Category Archives: Agricultura

RPT-AFRICA MONEY-Mozambique’s cashews get dose of Dutch disease | News by Country | Reuters

By Marina Lopes

MAPUTO, Sept 21 (Reuters) – Mozambique’s cashew industry is ailing, and the symptoms point to a bad bout of “Dutch disease.”

In a nutshell, this illness strikes an economy when the discovery of a resource such as oil draws in a flood of dollars, boosting the local currency but making all other exports uncompetitive.

The term was coined to explain the decline of manufacturing in the Netherlands after the discovery of North Sea oil and gas in the late 1950s.

In Mozambique’s case, an investment boom in the nascent coal and gas sectors hoisted the metical by a whopping 33 percent against the dollar from September 2010 to the end of 2011. It has since held on to the bulk of those gains.

Foreign direct investment soared to $2.1 billion last year – when the metical was the top-performing currency against the dollar – compared with just $7.8 million in 2010, central bank data showed.

While the government will welcome the money, it has crushed any cashew comeback and put the livelihood of tens of thousands of peasant farmers at risk in a country where agriculture still accounts for a third of gross domestic product.

The tropical southeast African nation and former Portuguese colony was once the world’s top producer of the coveted nuts, but – as with most of its economy – the industry was gutted when civil war erupted after independence in 1975.

The end of conflict two decades ago allowed the cashew sector to sprout anew, and in 2010, sales rose to a post-war peak of 113,000 tonnes, the third-highest in Africa behind Ivory Coast and Guinea-Bissau, according to the Ghana-based African Cashew Alliance.

But sales then tumbled to 63,000 tonnes last year.

Market and industry players say the currency’s appreciation prompted buyers in India, where most of Mozambique’s cashews are processed, to search for cheaper options elsewhere.

“Prices last year got to all time highs and that really hurts demand,” said Richard Rosenblatt, of the Richard Franco Agency, a U.S.-based nut broker.

Oil-rich Angola, another former Portuguese colony on the other side of Africa, also highlights the impact of Dutch disease on agriculture.

Before independence in 1975 and the chaos of its civil war, Angola was the world’s fourth-largest coffee producer, churning out 200,000 tonnes of beans a year.

Now, a decade after the fighting ended, it is vying with Nigeria to be Africa’s biggest oil producer, while its coffee industry remains in a rut with annual output of a paltry 4,000 tonnes.

One solution being explored in Mozambique is to process its cashew nuts at home.

“The cashew nut is consumed externally so it is the international price that dictates things,” said Filomena Maiopue, director of the National Cashew Institute in the capital, Maputo.

“We’ve reached the conclusion, in discussion with the Ministry of Agriculture, that in order to minimize that effect, we need to intensify local processing,” said Maiopue.

Even if the government does get its act together, there is little immediate relief in store for farmers as money continues to pour in from mining giants such as Brazil’s Vale to develop the Mozambique’s vast coal fields.

Joaquin Solomon Nhantumo, a farmer in southern Mozambique, has been forced him to grow lettuce and tomatoes in his back-yard orchard to provide for himself and his eight children.

But he says there is only one crop that will keep him in business in the long run.

“The cashew nut is our sole means of survival.” (Additional reporting and writing by Ed Stoddard; Editing by Hugh Lawson)

via RPT-AFRICA MONEY-Mozambique’s cashews get dose of Dutch disease | News by Country | Reuters.

via RPT-AFRICA MONEY-Mozambique’s cashews get dose of Dutch disease | News by Country | Reuters.

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Sécurité alimentaire : le paradoxe africain | Sécurité alimentaire : une très longue route | Jeuneafrique.com – le premier site d’information et d’actualité sur l’Afrique

Sécurité alimentaire : une très longue route

agriculture(508) – Banque mondiale(296) – G20(81) – sécurité alimentaire(38)

06/03/2012 à 15h:09 Par Alain Faujas

Atteindre la sécurité alimentaire pour écarter le spectre de la faim est une entreprise de très longue haleine. Il ne s’est pas encore passé grand-chose en la matière depuis 2007, année où la Banque mondiale a reconnu qu’elle avait délaissé l’agriculture depuis plus de vingt ans, donnant le mauvais exemple aux autres institutions multilatérales et aux gouvernements des pays en développement. Certes, le sommet de Cannes du G20 a promis, en novembre�2011, que priorité serait donnée à l’agriculture. Reste à mettre en oeuvre cette résolution tardive.

Écartons d’abord les bêtises à ne pas commettre. Pas question de viser à l’autosuffisance alimentaire, car aucun pays au monde ne peut produire, et au meilleur prix, tous les produits agricoles dont il a besoin : cultiver du blé ou du maïs au Sahel serait une coûteuse stupidité. Pas question de pratiquer une agriculture intensive de type européen dans les pays d’Afrique : les sols n’y résisteraient pas. Pas question d’établir des barrières protectionnistes pour préserver les cultures locales, sinon le temps qu’elles atteignent le seuil de compétitivité.

Comme le préconise Robert Zoellick, le président de la Banque mondiale, il convient avant tout d’«�investir tout au long de la chaîne de production agricole�». Et la difficulté du processus tient à cette complexité, car s’il manque un maillon, les efforts réalisés ailleurs resteront infructueux.

Cela débute avec le droit de propriété, qui doit être garanti afin que les paysans demeurent maîtres de leur sort et intéressés à produire davantage. On mesurera dans ce «�Plus�» l’importance des semences, des engrais et, bien sûr, de l’eau, sans laquelle les plantes et les animaux ne grandissent ni ne fructifient. La réussite du Brésil, devenu la ferme du monde, rappelle aussi que l’éducation des agriculteurs est essentielle pour qu’ils tirent le meilleur de leurs outils.

Mais on oublie que la sécurité alimentaire passe également par un stockage de qualité, car on ne peut manger toute une récolte ni sur place ni dans les jours suivant la moisson. Il faut des greniers, des silos et parfois des chambres froides, afin de la garder à l’abri des rats, des insectes et des moisissures, en attendant sa consommation ou sa vente. Or, selon les experts, c’est entre 30�% et 50�% des récoltes qui seraient gaspillés dans certains pays en raison de mauvaises conditions de conservation.

Et puis il y a l’impératif du transport et des infrastructures. Grosso modo, la planète produit suffisamment pour nourrir l’humanité, mais les productions sont mal réparties selon les zones géographiques et climatiques. Il est donc indispensable de redistribuer ces denrées, ne serait-ce que des champs vers les villes. Donc pas d’échanges sans les ports, les ponts, les routes et les pistes qui permettent d’emporter et d’apporter les produits agricoles là où c’est nécessaire.

Enfin, il n’y aura aucune sécurité alimentaire tant que les marchés financiers pourront, comme en 2007, multiplier en Afrique le prix du riz par trois en quelque mois, alors qu’aucune pénurie ne menaçait. C’est dans la maîtrise de cette spéculation, d’autant plus scandaleuse qu’elle porte sur des produits vitaux, que l’on mesurera la fiabilité des promesses du G20.�

via Sécurité alimentaire : le paradoxe africain | Sécurité alimentaire : une très longue route | Jeuneafrique.com – le premier site d’information et d’actualité sur l’Afrique.

via Sécurité alimentaire : le paradoxe africain | Sécurité alimentaire : une très longue route | Jeuneafrique.com – le premier site d’information et d’actualité sur l’Afrique.

How politicians gave away $100bn of land (The Africa Report n°42 – July 2012) | Novafrica Developments

How politicians gave away $100bn of land (The Africa Report n°42 – July 2012) | Novafrica Developments.

How politicians gave away $100bn of land (The Africa Report n°42 – July 2012)

With minimal consultation, governments and local authorities are signing away huge tracts of lands for lease on the cheap. Now communities are raising their voices in opposition to these projects that bring little local development.

The Nguruman Escarpment is one of the global tourism’s secret. Rising from the arid and salty wastes of Lake Magadi as the Rift Valley heads south out of Kenya is a steeply rising expense of yellow-fever acacia thickets and vast savannah meadows. At its northern edge, is overlooked the Serengeti plains from a height of 2,000m. It feels as if God installed a private balcony to gaze over creation.

Visits are by invitation. Bill Gates has been here; Kofi Annan stayed here while mediating the Kenya crisis in 2008; and Kenya’s Prime Minister Raila Odinga has used it as a retreat.

In the shadow of the Ngurumans lies a darker reality: the dispossession of a Maasai community to secure this paradise. The Olkiramatian Group Ranch, a community of about 8,000 people, faces eviction following a legal battle with Nguruman Ltd, the company that owns the escarpment property.

In 1996, during a severe drought, the community’s herders took their livestock up the escarpment. The northern edge of the escarpment has traditionally been used for dry season grazing. On that occasion, however they found their access paths blocked. A few days later, they received a court writ accusing them of trespass and charging them with destruction of grassland valued at almost $2m.

Recently, a court in Kericho ruled in favor of Nguruman Ltd and its sole director, Hermanus Phillipus Steyn. The ruling meant that if they were unable to pay the damages, some 3,000 families resident in Olkiramatian Group Ranch and the neighboring Shompole Group Ranch face eviction from their homes.

The land grab had started in 1986 when Steyn, a South African investor, along with 14 officials of Narok and Olkejuado county councils – the two local authorities under whose jurisdiction the Ngurumans fall – obtained the title deed to a small ranch known as Kamorora, on which the lodge sits. Kamorora had been illegally registered. However over the course of the next few years, Steyn quietly bought out his co-directors in Nguruman Ltd. As sole proprietor, he was able to dictate terms, preventing the surrounding communities from accessing the escarpment.

In Kenya, such stories are common. Presidents and their homeboys settle their people in new lands saving a chunk for themselves. They are then reluctant to implement land reforms that would secure individual and communal land rights or deal with historical dispossession. These were some of the underlying issues that led to the blood-letting following the botched 2007 presidential elections.

The tension between a deregulated land regime and claims to territory from marginalized ethnic groups such as the Maasai has defined much of Kenya’s politics. It is perhaps because of this raw domestic competition over land that it has escaped relatively unscathed from the bigger phenomenon sweeping Africa: the global land grab. Over the past decade Africa has experienced unprecedented pressure from foreign investors seeking cheap agricultural land. The figures are imprecise, collated by activist groups without verification from state authorities, but point to the scale of the problem. A review of data from several national reports, together with surveys by the African Union, the United Nations (UN) and the World Bank suggests Africa has effectively given away some $100bn of land since 2000.

The international market price of land is, of course, subject to huge dispute – not least because of the lack of reliable national valuation systems.

Market prices for land sold or leased in Africa vary spectacularly. For example, an acre [0.4ha] of land in Kitengela, just outside Nairobi, sells for a minimum of $10,000 an acre, yet there are reports of land in the Tana Delta, where Qatari companies are planning a rice project, being leased for as little as $3 an acre. In South Africa, tracts in the Wine lands can change hands for as much as R500,000 ($60,000) an acre but sell for as little as R700 in the Karoo. In Ghana, land prices have escalated sharply over the past two decades and plots in the Eastern Region, north of Accra, are sold on long leases for $40,000 an acre. Leases in Nigeria are generally more expensive still. Leases around urban centers such as Lagos and Abuja are among the most expensive in the world.

With growing activism and laws in Africa and beyond constraining the operations of mining and oil conglomerates, the trade in land and agricultural commodities is becoming the last frontier for buccaneer capitalism.

A recent report by the International Development Law Organization found that, globally, “in 2009 alone, transactions covering at least 56.6m ha were concluded or under negotiation, more than 13 times the average amount of land opened to cultivation annually between 1961 and 2007. Most of the 2009 deals were in Africa, where 39.7m ha changed hands –more than the cultivated areas of Belgium, Denmark France, Germany, the Netherlands and Switzerland combined.”

Wall Street goes farming. Demand for African farmland has boomed since the early 2000s. Global food prices have trebled because of harvest failures and the growth of biofuel production, which has displaced food crops. Reinforcing these pressures, says journalist Fred Pearce in his book The Land Grabbers, was the credit crunch of 2008. This prompted Wall Street investment banks like Goldman Sachs to shift risk from the sagging sub-prime markets into commodities exchanges. Between 2003 and 2008, notes Pearce, investment in commodity exchanges rose from $13bn to $300bn. At the same time, Middle Eastern countries such as Saudi Arabia and Qatar went looking for cheap farmland in Indonesia, Pakistan, the Philippines and Africa to grow food for their domestic markets.

They have been welcomed with open arms. “Africa needs investment, and this has been clearly stated by the leadership”, said Saudi agriculture minister Fahd bin Abdulrahman bin Sulaiman Balghunaim. “We open doors for the private sector to go and negotiate. It is up to the local governments to decide what they want to do, whether they want to lease the land, or they want to sell the land”.

Of all the agricultural land, says Pearce, none is as accessible as the Guinea Savannah Belt, “a great expanse of grasslands half the size of the United States, occupying an arc of 25 countries between the rainforest and the deserts – through West Africa to Sudan, then south through Kenya and Ethiopia to Zambia and Mozambique in the south. The World Bank calls this 1.5m square miles “the world’s last large reserves of under used land”.

None of this explains why, considering its tortured colonial history of land dispossession, Africa’s governments have so readily given up land for foreign investment. “I’ve argued that what is happening in Africa is a new scramble for the continent. But, in this present case, it is the state that’s grabbing the land and giving it to investors” says Ethiopian researcher Dessalegn Rahmato.

Foreign investors describe the deals in euphemistic terms. Speaking of agricultural development and reform, touting the benefits of technology transfer and increased employment, investors argue that these lands are scarcely populated.

But it is the posture of African states, as they open up their agricultural hinterlands, that is most disturbing. On a diet of neoliberal reform and growth based on foreign capital, governments in Mozambique, Zambia, Tanzania, Kenya Uganda, Ethiopia, the Democratic Republic of Congo (DRC), Mali, Liberia and others regard foreign direct investment in agriculture as a boon.

In most cases, the land deals are sealed in capital cities with little consultation with affected communities. As our research reveals, political elites use the new investments, usually in marginalized regions, to “civilize” their neglected populations and to benefit their own cronies.

During the World Economic Forum in Addis Ababa in May, Ethiopia’s premier, Meles Zenawi, announced that in addition to the millions of hectares his government had already made available, there was a further 4m ha on offer. Since 2001, the formerly Marxist government has turned away from a policy that favored the country’s teeming peasantry towards one that sees foreign capital as the route to middle-income status.

Between 1996 and 2008, according to the agriculture ministry, the government approved 8,000 applications totaling 3m ha of land for agricultural development. More than one-third of the lands were for smallholder farmers. Then the government started pursuing foreign investment. Initially, investors were directed towards the lucrative horticultural sector. Flower firms that had previously regarded Kenya as the primary East African investment destination redirected their investments to Ethiopia’s Rift Valley lakes.

Then, as global food prices rose in the mid-2000s, foreign investors began setting the agenda, growing crops such as rice, sugar, cotton and soya for export. This new investment agenda worked well for the federal government in Addis, which regarded the long-neglected regions in the west, south and east as ripe for exploitation. Lowland regions such as Gambela and Benishangul-Gumuz were urged to open themselves to foreign investors.

Coming up roses. The largest of these is Bangalore-based Karuturi Global, owned by Sai Ramakrishna Karuturi. The world’s largest owner of greenhouses, Karuturi Global produces 650m rose stems annually, some 10% of the global flower export market. After Karuturi’s investments in Ethiopian horticulture, the government granted it a 250,000ha concession for rice farming in Gambela. Now it wants a further 500,000ha.

Another major investor is Ethiopian- Saudi magnate Sheikh Mohammed Al Amoudi. He was, until 2009, Africa’s richest man, with a fortune estimated at $10bn. Al Amoudi has secured a 85,000ha rubber farm in Ethiopia. His 10,000ha rice paddy in Gambela, run by his flagship Star Enterprises, is advertised as “one of Ethiopia s premier investments”. Al Amoudi has asked for a further 100,000ha in Gambela to cultivate stock for biofuels. But as the new projects force local communities off their ancestral lands, destroy forests and eat into the game reserve in central Gambela, the Anuak and Nuer communities are rising in protest.

In Uganda, there is also a rising clamor over state-backed foreign investor-driven land gabs. A clear example of the new coalition of interests is emerging in the north-eastern region of Karamoja. Designated a closed district under colonialism, Karamoja and its pastoralist people are still assigned he role of “backward native” occupying a desolate place and caught up in a cattle-rustling culture.

Today, “development” means the deployment of the Ugandan army and Special Forces for “disarmament” exercises. That has been followed by the appointment of a “can-do” minister for Karamoja affairs. The minister Janet Museveni, is the wife of President Yoweri Museveni and mother of the commander of Special Forces, Colonel Muhoozi Kainerugaba.

Janet Museveni advised a jittery European Union official not to expect Uganda to “romanticize” what she termed “nomadism” but to recognize it as “a danger we have to fight like other social ills”. Pastoralists have been driven off as much as 60% of Karamoja’s fertile land.

Pointing fingers at the first family, Karamoja’s legislators recently named companies that have acquired more than 8,000ha in unclear circumstances. This did not include another 49-year lease of 1,000ha for just $50,000, paid not to the community, but to its local council.

In Mozambique, much of the new investment moved towards timber, for carbon credits, and agricultural land. According to the Oakland Institute’s seven- country study of land deals in Africa, Mozambique granted concessions to investors for more than 2.5m ha between 2004 and the end of 2009. This is 3% of the land area and 7% of the country’s arable land. More than a million hectares went to foreign investors, 73% for timber and 13% for biofuels and sugar.

“What appeared to be a new European “land grab” and the pressure for high profits has pushed foreign companies into seizing land farmed or used by local communities, displacing farmers and threatening their livelihoods and food security”, says the Oakland Institute report. As the investors needed local partners, Maputo’s political elite have benefited hugely, according to a local analyst.

In January, in the Cateme region of Tete Province, more than 700 families resettled by the Brazilian company Vale rebelled against the violation of their rights and poor living conditions after resettlement. Police beat back the protestors, a sign that the regime was not prepared to hear the community’s complaints.

Value not added. Part of the problem, says Namanga Ngongi, director of the Alliance for a Green Revolution in Africa (AGRA), is that African land has been the last factor of production to be marketed. After years of Bretton Woods structural adjustment programs, agriculture was liberalized when it required more state intervention and management. “Land was never factored into calculations around value”, Ngongi explains. “If we were able to show our rural populations that their lands were valuable, then maybe they can start factoring them into negotiations around the sale of those lands.”

There is no piece of land in Africa that is not claimed, says Joan Kagwanja, of the UN Economic Commission for Africa’s Land Policy Initiative. Although governments favor large-scale agricultural investments, the data shows Africa’s small-holder farmers to be far more productive.

Reversing land deals would require a Herculean effort. At the Land Policy Initiative, a research team has embarked on a thorough review of the land deals. It aims to set standards and guidelines for future land leasing.

In touting the benefits of large-scale plantation farming, Africa’s leaders are forgetting some very recent lessons. It is actually the continent’s 60 million small-holder farmers who are the backbone of agricultural development. Because their lands, from which so many are now being moved, have never been valued, they are being leased out to foreign investors for little more than nothing,

“If we were able to show rural communities that they are sitting on assets that could change their economic status you may have a lot more interest on their part in participating in discussions that would be profitable to them, to the country at large and to the international community,”’ says Dr Ngongi.

Parselelo Kantai in Addis Ababa, Fred Katere in Mozambique and Kalundi Serumaga in Uganda

via How politicians gave away $100bn of land (The Africa Report n°42 – July 2012) | Novafrica Developments.

Press Release: Investigation Reveals that Land Grabbing in Mali Threatens the Niger River and the Lives of Millions of West Africans | oaklandinstitute.org

Press Release: Investigation Reveals that Land Grabbing in Mali Threatens the Niger River and the Lives of Millions of West Africans | oaklandinstitute.org.

Gallery

Why Tanzania’s cotton crop is still bound up with poverty | Global development | guardian.co.uk

Why Tanzania’s cotton crop is still bound up with poverty | Global development | guardian.co.uk.

Paul Collier discusses market friendly food aid

Join the conversation on aid and development with World Food Programme‘s new Food Factor podcast! This week, Oxford Economist Paul Collier looks at rising food prices and a “fishy” way to hedge against them.

bit.ly

Author and Oxford economist Paul Collier discusses market friendly food aid, the food-price crisis of 2008, why even booming economies need help to bring down malnutrition and a fishy idea for funding food aid.

What is CAADP?

Mar 25 Posted by Administrator in Events 0
caadp_logoThe Comprehensive Africa Agriculture Development Programme (CAADP) is the most ambitious and comprehensive agricultural reform effort ever undertaken in Africa. An initiative of the African Union (AU) and New Partnership for Africa’s Development (NEPAD), it represents a fundamental shift toward development that is fully owned and led by African governments. It reflects African governments’ recognition of agriculture as central for the alleviation of poverty and hunger and hence for reaching the Millennium Development Goals (MDGs). 

An outcome of the 2003 Maputo Declaration CAADP is based on two overarching principles:

  1. The pursuit of six percent average annual growth in the agricultural sector at national level; and,
  2. Allocation of ten percent of national budgets to agriculture.

A framework rather than a roadmap, CAADP is composed of a set of key principles and targets for achieving these aims by 2015. It is at once flexible enough to accommodate the need for approaches toward poverty and hunger alleviation to be tailored to regional and national contexts, and broad enough to address policy and capacity issues across the entire agricultural sector and across the entire African continent.

CAADP’s vision of agriculture as a driver of poverty and hunger alleviation is underpinned by four pillars.

You can learn more about each pillar directly from the CAADP website by clicking on the respective links.
· Pillar 1: Extending the area under sustainable land management and reliable water control systems
· Pillar 2: Improving rural infrastructure and trade-related capacities for market access
· Pillar 3: Increasing food supply and reducing hunger
· Pillar 4: Agricultural research, technology dissemination and adoption

More about CAADP
NEPAD-CAADP website
NEPAD-CAADP calendar
CAADP Africa Forum
Regional Strategic Analysis and Knowledge Support System (by IFPRI)
UN support to AU/NEPAD’s CAADP

http://www.future-agricultures.org/index.php?option=com_easyblog&view=entry&id=20&Itemid=473

Investing in land: a commentary on the World Bank report

Sep 16 Posted by Administrator in FAC News 0
There is something for everyone in the long-awaited World Bank report, Rising Global Interest in Farmland: Can it yield sustainable and equitable benefits? In some sections there is a damning critique, in others a positive spin, with a narrative offering a bright future. Not surprising then that the press has picked up different angles in the few days since its release. The Financial Times, for example, headlines with “World Bank backs farmland investment”, while Bloomberg reports the World Bank as saying, “Large Land Deals Threaten Farmers”. Both are equally valid interpretations of an often ambiguous report. The bottom-line, take-home message seems to be that external investment in land is a good thing in some places, especially those where there are “large tracts of suitable land, but also a large proportion of smallholders with very low productivity”, but that governance measures, based on a set of high-sounding principles, are required to make this happen equitably and sustainably. But what does this mean? How should we interpret this report?

Is Agriculture the Key to Development?

IMG_2499iiiOn World Food Day (October 16th) Owen Bardur posted some stimulating thoughts on agriculture and development (link) – arguing that poverty and lack of entitlements are the key causes of hunger and food insecurity – not low agricultural productivity. He then goes on to argue that the best way to tackle poverty is not to invest in agriculture (as advocated by a romantic pro-agriculture lobby). If most poor people  are rural farmers then one can either argue that we should concentrate on improving farming for them, or that we should concentrate on getting them out of farming: he advocates the latter approach.

There is much truth in these arguments. Poverty and lack of entitlements are the fundamental causes of hunger, and we would do well to remember that. Rural poverty is more widespread and deeper than urban poverty, and exits from farming are widespread features of historical and current economic development, and the focus of many poor rural  people’s aspirations, for their children of not for themselves.  However it is a false dichotomy to set agricultural development and exits from farming as alternative investment choices and development paths: they are not alternatives but complements, and agricultural development is in very many situations a pre-requisite for wider economic development that involves exits from farming.

Considering Owen’s argument in a little more detail, I am worried by a number of its threads:

  • the false characterisation of the pro-agriculture lobby as hypocritical romantics idealising peasant life,
  • the false characterisation of farmers (particularly food insecure, hungry rural people) as benefiting from higher food prices,
  • the absence of consideration of wider issues of coordinated economic growth where growth in supply and (effective) demand for farm and non-farm goods and services match each other.
  • The counter example of Singapore’s non-agricultural growth led path (Hong Kong is another example) –Singapore’s tremendous achievements need to be recognised, but there is also validity in the reported comment of a senior Indonesian government official that Singapore is only a city – and a very well connected one ….. we need to look at rural and urban poverty, hunger and growth together

If we take these together

  1. There are some in the pro-agriculture lobby who advocate the benefits of a romantic view of idyllic peasant life, but the majority see improved agriculture as a necessary but temporary step for getting out of poverty. I analyse livelihoods in terms of hanging in (maintaining a minimum), stepping up (doing more / better of what we are already doing) and stepping out (doing different things). We can then understand individual and household livelihoods and regional and national economic development in terms of (a) a shift from emphasis on ‘hanging in’ to ‘stepping up and out’  and (b) a massive ‘stepping out’ from agriculture to non-agricultural income and activities and expenditure and from rural to urban living. ‘Bashing’ of the agricultural lobby as romantics must stop – it is highly misleading. Labelling agricultural romantics or agricultural fundamentalists (a term used by some) serves to muddy and debase the arguments, not clarify and face them.
  2. Owen suggests that a plausible story is

When people leave farms and get jobs in manufacturing their incomes are both higher and more secure. Demand for food in the cities grows; the number of people working in agriculture falls; food prices rise; and the remaining farmers get higher incomes. Rising incomes enable farmers to invest more in irrigation, fertilizer, machinery and seeds. Agricultural productivity rises, not as a consequence of direct efforts to improve agriculture but as the indirect consequence of industrialisation.  On this view, industrialisation will drive improvements in agriculture, rather than the other way round.

This raises some very large questions.

  • First who is going to buy all the manufacturing output that the cities are producing if most people are poor rural people, spending 50% or more of their meagre incomes on food? Investors will not invest if this question is not answered, so where will the investment come from? State led industrialisation does not have much of a record.…  So where are these jobs in manufacturing going to come from and how will they be sustainable?  – Singapore’s and Hong Kong’s manufacturing export experience without competition from China in the 50’s and 60’s is not very relevant to much of Africa today and is not in any case the industrialisation pathway Owen outlines.
  • Second, rising demand leads to rising food prices which benefits farmers? I find this very difficult to understand – theoretically or empirically. It is well established that 50% or more of farmers in Africa are poor food buyers (eg Barrett, 2008) and I understand that the figure is similar for India. Rising food prices harm the poorest farmers directly by reducing their food security and real incomes, and indirectly by reducing their ability to invest in farming. It also damages the urban poor. The history of development is not one of rising food prices (damaging to the poor)– it is one of falling food prices benefiting the growing non-farming population. This is driven by growing agricultural labour productivity, so that increasing food can be produced by fewer people, releasing labour and capital for the non-farm sector at the same time as increasing farm incomes (from higher labour productivity) and non-farm incomes (from falling food prices) raise demand for non farm goods and services. If all goes well, with matching rates of change, this is then matched by a similar process of increasing labour productivity in the non-farm sector, and we have virtuous cycles of growth (until we hit environmental limits …….)

This is shown in the diagram below first for agriculture (start in the top left) …

pic1

 

 

 

 

 

 

 

 

 

 

 

 

and then for non-farm activities (start in the bottom right)

pic2

 

 

 

 

 

 

 

 

 

 

 

Note that these meet in the middle – the virtuous cycle if all goes well. Other aspects of the virtuous cycle are not shown (growth in capital,  technology, knowledge, health benefits, global trade can/should benefit both farm and non-farm growth). However negative feedbacks are also not shown (increasing natural resource use, waste, pollution, environmental degradation, biodiversity loss, health dis-benefits, inequity). We may expect the positive feedbacks to decline with time and the negative feedbacks to grow. (This would be a late development problem if we did not live in an increasingly globalised world – where late developers are impeded by the negative feedback from early developers.)

A critical issue in the farm versus non-farm argument is sequencing and coordination.  Growth in labour productivity in the non-farm (manufacturing or service) sector in poor economies cannot drive broad based income growth and poverty reduction as effectively as agricultural labour productivity growth because

  1. not so much labour and land are employed in the nonfarm sector in poor economies, so higher rates of non-farm productivity growth may have slower absolute effects on overall productivity growth,
  2. not so much income is spent on non-farm goods and services as on food  by poor people, so the real income effects of falling non-farm prices are not as extensive – or so poverty  focussed – as they are for falling farm prices, and
  3. price and income elasticity of demand are greater for non-farm products, so price falls are lower, again reducing real income effects.

(These latter two points of course assume some isolation of local markets from imports and exports – but that is an assumption shared with Owen’s argument: if it is not the case then we are still left with point (a) in my argument above, but not with the pro-agriculture feedback arguments in Owen’s pro-industrialisation argument).

It is critical that the sequencing issues raised here be addressed by those promoting non-farm investment as a driver of broad based growth and the reduction of poverty and hunger.

I conclude with a slight modification to Owen’s conclusion:

So on World Food Day let us remember Sen’s insight that hunger is not a problem of food production but of poverty. The fact that most poor people work in agriculture suggests that a good way to escape poverty is to get out of agriculture.  However that can only work in most countries if it follows increases in smallholder agriculture productivity. So the best way to reduce hunger and help people out of poverty may be to focus on improving agriculture, so that people who want to can then leave agriculture for other more rewarding work.

References

Bardur, O (2010)  Is agriculture the key to Development?  Owen Abroad: Thoughts from Owen in Africa. 16th October 2010.  http://www.owen.org/blog/3903

Barrett, C. B. (2008). “Smallholder market participation: concepts and evidence from eastern and southern Africa.” Food Policy 33(4): 299-317.
By Andrew Dorward
October 21, 2010

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