New directions for smallholder agriculture

New Directions For Smallholder Agriculture New Directions For Smallholder Agriculture Edited by Peter Hazell and Atiqur Rahman Great Clarendon Street, Oxford, OX2 6DP, United Kingdom Oxford University Press is a department of the University of Oxford It furthers the University’s objective of excellence in research, scholarship, and education by publishing worldwide Oxford is a registered trade mark of Oxford University Press in the UK and in certain other countries # International Fund for Agricultural Development 2014 All rights reserved The Fund encourages reproduction and dissemination of material in this Work Applications for permission to reproduce or disseminate the Fund copyright material and all other queries received by the Publisher shall be referred to the Fund for response The moral rights of the authors have been asserted First Edition published in 2014 Impression: All rights reserved No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, without the prior permission in writing of Oxford University Press, or as expressly permitted by law, by licence or under terms agreed with the appropriate reprographics rights organization Enquiries concerning reproduction outside the scope of the above should be sent to the Rights Department, Oxford University Press, at the address above You must not circulate this work in any other form and you must impose this same condition on any acquirer Published in the United States of America by Oxford University Press 198 Madison Avenue, New York, NY 10016, United States of America British Library Cataloguing in Publication Data Data available Library of Congress Control Number: ISBN 978–0–19–968934–7 (Hbk.) 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Printed in Great Britain by Clays Ltd, St Ives plc n FOREWORD The environment in which smallholder agriculture operates across the developing world has seen significant changes in recent years Food markets across the globe have become more complex and better integrated, driven by growing demand and by technological and institutional change Environmental pressures and climatic shocks have created new challenges for food production systems in many regions Both globally and at the country level, a number of factors have combined to produce higher and more volatile food prices All these developments have focused global and national political debates on how to ensure food security An important issue in these debates is how to raise agricultural productivity and improve the efficiency of global, regional, and national food markets In this context, the role of smallholder agriculture in achieving national and global food security has moved towards the centre of policy discourse—including, most recently, in debates on a post2015 global development agenda Meanwhile, increasing demand for food and rising food prices have drawn new domestic and international private investors to agriculture As the policies in many developing countries have become more welcoming to corporate investors, we are witnessing the growth of large-scale investments in agriculture and the expansion of market and trading opportunities At the local level, non-farm activities have become an increasingly important part of rural economies They provide services to the farm economy, an important complement to farm-based livelihoods, as well as new opportunities—particularly for rural youth and rural women While large numbers of rural people remain underserved by formal finance institutions, in many places these are spreading into rural areas, offering products and services targeted to the investment needs of small rural entrepreneurs, whether in agriculture or other sectors These changes present both opportunities and challenges to smallholder agriculture, which today continues to support some billion people globally Whether or not smallholders can meet the challenges and seize the opportunities of a rapidly changing environment depends on whether appropriate measures and policies are in place to enable them to overcome their constraints Today, the people who work the world’s estimated 450 million small farms lack access to high-quality technology, secure access and control over productive land, access to water, quality education, markets, and financial resources Often they live in marginal areas, and many of them endure absolute poverty and food insecurity The policy and vi FOREWORD institutional environments at times work against rather than for them And climate-induced changes are increasing the risks that they face, negatively impacting their investment capacity, their livelihoods, and their food security Despite these constraints, given appropriate technical, financial, and institutional support, smallholders—women and men alike—can raise their productivity and output and get their product to market efficiently Furthermore, IFAD’s work, as well as that of others, has demonstrated the contribution smallholder agriculture can make to environmental sustainability, as well as the feasibility of climate change adaptation in this sector A dynamic smallholder agricultural sector would ensure food security at the farm level and make a major, and in many contexts the principal, contribution to food security at the national, regional, and global levels It would also be an important driver of inclusive and sustainable economic growth, and foster job-rich rural development as a complement to thriving urban economies And as custodians of a large part of the world’s natural resources, smallholders can and need to play a major role in the environmental sustainability and climate mitigation agendas that are now of increasing global concern These perspectives must be part of the policy debate on food security, both globally and at country level, both today and looking ahead beyond 2015 IFAD organized the 2011 Conference on ‘New Directions for Smallholder Agriculture’ to provide a forum for renowned specialists and IFAD’s own experts to discuss the many challenges and opportunities that smallholder agriculture faces in a rapidly changing world I am delighted that the conference was able to debate many critical issues, both old and new These included topics such as: how efficient smallholders are vis-a`-vis their larger counterparts; how to factor sustainability into smallholder development; how smallholders can thrive in competition with capital-intensive larger farmers; and what support smallholders need from development agencies and governments to embark on a path of sustainable development In short, the conference addressed the question: what is the future of smallholders in agriculture? While the conference could not be expected to provide ready-made answers to all these questions, it was nonetheless successful in expounding key findings and insights that can guide policymaking today and in the future The conference noted the great diversity in the policy, institutional, economic, and social environments of smallholders across Africa, Asia, and Latin America Yet, it also stressed commonalities in the opportunities and challenges that all smallholders face I would like to highlight a few of these First, it is evident that the social profile of smallholder households is changing Increasingly, around the globe, and particularly in Africa, smallholder farmers are women, who take on new responsibilities in farming as a consequence of male migration—although in many cases without having gender-equal access to land, inputs, finance, and other resources In addition, FOREWORD vii high unemployment and population growth rates in rural areas have left large numbers of rural youths unemployed, many of whom cannot engage in farming on increasingly fragmented family plots These youth represent a resource of immense value for a modernized, more climate-adapted, sustainable agriculture, which is also well connected to a thriving non-farm rural sector Second, smallholders continue to have difficulties securing access to essential resources such as land and water, due to pressures from increasing population, competition with larger investors, and environmental degradation For smallholder farming to be sustainable and to drive inclusive economic growth in the coming years, institutions will need to address these problems—focusing on easier but also more secure access to land and on respect and recognition of rights and entitlements It is also very important to improve access to financial services, technology, and other inputs This agenda requires the collaboration of governments, development agencies, and the private sector to develop and scale-up products and processes that are well suited to the needs of smallholders—women and men alike—with particular attention to supporting smallholders in managing the risks they face Third, it is essential that smallholder farmers be seen for what they are— operators of small businesses, and thus a core part of the rural private sector Other private-sector actors should be seen as potential partners and enablers of smallholder farmers, as they can facilitate access to inputs, services, capacity development opportunities, and markets Experiences around the world, including IFAD’s own experience, demonstrate that such private–private partnerships are possible, although the transaction costs may require thirdparty support and facilitation, especially to ensure the inclusion of poor farmers Fourth, it is quite evident today that many smallholders are not engaged solely in agricultural activities An increasing number are diversifying into non-farm activities to supplement their farm incomes Sustainable development of smallholders in agriculture has to take this into account, and promote the policy, financial, and infrastructural support needed for the growth of a thriving non-farm rural economy as a necessary complement of smallholder agriculture, and as a critical link between inclusive rural and urban economies Fifth, smallholders often lack strong institutional and social capital to influence policy- and decision-making processes or to negotiate favourable terms of market participation or access to key inputs and services Development agencies, supported by an enabling policy framework, can help address this challenge, along with partners within civil society, starting from farmers’ organizations themselves IFAD’s experience amply shows the transformative potential of such partnerships and the centrality of farmers’ empowerment in smallholder development viii FOREWORD The authors who have contributed to this book address these and other issues in depth, drawing on the papers they presented at the 2011 IFAD Conference and on additional research Our aim in publishing this book is to promote further discussion on the future of smallholder agriculture in a rapidly changing world I am confident that this volume will greatly enrich the ongoing policy debate and dialogue, helping us to chart a path that will lead to the full integration of smallholder farmers in a global agenda for sustainable and inclusive development Kanayo F Nwanze President, International Fund for Agricultural Development (IFAD) Rome, Italy December 2013 n ACKNOWLEDGEMENTS This volume owes a lot to the vision of the President of IFAD, Kanayo Felix Nwanze, who believes that smallholder agriculture of developing countries can not only be self-sustaining, but can also contribute towards food selfsufficiency of poor countries and be the driving force for economic growth and overall development if market and entrepreneurial skills of smallholder farmers can be harnessed With appropriate support, smallholdings can be developed as farm business enterprises He encouraged the Strategy and Knowledge Management Department of IFAD, under the leadership of Henock Kifle, to organize a conference on the future of smallholder agriculture in 2011 The conference, conceptualized and guided by Henock Kifle, and enthusiastically supported and contributed to by the members of the Department, attracted considerable attention among development experts, academicians, civil society representatives, and the private sector The conference participants and the chairpersons/facilitators contributed greatly towards understanding various issues relating to smallholder development The four young rapporteurs to the conference (Arindam Banerjee, Antonio Ferreira, Mateo Mier, and Jennifer Smolak) ably captured and shared with all the participants the essence of the two-day conference All these helped to shape the focus of this edited volume We would like to thank them all for their contributions The papers presented at the conference provided much of the material for the book; however, some key gaps in analysis emerging from the conference were filled up by a number of post-conference papers from experts We thank all the authors for their contributions Carlos Sere who took charge of the Strategy and Knowledge Management Department from Henock Kifle kept up the momentum for the book, leading, guiding, and providing the right support as needed He went through some of the chapters and provided valuable comments Without his enthusiastic support, this volume would not have materialized The chapters were reviewed by a number of referees, whose comments and suggestions were very helpful in improving the quality of the chapters We note the contributions made in this respect by Derek Byerlee, Alain de Janvry, John Farrington, Kjell Havenvik, Saleemul Huq, Nurul Islam, Stephen Klerkx, Jonathan Mitchell, S R Osmani, Frank Place, Collin Poulton, Agnes Quisumbing, Caludia Ringler, Ashwani Saith, Geoff Tyler, and Sajjad Zohir We also thank the four anonymous referees of the Oxford University Press whose .. .New Directions For Smallholder Agriculture New Directions For Smallholder Agriculture Edited by Peter Hazell and Atiqur Rahman Great Clarendon Street, Oxford, OX2 6DP, United Kingdom Oxford... Conference on New Directions for Smallholder Agriculture to provide a forum for renowned specialists and IFAD’s own experts to discuss the many challenges and opportunities that smallholder agriculture. .. role for small farms? Structure of the book 1 PART I THE STATE OF SMALLHOLDER AGRICULTURE IN THE DEVELOPING WORLD On being a smallholder Gordon Conway Right place, right time: the state of smallholders