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Dear Moderator, I sent my contribution to Dick Tinsley but I also think its relevant for this disscussion group. I've worked in the agri-development field and recently with the University of Exeter running a project on 'Joint Venturing in dairy farming'. I agreed with the adverse comments regarding agricultural co-operatives from Dick Tinsley. Farmers can often co-operate with just one or two other farmers who they know well, hence the fact that joint ventures have a record of being established successfully whereas co-ops tend to be too cumbersome. Fine for marketing or supply problems but cumbersome in the horizontal co-operation context. I looked at JVs because there is a need for them in the small scale farming dairy sector where economies of scale are so important to make a living. The problem is the 'legal infrastructure' to unite farmers hitherto has not been well known. Farmers need to keep their independence (although they must be prepared to be interdependent), they need to gain economies of scale, use other peoples know-how and reap greater profits than working alone. We found two legal infrastructures, namely the 'service company' and a form of 'share farming agreement' that allows farmers to do all of these things. The principle is applicable to smallholders whether they own or rent land and in the developed as well as in developing contexts. What is required is for Government Aid institutions and NGOs to examine the concept closely and pilot some projects in different circumstances. I would be very pleased to supply more information (a technical paper) about our project should anyone be interested. John Hambly Senior Research Fellow ----- Original Message ----- From: "Karen Birkbeck" <<address removed>> To: <<address removed>> Sent: Monday, April 26, 2004 12:29 PM Subject: Growth and Poverty mailing list - first summary from the moderator Sent on behalf of Gareth Williams Dear participant, Welcome to the first weekly summary for the growth and poverty mailing list. I will be moderating this discussion group jointly with Alex Duncan. Firstly, I would like to thank everyone who has contributed so far. The discussion has been busy right from the beginning, and it is most encouraging that we already have twenty excellent contributions. I am sure that we will build further momentum as the discussion proceeds over the next three weeks. In the short space available it is only possible to summarise some of the key themes that are emerging. It is inevitable that some of the richness and breadth of the discussions has been lost. I would therefore encourage readers to keep referring to the website where the original contributions have been archived: http://dfid-agriculture-consultation.nri.org/maillists/growth-and-poverty/maillist.html I would like to highlight six groups of linked questions that have been the focus of the discussion so far: * How does agriculture contribute to pro-poor growth and what are its limitations? How do the linkages between agriculture, growth and poverty vary in time and space? Is it helpful to focus on agriculture alone in considering what drives pro-poor growth, or is a multi-sectoral view essential? * Have we paid enough attention to the extent of self-provisioning in agriculture? Does this make a difference to our understanding of agriculture, growth and poverty linkages, and what are the implications for development policies? * What are the linkages between agriculture, hunger and nutrition, and how does this in turn affect growth and poverty? * How is the context of agriculture changing? How does this affect linkages between agriculture, growth and poverty, as well as policy priorities? * Should a focus on the intensification on smallholder farming be the main priority for donor support within the agricultural sector? * Is the problem simply to raise investment, or do we need to think more deeply about problems of governance, organisation and administrative capacity that prevent resources reaching poor farmers? 1) How does agriculture contribute to pro-poor growth? Many participants have responded to Simon Maxwell's questioning of the "conventional wisdom" that "agriculture is the primary motor of growth and poverty reduction." The range of viewpoints expressed suggest that issue is not clear cut, and that the answer may be that "it depends". Andrew Dorward argues that agriculture plays a different role in poverty reduction at different stages of the development process. He suggests that the particular role of agriculture has been to kick-start poverty reduction at an initial stage of development when improvements in staple food productivity have occurred. This has led to improved nutrition, real incomes, economic activity, and institutions that have provided a platform for subsequent growth. These later stages of growth may be associated more with non-agricultural sectors and more rapid poverty reduction. Buddhika Samarasinghe and Sunil Sinha express a rather different (although not necessarily opposing) view that agriculture alone is not able to deliver large-scale poverty reduction. Where agriculture has played a significant role in reducing poverty, this has mainly been through linkages with other sectors - for example, the effect of rising agricultural productivity on raising wage levels in the industrial sector. It is argued that the pattern of growth and linkages between agriculture and other sectors need to be understood in particular contexts. Several contributors have pointed to spatial differences in how agriculture contributes to poverty reduction and growth. Paul Mundy has commented on the diversity of agricultural systems and the need to avoid a "one size fits all" approach. Buddhika Samarasinghe and Sunil Sinha point to significant differences between Asia, Africa and Latin America in the pattern of growth and linkages between agriculture and other sectors. Referring to the case of India, Bhuban Barah emphasises the heterogeneity of farming systems at the country level. Andrew Dorward argues that the favourable conditions that allowed the green revolution to reduce poverty and stimulate growth in south Asia are not present in today's poor rural areas (i.e. areas with low agro-ecological potential, low population densities, and a high incidence of HIV/AIDS). Keith Reed has helpfully suggested that the ability of agriculture to contribute to growth and poverty reduction depends on presence of certain preconditions (e.g. infrastructure, and good policies). It may be fruitful for the discussion group to consider further what these preconditions might be. In his introductory article Michael Lipton provides a list of three preconditions (adequate incentives, fairly equal access to land and water, and improvement in employment intensive farm technology). Andrew Dorward has also provided a list of five necessary conditions for starting pro-poor agricultural growth. Moving the discussion forward. I sense that there is going to be a lot more to say on the role of agriculture in pro-poor growth, and that we will end up with a rather nuanced, rather than black and white, understanding. It would be good to hear more about how agriculture-growth-poverty linkages have varied between countries and time, and how agricultural development has affected other sectors and has reduced poverty through indirect mechanisms. The policy implications of these distinctions need to be fully explored. 2) What is the significance of "self provisioning" to debates about agriculture, growth and poverty reduction? Andy Bullock has contended that the introductory papers have not given enough attention to the fact that the majority of the African poor rely mainly on self-provisioning (i.e. subsistence farming). His views are echoed by several others. Berthold Seibert described the realities of rural development in Sichuan Province, China, where farmers' priorities are to secure subsistence production rather than to face the risks of participating in tricky agricultural markets. Andrew Macmillan argues that we cannot rely solely on market- driven solutions, but need also to empower families who remain largely disconnected from markets and services. Moving the discussion forward. I expect that there is rather more to discuss about the extent of self-provisioning in agriculture, and how this effects growth and poverty linkages. To what extent is self-provisioning a cause of poverty and low growth, or is it simply a response to constrained opportunities for diversification and growth? Should donors and governments push commercialisation as an essential first step in poverty reduction, or should, as Berthold Seibert has argued, we recognise the risks of agricultural markets and aim to secure subsistence needs first? What is it that prevents farmers engaging in commercial production? Are specific strategies required to support self-provisioning farmers? 3) What are the linkages between agriculture, hunger and nutrition, and how does this in turn affect growth and poverty? Andrew Macmillan has referred to research evidence on the links between improved nutrition and economic growth. He suggests that agriculture has special relevance because there are significant economic benefits to be reaped by raising the adequacy of food consumption levels of the most undernourished. In the context of self-provisioning mentioned above, the links between agriculture, nutrition and poverty reduction would appear to be particularly direct and significant. Per Eklund echoes these themes and calls for greater use of nutritional indicators (in particular, stunting) to assess progress in tackling hunger and poverty. Moving the discussion forward. Again I think that these contributions raise a lot of questions on which further discussion would be very welcome. Does the recognition of nutrition-growth linkages imply that agriculture's contribution to growth and poverty reduction may be greater than previously thought? Does the use of different indicators to measure poverty (e.g. consumption measures vs anthropometric measures) imply rather different development priorities? Does a focus on hunger and nutrition objectives require a greater priority to be given to agriculture? 4) How is the context of agriculture changing? How does this affect our understanding of the linkages between agriculture, growth and poverty? An interesting contribution from Mark Meassick looks at the changing context of agriculture. He identifies a shift away from a sole focus on primary production towards integration of the whole value chain "from farmer to fork". The economic contribution of agriculture has tended to be undervalued because only primary production has been considered. If the whole value chain in the food industry is measured then agriculture's contribution to GDP appears much greater. Mark Meassick also discusses arguments about the "multifunctionality" of agriculture, and considers that arguments about environmental and social contributions have some validity, although these are often used as a ploy to maintain subsidies. The increasing diversification of employment and income sources in rural areas is an important trend that means that we can no longer take it for granted that smallholders have excess labour. In this context labour saving technologies are becoming increasingly relevant - a different point of view to Michael Lipton, who calls for employment intensive farm technology. Moving the discussion forward. I hope that other contributors will also take up the theme of the changing context of agriculture. This is a major theme of Simon Maxwell's article, which makes numerous predictions on the future of agriculture. It would be useful to engage further with each of his points, and to consider implications for pro-poor growth. 5) Should a focus on the intensification on smallholder farming be the main priority for donor support within the agricultural sector? This is one of the main points of contention between the Simon Maxwell and Michael Lipton's introductory papers. It has also been an important theme of the discussion in this group. The majority view appears to be that a focus on smallholder agriculture is required. Christie Peacock has posted a FARM-Africa policy paper on the website that argues that the sustainable intensification of smallholder agricultural production should be a key component of national anti-poverty strategies in most, if not all, countries of sub-Saharan Africa. Andrew Dorward, has suggested that almost all historical examples of mass poverty reduction have started with rises in productivity in small family farms. While recognising the role of small farms, their limitations have also been discussed by several contributors. Dick Tinsley, discusses three specific problems with small farm agriculture: risk aversion, constrained and sub-optimal decision making and labour constraints. A priority emerging from these problems is to make mechanisation available to smallholders. Andrew Dorward has responded to these ideas and has posed a series of questions that may spark an interesting debate. Several contributors including Christie Peacock, Dick Tinsley and Andrew Dorward have discussed the specific problems faced by smallholders in marketing their produce. An interesting debate on the relative merits of cooperatives and private traders has begun. While I would encourage this debate, it could also be held within the "economic opportunity" discussion group, which specifically addresses the question of making agricultural markets work for the poor. The key issue for this group is whether marketing problems faced by smallholders compromises their contribution to growth and poverty reduction. For example, can smallholders compete in today's tightly integrated supply chains, where supermarkets demand increasingly tough quality and traceability requirements? Moving the discussion forward. There is probably going to be a lot more to say on these issues, in particular to address Simon Maxwell's concerns about the viability of small farms and his predictions of their decline. What evidence is there to support or refute such claims? In what conditions might a small farm model of development be appropriate, and in what conditions is it not? How can donors support small farm development effectively? This question is particularly pertinent in the light of Berthold Seibert's contribution, and Vinay Chand's assertion that "small farmers are probably the most difficult to help in the development process." 6) Is the problem simply to raise investment, or do we need to think more deeply about problems of governance, organisation and administrative capacity that prevent resources reaching poor farmers? A number of contributors have expressed frustration that the longstanding policy debate on the role of agriculture does not appear to have led to a reverse in the falling levels of donor investment in the sector. As Andrew Macmillan has argued "there is always room for fine tuning and further nuancing [of the arguments], but, at a certain point, this can become counterproductive, especially if it slows down the process of deciding on funding commitments for specific programmes and projects." Similarly, James Calvert argues that "DFID should not go on reflecting on what to do next, but must get on with action now and in a significant, transparent and accountable way." He calls for clear targets within DFID on agricultural spending and activities, as well as proactive lesson learning, a long-term commitment to supporting developing country policy researchers and makers, and relevant human resource and skills development within DFID. Moving the discussion forward. I wonder if these views find wider support within the discussion group, or if there is a range of opinions. Do we already have a good enough understanding to make a really sound case for increased investment in the agricultural sector? Vinay Chand suggests that money is not necessarily the problem. He argues that very little of the public resources allocated for agricultural development actually percolate down to the small farmer. This calls for new thinking in terms of raising private investment and private sector service provision. DFID also needs to develop new thinking on techniques of reaching small farmers because in Vinay's words "we don't need money half as much as we need better targeting, management, control and accountability." All of these points have important implications for the way DFID does business, which I am sure the discussion group will wish to consider further. The points that Vinay Chand has raised relate to a broad set of issues concerning problems of governance, organisation and administrative capacity that prevent resources reaching poor farmers. I think that it would be very interesting to open up a debate on these issues. If agricultural development (and small farmer development in particular) really is so good for growth and poverty reduction, why isn't it happening? What are the features of the political-economy of developing countries that limit the influence of farmers in the policy process and the interest of the political elite in responding to their demands? And what in the long- term are the processes and institutional changes that could address these obstacles in the political and governance realm and make pro-poor change more likely? ************ Thank you for taking the trouble to read to the end of this rather long summary. Given the volume of material coming in, I will try to send more frequent summaries from now on. In my next message, I'll discuss how we might try to focus the debate over the coming weeks. Kind Regards Gareth Williams Alex Duncan ************ ============================================================= 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 growth-and-poverty <your-email-address> ============================================================= 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 growth-and-poverty <your-email-address>
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