The Politics of and Policies for Smallholder Agriculture
The Future of Small Farms, Research Workshop Withersdane Conference Center Wye, UK June 26-29, 2005
Director, ISNAR Division International Food Policy Research Institute
Introduction Sub-Saharan Africa is the only region in the world where poverty is on the increase and per capita food production is declining. Alleviating poverty in most agrarian economies, including countries where the contribution of agriculture to GDP is relatively low, such as South Africa, requires the development of smallholder agriculture. The key to broadbased economic growth and poverty reduction in Africa is through smallholder agriculture. By 2050, the world’s population is expected to increases to 9 billion people. This population boom will challenge the world’s capacity to feed itself and create further stress on natural resources. The majority of this increase will be in developing countries, where people’s livelihoods, particularly the poor, depend heavily on small-scale farming systems. The Food and Agriculture Organization of the United Nations estimates that in Sub-Saharan Africa, 64 percent of the population relies on agriculture as their primary source of income. The challenges facing smallholder farmers are multifaceted. Tackling these challenges requires a host of responses, including government policies and institutional reforms that facilitate efficient rural service delivery, development of infrastructure, and integrated rural development options and advisory services. Government policies and institutions have an important role to play in supporting the success of smallholders. Despite various reform processes, and multi-stakeholder participation in the transformation of smallholder producers, the public sector has a crucial responsibility to assist smallholders in developing market-oriented agriculture that is sustainable economically, socially, and environmentally. Government policymakers, particularly in developing countries, would like to assist their people out of the poverty trap so they can enjoy a decent standard of living. Yet, despite efforts by national governments and cooperating partners, to alleviate poverty and improve food security, the situation remains the same in many developing countries, and
is even deteriorating in other circumstances. The key question is what is preventing them from reaching this aspiration? This paper draws on experiences from Eastern and Southern Africa. By using selected examples, an attempt is made to demonstrate that policies and politics may impact differently on smallholders. Good policies alone will not necessarily create impact. Policies should be supported by political commitment (in terms of resources and programs), and their implementation should be monitored closely to take corrective actions when needed to achieve the intended goals. Broad stakeholder participation, local capacity, and effective coordination are vital for the successful implementation of policies. Politics and Policy If we are to accept Benjamin’s (2000) definition, in a democratic society, “politics is the cooperative activity we engage in to achieve the things we cannot achieve individually.” Benjamin also claims that the heart of politics is relationships. Webster dictionary, in contrast, defines politics as “characterized by shrewdness in managing, contriving, or dealing.” In sub-Saharan African countries, we see both aspects reflected in our political systems. Policy, on the other hand, is defined as a definite course or method of action selected by governments, institutions, groups or individuals from alternatives and in the light of given conditions to guide and, usually, to determine present and future decisions. (Webster, 1998; ILRI, 1995). A policy is a set of coherent decisions with a common long-term purpose or purposes. Government policies are often supported by special legislation. The terms “policy,” “plan,” “program,” and “project” are progressively more specific in time and place. Policies usually refer to national policies (not district or provincial) and are not normally limited in time.
In the real world, policies and politics are intertwined. Politics can either positively or negatively contribute to the successful implementation of policies. Successful smallholder transformation therefore requires political stability as well as a conducive policy environment, supported by appropriate strategies and programs to match the everchanging social and economic environment. A conducive policy environment requires, at the bare minimum, the absence of conflict. Unfortunately, the majority of African countries are still experiencing some sort of conflict, as shown in table 1. Table 1: Political Stability on the African Continent Conflict (Immediate) Burundi Chad Cote d’Ivoire Democratic Republic of Congo Liberia Rwanda Sierra Leone Somalia Sudan Western Sahara Post-Conflict (Intermediate) Algeria Angola Benin Comoros Equatorial Guinea Eritrea Ethiopia Guinea Guinea Bissau Morocco Mozambique Nigeria So tome and Principle South Africa Uganda Yemen Zimbabwe Relatively Stable/ Minor conflicts Botswana Burkina Faso Cameroon Djibouti Egypt Gabon Gambia Ghana Kenya Lesotho Libya Madagascar Malawi Mali Mauritania Mauritius Namibia Niger Senegal Seychelles Swaziland Tanzania Togo Tunisia Zambia
Despite wide stakeholder participation in smallholder transformation, the role of government is crucial in establishing political stability and a conducive policy environment for the effective participation of all stakeholders.
A number of stakeholders contribute to the performance of the agricultural sector, especially smallholder farmers, as shown in table 2. Table 2: The Relative Importance to Stakeholders of the Functions of a National Innovation System
Actors/Stakeholders Government Policy and Resource Allocation Key function Core functions of government Financing Performance (Performance Level) Extensive Extensive Shared function – some involvement in involvement standards set by supporting both government, some by business and business tertiary education institutions Key function Extensive Shared function --some involvement as standards set by source and government, some by recipient business Regulatory ((Policy Level) Advisory? No involvement Advisory? Advisory? Some important as global level Key recipient Recipient No involvement No involvement Some have this as a key function Extensive involvement Limited No involvement Limited function Possible partners Human Resources/Capacity Building Some involvement in post-graduate training Infrastructure Provision Extensive involvement
Some advisory function
Tertiary education Other educational institutions Multipartite bodies Organized civil society Interested outsiders
Some advisory function No involvement Key function as advisors Key function as advisors Some may have an advisory function
Some involvement in post-graduate training. Should be important in life-long learning. Key function Key function No involvement Some involvement? Possible partners
Some involvement Some involvement No involvement No involvement No involvement
Source: Paterson, Adam and Mullin (2003)
Smallholders and Policies Worldwide, there have been dramatic increases in agricultural production over the last 40 or 50 years .In Asia and Africa, much of this growth has been in smallholder agriculture (Farm Africa, 2004). In order to alleviate poverty and foster smallholder-led, broad-based economic growth, smallholder farmers need to produce marketable surplus, be marketoriented, (in terms of both the quantity and quality of their products), intensify production systems, move towards greater specialization, and assume certain risks. To move towards commercialization, smallholder farmers require research and knowledge sharing systems that are responsive to their needs; access to markets, market information, and market intelligence; and an effective farmers’ organizations, among other needs. The necessary conditions for smallholder agricultural growth are summarized in Figure 1, including the need for a favorable institutional and policy framework so smallholder farmers can take advantage of technological changes. Figure 1: NECESSARY CONDITIONS FOR SMALLHOLDER AGRICULTURAL GROWTH
-Stimulate demand for agricultural produce National economy (macro) Low inflation Macro economic stability Good governance Reasonable prices Transparent trading system
Develop supply capacity in smallholder production
Local economy (meso) Locally responsive support services (govt, private, farmer organization
Assume households have (greater or lesser) asset endowment, e.g. land, access to water, indigenous technical knowledge
Household Economy (micro) Market linkages Access to finance Access to insurance Skill development Access to technology (Basic agro-climatic condition)
Cross-cutting themes Strong banking/financial system, political support, security of land tenure, good infrastructure, good communications, availability of food, reliance
Issues of concern HIV/AIDS, GMOs, vulnerable people (landles, workless, marginalized and those in marginal environment)
Land Tenure issues In sub-Saharan Africa, where more than a quarter of the population lives on small farms, the average holding is less than one hectare (Dunstan, 2001). Moreover, plot sizes are continuously declining and becoming more and more fragmented. In many of these countries, inefficient land tenure policies, difficult contractual institutional arrangements, cultural norms, and rural population growth are preventing small farms from becoming large and efficient. In some countries, division and subdivision of land has approached the point where many farms are now too small to provide subsistence living for households. Fragmentation of farms is also causing the further degradation of land. This calls for land reform and land tenure policies that will promote land markets and consolidation of land, as well as the empowerment of people who can effectively utilize arable land for agricultural production. Complementary policies are also required to economically engage those who move out of agriculture. In a number of countries, land reform policies are determined by politics or are poorly implemented, to the detriment of smallholder agriculture. Land reform policies should aim to develop smallholder production systems that are compatible with the sustainable management of natural resources. Collective Action by Smallholder Farmers Collective action by farmers’ organizations becomes efficient and effective when they build up experience, are organized without political interference, and have clearly defined objectives. Unlike former state cooperatives and parastatals that have become widely discredited because of their poor performance and inefficiency, new smallholders’ organizations should be organized in such a way that they are voluntary, economically viable, self-sustaining, self-governed, transparent, and responsive and accountable to their members. Policy support without political interference is needed to achieve these goals.
By organizing and coordinating smallholders, farmers’ organizations can link smallholders with market outlets by collecting produce from individual farmers and creating the critical mass required by the private sector. Such organizations can also serve businesses by providing an efficient instrument to reach small-scale producers. They can also help improve the quality and timeliness of small farmers’ production and their access to agricultural research and extension, input supplies, and agricultural credit. Farmers’ organizations also facilitate investments in farm infrastructure and the utilization of up-todate information services, while promoting new institutional arrangements in terms of land market and financial access. Lack of effective farmers’ organizations prevents smallholders from exploiting emerging opportunities, especially since cooperatives have collapsed in many countries. Being poor and disorganized, smallholders have always been at a disadvantage in the market place. When smallholder farmers trade individually, they trade in small volumes, often have variable and sub-standard quality products, lack market information, and have limited links with buyers in the marketing chain. These problems have been aggravated by market liberalization and globalization. However, these challenges confronting individual smallholders can be offset by appropriate policies that promote efficient collective action. Supporting collective action by smallholder farmers requires government and donor support and engagement with businesses and civil society groups. Producer-based organizations need help to develop business and management skills, establish information systems and connections to domestic and global markets, and create good governance practices and the infrastructure to connect small farmers to finance and input supply systems. Effective farmers’ organizations provide the necessary political voice to ensure that smallholders can articulate their demands. Liberalization and Private Sector Participation In this era of liberalization, the state no longer provides many direct marketing and service functions to smallholders, based on the assumption that the private sector will do so. But, in many countries, the private sector has not yet assumed this role. Indeed, the private
sector has little interest and ability to deal with small-scale farmers on an individual basis, even though it is emerging as a key player in linking large-scale commercial farmers with markets (e.g., linking contract farmers and supermarkets). Emerging Market Chains and Smallholders Marketing chains are also changing and becoming more integrated, and food quality and safety demands have increased. These changes are creating new opportunities for farmers involved in high-value agriculture who can compete and link to these markets. Supermarket standards and the ensuing marginalization of small-scale producers and suppliers is inhibiting smallholder farmers’ access to markets. In many cases, smallholders are not yet positioned to compete and access these markets and many will be left behind if they are not properly organized. Therefore, policy instruments are needed to provide the necessary support services to enable smallholder farmers to effectively participate in emerging markets. Supermarkets could implement policies that require sourcing a portion of their produce from smallholders as an appropriate contribution to broad-based rural economic development. Smallholder farmers face great difficulty in understanding the management and financial side of businesses. Smallholders may know how to raise crops and livestock, yet many do not know how best to reach their markets and customers, or how to effectively manage finances. Through business training, smallholders can gain these skills and learn to effectively plan for their future. Planning should be an integral process in helping smallholders transform into effective and efficient agricultural businesses. Smallholders should also be trained on how to use financial resources before they are promoted to credits. Many, however, do not plan for the long-term or understand how budgeting can help in the planning process (e.g., how to plan which crops to plant, when to add inputs, when to cull, etc.). An enabling policy environment should be created to encourage private sector participation in smallholder systems. Public-private partnerships are one way of addressing this situation. In Uganda, cereals and legumes (particularly maize and beans) could not be
exported to any countries in Eastern and Southern African even where there was a food deficit in those countries. To address this, the Ugandan government supported a consortium of private companies by providing warehouse facilities and access to working capital. The country now has an organization called “Ugandan Grain Traders Limited,” which effectively fulfils the marketing function. At present, Uganda is the second largest supplier of food to the UN’s World Food Programme in East, Central, and Southern Africa, supplying the region with over 130,000 mt. per year. In addition, commercial trade in maize, beans and soybeans has been established with Kenya, Tanzania, Rwanda, and Burundi 1 Support Services and Decentralization Sustainable intensification of smallholder agriculture is crucial to create necessary surplus for the market. Smallholder farmers need access to appropriate technologies and support services to effectively participate in the transformation process. The agricultural research and development (R&D) system has been undergoing a series of transformation over the years. The reform agenda includes: • • • • • • Redefinition of the role of government in agricultural R&D Decentralization and/or privatization of agricultural R&D activities Broader and active stakeholder participation (pluralism in service provision) Increase in networks, partnerships, and new funding arrangements Separation of financing from service provision and research execution Orientation of R&D to be more outward looking, client- and impact-driven, and adopting a “systems” perspective These reforms aim to foster a more pluralistic, performance-oriented culture in a less centralized public sector. The whole notion of extension has also changed and extension agents are viewed as service providers and knowledge brokers. Nonetheless, the public sector still has a crucial role to play in providing services to smallholder, subsistence farmers who live in remote areas far from markets. Decentralization has been used as an
Personal communication with chief executive of Uganda Grain Traders, LTD
instrument to make services more relevant, to bring them closer to the end users, and to enhance ownership and empowerment. According to the International Fund for Agricultural (IFAD, 1995), decentralization is an umbrella term for a number of related policy reforms under which central government agencies transfer rights and responsibilities to local institutions. Decentralization is a multi-dimensional process of shifting the focus of development away from central planning and bureaucratic government agencies to community-based, participatory systems that use the full range of local public and private institutions. The political, fiscal, and institutional elements of decentralization are particularly important. Research findings suggest that each element needs to complement the others for effective results to be realized (World Bank, 2004). In the case of public services, decentralization most often refers to: • • • Shifting power from central offices to peripheral offices having the same administrative structures Giving semi-autonomy to field officers for routine decision-making Planning functions in accordance with the central government guidelines
Ineffective, centrally-administered local development programs and weaknesses in rural policies and programs that address local needs have led to the realization that poverty alleviation cannot be achieved unless the poor have a voice in the planning and implementation of schemes meant to help them. Decentralization’s merits include easier access to local information, greater sensitivity to local needs, and accountability to the local community. Smallholder farmers have not benefited fully from decentralization due to partial implementation, local politics that are counter productive, and lack of accountability. However, there are a number of success stories, including the decentralization of research and extension in Uganda, where the National Agricultural Advisory Services program represents an ambitious plan to decentralize extension services by scaling-up from six
pilot districts to national coverage by 2008. An autonomous board coordinates the program at the national level. Local farmer groups are represented in sub-county and district levels and farmer forums approve project proposals submitted by farmer groups. Funding for projects comes from the program funds, most of which are allocated to subcounty farmer forums. Based on this initial experience, efforts are underway to form an Eastern and Southern African network of service providers. Emerging Technologies The use of modern biotechnology is on the increase in most parts of the world except in Europe and Africa (see Figure 2). Concerns about the use of biotechnology in Africa are partially a spillover from concerns in Europe about food safety and environmental issues, as well as public mistrust of multinationals, which are often seen as being manipulative and unscrupulous (Eicher 2005). If judiciously combined with other technologies to produce food and agricultural products and services, biotechnology represents an undisputable potential to increase production and productivity among smallholder farmers and holds serious promise for the sustainable intensification of agriculture. To fully benefit from new technologies, including biotechnology and ICTs, national governments should have a clear vision of what they expect from them and how they can integrate them harmoniously with other options, including the development of conventional technologies. When dealing with the issue of agricultural biotechnology, countries in sub-Saharan Africa need to address three major policy issues: Appropriate intellectual property rights, biosafety and regulating mechanisms, and national capacities. There is also a clear need for an open exchange of technical information on genetically modified (GM) products, training for African scientists, and helping African nations develop their own policies to guide regulatory, legal, and technology transfer issues (Eicher 2005).
Rapid Adoption &Tremendous Grower Receptivity
Global Area of Biotech crops (in million of hectares, 19962004)
17 BIOTECH Countries
Globalization and Smallholder Farmers The idea of globalization was enthusiastically welcomed by many developing countries based on the assumption that it would provide access to markets in developed countries. However, policies that restrict access to the markets of developed economies adversely affect smallholders hoping to exploit these market opportunities. Debates surrounding biotechnology, biosafety, the WTO, and non-market barrier issues remain a puzzle to many smallholders who require increased capacity and income to actively participate in these markets. Policies that are reflected in non-tariff barriers, such as Eurep Gap, particularly the traceability and equivalence rules, increase transaction costs for smallholders, preventing them market access. Policy and institutional instruments are needed to effectively address these issues so that smallholders can benefit from these new opportunities. Policy Harmonization Very often, policies are often crafted without much consideration for their implications on other policies. In addition, given the forward and backward linkages between the agricultural sector and other sectors of the economy, such as health, education, water, and energy, there is a need for policy harmonization at the national level. Similarly, some policy frameworks proposed by developed countries have implications for smallholder farmers. There is a need to integrate and harmonize various policies to ensure that they do not have a negative impact on smallholder participation in emerging markets. Conclusion It is increasingly evident that in the majority of sub-Saharan African countries, smallholder producers are there to stay for the foreseeable future. This paper argues that both politics and policies are intertwined and equally important for smallholder-led, broad-based economic growth. The paper advocates for policies that will lead to marketoriented, smallholder production systems that are compatible with sound natural resources management. Specific policies are needed to promote collective action by farmers, increase private sector participation, facilitate greater participation of
smallholder farmers in emerging market chains, and capitalize on the potential benefits of biotechnology. Good policies are necessary, but not sufficient, to create the necessary transformation. To be fully effective, these policies should be followed up with effective implementation plans (e.g., strategies, programs, and resources) and monitoring and evaluation systems to detect problems and adverse unintended effects.
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