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Dear List Members, A quieter week within Economic Opportunity this week, but still some stimulating contributions to report on. Contributions on issues that DFID should be interested in are summarised below under three headings â market information, credit and technology. We have also received some important contributions on âhowâ DFID goes - or should go - about its business of addressing these. As the forum heads towards its conclusion, these are question that deserve additional attention. Market Information Andrew Shepherd has in the past documented âproblems with donor-assisted, state-run market information servicesâ. Since this work (still downloadable from the FAO website) was undertaken, advances in technology (mobile phones, the internet, FM radio) have created new possibilities for improving the efficiency and effectiveness of such services. Andrew also reports that market information now appears on TV in Bangladesh and India (by popular demand). However, critical practical questions concerning MISs remain to be answered, such as how the consistent, long-term collection of reliable information can be sustainably achieved. As the importance of market information is almost universally acknowledged, should this remain a priority area for DFIDâs attention? Another contribution this week raises a particular point about international crop prices. James Biscoe suggests that, if world prices of crops were disseminated alongside locally realised prices, this could stimulate plenty of debate and reflection amongst producers and traders alike. Credit A couple of contributions this week have argued that credit is vital if agricultural producers are to obtain higher incomes from enhanced production activity. In one contribution, drawing on Asian experience, it is observed that producers already have access to informal credit, but the finance that they take ties them to particular market channels and compromises their ability to obtain higher returns from their agricultural production through pursuit of new marketing options. However, another notes the inherent incompatibilities between current micro-finance lending products and the resources and requirements of smallholder agricultural producers engaged in seasonal production (e.g. the dominant products currently offered are short-term loans requiring weekly or monthly repayments). Whilst DFID and other donors should continue to work with promising micro-finance and grassroots financial institutions, they are cautioned against supporting expensive buildings and vehicles etc that raise costs of operation and hence break-even interest rates. Technology and Support Services One strand of the credit debate has also been intertwined with discussions on labour saving technologies and supply of support services, with a strong gender dimension to these discussions. A general point made by Dick Tinsley and supported by Sophia Huyer is that there is potential for labour saving technologies to reduce drudgery and free up valuable time for poor households to use in other ways (possibly more productive ways, possibly just gaining additional but much needed rest). Specific examples of this have related to land preparation and to energy provision / saving for household chores often undertaken by women (e.g. fuel efficient stoves, water pumps). There has been some discussion on the specific example of tractor services â in many parts of Africa, the economics of tractor operation have been questioned, so suggestions have been made of alternative ways of raising the productivity of existing operations (e.g. through greater promotion of animal draft power or conservation tillage, which is currently exciting much interest in Zambia and Zimbabwe). However, the general point about labour saving technologies is supported, as is the related point that supply of such technologies, through equipment sale or rental, itself provides an opportunity for income generation for rural entrepreneurs. One question that then arises is why there is not more such equipment sold and/or rented. Comparison between India and Africa suggests that the purchase price of equipment may often be a constraint in Africa (whereas âIndians are very good at radical cost cuttingâ â the examples of treadle pump production and micro-drip irrigation technologies being cases in point here). When donors and others get involved in the promotion of new technologies, the importance of creating local supply capacity at the same time as promoting demand has also been highlighted. An East African example of this (not cited by list participants) is the manufacture of âMavunoâ fertiliser in Kenya and its sale in tiny packs (as small as 1kg). The link between micro-finance and technology supply comes in here. Are local-level service suppliers prevented from entering the market (or expanding) by lack of access to finance? Alternatively, is the constraint really a lack of people with the appropriate business skills to make profitable use of finance? A second question returns to discussions of farmer collective action from earlier weeks: are support services best provided by individual entrepreneurs (where decision making is most straightforward, but lack of collateral could be a problem in accessing sufficiently large quantities of finance) or through (user?) groups? Sophia Huyer highlights a gender dimension to this question, noting that womenâs self-help organisations can assist in technology access for production and marketing activities, as well as enabling women to articulate their particular concerns in society and to strengthen their bargaining position in a number of areas: âmost technologies are bound up in hardware and their products are goods to be sold or used. Questions of access and control are central in determining actual benefits to women.â The theme of access to, and control, over productive assets is echoed by Ruchi Tripathi, who sets out Action Aidâs position on rights to land, seed and protection of knowledge, plus other rights related to accessing markets and services on reasonable terms. (More detailed contributions on land and credit can be found under the Public Policy and Expenditure theme). A theme of these contributions is empowerment of poor groups, often through some form of collective action â an area for DFID involvement? Another contribution highlights the importance of women having secure rights to land. Where women are expected to bear the burden of providing food for their families, this can be critical to household food security and nutrition. Finally, two contributions have reminded us that, in Africa, women are at least as heavily engaged in food crop trading as men. The term âmiddlemenâ is, therefore, often misleading. I shall try to remember to stick to âmarket intermediariesâ in futureâ The Final Two Weeks As the forum heads towards its conclusion, we need to be moving our contributions on, from issues that DFID should be interested in, to practical ideas as to what DFID, as an international development agency, should actually do about these issues. Whilst many list members do not have detailed knowledge of how DFID operates or of its relative strengths and weaknesses compared to other donor agencies, we can frame contributions in the light of generic constraints that such agencies operate under and also of the general opportunities open to them. For example, DFID can potentially exert influence amongst all of the following: recipient (national) governments and other stakeholders in development processes in low income countries; international bodies (e.g. WTO, NEPAD, UN organisations, CGIAR, World Bank, EU development programme), and other UK government ministries (e.g. Ministry of Trade and Industry, DEFRA). On the other hand, the fact that within low income countries, DFID is an agency of an external government also imposes constraints. There are widely acknowledged difficulties in working through many existing host government agencies. However, it has limited capacity to manage field activities (assuming it wanted to) and a preference for disbursing funds in ways that keep the âtransaction costsâ of fund disbursement to reasonable levels. The move towards direct budgetary support (discussed briefly within the Public Policy and Expenditure theme) is intended to enhance local ownership over development processes, but perhaps also reflects a view that DFID staff time is better employed in constructive engagement in these policy processes than in overseeing disbursement of, and accounting for, relatively small chunks of project money. In the light of these types of considerations, should DFIDâs efforts to enhance access for the poor to assets and markets be focused on (for example): - Working for better policies within low income countries (if so, what are priority areas for attention within the general area of access to markets and to assets?) - Funding projects that explore innovative solutions to practical problems on the ground (if so, after five weeks of debate, what are the priority problems?) - Strengthening civil society organisations that campaign for interests of particular poor groups and/or hold public sector agencies accountable for their performance and use of resources? Are there other ways that DFID can engage with the political dimensions of agricultural policy making to enhance access for the poor to assets and markets? Finally, Andy Bullock has drawn attention to internal DFID organisational issues with his contributions on the Public Service Agreement and its relative neglect of agriculture and, in particular, hunger. Are there other similar issues that list members see as critical to improving DFID performance in our areas of interest? Looking forward to more stimulating and challenging contributions! Best wishes, Colin Poulton
Please visit dfid-agriculture-consultation.nri.org.