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Dear participant, This week we have had a number of thought provoking new contributions to the "growth and poverty" discussion group. The issues highlighted in this summary are: 1) The political dimension of agricultural reform 2) The contribution of agribusiness 3) Recognising the diversity of the smallholder sector 4) The changing context of agriculture 5) Environmental monitoring ************** 1) The political dimension of agricultural reform In a challenging contribution, Brian Cooksey draws attention to the political dimension of agricultural reform. He argues that "political issues and constraints underlie all our discussions, and challenge the relevance of our proposed solutions to rural poverty." Using examples from East and Southern Africa, Brian considers the political interests at stake in agricultural reform processes. He suggests that in the case of Tanzania there has been a backlash against the liberalisation of export agricultural markets because this challenges vested interests in maintaining a more regulated market. Brian argues that donors have tended to stick to technical prescriptions for policy change, and have ignored the political dimensions of reform. Aid has often proven to be counterproductive because it has strengthened the power of bureaucrats and politicians, who have little interest in the incentives facing farmers and investors. There are inherent risks in providing budget support for agriculture where this weakens incentives for reform. In some cases, the contribution warns, aid "may be part of the problem." Moving the discussion forward. I hope that this contribution will stimulate a lively debate on the political dimension of agricultural reform and donor strategies. This forum has shown that there is a certain consensus around many of the policy measures that are required in the agricultural sector to promote growth and poverty reduction. However, there has been relatively little discussion up to now as to why these desirable patterns of change often do not take place. In order to answer this question we need to unpack the notion of "political will" and think more deeply about the political economy of agriculture in developing countries. What are the interests at stake? What are the incentives and restraints that cause particular agents to act in certain ways? How can donors get smarter about political economy issues to ensure that aid programmes strengthen rather than undermine the prospects for policy change in the agricultural sector? And how do the incentives operating within donor agencies influence decision making on aid for the agricultural sector? 2) The contribution of agribusiness Jonathan Innes' contribution on commercial agriculture has raised a subject that has been rather neglected in the forum so far. Jonathan suggests that investments in agribusiness generate numerous benefits, including employment creation, marketing opportunities for outgrowers in the smallholder sector, the development of value-adding agricultural processing, skills formation, the provision of social infrastructure and community services, and strong multiplier effects arising from upstream and downstream production and marketing linkages. Jonathan notes that there has been a decline in investment in commercial agriculture, notably in Africa. This is attributed to the above average level of investment risk. He suggests that there are many investment opportunities in agriculture that are not being realised, and calls for the creation of an agribusiness investment fund to channel private capital into agricultural projects meeting development, social, environmental, ethical, health and safety and corporate governance criteria. It is suggested that this fund would mainly be financed from private sources, but that DFID could support the process by: (i) providing loan guarantees and underwriting debt, (ii) committing equity and grant funds, and (iii) providing grants for the provision of social infrastructure and community projects. Moving the discussion forward. I hope that this contribution will stimulate further discussion on the subject of commercial farming. It may be worth returning to Simon Maxwell's introductory article that argues that smallholder agriculture is likely to increasingly give way to large-scale, commercial farming. Is there any evidence for such a trend, and what are the conditions that determine how rapidly such a transition may take place? What are the implications of large-scale commercial farming for growth and poverty reduction? Should donors support the growth of agribusiness, and if so, how? How can private investors be encouraged to finance agribusiness in developing countries? 3) Recognising the diversity of the smallholder sector Returning to the subject of smallholder agriculture, I would like to draw your attention to a contribution from Karim Hussein, who argues that the smallholder sector should not be treated as a single category, should instead be recognised as a diverse group of different types of family farm. Drawing on research work in West Africa, Karim presents a typology of three categories of family farm: (i) farms oriented towards the market, (ii) farms in which cereals and cash crops are largely balanced in terms of relative importance, and (iii) farms oriented towards staple food grain production to satisfy household consumption needs. He concludes that "too often these three categories are considered to as one overall group of family farm producers, and policies and approaches are not adapted to their differing circumstances." Karim has posted two papers on the work of the Sahel and West Africa Club on the forum website. 4) The changing context of agriculture Karim Hussein's contribution also draws attention to a number of medium and long terms trends in the development of agriculture. These include the diversification of agriculture, upstream and downstream linkages in agricultural production, rural-urban dynamics, population growth, the increasing diversity of actors in the agricultural sector, the growing importance of regional and cross-border perspectives, land and natural resource conflicts and the spread of innovation. In a follow-up to last week's discussion on the rise of urban and peri-urban agriculture, Diana Lee-Smith has provided further ideas on urban livestock husbandry. Moving the discussion forward. Over the past three weeks numerous trends in the development of agriculture have been identified. I sense that we now have a good picture of how the world is changing, but what is perhaps lacking is discussion of how these trends should be reflected in policies for the agricultural sector and donor assistance strategies. 5) Environmental monitoring Following last week's contributions, David Bourne discusses the need to integrate environmental considerations more effectively in agricultural development strategies. He suggests that one of the main obstacles to achieving this goal is the dearth of reliable information on the current state of land use and natural resources. He calls for DFID to consider supporting national and regional organisations involved in natural resource assessment and environmental monitoring. ******** Well that's all for this week. Thanks for all your contributions, and remember there are just three weeks to go now. Gareth Williams Moderator Rue des Pâquis 15 1201 Geneva Switzerland tel: 0041 22 732 2372 mob: 0041 78 611 8589 email: <address removed> web: www.garethwilliams.info ============================================================= 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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