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technology Sender: <address removed> Precedence: bulk The postings below went first to the Science and Technology group, then to the Growth and Poverty list, but perhaps they are most fundamentally a matter of economic opportunity, to the extent that an exogenous boost to the primary productivity of poor people's labor and natural resources may be necessary to break certain poverty traps. In other words, without some tangible new technology that creates new biophysical oppportunities, the poorest may remain stuck no matter what is done to prices or market access or social organization. =20 =20 The question is, how can outsiders create incentives for people to invent and develop new technologies that meet their needs? One of many useful approaches would be for donors to contribute lines of credit, for prize funds to be paid out to reward successful innovations. The original article explaining this idea is at: at:=20 http://www.agbioforum.org/v6n12/v6n12a14-masters.htm <http://www.agbioforum.org/v6n12/v6n12a14-masters.htm>=20 and there is also a two-page summary and a longer journal article explaining the concept on my website: www.earth.columbia.edu/cgsd/masters- news =20 Thanks to all for a very interesting set of discussions -- =20 Will Masters =20 =20 -----Original Message----- From: Will Masters=20 Sent: Wednesday, April 28, 2004 2:15 PM To: growth-and- <address removed>; <address removed> Cc: <address removed> Subject: Follow-up to Michael Lipton posting: prizes for innovation Below is a posting I sent earlier today to the Science and Technology list, that I think responds directly to Michael Lipton's challenge to the Growth and Poverty group. =20 =20 If DfID and other donors are to focus on raising the primary productivity of the poorest people, one important tool will be the introduction of new funding mechanisms. The "invention" of the CGIAR in the 1960s was a great achievement that unlocked a lot of other funding and delivered extraordinary results, but the subsequent decline in support to agriculture tells us something important about the limitations of the mix of institutions that are now available to donors. =20 To raise funding levels now, having a new and different way to reward accomplishments would be helpful. My own proposal for a additional funding mechanism that could complement other institutions, improve effectiveness and raise funding levels is a way to pay "prizes" for agricultural innovations. I won't explain the approach here -- a short journal article is available on-line, at: www.agbioforum.org/v6n12/v6n12a14-masters.htm and there is also a two-page summary and a longer journal article explaining the concept on my website: www.earth.columbia.edu/cgsd/masters-news <http://www.earth.columbia.edu/cgsd/masters-news>=20 =20 Perhaps the growth-and-poverty list members would like to comment on how a new funding device, perhaps prizes in particular, can help re-invigorate support for what Michael Lipton quite rightly calls Plan A. =20 Will Masters =20 -----Original Message----- From: Will Masters=20 Sent: Wednesday, April 28, 2004 9:58 AM To: science-and- <address removed> Subject: "Demand-led" versus "supply-led" innovation=20 Colleagues, I'm glad that the science and technology portion of this exchange is heating up! I would like to applaud Dana Dalrymple's latest posting, and would add the following: =20 Ultimately, all successful innovation must fill users' needs, or else it will not be adopted. But this does NOT mean that the users can or should be "leading" the innovation, or even that users must participate directly in the innovation process. Of course end-users must participate in the final stages of refinement of any innovation, but to the extent that the whole innovation process is made demand-led and participatory, it will be pursuing approaches that are already known and available to the users: in other words, it won't be as innovative as it might be. One can think of a continuum, from what users know and can do to what specialized researchers know and can do. It seems clear to me that poor farmers know more than anyone else can possibly know about their own circumstances: what they can't do is how to make large changes in the available technology, through new crop genetics, new mechanical devices, etc. =20 As I see it, the key question is whether specialist innovators have a real incentive to meet users' needs. If they do, they will use their specialized knowledge and skills to do something genuinely new, something that the users can use but couldn't make for themselves. Dana Dalrymple's "supply-led" innovators have been successful where users' needs are relatively easy for outsiders to see. To make a gross generalization, I think this was more the case for the large and relatively homogeneous cultivation systems that benefited from the past green revolutions, than it is for the patchy, agro-pastoral systems of Africa and parts of South Asia, the Andes, etc. that have not yet experienced a green revolution, and where it is not at all obvious to anyone what technologies are likely to work best. =20 So, how to reward innovators to produce what users need, but can't make for themselves? One proposal is to introduce some "pull" mechanisms for the funding of research, to complement the "push" mechanisms by which donors fund projects and programs. The terminology is due to Michael Kremer, who considers pull mechanisms to be all payments that are tied to adoption and impact: most notably that would be royalties from patents, but it would also include "prize" payments paid for public domain technologies. =20 =20 The trick in designing a pull mechanism is how to compute the value of payments, and make a low-transaction cost mechanism for donors to reward innovators. A particular proposal for how to do this is detailed in a recent journal article, available on-line at: http://www.agbioforum.org/v6n12/v6n12a14-masters.htm I won't go into details here -- there are also longer write-ups of the proposal available on my own website, at: http://www.earth.columbia.edu/cgsd/masters-news <http://www.earth.columbia.edu/cgsd/masters-news>=20 =20 I know that DfID has been interested in the pull mechanisms in the past -- indeed their work with Michael Kremer stimulated the work that is referenced above. I would be very keen to hear what the community is now thinking about this kind of payment device, and its potential to help answer the question of how to make R&D more demand-led, without losing its innovative character. =20 Will Masters ------------------------------------------ William A. Masters Center on Globalization and Sustainable Development, The Earth Institute at Columbia University http://www.earth.columbia.edu/cgsd/masters <http://www.earth.columbia.edu/cgsd/masters>=20 Visiting Professor of International and Public Affairs, Columbia University Professor of Agricultural Economics, Purdue University ------------------------------------------ -----Original Message----- From: Michael & Merle Lipton [mailto:<address removed> Sent: Wednesday, April 28, 2004 12:12 PM To: <address removed>; <address removed> Cc: <address removed> Subject: Fwd: Re: Agricultural e-forum =09 =09 Dear all, =09 =09 I have been following several of the Group discussion fora with interest. There are many thoughtful, useful contributions. But I am depressed by the fact that few contributors are following up on what seems to me to be the main point, and the central lesson of history for initial mass poverty reduction. It is that without sustained initial, employment-intensive, smallholder-based yield growth in agriculture, probably focusing initially on food staples - call it Plan A - the remaining heartlands of world poverty will not reduce it much. Hence the issue for development actions in general, and for UK aid policy in particular - if these aim to cut poverty in its heartlands - is what policies can implement Plan A. It is not what alternatives there might be in la-la-land. =20 First, the central fact, and an important proviso.=20 Fact: over 90% of the dollar-poor are in sub-Saharan Africa and S and E Asia, and over 70% are rural. Though almost all of them obtain income from many sources, much the most important is agriculture, and non-farm growth is seldom robust (or povery reducing) until dermand from agriculture grows. Ravallion's projection is that over half the world's poor will be rural until 2035. Proviso: Non-farm expansion is increasingly the main way to reduce, and fairly soon to remove, extreme dollar poverty where there have already been 10-20 years of 3%+ agricultural yield growth (usually starting with food staples) that is smallholder-based and employment-intensive. Demand from small farmers and labourers, fuelled by agricultural progress, in turn sets off rapid non-farm growth. This has happened in large parts of East Asia and some parts of South Asia. =09 First, however, affordable demand for the labour of the rural poor (accompanying, of course, measures to raise their educational, skill and health levels) are needed. The rural poor have multi-faceted livelihoods, but, almost always, only yield expansion in agriculture - overwhelmingly the main component of those livelihoods - can provide such extra livelihoods initially where mass rural poverty prevails. =09 So: how can Plan A be implemented? Most of the remaining poverty heartlands have little water control, especially in sub-Saharan Africa, and have so far gained little from the Green Revolution. Aid to agriculture, and (except in parts of Asia, and including within the CG syastem) finance of public-purpose research aimed directly to improve crop productivity and robustness, have collapsed. Staples yield growth in the developing world has fallen from about 3%/year in the early 1980s to around 1%/year recently.=20 =09 So it will not be easy to revive agricultural growth in the poverty heartlands, Yet, given agriculture's role in employment- income and consumption for most of the world's dollar-poor, there is no hope of meeting the MDG to halve poverty in 1990-2015 unless that happens. One requirement - of course not the only one - is that aid to small-farm and employment-intensive agriculture revives sharply. (All aid to agriculture has fallen by over 60% in absolute terms since the late 1980s, folloowing a previous sharpl fall from the late 1970s; the falls are mostly due to agriculture's plummeting priority within sector-specific aid, not to the rise of structural adjustment assistance). A UK lead, combined with the renewed concern of other donors on this matter, could be crucial to the revival. Obviously, how we do it is at least as important as that we do it. It is right that these fora focus on the 'how'. Aid has to be is directed to the right targets to benefit the poor (which include producing items in sufficient demand, local or foreign); and aid has to be reasonably well based in the will of recipient societies and governments, e.g. as expressed in the (currently rather sector-free) PRSPs, so that extra aid claws in, rather than drives out, domestic effort.But let's not be so concerned to discuss and differ on the difficulties, that we lose sight of the central point - the case for a DfiD focus on Plan A. This means dated targets for reviving the proportion of aid from the UK, and if attainable for EU and the World Bank, supporting - in a broad sense - smallholder and employment-intensive farming. =09 Otherwise - without extra demand for the labour services of the rural poor, which in the initial stages, and in the remaining recalcitrant poverty heartlands, can come affordably only from small-scale agriculture - there is little hope of big poverty reductions in the parts of the world that have NOT, so far, had either poverty reduction or substantial progress in farm income or in yields of food staples.=20 The rising worker-to-dependent ratios in the poverty heartlands in 2000-2040 can be a wonderful opportunity for a farm-income-led attack on poverty, increasingly feeding into off-farm income diversification, as happened in East Asia in 1970-90. Or, without sustained yield growth, the opportunity can turn into an employment and poverty debacle.=20 =09 Which will happen? It depends in large part on trade policies in OECD, on domestic responses in the poverty heartland nations, and on the priorities within farm science. But aid plays a big role, especially since aid policy affects all these other things too. What should the UK do in this context? How should it seek to influence EU and the World Bank? How do we get to targets for aid to agriculture and farm research over the next 5-10 years, and for steering that aid to the needs of the poorest: policies that prioritise small farms and employment income, water control and better seeds for more robust farming, and poor people's access to bigger shares of farmland (including via orderly land reforms) and farm water?=20 =09 It would be useful if we could re-inject an emphasis on these central points into the fascinating but, inevitably with many participants and fora, perhaps not yet sufficiently focused discussions. =09 Best wishes for our work! =09 Michael Lipton =09 P.S. Here is a list of issues I have sent to Sarah Hartwell, for the interview to which her Select Committee on DfID agricultural policy has asked me. (Sorry for some overlap with the above.) (a) 55-60% of the world's dollar-poor depend on agriculture for their livelihood. (b) Historically, almost all initial mass poverty reduction - most recently and strikingly in large parts of Asia in 1965-90 -began with big, employment-intensive productivity gains on small farms. (c) Non-farm growth, while crucial to poverty reduction later, first needs demand from small farms and so has hardly ever created enough affordable workplaces to initiate early mass poverty reduction. (d) A unique opportunity for accelerated poverty reduction - yet also a great risk of an unemployment surge, deepening poverty - is created by the rapidly rising worker/dependent ratios (due to sharp post-1980 fertility falls) in Asia and Africa, and only small-farm growth strategies are likely to seize the opportunity.=20 (e) Yet since the 1980s there have been sharp (and non-coincidental) falls in ---yield growth in main food staples in developing counties;=20 ---aid to agriculture;=20 ---public-purpose research into raising productivity of main staples; and=20 ---the rate and spread of dollar-poverty reduction.=20 (f) These setbacks are despite big falls in price bias against agriculture in many developing countries - and are partly due to OECD policies on farm trade, aid, and science. (g) The forms of aid required to improve the impact of agriculture on poverty reduction are fairly familiar, but little-discussed. Central issues include: --possible need for specific commitments to raise volume, and share, of UK aid reaching small-scale farming, given the above facts; --the use of aid to address the water crisis, especially since absence of water control is the main obstacle to progress on small farms in Africa; --how to steer more aid to agricultural (especially seed) research that favours production and employment of the poor; --how to increase UK aid's impact in improving the poverty focus, and in raising the amount, of support for agriculture via multilateral agencies; --prospects for aid in support of well-conceived programmes to redistribute, where feasible consensually, farmland and water to the poor; --how to use aid or other means to improve the prospects that globalisation benefits, rather than harms, small and remote farms, given the increasing role of supermarkets, horticultural multinationals, and food and labour grades and standards; and --how to ensure that aid complements, rather than drives out, domestic private and public investment in agriculture. ============================================================= To send a reply to this message that goes to all list members, make sure that you send your reply to <address removed> To unsubscribe from this list, send an email to "<address removed>", with the message body: unsubscribe economic-opportunity <your-email-address>
Please visit dfid-agriculture-consultation.nri.org.