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-----Original Message-----
From: tadreg [mailto:<address removed>
Sent: Wed 05/05/2004 17:05
To: Poulton, Colin D
Cc:
Subject: Re: Thoughts from the Moderator - Week 3
Before proceeding to ask 'what can DFID usefully do?' I would like to
make 2 points which cross-cut the discussions in the three groups.
First, there is little or no discussion of the political dimension of
smallholder farming, yet politics (and ideology) are fundamental to the public
policy and reform themes. Understandably, economists conflate politics with the
policy discourse, and assume that the 'best' policy prescriptions can be sold
to the relevant decision-makers. Colin started to approach the issue when he
mentioned reforming ministries of agriculture, which is surely a priority where
I live (Tanzania), though not one anybody is talking about. Tony Jayne argues
that most countries in East and Southern Africa 'are generally less far along
the reform process ... in early 2001 than they were five years earlier.' I note
the same in Tanzania: there has been a steady and under-reported backlash
against liberalisation in export agriculture (not in local grain markets).
Stefano Ponte calls this 'the politics of ownership':- liberalisation allows
international investors, multinationals and Asian middlemen to elbow out the
marketing boards, state-owned banks, and cooperative unions. I could cite half
a dozen examples of how this works here. The consequences are poor regulation,
ad hoc interference in markets, and unnecessary taxes on producers and
middlemen. Incentives go down as risks increase. There is very little political
demand for more liberalisation of export agriculture and more state
intervention (justified in terms of 'market failure') are welcome by most key
players.
Except the donors. But my second point is NOT that donors serve as a
counterpoint to these anti-market politics, but rather that aid to agriculture
is essentially policy-neutral. Big loan-funded projects from the WB, IFAD and
others aim ostensibly to improve credit availability and marketing,
recapitalise soils, strengthen research and extension, but in fact they serve
mainly to empower the bureaucrats and politicians who run them and have very
little to do with providing incentives to farmers and investors. (In this,
nothing much has changed). The issue of basket-funding agriculture presupposes
that policies are 'good' (to use the WB's penetrating terminology). If they are
not, gvt and donors end up throwing money into the proverbial bottomless pit
(in a recent survey REPOA found that 15% of farmers saw an extensionist in the
previous 12 months).
Conclusions: (1) political issues and constraints underlie all our
discussions and challenge the relevance of our proposed solutions to rural
poverty in SSA; (2) aid does not have a track record of success to draw on: it
may be part of the problem.
My last point is that many (most?) of the examples cited in past
contributions tothese discussions refer to Asia. Their relevance to SSA has to
be demonstrated, not assumed.
Brian COOKSEY
----- Original Message -----
From: Poulton, Colin D <mailto:<address removed>>
To: <address removed>
Sent: Wednesday, May 05, 2004 5:54 PM
Subject: Thoughts from the Moderator - Week 3
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 âAs much as 50%
of the existing irrigated area in Africa requires rehabilitation and
modernization.â 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 âeconomicâ 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 âbottom upâ organisations, but the record of âtop
downâ 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 âmodelâ 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 âown accountâ 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 âproductiveâ 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 âbig falls in price bias against agriculture in many
developing countriesâ 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 âinstitutional
arrangementâ 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 membersâ 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
âAgricultural Markets and the Rural Poorâ that David Orden has posted to
the site. Davidâs 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 producersâ
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 moderatorâs 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
Please visit dfid-agriculture-consultation.nri.org.