|From subsistence livelihood to viable business|
|Sections - Food & Agriculture|
|Tuesday, 26 April 2011 00:00|
the role of agriculture in development
By Ekaterina Mitiaev, THP-UK Head of Policy and Knowledge.
‘We wish to abolish poverty and to provide abundance for all. We do not
Agriculture has played a key role in reducing abject poverty and hunger as well as catalysing economic growth in many developing countries. Furthermore, most of the countries that have failed to launch an agricultural transformation remain trapped in poverty and economic underdevelopment.
The success stories are numerous. Brazil invested heavily in research and successfully transformed itself into an agricultural superpower owing mainly to large commercial farms. In the midst of the World Food Crisis of 2008, India managed to increase its agricultural output to a record level of 227 million tons. Vietnam, through policy changes turned itself from one of the world’s largest importers of rice into the world’s second-largest exporter.
“Nostalgie de la boue”: dismissing modern food production
Despite the tremendous progress, the challenge of hunger and malnutrition remains.
Even though the majority of its labour force works in agriculture, Sub-Saharan Africa is still unable to feed its growing population. Food imports to the continent have reached $33 billion annually in addition to $3 billion in aid. Still 265 million Africans are undernourished. Notwithstanding India’s remarkable agricultural production, in the Global Hunger Index 2010, it ranked 67th - lagging behind Burkina-Faso and Mozambique.
Mounting environmental concerns, relative deindustrialisation and overall disenchantment with modernisation in the developed countries has resulted in a romanticised view of nature and subsistence life. There is a growing lobby of activists, experts, politicians, journalists and food writers arguing against modern food production and calling for a return to more traditional and natural ways of farming.
Many NGOs favour small community approaches, basic technology and small price premium schemes in order to “sustain the livelihoods” of poor people rather than seeing it as only a first step towards genuine development. Poverty of smallholder farmers has been redefined as “climate vulnerability” that needs to be ameliorated through various social provisions. Although these initiatives may have assisted farmers in meeting their basic needs, they have done little to transform their productivity and stimulate growth on a sufficient scale.
“Enough with this obsession with villages”: land grab in the Global South
Not everybody in the development sector agrees that “small is beautiful”. According to Paul Collier, the author of the ‘Bottom Billion’, “Large organisations are better suited to cope with investment, marketing chains, and regulation. Yet for years, global development agencies have been leery of commercial agriculture, basing their agricultural strategies instead on raising peasant production ... to ignore commercial agriculture as a force for rural development and enhanced food supply is surely ideological”1.
He has plenty of followers among the crème de la crème of the global investment community. Owing to the world’s lowest cost of farmland, relatively little investment required to increase yields coupled with growing food prices, investment funds consider Africa the last investment frontier. For example, the African Agriland Fund backed by Emergent Assets Management promises a 25% return to its investors, while also bringing economic uplift to communities.
The evidence on the ground has been mixed. While 13 million Ethiopians need food assistance, the Ethiopian government is offering three million hectares of its most fertile land to foreign investors. Workers on the commercial farm run by Bangalore-based Karuturi Global Ltd receive less than the World Bank’s $1.25-per-day poverty threshold, even as the business is projected to achieve $100 million earnings by 2013. The employees, who were not consulted on the lease deal, believe that unless the company invests in improving working conditions, they would have been better off working on their land2.
Although commercial investors can substantially improve yields, poor villagers cannot afford to buy the new farms’ products or start using the same modern technology and superior inputs.
The early development paradox: invest in agriculture to move out of it
Spending on farming as a share of total public spending in developing countries fell by half between 1980 and 2004. Furthermore, foreign aid for agriculture has decreased from 20% of all aid in 1980 to 5% today.
There is no doubt that it is easier for the governments to offer land concessions to foreign investors rather than invest in rural infrastructure, agricultural research and extension, education and health care. But even though in the long-run larger scale farming will be better positioned to meet the challenges of feeding the increasing world’s population, should the process of land concentration be accelerated?
Despite their CSR rhetoric, the priority of investment funds is maximising financial returns, not ensuring local food security or preserving land’s fertility. As Philippe Heilberg, an American businessman who has leased one million acres in Sudan stated “When food becomes scarce, the investor needs a weak state that does not force him to abide by any rules”3.
There are plentiful success initiatives across Africa which did not emanate from large-scale industrial farming nor required preserving basic production methods. They include government policies, corporate programmes and NGOs’ business development schemes. What they all have in common though is investment in local human capital.
Brewing giant SABMiller has been successfully integrating smallholders into its supply chains. In Tanzania, it sources barley from around 66 medium to large scale farmers and Co-operative Societies with a combined membership of around 700 smallholders. The company hopes to expand the number of small holding farmers to 30,000 in 2012.
An entrepreneurship-focused NGO Technoserve provides agronomic, marketing and personnel management advice to farming enterprises across Africa. One of their mentorees, a baby-vegetable farm in Swaziland, was recognised as the Community-Based Business of the Year due to the owner’s commitment to good employment practices.
Between 2004 and 2009, Malawi averaged 7% annual GDP growth. Furthermore, it achieved significant poverty reduction and a notable drop in inequality. Such impressive results have been accomplished mainly owing to the input subsidy programme that stimulated agricultural growth and stabilised inflation.
The Hunger Project: empowerment is not about teaching people how to fish
Since its inception in 1977, The Hunger Project has strongly believed in humanity’s ability to produce enough food. It never viewed the problem of hunger as an issue of technical capacity or perceived environmental limits, but rather as a fundamentally human one. Its people-centred approach relates to hungry people as mainly producers and entrepreneurs and not mere recipients or consumers. THP has always believed in the importance of modernisation of agriculture and treating it as an engine for development and economic growth, not just a way of subsisting. According to the Economist, the main challenge now is to disseminate agricultural knowledge and improved inputs into remote rural areas. Furthermore, reducing post-harvest losses just by half would be the same as a rise in output of 15-25%4. The Hunger Project community centres (epicentres) are positioned to address both of these challenges.
The epicentre demonstration farms enable extension agents to easily pass on agricultural knowledge to the farmers from several villages. They are introduced to improved seeds of staple crops and vegetables and new technologies for water use efficiency and soil enrichment. THP-Uganda partnered with the East Africa Seed Company to provide all epicentres with vegetable seeds to kick-start lucrative vegetable production. THP-Burkina, in partnership with the National Institute of Agricultural Research, introduced micro-dose fertiliser technology (the application of small quantities of fertilisers directly in the seedbed to increase yields while minimising the input cost).
The poverty and malnutrition of rural farmers is exacerbated by market forces, which oblige farmers to sell food at low prices immediately after the harvest, and pay top prices before the next one. This often results in severe seasonal hunger. Epicentres establish food banks, where the grain harvested from communal land as well as contributed by individual farmers who benefit from various development schemes, is kept as a safety net. THP-Burkina introduced triple bag technology for safe long-term storage of cowpeas.
Community food processing centres introduce new post-harvest technologies to improve shelf-life, taste and market and nutritional value of produce and rent out the equipment to the farmers who then make bread, jam and other high-value products. THP-Mozambique recently introduced a sugar cane machine and the women of Mpigi epicentre in Uganda opened a shop where they sell their fruit jams and juices.
THP epicentre strategy provides efficient channels to reach smallholder farmers in remote areas who are hungry for development, growth and new opportunities. THP is now looking for partner organisations interested in offering new technologies or inputs to rural communities, or keen to integrate them into wider commercial markets and supply chains.
In 2010, according to FAO, 925 million people were malnourished even though world agriculture produced enough to provide everyone in the world with at least 2,768 kcal per day. The focus so far has been firmly on the production side – it is time to shift it towards enabling hungry people to liberate themselves from the debilitating anxiety about having enough to eat.
A retreat to outdated farming methods and dismissal of contemporary food production will only replace new problems with old ones. So let us disseminate the necessary technology, inputs and information to the smallholder farmers in the developing world. Let us ensure that they can access credit and markets for their produce. Let us help them grow their farming businesses while developing off-farm opportunities for those who want to exit farming.
And let us celebrate humanity’s increasing ability to feed itself. For the first time in history the sustainable end of hunger has actually become achievable.