■■
Waste
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APPENDIX B: REVIEWING POLICY LITERATURE
IFAD, 2010. RURAL POVERTY REPORT 2011
Title: International Fund for Agricultural Development, 2010, Rural Poverty Report 2011: New realities, new
challenges, new opportunities for tomorrow’s generation, Rome: IFAD
AIM: An in-depth study of rural poverty by IFAD, with a strong focus on escalating risk factors.
Enabling environment
Yes. Accorded important emphasis in terms of what is needed to be done to reduce
poverty amongst smallholders.
Provision of rural public goods
Yes. Especially infrastructure (roads) but also water and energy; education and
healthcare; financial services and BDS. Financial services for the poor are also mentioned, in order to reduce costs of accessing credit, savings and remittances.
Rural transitions
Yes. Mentions the trajectory of most countries will mean that some farmers are
able to take advantage of opportunities available, others will move out.
‘In the future, growing resource scarcities, market transformations are likely to
simultaneously strengthen the viability of smallholder agriculture for a number of
small farmers, (those who can make it a sound ‘business’) and push many others
to seek different opportunities, as agricultural workers, in the RNFE or through
migration. The key challenge is to ensure that those opportunities enable people
to move out of poverty’ (p. 221).
Small-scale versus large-scale
farms
Emphasis of this document is largely on small-scale farmers and poverty reduction.
Few mentions of how large-scale farms have been better able to respond to changing situation (higher food prices, higher demand).
Land rights
Brief mention in the context of the need for more security in order to encourage
farmers to invest in sustainable intensification of production.
Rural market failures
Trade openness and protection
Relatively little, -mainly linked to stabilising market below.
Competitiveness and value
chains
Yes. A role for government in facilitating linkages with the private sector and
reducing transactions costs for smallholders along the value chain. Can be done
through ICTs, contracts.
Stabilising markets
Takes a view that this can be done, Provides a discussion of the various situations
where countries have suffered from volatility (import surges; high prices) and the
various successful ways in which governments have done this (etc. defending floor
prices).
‘The issue is not one of whether governments should or should not engage in food
markets. Rather, it is one of ensuring that the policies and interventions are sustainable and that they are appropriate for, and effectively contribute to, reducing
risk and promoting on-farm investment. They therefore need to be identified on
a case-by-case basis, respond to context-specific (and often time-bound) issues,
have clearly defined and circumscribed goals, and be based on government institutional capacity for effective implementation. Finally, they must also have a strong
governance framework, and be financially sustainable’ (p. 97).
Technology
122
Yes. Some mention on the benefits of ICTs and their potential for reduced transactions costs. Includes a discussion on the continued relevance of Green Revolution
technologies, but how these need also to be improved upon to meet challenges
associated with growing scarcity of resources. Has a balanced picture of the role
of GM Includes a discussion on technology diffusion and how farmer to farmer
systems provide a useful model.
AGRICULTURAL DEVELOPMENT POLICY: A CONTEMPORARY AGENDA
Environmentally sustainable
farming
Yes. Emphasises the need for sustainable intensification in farming worldwide, and
a need to redress policies so that they become more orientated towards sustainability concerns; and provide incentives towards sustainable intensification.
Also highlights a need for integrating smallholder farmers more closely into PES
markets.
Responding to climate change
Briefly, but mainly in the context of sustainable intensification.
Other concerns
Includes a stronger focus on risk management. This includes both strengthening
smallholders’ ability to deal with risks and advocates a role for government/ NGOs
in reducing risks that the poor face. This is noted as being of special importance in
order to encourage sustainable intensification.
Also includes a focus on the need to improve training and vocational skills in rural
areas, in order to ease transitions, improve agricultural skills.
IFPRI, 2012. STRATEGIES AND PRIORITIES FOR AFRICAN AGRICULTURE
Diao, Xinshen James Thurlow, Samuel Benin, and Shenggen Fan (Eds), 2012, Strategies and Priorities for
African Agriculture. Economy-wide Perspectives from Country Studies. Washington DC: International Food
Policy Research Institute
Models 10 African countries to look at the potential returns to investment in agriculture as a way to generate
growth and to reduce poverty
Enabling environment
Provision of rural public goods
Since there are good returns to investment in agriculture, argues for more spend on
agricultural development.
But qualifies this by arguing for more efficient public investment.
Rural transitions
Small-scale versus large-scale
farms
Broad-based growth has strongest impacts.
Land rights
Rural market failures
Trade openness and protection
Competitiveness and value
chains
Stabilising markets
Technology
Environmentally sustainable
farming
Responding to climate change
Other concerns
Investing in staple crop production usually has a stronger impact than in exports,
owing to greater size of staples and stronger multipliers than in export crops where
most exports are raw and unprocessed.
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APPENDIX B: REVIEWING POLICY LITERATURE
INTERAGENCY REPORT TO THE G20, 2012. AGRICULTURAL PRODUCTIVITY AND
BRIDGING THE GAP FOR SMALL FAMILY FARMS
FAO, OECD, Bioversity, CGIAR Consortium, IFAD, IFPRI, IICA, UNCTAD, HLTF, WFP, World Bank, and WTO,
2012. Sustainable Agricultural Productivity Growth and Bridging the Gap for Small Family Farms: Interagency Report to the Mexican G20 Presidency. Available at: www.oecd.org/tad/agriculturalpoliciesandsupport/50544691.pdf
AIM: To present evidence and discuss the scope and potential pathways for smallholders to raise levels of
productivity. This report was commissioned by the Mexican Presidency of the G20.
Enabling environment
Yes. Cites
‘significant improvements in macroeconomic, structural, and agricultural policies and
institutions to provide the necessary incentives to farmers and the private sector to
increase investments and build the necessary capital.’
Provision of rural public
goods
Yes. An important role remains for public sector, as private sector will orient towards
high value, market orientated production systems. Highlights the importance of
extension.
Rural transitions
No specific mention of out-migration. Only one reference to providing opportunities
for farmers to seize opportunities in RNFE.
Small-scale versus largescale farms
Yes, strong supportive of small farmers and their role in contributing to agricultural
development objectives.
‘The role of smallholder farmers and their families in increasing agricultural productivity growth sustainably will be crucial…The success of developing countries in
increasing agricultural productivity will have global implications in strengthening the
resilience of food markets, enhancing food security, improving wellbeing and promoting sustainability’ (p. 7).
A main focus of the document is how to raise their productivity.
Notes that they provide the bulk of agricultural investment in many developing countries.
Land rights
Yes. Mentioned as an area where particular attention is needed.
‘Of particular concern are poor policies and institutions that grant smallholders limited control over land and water resources on which their productive activities and livelihoods depend. An estimated 1 to 2 billion people globally live on and use commonly
held land over which they have no legal title (IFAD, 2011a). Poorly defined property
rights limit their access to credit and insurance markets, and prevent them from investing in improved environmental sustainability and natural resource management.’
Rural market failures
Not specifically. For credit, discussion of benefits of mechanisms (loan guarantees,
vouchers) as opposed to subsidies. Mention of risk management tools (weather index
insurance) and the need to roll these out.
Trade openness and protection
Yes. Echoes what is said in the Price Volatility in Food and Agricultural Markets report.
Generally pushes for liberalisation in markets, with exceptions for exceptional circumstances, and other flexibility in accordance with existing instruments (Aid for Trade
initiative).
Competitiveness and value
chains
Yes. Provides a nuanced view on support policies through value chains:
‘Commodity-based support has the largest impact on production, but protecting
farmers from competition does not encourage them to increase productivity. Market
interventions often treat the symptoms of market failure and under-development
rather than the cause’ p16.
There are multiple roles for governments to intervene to support the development of
agricultural markets and value chains in which smallholders can find profitable, low
risk market opportunities…
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AGRICULTURAL DEVELOPMENT POLICY: A CONTEMPORARY AGENDA
Stabilising markets
Takes a nuanced view on benefits, citing both the ability to create a more stable
investment climate, but also imposing high costs on consumers and thwarting the
development of private risk management.
Technology
Short mention emphasising the need for additional commitment to technology breakthrough, better tech transfer mechanism, and the need for developing countries to
establish new institutions and policies to drive private sector investment in technology. Discusses IPR and seed laws, and the need for some countries to revise laws (p. 35).
Environmentally sustainable farming
Included in the discussion on CSA, with additional mention of the need for governments to reduce perverse incentives.
Responding to climate
change
Yes. Includes a discussion on the need for Climate Smart Agriculture, and policies
needed to transition towards this.
Other concerns
There is a strong focus on the need for strengthening Agricultural Innovation Systems,
and outlining how these can be built up.
INTERAGENCY REPORT TO THE G20, 2011. PRICE VOLATILITY IN FOOD AND AGRICULTURAL MARKETS
FAO, IFAD, IMF,OECD, UNCTAD, WFP, the World Bank, the WTO, IFPRI and the UN HLTF, 2011. Price
Volatility in Food and Agricultural Markets: Policy Responses. 2 June 2011. Available at: http://www.fao.org/
fileadmin/templates/est/Volatility/Interagency_Report_to_the_G20_on_Food_Price_Volatility.pdf
Enabling environment
International lending to compensate countries against price risks in world markets
Macroeconomic adjustment (could also be considered as crisis prevention mechanisms
depending on the triggers)
Countercyclical loan instruments and emergency drawing rights
■■
AFD pilot
■■
IMF facility
Provision of rural public
goods
Rural transitions
Small-scale versus largescale farms
Land rights
Rural market failures
Trade openness and protection
Competitiveness and value
chains
Contract farming to offset risks.
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APPENDIX B: REVIEWING POLICY LITERATURE
Stabilising markets
Potential of risk management:
We recommend that bilateral, regional and multilateral development banks develop risk management advisory and intermediary services that would help developing
countries: (1) assess their risk coverage needs and establish a mapping of relevant food
security and agricultural production risks; (2) identify solutions to satisfy their needs;
and (3) negotiate costs for the service to be provided.
Mainly aimed at public agencies, but could extend to private actors
Toolbox might include:
■■
Index-based weather derivatives – Malawi (World Bank intermediation, DFID
financing); WFP programs in cooperation with AXA for drought in Ethiopia;
WFP-African Union initiative to develop a financial institution (the African Risk
Capacity) to provide an ex-ante weather risk management facility
■■
Cotton price smoothing mechanism – Burkina Faso (French Development Agency)
■■
Caribbean Catastrophe Risk Insurance Facility
■■
Futures on corn – Mexico
■■
Pull mechanisms for farm inputs – Proposal of Canada
■■
IFC risk sharing facility
■■
WFP’s insurance scheme in Ethiopia’s drought using index-based weather derivatives
Increasing transparency and information
■■
Monitoring and data collection mechanism
■■
AMIS project for food security
■■
Improving meteorological forecasts
■■
Improving information on stocks (quantity and quality)
Improving agricultural production and productivity
■■
■■
Agricultural development programs that include a risk management dimension
■■
Strengthening of CAADP
■■
Pledges to GAFSP
Regional agricultural exchange markets
■■
Ethiopia pilot (WB)
Promoting risk management culture and access to market-based instruments
■■
Developing price risk management advisory and intermediation services
■■
■■
Price smoothing mechanisms
■■
126
Proposal of a multi-donor initiative
Burkina Faso pilot on cotton (AFD)
AGRICULTURAL DEVELOPMENT POLICY: A CONTEMPORARY AGENDA
■■
Insurance mechanisms
■■
Malawi pilot on weather derivatives (WB/DFID)
■■
Caribbean pilot on natural disasters (CCRIF)
Variation of input prices
■■
Advance market commitments and other pull mechanisms – and link with research
■■
■■
Canada proposal
Futures on commodities (e.g. oil)
Variation of climate conditions
■■
Weather index insurances – including in private contracts
■■
WFP’s Ethiopia Drought Index-based insurance scheme
Variation of international or domestic prices
■■
■■
Risk hedging – including in private contracts
■■
Risk sharing pilot facility (IFC)
■■
Private contracts with price smoothing mechanisms – proposal to be promoted
through public-private risk sharing
Private stocks and warehouse schemes
Technology
Environmentally sustainable farming
Responding to climate
change
Other concerns
127
APPENDIX B: REVIEWING POLICY LITERATURE
MULTIPLE AGENCIES, 2010. SCALING UP NUTRITION: A FRAMEWORK FOR ACTION
SUN, 2010, Scaling Up Nutrition. A Framework for Action. Available at http://siteresources.worldbank.org/
NUTRITION/Resources/281846-1131636806329/PolicyBriefNutrition.pdf
Aims: The first is to provide an outline of the emerging framework of key considerations, principles and
priorities for action to address undernutrition.
The second is to mobilise support for increased investment in a set of nutrition interventions across different
sectors.
Only about food and nutrition security
Key document since it has been signed by more than 100 research centres, NGOs, donors,
multilaterals, UN agencies, etc.
Nutrition
Impassioned plea for more investment and action to combat malnutrition, backed by of the
high costs of malnutrition.
Argues that waiting for income growth to solve malnutrition will take too long.
In addition, the evidence shows not only that improvements in nutrition lag far behind income
growth4 but that families with ample incomes for adequate food intake also suffer from surprisingly high rates of undernutrition.
Hence calls for emphasis on the 13 specific interventions — in feeding practice, in nutrient
supplementation, in fortification of foods, and therapeutic feeding of undernourished infants —
that have been proved and for which benefit-cost ratios are high.
Results from field studies indicate that, at full implementation, the package of 13 interventions
would result in a child mortality decline of about 1 million deaths per year, equivalent in the
case of young children to 30 million life years (or, more precisely, what is referred to in public
health as ‘disability-adjusted life years’ or DALYs) saved. Even partial progress would bring extraordinary results. For example, when 50% coverage is attained, 500,000 children’s lives would
be saved.
But, as already noted, the benefits of childhood nutrition interventions go far beyond mortality
reduction to include cognitive and physical development, better health and higher earnings
A rigorous longitudinal study in Guatemala, for example, found that boys receiving a fortified
complementary food prior to age 3 grew up to have wages 46% higher than those in the control
group. The study estimated an increase in GDP of at least 2-3%. These substantial benefits are
why it is important to address mild as well as severe undernutrition
So scale up efforts!
For the 36 countries where 90% of the world’s under-nourished children live, the costs would
be US$11.8G a year. Total costs may be greater when expanding this across countries, when
delivering programmes for children over age 2, and if programme delivery were not aimed at
90% coverage, but at 100%.
Much made of calls for nutrition-sensitivity and for better co-ordination of existing efforts.
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AGRICULTURAL DEVELOPMENT POLICY: A CONTEMPORARY AGENDA
OECD, 2012. AGRICULTURAL POLICIES FOR POVERTY REDUCTION
OECD , 2012. Agricultural Policies for Poverty Reduction, Paris: OECD Publishing.
AIM: Discusses successful agricultural policies and their relationship to poverty reduction in a historical
context and across countries.
Enabling environment
Equally important is the overall investment climate, which depends on factors such
as peace and political stability, sound macroeconomic management, developed
institutions, property rights and governance.
Provision of rural public goods
Heavy stress on investing in these, as opposed to private goods
Many of the policies required to improve farmers’ opportunities are non-agricultural. Improvements in education and primary healthcare are key to prospects
within and outside the sector.
In agriculture-dependent economies, there is a strong case for increasing the share
of public spending allocated to sectoral public goods, such as rural roads and agricultural research, and to technology transfer, farm extension and advisory services.
Rural transitions
Key part of context: some farmers will leave as and when their farming ceases to
pay.
In the short to medium term, there is a need to raise the basic incomes of the poor
and to strengthen systems of social protection. Since over two-thirds of the world’s
dollar-a-day poor live in rural areas, where farming is a core economic activity, this
implies policies and investments that raise economic returns within agriculture.
In the long run, there is a need to anticipate the structural changes in agriculture
that accompany successful economic development. These include:
i) a declining share of agriculture in GDP as the economy develops and diversifies; ii) a release of labour from the sector driven by a combination of the ‘push’
of labour-saving technical change in agriculture and the ‘pull’ of growing labour
demand in non-agricultural sectors; and iii) rising agricultural output
This means offering multiple development pathways for farm households: improving competitiveness (i.e. productivity) within the agricultural sector; diversifying
income sources among household members; and, for some, leaving the sector for
better paid jobs.
Small-scale versus large-scale
farms
Land rights
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APPENDIX B: REVIEWING POLICY LITERATURE
Rural market failures
Stabilising markets
Under-developed institutions and endemic market failures have therefore led
to ‘second best’ options being explored, including the use of price stabilisation
schemes and subsidies for fertiliser and other inputs. This volume considers the
specific circumstances under which the use of such instruments might be warranted.
In low-income countries, however, it has been suggested that – because of weak
institutions and endemic market failures – market interventions might also be warranted. Price support, price stabilisation, and input subsidies have been proposed
as ways of addressing short-term objectives with respect to incomes, poverty and
food security, and of promoting long-term economic development.
In the short term, price policies provide an easy lever for government, but are inefficient at addressing income concerns. Price support for food products is a blunt
instrument because, among the poor, there are net sellers and net buyers of food –
in many poor countries, the majority of farm households are net buyers.
Price stabilisation (as opposed to price support) can limit the impact of adverse
shocks on producers and consumers, but often proves to be fiscally unsustainable.
A preferable option for the poor – both producers and consumers – is targeted
social programmes, including cash transfers, although these may be difficult to
implement in the poorest economies. At the same time, agricultural investments
can improve farmers’ resilience to risk.
Over the long term, market interventions treat the symptoms of market failure and
under-development rather than the causes. Price stabilisation can provide a more
stable investment climate, but thwarts the development of private risk management and can export instability onto world markets. Input subsidies can redress
failings such as the under-development of infrastructure, missing markets for
credit and inputs, and a lack of knowledge of the benefits of using improved seed
and fertiliser, but can impede the development of private markets. In both cases,
the benefits and costs of intervention need to be judged relative to the benefits
and costs of tackling the underlying problems directly.
Finally, there are dangers in using market interventions to address multiple
economic and social objectives. Such programmes can become an easy target for
interest groups, outliving their original justification and becoming a budgetary
millstone. An important priority is that expenditures on market interventions
should not crowd out essential investments in support of long-term agricultural
development.
Trade openness and protection
Liberal trade a prime measure for more stable markets.
Competitiveness and value
chains
Technology
Environmentally sustainable
farming
Responding to climate change
Other concerns
Social protection as the prime way to deal with poverty:
It leaves an important role for targeted social policies in helping farmers who cannot adjust within the current generation, and for addressing immediate concerns
about the level and distribution of income.
130
AGRICULTURAL DEVELOPMENT POLICY: A CONTEMPORARY AGENDA
UK GOVERNMENT, 2011. FORESIGHT REPORT ON THE FUTURE OF FOOD AND
FARMING
Foresight, 2011, The Future of Food and Farming: Challenges and choices for global sustainability, Final
Project Report. London: The Government Office for Science
Aims: to explore the pressures on the global food system between now and 2050 and identify the decisions
that policy-makers need to take today, and in the years ahead, to ensure that a global population rising to
nine billion or more can be fed sustainably2 and equitably.
Enabling environment
Provision of rural public goods
Technology
Box 1.2 Appraising new technologies in the food system
New technologies (such as the genetic modification of living organisms and the use
of cloned livestock and nanotechnology) should not be excluded a priori on ethical
or moral grounds, though there is a need to respect the views of people who take a
contrary view
Investment in research on modern technologies is essential in light of the magnitude of the challenges for food security in the coming decades
The human and environmental safety of any new technology needs to be rigorously established before its deployment, with open and transparent decision-making
Decisions about the acceptability of new technologies need to be made in the
context of competing risks (rather than by simplistic versions of the precautionary
principle); the potential costs of not utilising new technology must be taken into
account
New technologies may alter the relationship between commercial interests and
food producers, and this should be taken into account when designing governance
of the food system
There are multiple approaches to addressing food security, and much can be done
today with existing knowledge. Research portfolios need to include all areas of
science and technology that can make a valuable impact – any claims that a single
or particular new technology is a panacea are foolish
Appropriate new technology has the potential to be very valuable for the poorest
people in low‑income countries. It is important to incorporate possible beneficiaries in decision-making at all stages of the development process.
Small-scale versus large-scale
farms
Trade openness and protection
Rural market failures
131
APPENDIX B: REVIEWING POLICY LITERATURE
Stabilising markets
Possible there will be more volatility in future after stable times.
Argues that price spikes are inevitable.
A wide range of drivers is likely to affect volatility in the future: non-economic
factors such as armed conflict and breakdown of regional or national governance;
general economic factors such as globalisation and international trade, and shocks
in other commodities particularly in the price of oil; the level of food stocks held
by private and public sector agents; how the markets are regulated; continuing
improvements in crop protection and biotechnology; subsidies or incentives to biofuels; and for particular commodities the size of the relevant market. The cultural
importance of certain foods can also be influential, as this can lead to government
interventions to reduce price volatility.
Policy options include safety nets, more information to allow markets to function
better. Explicit rejection of more public reserves, physical or virtual.
Suggests that more study of derivatives and automatic trading are needed.
Targeted food reserves for vulnerable (typically low-income) countries should be
considered. There is a strong case for establishing an emergency food reserve and
financing facility for the World Food Programme to help low-income countries
facing sudden increases in food import bills when price spikes occur.
The poorest food producers need specific assistance to obtain insurance against
risk and volatility.
Safety nets will be required at times of unusually high food prices.
Land rights
132
Mention of need to ensure people have secure right.
AGRICULTURAL DEVELOPMENT POLICY: A CONTEMPORARY AGENDA
Responding to climate change
Environmentally sustainable
farming
The context is that there is widespread hunger and malnutrition in the world,
including a rising problem of obesity; with many farming systems are not sustainable. (Strong statement on this)
Many systems of food production are unsustainable. Without change, the global
food system will continue to degrade the environment and compromise the world’s
capacity to produce food in the future, as well as contributing to climate change
and the destruction of biodiversity. There are widespread problems with soil loss
due to erosion, loss of soil fertility, salination and other forms of degradation; rates
of water extraction for irrigation are exceeding rates of replenishment in many
places; over-fishing is a widespread concern; and there is heavy reliance on fossil
fuel-derived energy for synthesis of nitrogen fertilisers and pesticides. In addition,
food production systems frequently emit significant quantities of greenhouse gases and release other pollutants that accumulate in the environment
Ways to reduce GHG:
■■
Creation of market incentives to encourage emissions reductions. These might
include grants, subsidies, levies, carbon taxes or carbon cap and trade schemes
■■
Introduction of mandatory emissions standards or limits by direct regulation
■■
Adoption of low-emission strategies through market pressures driven by
consumer choice. This requires active and informed consumers, and sources
of accurate and trusted information such as labelling for emissions or product
certification
■■
Voluntary (non-profit driven) measures taken by industry as part of corporate
social responsibility
Some changes entail double wins.
Need to take land use change seriously.
Link of biofuels needs attention.
Increased carbon sequestration through integrated soil and vegetation management is also promising: were the organic carbon pools in the world’s soils to be
increased by 10% in the 21st century, it would be the equivalent of reducing atmospheric CO2 by 100 parts per million.
Need to be able measure better the GHG for food.
Industry OK with standards, but worried about not getting a level playing field.
Competitiveness and value
chains
Rural transitions
About transitions to sustainable farming and food systems.
Other concerns
Sets out the issues: by 2030 population with reach around 8 billion; 9 billion or
more by 2050. People will be better off. On the supply side, limits to land, water
and energy; while adapting to climate change and mitigating it. While globalisation
is expected to continue
That creates five imperatives in balancing supply and demand, reducing volatility,
ending hunger, and doing so in ways that are environmentally sustainable
Sets out the issues of reducing demand for meat and of cutting waste in food
systems
133
APPENDIX B: REVIEWING POLICY LITERATURE
UN HLTF, 2010. UPDATED COMPREHENSIVE FRAMEWORK FOR ACTION
United Nations High-Level Task Force on the Global Food Security Crisis, 2010. Updated Comprehensive
Framework for Action, September 2010. Available at http://www.un-foodsecurity.org/node/842
Aims: Sets two objectives:
1. Meeting immediate needs of vulnerable populations
Objective: Improve access to food and nutrition support and take immediate steps to increase food
availability
2. Building longer-term resilience and contributing to global food and nutrition security
Objective: Strengthen food and nutrition security in the longer term by addressing the underlying
factors driving the food crisis
Enabling environment
1.4 Management of macroeconomic implications.
Hold down core inflation and inflation expectations.
Assess the impact on the balance of payments and feasibility/sustainability of a
reserve drawdown.
Mobilise external support to finance additional food imports.
Ensure adequate levels of foreign exchange reserves.
Assess and comprehensively cost all fiscal measures taken in response to the rise in
food prices.
Provision of rural public goods
Improve rural infrastructure.
Technology
Invest in agricultural research.
Small-scale versus large-scale
farms
2.2 Sustained increases in food availability through growth in smallholder farmer
food production.
Ensure that the macroeconomic, budget, trade and sector policy framework provides incentives for sustainable increases in smallholder production.
Stimulate private investment in agriculture with focus on small-scale farming.
Enhance secure and equitable access to natural resources.
134
AGRICULTURAL DEVELOPMENT POLICY: A CONTEMPORARY AGENDA
Trade openness and protection
Promote increased agriculture trade and more open trading environments.
Reduce/eliminate agricultural trade distortions in higher-income countries.
Complete the Doha Round of trade negotiations.
Ensure additional resources for ‘Aid for Trade’.
Develop trade financing infrastructure.
1.3 Adjustments to trade and tax policies
Encourage better functioning food markets through improved regional political
and economic integration and better functioning environments for trade in food.
Immediately review trade and taxation policy options and their likely impacts.
Use limited strategic grain reserves.
Avoid generalised subsidies for food consumers.
Minimise use of export restrictions.
Reduce restrictions on use of stocks.
Reduce import tariffs and other restrictions.
Improve efficiency of trade facilitation.
Temporarily reduce VAT and other taxes.
Rural market failures
Ensure sustained access to competitive, transparent and private-sector led markets
for food produce and quality inputs.
Support development of, and strengthen producer organisations with the participation of women.
Strengthen access of smallholders and other food value chain actors to financial
and risk management instruments.
Stabilising markets
2.4 Improved performance of international food markets
Support development of mechanisms for improving emergency access to food
through stock sharing.
Assess the feasibility of models for the establishment and operation of sustainable,
strategic reserves of key grains.
Strengthen international oversight and analysis of food commodity and futures
markets to improve their transparency and predictability and to limit the scope for
speculation to exacerbate price volatility.
Reduce constraints to enabling environment that encourages private sector involvement in food markets.
Land rights
Responding to climate change
Environmentally sustainable
farming
2.3 Better-managed ecosystems for food and nutrition security
Strengthen ecosystems monitoring and assessment; Improve natural resource
management within agricultural ecosystems; Improve economic and institutional
mechanisms to support sustainable management of agricultural ecosystems.
135
APPENDIX B: REVIEWING POLICY LITERATURE
Competitiveness and value
chains
Rural transitions
Other concerns
1.1 Emergency food assistance, nutrition interventions and safety nets enhanced
and made more accessible.
Ensure that emergency food needs are fully met; Protect basic consumption needs
of vulnerable populations; Scale up nutritional support; Support management and
prevention of undernutrition; Promote school feeding; Adjust social protection
programmes for food prices; Allow free and predictable flow of food assistance;
Ensure that local purchases of food and food components for humanitarian
purposes are exempt from restrictions; Explore the establishment of efficient and
effective humanitarian food reserves; Reach all households with pertinent public
information on food assistance, nutrition and hardship alleviation programmes;
Urgent increases in food availability from smallholder farmer food production;
Provide productivity-enhancing safety nets; Reduce post-harvest crop losses and
improve food stocks along the value chain; Remove artificial constraints to domestic trade throughout the food chain in order to link smallholder farmers to markets;
Address basic energy needs of smallholders and rural households.
Social protection: 2.1 Expanded social protection systems
Strengthen capacity to design and implement social protection policies and
programmes; Ensure that special care is taken in identifying and addressing the
needs of the most vulnerable; Balance the need to ensure effective coverage of the
vulnerable with the need to maintain efficient use of resources; Improve linkages
between sectors and between actors; Improve the quality and diversity of foods;
Support the implementation of international labour standards.
Information, monitoring, accountability:
3.1 Strengthened information monitoring and accountability systems Implement
systems that track and review the implementation of national policies strategies,
and legislation relevant to food and nutrition security.
Improve further the co-ordination of information systems.
Continue to carry out comprehensive food and nutrition security assessments,
monitoring and evaluation.
Undertake integrated analysis and monitoring of the impacts of shocks.
136
AGRICULTURAL DEVELOPMENT POLICY: A CONTEMPORARY AGENDA
UNITED STATES GOVERNMENT, 2010. FEED THE FUTURE GUIDELINES
United States Government, 2010. Feed the Future Guidelines. Available at http://www.feedthefuture.gov/
AIM: This document lays out the areas of focus for US investments under the Feed the Future initiative. It
also provides details of the other on-going national and international initiatives which the US funds.
Enabling environment
Yes. Mentioned in the context of the limitations of public investments, and the
need to create these in order for the private sector to step in (p. 6). Highlights the
importance of collecting and analysing market info. Is also mentioned in the context of ‘increasing economic resilience’.
Provision of rural public goods
Sees this as a critical component allowing private sector to operate. GFASP in
particular is expected to fund rural infrastructure, which other donors find difficult
to do.
Technology
Access to technology mentioned as being important in the context of raising productivity for smallholders; increasing access to market info; and an area of focus
for linking research to smallholders.
Small-scale versus large-scale
farms
Broad support for small-scale farming for poverty reduction.
‘Unleashing the proven potential of small-scale agricultural producers, while
encouraging the sustainable and equitable management of natural resources, will
reduce hunger and create a more resilient global food supply for everyone’.
Aims most of its support at areas to help small-holders’ productivity increases (p.
10).
Trade openness and protection
Yes. Prioritises increasing regional trade (p. 21) and expanding access to markets.
Rural market failures
Stabilising markets
Yes. Sees government control over commodity prices as a barrier to creating an
enabling environment for agribusinesses (p. 12).
Land rights
Yes. Investing in land tenure systems (including harmonizing statutory and customary tenure) is an area highlighted for increased investment.
Responding to climate change
Yes; described in the context of environmentally sustainable farming.
Environmentally sustainable
farming
Yes- highlights the importance in reducing environmental degradation and includes objectives related to this (p. 30)
Competitiveness and value
chains
Rural transitions
Yes. Mentions the need to reasonably regulate labour migration and enable labour
mobility and small enterprise development.
Other concerns
There is a strong focus on improving nutritional status. Also the need to engage
more with women.
137
APPENDIX B: REVIEWING POLICY LITERATURE
WFP, 2009. HUNGER AND MARKETS
World Food Programme, 2009. World Hunger Series: Hunger and Markets, London: Earthscan
AIM: To highlight the links between how markets operate and food security.
Enabling environment
Briefly. Highlights the important role in creating an enabling environment for food
marketing in ensuring the proper functioning of markets.
Provision of rural public goods
Supportive of government intervention in backstopping institutions, coupled with
market liberalisation.
‘Providing public goods and improving market performance may decrease transactions costs, information asymmetries and co-ordination failures, indirectly enhancing both food availability and food access’.
Also argues that the provision of public goods may not obviate/ lessen the need for
intervention in markets. However, argue that this may also be dangerous: Governments may fail in this (provisions of public goods), potentially weakening markets.
Technology
Yes. States the need for investments in technology are needed to alleviate hunger,
but no further details provided.
Small-scale versus large-scale
farms
In passing. Acknowledges greater land productivity on small farms. ‘Production
would…increase if land were cultivated as smaller farms’ (p. 64).
However, smallholders also face challenges on four fronts: lower producer prices
due to higher unit transport costs; crop choice motivated by safety-first considerations; need for cash and poor storage leads to selling immediately after harvest at
low prices; and, opportunity costs for reaching markets may be prohibitive.
Trade openness and protection
Yes. An emphasis on trade policy which supports food security. Acknowledges
the mixed benefits brought about by liberalisation (seasonality; thin markets; thin
institutions (Kydd & Dorward, 2004) Discusses the need to end sudden disruptive
trade bans, but acknowledges that countries are wary of total liberalisation and
dependence on large grain dealers. (p. 29). Highlights the need for discussion between government and traders.
Rural market failures
Limited discussion of these in terms of credit, and discusses the role of both microfinance and social safety nets and insurance in addressing credit and risk failures.
(p. 105). Discusses the increased frequency of market failures during crises, and in
their aftermath. (p. 113)
Stabilising markets
Stabilising prices can be an effective complement, as applied during the Green
Revolution in many Asian countries. But uses should be limited to cases of market failure. ‘Stabilising prices is less effective if it is not combined with measures to
improve price stability, infrastructure, incentives and investment’ ‘Any government
involvement should constantly adapt its policies to changing market situations.’ (p.
128).
Should operate only when prices exceed a price band but defending this is troublesome ‘In the long run, stabilizing macroeconomic conditions, enhancing market
information, reducing transactions costs, improving credit and insurance markets,
and developing safety nets may be more beneficial than price stabilization schemes’
(Gabre-Madhin, 2005) (p. 127).
Land rights
Responding to climate change
Environmentally sustainable
farming
138
Yes. Insecure tenure and lack of registration inhibit the development of a land
market in many DCs. Lack of clear title… hinders use by the most productive cultivators.
AGRICULTURAL DEVELOPMENT POLICY: A CONTEMPORARY AGENDA
Competitiveness and value
chains
Emphasises the need to maintain competition and numerous players in the market.
Rural transitions
Transitions are acknowledged (and a heightened role for governments in disciplining markets is suggested) but not expanded upon further.
Other concerns
Looks in detail at the performance and impacts of markets during crises, and actions that should be taken thereafter.
Also cautions on providing adequate support (through PPPs) to address the change
in markets owing to increasing power of supermarkets, for both consumers and
producers. For consumers the issue is of changing diets to increasingly affordable,
but less nutritious foods. For producers, the lack of access due to higher standards
and purchasing arrangements favourable to large farms.
WISE & MURPHY 2012. RESOLVING THE FOOD CRISIS: ASSESSING GLOBAL POLICY
REFORMS SINCE 2007
Wise, T.A. and Murphy S, 2012. Resolving the Food Crisis: Assessing Global Policy Reforms Since 2007, Medford, MA: Global Development and Environment Institute and Institute for Agriculture and Trade Policy
The purpose of this paper is to assess what has changed since the crisis erupted. Our goal is to examine the
changing architecture for the global governance of food and agriculture, outline the main policies and
priorities of major institutions and governments, and review the ways in which these have led to changes in
practice, both in funding levels for agricultural development and in the priorities evident in the programs
that are supported.
Reviews the changing narratives since 2007. Sees a major push coming from the World Development Report
of 2008 in redirecting attention to agriculture and the role of SF. Notes IIASTD producing a more varied
vision of agricultural development.
Reports that there is increasing recognition of the role of the state. While there are declarations in favour of
SF and women in agriculture, it is less clear there will be action to reflect this. Their assessment is that analysis of SF still tends to depend on markets working well. Little discussion of lower input farming can be seen.
Climate change little addressed.
Critical of G20 as usurping the position of other democratically mandated agencies, such as the UN system.
Enabling environment
Provision of rural public goods
Technology
Small-scale versus large-scale
farms
Trade openness and protection
Trade: argues that trade liberalisation is not needed.
Rural market failures
Critical of excessive faith in free markets.
Bank on agricultural finance:
Launched in 2010, AgriFin is a new Bank initiative intended to overcome market
failures in credit and finance by funding approved domestic financial institutions
to encourage increased lending to smallholder agriculture and rural enterprises.
Grants support capacity---building in established, regulated financial institutions
(AgriFin, 2010).
Stabilising markets
Strong on need to do more.
139
APPENDIX B: REVIEWING POLICY LITERATURE
Land rights
Strong on need to question land deals.
Responding to climate change
Critical of World Bank on environment, and especially of notion of using markets to
reward farmers for storing carbon.
Finally, from within the UN system the CFS is well positioned to play a positive role
on climate change and agriculture. While the UNFCCC negotiations are struggling
to agree to basic steps forward on mitigating and adapting to climate change,
they have all but entirely ignored agriculture, despite the importance of industrial
agriculture as a source of greenhouse gas emissions, and the already evident impact of climate changes on agricultural production in some regions. This gives the
multi-stakeholder CFS an important place in global climate negotiations and at the
upcoming June 2012 Rio+20 meetings. HLPE will be producing a report on climate
change and agriculture in 2012.
Environmentally sustainable
farming
Agro-ecology: little progress here.
Competitiveness and value
chains
Rural transitions
Other concerns
Biofuels: even less, outright parking of the issue by high levels, prompting walk out
by CSOs at the CFS.
In the conclusions sees three main things being ignored:
140
■■
Biofuels
■■
Price volatility
■■
Land grabs
AGRICULTURAL DEVELOPMENT POLICY: A CONTEMPORARY AGENDA
WORLD BANK, 2007. WDR 2008: AGRICULTURE FOR DEVELOPMENT
World Bank, 2007, World Development Report 2008: Agriculture for Development. Washington, D.C.: World
Bank
AIM AND OVERVIEW: Major statement on agricultural development: needed to beat poverty. Migration
usually does not alleviate much poverty.
But changing context and three words in which agriculture operates: agricultural, transition, urbanised.
Enabling environment
Biases in policy against farming - even if the worst of negative protection is now
history.
Not enough has been spent on farming in many countries, with a disastrous
tendency to extract with too little investment in many cases.
And aid for agriculture has fallen, owing to:
(1) falling international commodity prices that made agriculture less profitable
in developing countries;
(2) increased competition within ODA especially from social sectors;
(3) emergency responses to numerous crises;
(4) opposition from farmers in some donor countries to supporting agriculture
in their major export markets; and
(5) o
pposition from environmental groups that saw agriculture as a contributor
to natural resource destruction and environmental pollution. (p. 43)
Ch. 4: Reforming trade, price, and subsidy policies
Provision of rural public goods
Access to assets matters, but for most rural households their access is low - and
often highly unequal amongst the rural population. Review in turn:
■■
Human capital - low levels of rural education, health;
■■
Land;
■■
Livestock;
■■
Social capital:
Producer organisations can be part of the social capital of many smallholders, contributing to smallholder competitiveness. Between 1982 and 2002, the proportion
of villages with a producer organisation rose from 8% to 65% in Senegal and from
21% to 91% in Burkina Faso. Overall, 69% of Senegal’s rural households and 57% of
Burkina Faso’s are now members of producer organisations. Data for other African
and Latin American countries, although fragmented, also indicate a rapid increase
in the number of such local organisations.
Risks - both covariate and idiosyncratic - are pervasive and costly.
141
APPENDIX B: REVIEWING POLICY LITERATURE
Technology
Innovating through science and technology.
Genetic improvement has been enormously successful, but not everywhere.
Management and systems technologies need to complement genetic improvement.
Investing more in R&D.
Institutional arrangements to increase the efficiency and effectiveness of R&D
systems.
Using available technology better: extension and ICT innovations.
Moving forward.
focus E: Capturing the benefits of genetically modified organisms for the poor
Small-scale versus large-scale
farms
Small farms: rehearses argument for seeing SF as efficient, but notes the market
failures and other disadvantages faced.
Evidence on yields from Brazil and Chile shows large farms as having higher yields:
sense that longstanding advantages of SF may be ending.
Trade openness and protection
Reforming trade, price, and subsidy policies.
Agricultural protection and subsidies in developed countries.
Agricultural taxation in developing countries.
Simulated gains from trade liberalisation.
Scope for achieving potential gains.
Transitional support.
Public investment for long-term development.
Conclusions
Rural market failures
Market failures can mean that the reactions of households to incentive appear
perverse. The public role:
In many cases, collective action alone cannot correct market failures; that is a
crucial role for policies and the state. Yet in many developing countries, the state
has failed to play this role. To the contrary, many policies have been detrimental
to rural households’ livelihoods. Taxation of the agricultural sector, policy biases
favoring large farms, and failure to provide education and health services severely constrain the potential of rural households to pull themselves out of poverty
through the farming pathway. Reversing such policies can enhance existing household strategies or open the potential for new and successful ones (p. 83).
Stabilising markets
Land rights
Responding to climate change
142
Climate change will affect the distribution of production, with Sub-Saharan Africa
expected to lose out.
AGRICULTURAL DEVELOPMENT POLICY: A CONTEMPORARY AGENDA
Environmentally sustainable
farming
8 Making agricultural systems more environmentally sustainable (p. 180)
Drivers of resource degradation.
Improving agricultural water management
Greening the green revolution
Managing intensive livestock systems
Reversing degradation in less-favored areas
Payment for environmental services
Conclusions
focus F: Adaptation to and mitigation of climate change in agriculture
Acute water scarcity will be apparent.
According to the Comprehensive Assessment of Water Management in Agriculture,
approximately 1.2 billion people live in river basins with absolute water scarcity
(figure 2.1); 478 million live in basins where scarcity is fast approaching; and a further 1.5 billion suffer from inadequate access to water because of a lack of infrastructure or the human and financial capital to tap the available resources (chapter
8). The Middle East and North Africa and Asia face the greatest water shortages,
although there are pockets of severe water scarcity in all other regions as well.
Over-abstraction of water and drawing down on aquifers:
Large areas of China, South Asia, and the Middle East and North Africa are now
maintaining irrigated food production through unsustainable extractions of water
from rivers or the ground. The groundwater overdraft rate exceeds 25% in China
and 56% in parts of northwest India. With groundwater use for irrigation expected
to continue rising, often driven by subsidised or free electricity, the degradation of
groundwater aquifers from overpumping and pollution is certain to become more
severe (chapter 8).
Rising energy costs will affect agriculture both on the supply side given high use
of energy in machinery and fertilisers, and on the demand side as the demand for
biofuels rises.
Competitiveness and value
chains
5 Bringing agriculture to the market (p. 118)
focus D: Agribusiness for development (p. 135)
6 Supporting smallholder competitiveness through institutional innovations
Rural transitions
With development, with see two things: the share of GDP in agriculture falls, as
does the share of the labour force - but the latter is disproportionately high, and
poverty tends to be both rural and agricultural. As other sectors, moreover, although rural incomes often rise, the gap between town and country usually widens
- see East Asia.
Three ways out of poverty: through farming, the non-farm economy and migration. In all three respects, there are good and bad ways to do this: farming can be
subsistence or commercial; non-farm jobs can pay well or very badly; and migration can be a ladder up or an act of desperation.
Other concerns
143
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