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Dear All, A busy week in the Economic Opportunity theme! Once again, thank you all for your contributions. We have just over two weeks to run, so I would particularly like to encourage those who have yet to share their experience and insights with the forum to consider doing so this week. This week, we have received contributions on the following topics: Water The discussion of access to water has continued at a lively pace this week. We were told that successful uptake of small-scale water control and irrigation has been documented in a large number of countries in Asia, Africa and Latin America. Specifically, two contributors praised the approach of the NGO IDE, which combines: technology development (e.g. treadle pumps and mini-drip irrigation); encouraging competitive supply of the necessary equipment to smallholder producers, and assistance to those producers to access output markets (especially for horticultural products) that allow them to achieve a good return on their investments. Higher incomes as a result of the promotion of treadle pumps by the FAOâs Special Programme for Food Security in Zambia were also noted. However, some contributors pointed out that treadle pumps make an additional demand on human labour and suggested that hydraulic ram or other powered pumps might be preferable in some situations. The potential of vetiver grass and leguminous cover crops for soil and water conservation was noted. Constraints identified to more widespread uptake of small-scale water control and irrigation include: legal and institutional hurdles (often introduced by colonial authorities), post-independence governmentsâ preference for large-scale schemes and the small-scale, relatively simple technology (paradoxically?) reducing incentives for influential development practitioners to champion it. It was also suggested that, in Sub-Saharan Africa, âpaucityâ of land tenure (meaning lack of formal title?) might discourage investments in micro-irrigation. Whilst much of the focus this week has been on small-scale water control and irrigation, we were reminded of the need for large-scale, as well as small-scale, irrigation development. Also, given the competition for water, particularly in semi-arid areas, do we not need advances in âfarm-water scienceâ to increase the productivity of water use? The debate on waste water use also continued. This weekâs contributions discussed the pros and cons of reducing quality standards for agricultural use - the case âforâ being that these can be over-protective of human health and end up discouraging re-use; the case âagainstâ being that complementary opportunities (e.g. generating methane gas) may be lost if lower standards are required. Access to Markets This week has seen some interesting exchanges on the efficiency and effectiveness of existing informal agricultural market systems and suggestions as to what may be required to develop stronger market systems (with particular reference to grains). The exchanges were kicked off by Vinay Chandâs observation, drawing particularly on Asian experience, that farmers nearly always do have access to markets through collectors (assemblers); the issue is what share of the final retail price the farmer receives. A note of caution was injected against focusing too narrowly on the share of the retail price received by the farmer, as â even in competitive markets - this depends on a range of factors, such as distance, timing, product quality and degree of processing. Nevertheless, the issue of marketing margins is important. Subsequent contributions argued that, whilst informal market systems can be highly competitive and hence effective at transmitting demand/price changes to producers, the fragmented nature of the marketing system can contribute to high marketing margins. Two examples of this were given. Firstly, the large number of links in the chain means that numerous intermediaries all have to take their margin. Opinions were divided along similar lines to previous weeks as to whether farmer organisations should seek to engage in the aggregating/assembling function in place of collectors. Secondly, it was pointed out that, at each stage of the chain (including wholesaling) there are large number of small players, all of whom have to live off their trading margins from small consignments, hence necessitating high margins per unit. Two interventions that could contribute to raising farm gate prices were also discussed this week. Firstly, a debate was initiated on (public) provision of market information and specifically on whether such activity should focus on providing real time (current) market price information. One contributor argued that such information is of little relevance to producers, who are often several steps removed from the market where information is actually collected and who anyway have little flexibility to respond to short-term price changes. Instead, longer-term price analysis and information on broader market demand movements are what producers need â there is a role for extension in communicating this. By contrast, another contributor pointed out âcollectors trade on informationâ; hence, appropriate current price information is needed by producers for bargaining purposes. Secondly, several contributions highlighted the importance of improving transport systems, which can encompass port infrastructure, roads, tracks and efficient use of vehicles. Better transportation will assist not just agricultural marketing, but also a range of rural non-farm activities. It was pointed out that middlemen often obtain part of their profit from the supply of rural transport services, which could often do with being more competitive. The use of mobile phones (by better-off producers) for arranging transportation was noted. One contributor asked about the economics of domestic fuel production as a way of reducing costs. Finally, citing experience from grain markets in Southern Africa, Jonathan Coulter considered what is required for more efficient private market systems to develop, including the participation of larger, âformal sectorâ players. He noted that greater private investment (both national and international) in agricultural market development is discouraged by the habit that politicians and officials have of intervening in markets on an ad hoc basis, ostensibly to correct for market failure, but often for their own personal or political ends. Developing more efficient private market systems may require a 10+ year time horizon, during which time ad hoc public intervention is replaced by constructive efforts to put in place essential building blocks for private market activity, including reliable crop forecasts, improved transport infrastructure and, where possible, systems of warehouse receipts that can simultaneously tackle challenges of trade financing, product standardisation (grading), market information and contract enforcement. He challenged DFID and other donors to commit to this sort of long-term agenda. Would others like to comment on this approach? Contract Farming We received one contribution on this subject this week, plus reference to a book on the subject from Andrew Shepherd. In response to last weekâs comments about the risks of growing high value crops, James Cock observed that contract farming serves to reduce the risks of growing such crops. In his experience, mutual trust and understanding, plus the commitment to an ongoing relationship, can be more important in making contract farming work than the existence of a formal contract. He observed that contract farming is becoming increasingly important and that it will become even more so as âsupermarketisationâ increases. Urban Agriculture The debate on urban agriculture, which began within the Growth and Poverty theme, has migrated in search of Economic Opportunity this week! Henk de Zeeuw kicked us off with a call for DFID to give due attention to the promotion of appropriate technologies for small-scale urban horticulture, agro-forestry, livestock and aquaculture production, plus microenterprises involved in processing and marketing the resulting products, and to the collection, treatment and reuse of urban wastewater. Such activities would both contribute to poverty reduction and benefit the environment in urban areas. Subsequent contributors have highlighted the importance of legal issues (strengthening land rights and changing bye laws that restrict livestock ownership) to the development of urban agriculture. Debate has focused firstly on the priority to be given to urban agriculture when the majority of the poor in low income countries still live in rural areas. It has, however, been pointed out that the number of urban poor is rising rapidly in many countries. Secondly, there has been debate on the extent to which urban agriculture competes with rural production (further restricting the opportunities that poor rural producers have to generate income through sale of âtradableâ products). It has been suggested that, whilst road networks remain poor and cold chains non-existent, there will be less conflict when (peri-)urban producers focus on perishables such as milk, eggs, vegetables and meat, than when they grow cereals. However, it has also been pointed out that many poor urban dwellers (households with HIV were cited) engage in agriculture for survival reasons, hence subsistence-oriented production of cereals, rather than market-oriented production of higher value produce. As well as considering priorities across urban and rural, participants might also reflect on the particular challenges facing support to agriculture in less favoured (as opposed to higher potential and/or more accessible) rural areas. Is it most cost effective to focus initial efforts on higher potential areas (as in much of Asia during the Green Revolution) or do poverty reduction ambitions require that we look directly to the areas with the most intractable poverty? If so, what can be done in less favoured areas? This debate is, of course, also relevant to our discussion of market access and market development above. Political Dimension There has been relatively little discussion of farmer organisations this week, but the topic of the political dimension to agricultural policy making has been raised within the forum by Brian Cooksey and we have been encouraged by the process moderator (message of May 11th) to consider aspects of this within our theme. James Biscoe noted in his contribution to our urban agriculture discussion that, âMore people live in rural areas than urban, although being less densely settled and less near the seats of power they are often less noticed.â This is a major contributory factor to current poverty profiles. Similarly, price discrimination against rural producers in favour of urban consumers has been raised. How can we get the voice of the farmer better heard within the policy dialogue and decision taking process? Two contributors have observed the problems when donor projects work through host governments or when donors support national policies that give undue powers to politicians and officials, rather than leaving the floor to the private sector. To what extent does this compromise the ability of donor-supported activity to enhance the access of the poor to markets and assets? If there are real difficulties, what might be done to overcome these? In addition, Clive Robinson has reminder the forum of the gender dimension to the issues we are discussing. Relevant to our theme, he claims that, âEnhancing women's access to and control over resources, assets and decision-making is crucial to improving the outcomes of agriculture.â Are their particular implications that list members would like to draw out for the discussions that we have so far had on water, land or farmersâ organisations? I am aware that these comments appear to be opening up new areas of debate at a fairly advanced stage of the consultation. I would, therefore, like to close by reminding us of the need to focus on âhow DFID might best deploy its efforts to unlock the potential of agricultureâ. This encompasses not just what is most likely to work based on existing experience (further success stories in different areas are welcomed), but also where DFID in particular is best placed to make its contribution. Looking forward to further contributions, Colin Poulton
Please visit dfid-agriculture-consultation.nri.org.