Class XIV Alternatives for Agricultural Development

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					                 Class XIV
Alternatives for Agricultural Development
             K. S. U. Jayaratne, Ph. D.
                   Class Objectives
• Students will be able to:
  – Describe the major challenges of agricultural development
  – Explain the strategic alternatives needed to meet the major
    challenges of agricultural development
  – Describe situation specific strategies for agricultural
  – Identify agricultural development indicators
  – Discuss essentials for sustaining agricultural development.
  What Do We Mean by Agricultural

• Achieving food security, economic prosperity,
  environmental sustainability and social justice
  in a country by mobilizing agricultural
    Major Challenges of Agricultural
• Achieving food security
• Reducing rural poverty
• Minimizing environmental degradation and
  climate change
             Strategic Alternatives
•   Policy reforms for agricultural development
•   Mobilizing resources
•   Building organizational capacity
•   Systemic approach
    – National level
    – Regional level
    – Rural level
                    Policy Reforms To:
•   Allocate adequate funding for agricultural development
•   Grant access to land ownership
•   Ensure women farmers’ rights and access to resources services
•   Form and manage farmer organizations and cooperatives
•   Create a market driven production system
•   Address gender issues in agricultural research, extension and
•   Establishment of stakeholder advisory councils for agricultural
    research and extension
•   Facilitate NGO work
•   Promote public and private partnerships
•   Minimize bureaucratic hurdles
•   Increase accountability and transparency of public institutions
      Mobilizing Resources For:
•   Development of Research and Extension
•   Infrastructure development
•   Rural development
•   Education
•   Health
Investment in Agricultural Research
           & Extension
• Increase food production
  – Increasing cultivating extent
  – Increasing productivity per unit
• Achieving sustainability
  – Conserving natural resources
  – Maintaining production capacity
Investment in Agricultural Research
• Plant breeding for increasing yields, nutritious value,
  pest and disease resistance and drought tolerance
• Animal breeding for increased adoptability and
• Farming systems research for increasing productivity
  while achieving sustainability
• Processing and value addition
• Mechanization
• Conservation of natural resources and environment
Extension Systems Trapping in a
         Vicious Cycle
                          Lack of Funding

 Lack of Public Support                 Inability to Meet Clients’ Needs

                      Clients’ Dissatisfaction
Increase Funding to Improve the
   Effectiveness of Extension

       • Management changes
       • Programming changes
          Management Changes
• Implementation of policy changes
• Providing adequate training and professional development
  opportunities for extension workers
• Systematic evaluation of programs for improvement and
• Performance based promotional system and recognition for
  motivating extension workers
• Support for travelling to reach local clients
• Use of quality volunteers
       Programming Changes

• Need based programming
• Bottom-up programming with inputs from specialists
• Active engagement of stakeholders in programming
• Use of demonstrations and experiential learning
  approached to deliver programs
• Complementary use of mass methods to deliver
• Evaluation of programs for improvement and
       Strategies to Overcome
      Infrastructural Limitations
• Development of value chains for achieving
  market efficiency
• Micro credit for preventing predatory lending
• Introduction of appropriate technology for
  mechanization of agriculture
• Development of irrigation capacity and water
• Development of road network, transportation
  and communication system
    Agricultural Value Chain
   What do we mean by agricultural value chain?
   Significance of analyzing value chains
   Value chain analysis
   Typical value chains in developing countries
       Farmers
       Retail collectors
       Transporters
       Wholesale Traders/Processing
       Retail sellers
       Consumers
 Issues of value chains in developing countries
 Alternatives for improving the capacity of value chains
  elated (Video about USAID funded value chain product
  development in Ecuador)
  What Do We Mean By Agricultural
           Value Chain?
• The system in which value is added to a farm
  product when it moves from farm gate to
  consumers through this system.
• Example: When milk is collected from farmers
  and processed to make cheese at processing
  centers and sold cheese to farmers as a
  processed product at the grocery store, we
  can see a value chain of milk.
Significance of Analyzing Value Chains
  Value chain analysis will be helpful for someone to
   identify needed improvements for value chains
  Value chain analysis is important for marketing
  Marketing improvement is one of the most important
   factor for agricultural development
  Marketing improvement includes:
      Adding value
      Grading and improving the quality of products
      Increasing efficiency
      Minimizing losses
      Increasing farmers’ income and consumer satisfaction
  Agricultural Value Chain Analysis
• Identify the product channel path from farm
  gate to the consumer
• Identify major players and their limitations
• Identify strengths and weaknesses of the
• Identify major issues associated with the
• Identify needed changes and strategies to
  improve the efficiency of the value chain
 Issues of Value Chains in Developing
 Lack of stable market for farmers
 Seasonal production with lack of storage and processing
 Lack of value addition
 Inadequate transportation with poor quality
 Lack of fair competition
 Lack of quality control
 Handling losses
 Poor quality products available for consumers at higher prices
 Unsatisfied producers and consumers
 Benefiting few middlemen
 Inefficient marketing
 Barrier for agricultural development
    Alternatives for Improving the
  Capacity of Agricultural Value Chain
• Identify needed interventions for increasing
• Provide technical and funding support for:
  – Building storage, processing and value addition
  – Improving transportation and handling capacity
  – Creating an environment for fair market competition
Building Storage, Processing and Value
           Addition Capacity
• Funding/Credit with technical support and
  training for the:
  – Development of producer cooperatives and
    assisting them to build storage, processing and
    value addition capacity
  – Identification of potential businesses and
    supporting them to expand their storage,
    processing and value addition capacity
     Improving Transportation and
          Handling Capacity
• Funding, technical support and training for:
  – Improving packaging
  – Increasing transportation facility
  – Maintaining temperature while transporting
  – Handling
  – Maintaining quality
  – Minimizing losses
      Creating an Environment for Fair
            Market Competition
 Breaking monopoly by assisting potential businesses to
  enter into the market
 Organizing farmers to form cooperatives for marketing
  their products
   Training, technical and funding support
   Policies
 Quality control
     Consumer protection regulations
     Quality specifications
     Training to follow quality specifications
     Imposing quality control regulations
 Dissemination of market information across the value
  chain for the benefits of producers and consumers
       Diversification of Agricultural
            Marketing Systems
 Farmer cooperatives
   Successful farmer cooperatives operating in some countries
    (Examples: Netherlands)
   Development of farmer cooperatives in developing countries is
    challenging but effective strategy
 Private businesses
   Most common system
   Individuals and co operations
 Governments
   In developing countries government handles some of the grain
 Joint systems
   Public and private ventures
   Public and cooperative ventures
   Private and cooperative ventures
              Micro Credit

 Micro credit is a small credit line provided to
  poor people for meeting their credit needs at an
  affordable interest rate
 Neighboring community members will become
  collateral for each other
 This approach was introduced by Dr.Muhammad
  Yunus (For more information: http://www.grameen-
 Contributed for rural development and
  preventing predatory lending
      Agricultural Mechanization
• Mechanization of agricultural work
   – Appropriate technology
   – Affordability
• Increase labor productivity and minimize
• Essential for agricultural development
Development of Irrigation Capacity
     and Water Productivity
• Irrigation projects such as building reservoirs
• Strategies for the maximum utilization of rain
• Projects to improve irrigation efficiency
• Assisting farmers to buy irrigation equipments
      Development of Road and
       Communication System
• Poor road network limits farmers access to
• Development of road network is critical for
  transporting agricultural goods from farms to
• Development of communication network is
  essential for farmers to get market and
  production information
            Rural Development
•   Access to education
•   Community engagement in development process
•   Transportation
•   Communication
•   Development of markets
•   Access to land, operating capital and technology
•   Processing and value addition
•   Development of agriculture based industries
•   Public & private partnerships
•   Access to health service
   Preconditions: macroeconomic
 fundamentals, governance, sociopolitical

                 Demand for                                       Demand for
                 agricultural                                      agricultural
                  products                                        and nonfarm

                                            Income     Income
                                             effects   effects

                        to market                                Transition to

(Source: World Development Report, 2008)
Agriculture Based Rural


Essentials for Agriculture Based Rural
•   Favorable policy reforms
•   Access to land
•   Development of new agricultural technology (Agricultural research)
•   Transferring new technology to farmers (Extension)
•   Development of agricultural input (Seeds, farm tools, fertilizer and
    other agro-chemicals) markets
•   Women farmers access to land, extension and credit
•   Access to credit
•   Development of markets, storage, transport and processing facilities
    for agricultural production
•   Development of agriculture based rural industries for value addition
    to agricultural production
         Complementary Factors for
    Agriculture Based Rural Development
•   Development of rural roads and communication
•   Development of irrigation
•   Development of farmer organizations/cooperatives
•   Creating an environment for the development of agriculture based
    industry and service sectors (technology, credits, tax incentives,
    information, etc.)
•   Continued investment in agricultural research and extension
•   Investment for institutional capacity building
•   Appropriately mechanization of agriculture to overcome the
    drudgery associated with farming and maximize labor outputs
•   Access to health service
•   Access to education
Factors Sustaining Agriculture Based
         Rural Development
• Conservation of natural resources and environment
• Quality control of agricultural products
• Continued investment on farming systems research and
• Continued investment in institutional capacity building
• Empowerment of rural mass to engage in development
• Increasing women’s access to education
Investments to Improve the Agricultural
         Education Systems

      •   School education
      •   Technical education
      •   College education
      •   Graduate education
Investments to Improve Health
  • Prevention
    – Health education
    – Vaccination
    – Sanitation
  • Treatment
    – Clinics
    – Hospitals
    Building Organizational Capacity
•   Defining missions with clear mandates
•   Human resource development with training
•   Providing equipments and other resources
•   Service orientation
•   Accountability and transparency
•   Overcome bureaucracy
•   Address gender issues
             Integrated Approach
• Example integrated rural development
  – Holistic approach to development issues
  – Coordinated effort
     •   Economic development
     •   Infrastructure developments
     •   Health
     •   Education
  – Maximize investment
  – Increase efficiency
  – Sustain development
    How Do We Determine Whether
       Agriculture is Developing
•   Increased food security
•   Reduced rural poverty
•   Increased demand for education
•   Developed rural service sector (marketing,
    processing, banking, education, health)
•   Reduction of labor force in agriculture
•   Reduction of agriculture’s contribution to GDP
•   Conservation of natural resources
•   Improved quality of rural farm families
•   Challenges for agricultural development
•   Strategic alternatives
•   Policy reforms for agricultural development
•   Mobilizing resources
    – Research and extension
    – Infrastructure
    – Rural development
• Building organizational capacity
• Systemic approach