Friday, April 25, 2014

Governments must rethink policy on small-scale farmers- Report

Published:

The report advised governments on agricultural policies.

 

A three-year study of the ways small-scale farmers operate in Africa, Asia and Latin America has highlighted the consequences of weak representation of small scale producers in agricultural policies and prompted calls for a major rethink and restructured approach to the success of the development and welfare of small scale farmers.

The final report by the International Institute for Environment and Development (IIED) – Humanist Institute for Development Cooperation (Hivos) project shows how mainstream efforts to make markets work for poor farmers can fail to operate in tune with the ways such farmers themselves try to make their markets work.

“Contrary to the prevailing narrative, and what NGOs, policy-makers and donors expect, interventions that aim to upgrade small-scale farmers into high-value, formal supply chains and modern markets tend to benefit only 2-10 per cent of farmers,” Bill Vorley, a principal researcher at the International Institute for Environment and Development (IIED) and co-author of the report said.

Mr. Vorley and his co-authors point out that most small-scale farmers combine farming with other activities and trade more in informal than formal markets – and rarely through cooperatives or producer organisations that can take advantage of connections with modern markets.

The report showed that rather than being a problem that needs to be fixed, informality can provide the space for small-scale farmers’ agency, to find and build flexibility and resilience in a globalising world.

The report highlighted a key issue: the fact that fewer young people will want to farm tomorrow.

“Policies and development interventions to support small-scale farmers need to fit with this changing and complex reality to get the future right regarding not only agricultural production and consumption but also youth employment,” the report stated.

The Co-author, Ethel Del Pozo-Vergnes, a senior researcher at IIED, said it would be better for governments, donors, development agencies and big business to work to understand and support the strategies small-scale farmers are already using, as the combine formal and informal ways to make markets work for them.

“Informality has its downsides,” says Vorley. “But it can bring small-scale farmers great benefits – in market access, flexibility and even market power – but policies tend to ignore this potential in favour of formal structures”.

Shifts in policy that take account of this informality while addressing its downsides would benefit far more farmers, the report stated.

Stories of poor and marginalised farmers lacking a voice in government are ubiquitous in development circles. Farmers association can speak for some producers, but the majority of small farmers in the developing world do not belong to such groups and those organisations that gain a measure of political influence are all the more likely to be co-opted and driven by elites at the expense of small holders.

While small farmers need legitimate and credible representatives at policy tables, this is not enough unless those representatives are also skilled at framing policies in farmers’ economic interest, indicating that they are still shut out of the policy process.

There are also lack of coherence and coordination as policy making is sometimes driven by large numbers, political opportunities and short-termism. In some developing countries, agriculture as a whole usually contributes a much smaller fraction to GDP than to employment and farmers are thus seen as surplus labour, an economic inefficiency.

The report stated some of the challenges of the small scale farmers in accessing finance to include lack of acceptable collateral, poor financial records, cost of lending (as banks absorb higher administrative and servicing cost for small loans and therefore may avoid them or price them higher), interest rate too high for farmers among others.

Nigeria’s agricultural output in recent times, continues to fall with consequences for food prices.
Agricultural output declined further to 3.98 per cent in the second quarter compared to 4.15 per cent in the first quarter and an average of 5.76 per cent per quarter in 2011.

The contribution to total GDP however rose to 47 per cent from 34.4 per cent in the first quarter of the year as a result of a decline in the contribution of commerce to GDP from 23.39 per cent to 19.81 per cent over the period.

Though the decline in agricultural growth is not unconnected with production losses from massive flooding in the main farming areas of the North during the quarter, it has also highlighted the nation’s lack of adequate storage facilities.

Storage of crops and food items has been a major problem in Nigeria. Thus, when the floods happened, the food stuff inventory across most states was mostly destroyed.

Although the Nigerian economy depends significantly on the oil sector, agriculture remains its mainstay, contributing up to 42 percent of Nigeria’s gross domestic product (GDP) in 2008. Majority of the countries farmers are however small scale farmers.

Agriculture is the second largest export earner after crude oil and the largest employer of rural labor; thus, the sector ranks as a key contributor to wealth creation and poverty reduction. However, food security remains a major concern due to the subsistence nature of the country’s agriculture.

President Goodluck Jonathan, while presenting the 2013 budget, said his dispensation has instituted key policy reforms in agriculture.

“So far, we have succeeded in attracting $7.8 billion investment commitment. This investment and the value chain approach has the capacity to create 3.5 million additional jobs in the medium term, by 2015. Government provided incentives to support cassava value chain, including zero duty on machinery and equipment to provide high quality cassava flour” he said, adding that the vision on achieving self sufficiency in rice production in 2016 is still being pursued.

Agricultural policies in Nigeria have undergone four main phases: the first from 1960 to 1969 immediately after independence; the second from 1970 to 1979, the period of the oil boom; the third from 1980 to the late 1990s, during the structural adjustment program (SAP); and the NEEDS framework.

Many of the strategies used to improve agricultural growth have failed because the programs and policies were not sufficiently based on in-depth studies and realistic pilot surveys.

This, according to a Nigeria Strategy Support Program (NSSP) report, can be broadly attributed to two factors. “First, policies lack public participation in design, formulation, implementation, and evaluation, and therefore, the extent that policies reflect public interest is questionable”.

As a result, policies deemed important by sectoral ministries are often implemented without open dialogue and discussions among the stakeholders.

“Secondly, efforts to implement policies suffer from a lack of appropriate capacity within sectoral ministries and a poor understanding of the specifics by policy implementers. Thus, it is critical to assess Nigeria’s current policymaking and agenda-setting process in order to devise strategies for improving agriculture and reducing poverty,” the NSSP report stated.

The IIED – Hivos project’s  report urged governments that to design more appropriate policies and interventions, they need to perceive the complexity of markets of the poor.

“Private businesses initiatives, social enterprises and development interventions must reconsider assumptions about ‘upgrading small scale producers through formal organisations and upscaling one value chain at a time.

“Understanding farmers’ own strategies, interests, expectations and limitations will contribute to better informed policies that do more for truly inclusive economic growth, social cohesion, business profits and small-scale farmers’ wellbeing,” the report stated.

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