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This is the second summary of the growth and poverty mailing list. In the past week the discussion really has shifted up a gear, and moved in several fascinating directions. The number of contributions is snowballing (64 at the time of writing), which makes the job of the moderator all the more interesting, but harder. I have had to be quite selective in summarising the proceedings, which means that unfortunately it is not possible to cover all of the points raised in the many interesting contributions. I would like to focus this summary on the following issues: 1) The core arguments about agriculture, growth and poverty reduction 2) Agriculture and nutrition 3) The changing context of agriculture (urban and peri-urban agriculture, agricultural diversification, environmental concerns, HIV/AIDS, contract farming) 4) Aid effectiveness in agriculture 5) Farmers associations 6) Extension ******************* 1) The core arguments about agriculture, growth and poverty reduction I would like to begin by drawing your attention to Michael Lipton's recently submitted contribution, which provides a clear and challenging set of arguments that I am sure that the forum will want to engage with. Michael contends that "without sustained initial employment-intensive, smallholder-based yield growth in agriculture, probably focussing initially on food staples . the remaining heartlands of world poverty will not reduce much". Michael calls this strategy "plan A", and suggests that it is one of the main requirements for meeting the MDG goal of halving world poverty by 2015. There are a number of interesting points in Michael's contribution. First, he makes a similar point to Andrew Dorward's earlier contribution that the role of agriculture in poverty reduction is most significant at early stages of development. Yield expansion on small farms using employment intensive technologies is the principal means to support livelihoods initially where mass poverty prevails. After 10-20 years of 3%+ agricultural growth, demand from small farmers and labourers fuelled by agricultural progress, in turn sets off rapid non-farm growth. A second crucial point is that donor strategies appear to have moved away from 'plan A' over the past 20 years, as evidenced by plummeting aid levels for the agricultural sector. Michael Lipton calls for "dated targets for reviving the proportion of aid from the UK, and if attainable for the EU and World Bank, supporting - in a broad sense - smallholder and employment-intensive farming." Increased aid will need to be matched by more open OECD trade policies, appropriate domestic policy responses and changing priorities within farm science. In debating Michael Lipton's arguments, it may be worth revisiting Simon Maxwell's introductory article that raised a number of concerns with the plan 'A' type strategy, namely price declines for agricultural commodities, the small farm focus, and labour scarcity resulting from HIV/AIDS, rural-urban migration and rural diversification. Following Michaels contribution, Milind Murugkar has questioned whether yield growth might be offset by price falls for agricultural commodities. This echoes some contributions last week. For example, Buddhika Samarasinghe suggested that successful growth in agricultural commodities can lead to a fall in unit value of agricultural output. He relates this to the low income elasticity and high price elasticity of the majority of agricultural commodities. His contribution underlines the central role of sustained rises in productivity in factor use if farmers' incomes are to be maintained at a time of falling output prices. Behind rises in small farmer productivity lies a large public agenda and a major challenge for farm science (see science and technology group). Several contributors have pointed to the harmful effects of public policies on crop prices (for example Milind Murugkar's discussion of the Public Distribution System in India and M.A. Sattar Mandal's discussion of the effect of the dumping of Indian rice on the Bangladeshi market). There have been a number of other interesting contributions on the links between agriculture, growth and poverty reduction. Louis Bockel refers to John Mellor's work on the multiplier effect of agriculture on the rest of the economy. The multiplier effect is strong because agriculture, especially smallholder agriculture, generates widely shared income that tends to be spent locally. Furthermore, agriculture is part of a commodity chain with a wide range of upstream and downstream actors, employed in labour intensive productive activities with a low import content. M.A. Sattar Mandal points to the strength of linkages between the farm and non-farm economy in Bangladesh. As during last week's discussions, several contributors have suggested that the links between agriculture, growth and poverty vary between different places. Andy Bullock has proposed a three way classification of agricultural systems: (i) systems based entirely on self-provisioning, (ii) systems oriented mainly towards export markets, and (iii) the intermediate, and frequent case, where self provisioning and production for the local market are intertwined. The role of agriculture in supporting the MDG's varies between these cases. Colin Poulton refers to differences between areas of high and low agro-ecological potential. He contends that in areas of low agro-ecological potential it is hard to see agriculture acting as a powerful growth driver. However, it may still be worth supporting agriculture in these areas in order to avoid the costs of providing long-term welfare support. Seamus Clearly argues a rather different position that assistance needs to be given to support exit strategies to help marginal producers move out of agriculture into alternative activities (e.g. pastoralists in parts of Mongolia, and Windward Island banana growers). Colin Poulton also develops the idea 'low level equilibrium trap' that may limit the contribution of agriculture to growth and poverty reduction in certain cases. Referring to fieldwork in western Kenya, he notes that yields from subsistence maize production are insufficient to allow investment in improved soil fertility. This traps households in a cycle of poverty and soil depletion. Providing access to markets, knowledge, improved seeds and credit will be essential to escape the low-level equilibrium trap and to generate growth and poverty reduction. 2) Agriculture and nutrition Following on from Andrew Macmillan's contribution last week, Andy Bullock provides further evidence on the economic benefits of improved nutrition. However, he reminds us that improved nutrition is a benefit in its own right. The MDGs set targets for infant and maternal mortality that depend for a large part on improving nutrition (as supported by empirical evidence referred to in Andy's contribution). Andy argues that the specific role of agriculture in contributing to raising nutrition levels needs to be more fully recognised, in particular in the broader context of the MDGs. These arguments provide an additional reason to invest in agriculture, going beyond the case made by Michael Lipton. They suggest that agricultural investment is desirable even in cases where agriculture-growth linkages may not be strong, for example in low potential areas and agricultural systems characterised by self-provisioning. Several other contributors have suggested that we need to take a broad view of the contribution of agriculture to poverty reduction, encompassing all of the MDGs. 3) The changing context of agriculture This week's contributions draw attention to a number of interesting trends in agricultural development: * Growth of urban and peri-urban agriculture Diana Lee-Smith has raised the issue of urban and peri-urban agriculture. Although this has long been an important (although under-recognised) phenomenon, urban and peri-urban agriculture has increased in importance. Farming is an important part of urban livelihood strategies. Research suggests that about a third of urban residents in East Africa rely on farming for a significant portion of their incomes. Urban and peri-urban agriculture tends to be more market oriented than rural agriculture, and is usually part of a diverse livelihood strategy. Diana suggests that: 1) we need to know more about these livelihood systems, 2) we should assess risks and benefits, and 3) urban and agricultural policies need to become more complementary. Following on from this contribution there has been an interesting exchange about urban livestock farming (see contributions of Mahesh Chander and Brigitte Nyambo). * Agricultural diversification - Non-crop sectors Several contributors have pointed to the increasing importance of non-crop sectors. Andrew Catley refers to predictions of a 'livestock revolution', and the opportunities for livestock producers. His contribution discusses priorities for livestock development in East Africa (Community-based Animal Health Workers and animal health standards in international trade). M.A. Sattar Mandal describes the rapid growth of high value, non-crop agricultural enterprises in Bangladesh (livestock, poultry, dairy and shrimp farming, horticulture and fishing). He suggests that pond fisheries and poultry farming offer important opportunities. However, in the case of the latter, high risks and capital requirements are an obstacle to the participation of the poor. * Rising profile of environmental issues Alexandra Gonzalez-Calatayud has called for a discussion on sustainability and environmental questions concerning agriculture. She suggests that "environmental considerations are not an add-on extravagance, but an essential element for lasting agricultural growth". Environmental degradation threatens vital ecosystem services that maintain agricultural productivity, and is most harmful to the poor, who are the most dependent on environmental resources. In calling for environmental mainstreaming, she argues that "what we need now is not new institutions, but new thinking in old institutions and strategies to ensure the adequate implementation of new policies." It is perhaps surprising that there have so far been rather few submissions on agriculture and the environment, but perhaps this contribution will stimulate further debate. * HIV/AIDS Per Eklund has suggested that the forum should consider the impact of HIV/AIDS on farming in sub-Saharan Africa. I expect other contributors will wish to address this issue. * Contract farming M.A. Sattar Mandall discusses the benefits growth of contract farming in Bangladesh, where smallholders are increasingly linked to national and export markets through contracts with private companies. This relates to the points raised in Simon Maxwell's article about the integration of supply chains and the technical barriers to trade that increasingly constrain smallholder participation in export markets. I understand that there has also been a discussion of these issues in the global trade group. 4) Aid-effectiveness in agriculture Michael Lipton calls for large increases in aid spending on small-scale agriculture. However, a valid case for 'plan A' can only be made if ways of using aid effectively can be found. As the debate progresses, we need to focus more and more on the HOW and not just the WHAT. Contributions addressing this, especially those reflecting real experiences, will be of increasing value. The questions include, not exhaustively, how the human and financial resources available can be used sustainably: * To support those contextual and underlying forces enhancing agriculture's contribution to growth and poverty reduction * To identify and promote policy change and institutional reform * To strengthen capacities in public and private sectors, and in civil society * For successful investment and development projects Last week a number of contributors raised concerns about the difficulties of ensuring that resources reach small farmers. This week John Atibila has added a contribution comparing the waste of resources in public sector support for forestry in northern Ghana with a much better targeted, small, community-managed project. Per Eklund discusses the risks of elite capture of resources that is commonly apparent in devolved systems of government. However, other participants have provided a more optimistic point of view. John Madeley points to the numerous success stories in supporting agriculture and farmers' livelihoods. He calls for DFID to compile a database of success stories in small-scale agriculture, and to make aid available for the replication of successful models There has not yet been much discussion on appropriate instruments for donor support to the agricultural sector. However, I expect this will come later. Per Eklund criticises the move towards budget support, which, he states, is often dressed up as poverty reduction, but in reality tends not to go far beyond ministries of agriculture. I am sure the debate will not be one sided. Have there been successful examples of budget support contributing to valuable reform processes in the agricultural sector? Can donors really continue with the project approach given its inherent weaknesses? I sense that there is an interesting debate emerging on the role of international institutions in agriculture. Will Masters questions the performance of these institutions arguing that "the subsequent decline in support to agriculture tells us something important about the limitations of the mix of institutions that are now available to donors." Other contributors have stressed that we need to work within the framework of existing institutions rather than creating new ones (see Alexandra Gonzalez-Calatayud and Bhuban Barah's contributions). It would be very interesting to hear more views on these issues. Is the international architecture of institutions working in the field of agricultural development still appropriate? By institutional architecture I mean organisations, such as UN specialised agencies, CGIAR system, other multilaterals, bilaterals and NGOs, as well as treaties and international regulations. Are there too many institutions, or too few? Do mandates need to be clarified, and overlaps removed? Are there any major gaps in the architecture? Getting the institutions right seems to be an important precondition for raising levels of support to agriculture in developing countries. ***** The rest of this summary deals with farmers associations and extension. As previously announced, discussions on these themes have been moved to other groups. In order to ensure continuity, I will briefly cover these issues in this summary before handing over to the other moderators who will continue the debate. 5) Farmers associations A vigorous debate has begun on the merits, or otherwise, of farmers associations. Several contributors have suggested that the development of farmers associations should be a central part of assistance strategies. Andrew Dorward discusses the benefits of farmers associations in lowering the costs of service provision (especially input supply and marketing) by achieving economies of scale and reducing transaction costs. Christie Peacock, referring to FARM Africa's experiences, points to a whole range of benefits including: mutual support and encouragement, empowerment and representation, providing a cost-effective entry point for external support, service provision and enterprise development. Vinay Chand argues that there are many successful examples of farmers associations, but remarks that they have often been misused and politicised in the past (e.g. agricultural cooperatives). A more sceptical point of view is evident in a series of contributions submitted by Dick Tinsley. Dick argues that the overheads in establishing farmers organisations (e.g. building trust, accounting requirements) generally exceed their benefits. He suggests that farmers are essentially individual entrepreneurs and that they are generally not interested in being organised in groups. In these conditions the prospects for donors to establish sustainable farmers associations are very limited. Dick challenges the discussion group to consider what proportion of farmers associations will still be in existence two years after donor funding ceases. He argues that private enterprises are a more appropriate means to deliver services to farmers. However, farmers associations could play an important role in regulating private dealers. I am sure that many participants will have direct experience of farmers associations and will wish to respond to Dick Tinsley's challenging arguments. The debate will continue within the 'economic opportunity' group. 6) Extension There has been a very interesting discussion on the future of agricultural extension systems. Dick Tinsley questions the appropriateness and affordability of traditional models of one-on-one extension, and calls for greater use of mass media and informal means of communication within farming communities. He argues that in many developing countries the public sector is no longer able to deliver effective services because operational budgets are so constrained. Dick Tinsley also questions the value of extension messages, which tend to reflect the idealistic concerns of agronomists to reach maximum potential yields, and do not take account of the real constraints faced by farmers. The ability of farmers to use extension messages is constrained by the availability of labour and draft power, as well as the large spread observed in planting dates. Dick Tinsley argues that the starting point in extension should be to analyse the constraints hindering the adoption of innovations, and only then to consider what technologies may be required. Other contributors have raised similar concerns. James Biscoe proposes that basic economic assessments (e.g. partial gross margins) should be used much more systematically in deciding which research results to extend to farmers. On the basis of experience in South Africa, Alastair Bradstock suggests that new methodologies are required to deliver extension in a structured way. Vinay Chand comments on the need to promote alternative sources of extension outside of the public sector, but contrary to Dick Tinsley, argues that there is no substitute for face-to-face contact between extensionists and farmers. A fascinating debate seems to be emerging here, which will be continued in the 'science and technology' groups. ********** Thanks to everyone for your excellent contributions. Kind Regards Gareth Williams email: <address removed> ============================================================= 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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