Economic Opportunity Mailing List Archive

["Poulton, Colin D" <<address removed>>]

Dear All,

Once again, thank you for all your contributions over the past week.

This week there have been two main areas of discussion - water and farmer 
organizations - plus recent contributions on price policy and contract farming. 
These are briefly reviewed below. I will then suggest how we may (continue to) 
move forward over the coming week.


Water

There have been three strands to this discussion. Firstly, contributions have 
asserted the benefits of improved water control in rainfed agricultural 
production systems for both food production and crop diversification. Examples 
of particular success stories would still be welcome here. However, it has also 
been observed that uptake of improved water control technologies has not (yet?) 
been very widespread (why is this?). Secondly, Andy Bullock has drawn attention 
to the importance of rehabilitating existing irrigation systems, with 
particular reference to Africa where "As much as 50% of the existing irrigated 
area in Africa requires rehabilitation and modernization." Focusing on 
rehabilitation of existing schemes, rather than creation of new ones, is 
justified by the fact that both dams for seasonal storage and the use rights 
for the water (at scheme level) are already in place. However, it has been 
suggested that it is important to find out why past experience with these 
schemes has not always lived up to expectations before investing in 
rehabilitation and modernization. Consulting the users is the best way to do 
this. Thirdly, the issue of wastewater recycling has been raised. This can 
bring benefits in terms of water availability, sludge for fertilizer and gas 
production (primarily for urban and peri-urban areas?).


Farmer Organisations

Here we have benefited from some transferred contributions from the Growth and 
Poverty theme, plus some direct contributions. As noted in previous summaries, 
there has been a lively debate on the benefit of farmer organizations and 
whether or not they deserve a central place in agricultural development 
strategies. Contributions have noted the valuable role that they can play in 
policy advocacy, as well as their "economic" roles (e.g. realizing scale 
economies, contributing to value addition), which have perhaps been the area of 
greatest controversy. The record of farmer organizations is clearly mixed. Some 
suggest that there has been more success than failure when they have been 
genuine "bottom up" organisations, but the record of "top down" organisations 
(political creations or subject to political control) is largely one of 
failure. A recent contribution by Andrew Palfreman to the Growth and Poverty 
theme suggests some technical criteria for when collective action will and will 
not be appropriate.

Critical comments on farmer organizations point to their costs of organization 
and administration - linked to collective decision making processes and hence 
the heightened need for transparency? - which are often greater than the profit 
margins of private traders. Hence, private suppliers are often more efficient 
providers of services to rural households (smallholder agricultural producers 
and pastoralists). Drawing on experience in East Africa and the Horn, Andy 
Catley has argued that private veterinary service provision (regulated and 
inspected by government veterinarians) is far more efficient than service 
provision by farmer / pastoralist groups, whilst John Hambly has extolled the 
virtues of farmer joint ventures. A second criticism of farmer organizations 
has been their sustainability when initial donor funding (assuming that they 
are donor funded) ends.

More case studies of experience with farmer organizations are still very much 
welcomed. The most successful "model" that I am aware of is that developed by 
CLUSA in Mali and now replicated in Zambia and Mozambique (with CARE) and also 
being copied by other organizations in neighbouring countries. In contrast to 
the focus on "own account" service provision, in competition with the private 
sector, that has been questioned above, this focuses on equipping rural 
households to link up to agribusinesses and other service providers (e.g. 
credit providers, extension agencies). There is a strong emphasis on training 
(including both functional literacy and problem solving) for empowerment and a 
large number of groups and associations have been established in a relatively 
short time in all the countries named. Options for sustainability include the 
creation of a local NGO to provide ongoing  support services (additional 
training, advice or legal support?) on a contract basis or building the 
capacity of apex organizations to provide such services - in addition to their 
advocacy roles, but perhaps instead of more traditional engagement in directly 
"productive" activities. Are others familiar with this model or with others 
that are demonstrating widespread replicability at reasonable cost?


Price Policy

Two contributions have highlighted the importance of providing attractive 
prices to smallholder producers; they have argued that farmers will find a way 
of investing if profitable opportunities exist. The implication is that 
governments are still inclined to suppress prices to provide cheap food to 
vocal urban interests, at the expense of less well connected and organized 
producers. This may well be true and perhaps provides one of the justifications 
for farmer organizations to engage in policy advocacy. However, as Michael 
Lipton notes in his contribution this week to the Growth and Poverty theme, 
there have been "big falls in price bias against agriculture in many developing 
countries" since the 1980s, yet there have also been falls in yield growth in 
the main food staples and in the rate and spread of dollar-poverty reduction. 
Michael highlights investment in water control, seed research and land reform 
as key complements to removing price bias. Are list members happy with this as 
a set of priorities for DFID to invest in?
 

Contract Farming

Contract farming has been highlighted as an "institutional arrangement" worthy 
of further attention and support. It has potential to assist in the promotion 
of agricultural diversification and, more specifically, to overcome some of the 
barriers to smallholder participation in increasingly competitive and demanding 
global commodity chains (one of the subjects of the Global Trade theme). Our 
contributions have highlighted some pre-conditions for contract farming to 
deliver successful outcomes, including suitable infrastructure, a critical mass 
of producers (taking us back to contributions last week) and a framework to 
protect the rights and bargaining position of poor producers. It has also been 
suggested that only producers who can achieve a certain level of 
self-sufficiency in staple food production can/should embark on contract 
farming. Whilst the commodities are high value, they are also often high risk 
(principally due to demanding quality requirements), so may not be high profit 
options for producers. We welcome list members' examples of smallholders 
successfully and sustainably increasing their participation in global commodity 
chains through contract farming, plus case studies of schemes more oriented 
towards national and regional markets.


Before looking ahead, I should also flag the paper on "Agricultural Markets and 
the Rural Poor" that David Orden has posted to the site. David's message this 
week provides a summary of the paper. In addition to issues already touched 
upon, this highlights the potential contribution of rural capital-intensive 
infrastructure to enhance producers' access to national markets. It also 
distinguishes three categories of producers who face different constraints to 
market participation - a categorization that others might find helpful to their 
thinking. We continue to welcome papers that shed light on particular debates 
within the Economic Opportunity theme. If you send them to <address removed> 
<mailto:<address removed>>, stating that they are for the Economic Opportunity 
theme, I can approve them for posting, so that all can benefit.


Finally, therefore, suggestions for the week ahead. I hope that people still 
have contributions to make on the four areas summarized above and perhaps on 
others going back to the first weeks of the consultation or even to the initial 
moderator's introduction. To help list members track debates, perhaps we can 
use the four headings that I have used above when commenting on these 
established themes. 

However, we are also well into the e-consultation now, so need to begin to move 
from debating what the issues are (i.e. what are the key constraints to access 
to markets and assets for rural producers?) onto what can realistically be done 
to remove these constraints and, in particular, onto what DFID can best 
contribute to this process. On the first of these, we particularly welcome 
success stories of enhanced access to markets and/or assets, preferably giving 
an indication of impacts and drawing out the keys to success and lessons for 
replication. On the question of priorities for DFID investment / activities, we 
need to think not just what needs doing, but also how DFID can maximise its 
contribution, given its expertise, international position and the means at its 
disposal.

As always, we look forward to your continuing contributions.

Best wishes,

Colin