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.) ISBN 978–0–19–968935–4 (Pbk.) 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 560 INDEX Asia (cont.) migrant remittances 383 mobile banking 223 horticulture production 76 income sources 389 irrigation 46 land degradation 379 land distribution 38 land ownership patterns 379 livestock products 76–7 market access farmer companies 204–7, 210 Producer Organizations (POs) 203–4 and public–private partnerships 200–203 role of non-governmental organizations (NGOs) 196 role of private sector 197–200, 209–10 role of the state 190–95 non-farm economy 392 non-farm income shares 529 number of small farms 69–70 rain-fed systems research 325 rural demographics 384–5 rural non-farm economy (RNFE) 484–5 rural poverty 155 small farm assistance policy 536 smallholder challenges access to services and credit 78 and advantages 184–6 food prices 78 large-farm competition 79–80 productivity decline 78 subcontracts to rural areas 383 trade 41, 42, 75 uncultivated land 39 urbanization 75 women’s empowerment 435 Asian Development Bank Northwest Crop Diversification Project (NCDP) 443–4 Awakening Africa’s Sleeping Giant study (2009) 45, 46, 55–6 Bangladesh 437–8 average farm size 70, 71, 184 climate change impacts 460 contract farming 197 informal finance 216 Labour Force Survey 438 land distribution 71 profit inefficiency 161 Proshika 196 Rural Advancement Committee (BRAC) 196 rural non-farm economy (RNFE) 499 rural poverty 388 small farms, number of 70 women 439 fig empowerment 437 labour force participation 438–43 micro-credit projects 443–53 socio-economic status 435–6 Banking Correspondents system 239, 240 banks see also finance AGRA/bank partnerships 278–80 agricultural lending 282 Asian Development Bank 443–4 Equity Bank, Kenya 278–9 First National Bank (FNB), South Africa 381 Grameen Bank 297 mobile banking 221–2, 223, 381–2 National Bank for Agriculture and Rural Development (NBARD), India 218 National Microfinance Bank, Tanzania 279–80 Standard Bank, Africa 280 Basix, India 200–201 Benin adoption rate of improved maize varieties 253 agricultural lending as share of agricultural GDP 270 interlocked credit system 274 Bihar 197–8 Bill and Melinda Gates Foundation 242, 339 bio-energy 296, 469–70 bio-fuels 296, 308, 317 biotechnology 329–30 crop research 328–31 Botswana average farm size 37 Brazil corporate agribusiness 295 land distribution 38 Burkina Faso agricultural lending as share of agricultural GDP 270 agricultural performance 41 water management schemes 262 business environment 316 business management see also corporate agribusiness agro-dealers 268–9 donor financing 52 INDEX 561 entrepreneurship 547–8 investments 51–2 marketing systems 48, 51 risk 47–53, 62, 156 supply chain integration 52 Cambodia land concessions 79–80 land ownership patterns 379 poverty 72 Cameroon water management schemes 262 cash crops 42, 46, 273–4 Centrale de Securitisation des Paiements et du Recouvrement (CSPR), Benin 274 cereal production 42 CGIAR Centres 325, 331, 333 Chad water management schemes 262 Chile rural poverty 388 China agricultural growth 185 average farm size 70, 184 contract farming 197 corporate agribusiness 292 economic growth 512–13 horticulture production 76 informal finance 216 land degradation 379 non-farm income shares 529 profit inefficiency 161 rural poverty 388 small farms, number of 69 subcontracts to rural areas 383 Citizens’ Network for Foreign Affairs (CNFA), Malawi 269 climate change 470–1 adaptation mechanisms 465–8 bridging local knowledge and modern science: 474–5 information communication technologies (ICT) 472–3 infrastructure investment 475–6, 477–8 market engagement 476–7 pastoralist strategies 467 recognizing local resource rights 473–4 research and technology 472 resilient social systems 475–6 addressing risks 462–5 costs 461–2 deforestation 379 greenhouse gases (GHG) 30, 458–9, 468–9 ‘hot spots’ of vulnerability 460–61 impacts on crop yield 459–60 floods 458 global warming 459 length of growing season 460 rainfall 458, 460 social and welfare 461 infrastructure investment 457 and land degradation 379–80 market opportunities 468–71 access to funding 470–71 biofuel production 468–9 global cap on emissions 468–9 and price volatility 44 projections 459 risk management farm and crop contracts 463–4 insurance 463–5 livelihood diversification 463 and weather index insurance (WII) 235 cluster analysis 160–61 cocoa 42 coffee 42, 59–60 Community Based Adaptation (CBA) 467 Community-managed Village Savings and Credit organizations 219 competition 528–9 Comprehensive Africa Agricultural Development Programme (CAADP) 51, 240, 241 box 8.9 Congo agricultural lending as share of agricultural GDP 270 contract farming in Asia 188–9 in Bangladesh 197 in China 197 as form of corporate/small farm engagement 320–21 in India 193, 233 in Malaysia 192–3 models 197 in Thailand 191–2 cooperatives credit unions 219 Dhruva (India) 196 Horticultural Producers’ Co-operative Marketing and Processing Society Limited (HOPCOMS) 193–4 large and small farms 80 marketing loans 59–60 Safal 194 Turmeric Cooperative (FAPRO) 194–5 562 INDEX corporate agribusiness 288 agro-dealer skills 268–9 benefits, costs, and risks in general 308–9 projects involving small farmers 309–10 business environment 316–17 business models and value chains 298–303 context and scope 288–91 corporate social responsibility (CSR) 321–2 developments bio-energy production 296 concern over security of raw material supply 293–4 interest in agriculture as ‘growth industry’ 293 interest in large-scale farming 294–6 interest in social enterprise 297 south–south investment 296 forms of engagement contract farming 320–21 investment decisions 307–8 nature of transactions 302–3 outcomes 305–6 price determination 304–5 terms and conditions 304 investment decisions external influences 312 internal influences 310–12 small farm ’exclusion’ issue 312–13 market intervention measures 319 parties involved 314–15 policy implications 313–14 and public–private partnerships 316–17 sector growth 293 security of raw material supply concerns 293–4 and the small-farm sector 298 value chain investment 291–3 corporate social responsibility (CSR) 321–2 corporatization 289, 292 corruption perception index (TI) 43 cotton 42, 274 credit see loans credit guarantee schemes 276–8, 545–6 credit unions 219 crop research 328–9, 331 crops see also seeds adoption of new crops 192 cash crops 42, 46, 273–4 cocoa 42 coffee 42, 59–60 cotton 42, 274 diversification 448–9 fox nuts 197 high-value crops 187–9 maize 252 mangoes 196 mushrooms 197 oranges 42 productivity 74 research and development 328–31 rice 42, 55–6 soybeans 45 sugar 42, 293–4 tea 42, 295 tobacco 295 tomatoes 201–2 turmeric 194–5 wheat 42, 184 dadan system 218 decision-support systems (DSS) 335 deforestation 30, 31, 379, 470–71 Democratic Republic of Congo average farm size 37 land distribution 38 demonstration trials 335 Department of Agricultural Extension, Bangladesh 443–4 development projects based on agricultural potential and malnutrition 159–60 fertilizer subsidy programmes 59 marketing loans 59–60 multilateral and bilateral donors 60 temporal and spatial coordination 58–65 operationalizing ‘right place’ 63 operationalizing ‘right time’ 63–5 stakeholder roles 63–5 Dhruva 196 direct finance 224–30 distribution systems direct systems 252–3 fertilizer demand side constraints 257–9 supply side constraints 259–61 seed improved supply initiatives 255–7 supply bottlenecks 254–5 systems 253–5 diversification 448–9, 529 Doing Business Rankings (IFC) 43 donors finance 52 delays in provision 59–60 INDEX 563 International Fund for Agricultural Development (IFAD) 61 role in SSA development projects 64–5 DoubleAPaper, Thailand 313–14 DrumNet IT platform 228 East Asia and Pacific (EAP) cultivation costs 39 infrastructure 40 market access 53 rural poverty 155 Economic Community of West African states (ECOWAS) 257 economic development rural sector and demographic change 384–6 domestic market growth 380–81 impact of globalization 383–4 impact of technology 381–2 infrastructure improvements 383–4 livelihood strategies 389–93 migration 382–3 non-farm economy 392 opportunities and risks 386–9 structural transformation 377–8 economies of scale contract farming 188–9 farmer companies 204–7 public-private partnerships 200–203 Egypt rural poverty 388 El Salvador informal finance 216 employment and agricultural performance 40–41 and education 391, 397 self-employment 391 smallholders and labourers, dichotomy 70 wage employment 391 by gender 440–2 women 391–2 young people 45–6 entrepreneurship policy support 547–8 environmental degradation 379–80 Equity Bank, Kenya 278–9 Ethiopia adoption rate of improved maize varieties 253 average farm size 184 financial services access to finance 219 insurance contracts 232 land distribution 38 rural poverty 388 seed distribution 255 European Emission Trading System 468 exports cash-crops 42 sub-Saharan Africa (SSA) 42 extensification strategy 39, 45–7 Fair Trade 185, 209, 321 Fair Trade Alliance-Kerala (FTA-K) 185 Fairtrade Labelling Organisation (FLO) 185 FARM-Africa 314, 318, 319 farm credit see loans Farm Inputs Promotion Service (FIPS), Kenya 265 farm size, reverse transition drivers 529–31 significance 531–5 economic efficiency perspective 531–2 environmental perspective 533 food security perspectives 532 poverty and income equality perspectives 532–3 farmer companies 204–7, 210 farmer organization 293, 299, 309 role in SSA development projects 64 Farmers’ Produce Promotion Society (FAPRO) 195 farming systems research 334 fertilizers demand side constraints 257–9 farm subsidies 263–4 farmer knowledge about 258–9 Fertilizer Support Program, Zambia 263–4 inappropriate recommendations 259 late delivery impact on profitability 59 output markets 258 packaging 264–5 price and value-to-cost ratio 257–8 supply side constraints 259–61 transportation costs 259–61 use in Africa 257, 261–2 use in rain-fed systems 339 use in sub-Saharan Africa 46 financial instruments 225 financial services see also corporate agribusiness agricultural development banks 238–9, 271–2 agro-dealer access 267, 268 Banking Correspondents system 239, 240 for capital equipment 256 564 INDEX financial services (cont.) context and challenges 215–16, 224–36, 281–2 credit guarantee schemes 276–8, 545–6 credit risk 276–8 dadan system 218 direct finance 224–30 for fertilizer imports 259 financial instruments 225 foreign direct investment 75, 295 formal sector 217–18 fund management 297 guarantee funds 238 informal sector 216–24, 242 developments and limitations 223–4 membership-based organizations 217–19 sanadiq system 219 savings and credit cooperative (SACCOs) 219, 273 insurance climate change risk 462, 463–5 weather index insurance (WII) 230–6 introduction 214–15 land transfers and financial markets 404–5 lending AGRA/bank partnerships 278–80, 282 agricultural development banks 271–2 commercial bank lending 270 interlocked credit systems 273–6 as share of agricultural GDP 270 microfinance 220–2, 272–3, 272–3, 396–7, 437–8 micro-credit projects, Bangladesh 443–53 mobile banking 221–2, 223, 381–2 public sector finance 236–43 public-private partnerships 242 regulation 239–40 remittances 382–3, 392–3, 396–7 rural non-farm economy (RNFE) 505–6 savings 222 social enterprise 297 subsidies 237–8, 261–4, 261–4, 281 trade credit 218, 225, 269 value-chain finance (VCF) 224–30, 243, 273–6, 545 financial instruments 225 model 226 venture-capital 297 warehouse receipt schemes 229 warehouse receipt systems 546 weather index insurance (WII) 243 for women 437–8 First National Bank (FNB), South Africa 381 food chain partnerships 189 food price crisis (2007-8) 44, 262 food production challenges to productivity 250–51 high-value commodities 75–7 input supply systems agro-dealers 265–9 fertilizer 257–61 packaging 264–5 seed 252–7 subsidies 261–4 Food Security at Household level (FoSHol) project 443 foreign direct investment agricultural transformation factor 75 large-scale farms 295 forests 30, 31, 379, 470–71 fox nuts 197 fuel 42 fund management 297 gender inequality 436–7 Gender-Related Development Index (GDI) 437 Ghana adoption rate of improved maize varieties 253 agricultural lending 280 business climate 43 farm subsidies 263 seed laws 256–7 Global Agriculture and Food Security Program (GASFP) (G20) 241–2 Global Good Agricultural Practices (GlobalGAP) 199 Global Harvest Initiative 236 global warming 459 globalization 383–4, 510–12 Grameen Bank 297 Green Revolution 73, 74, 262, 324, 338–9, 536 greenhouse gases (GHG) 30, 458–9, 468–9 guarantee funds 238 Guatemala 166–7 Guinee Bissau agricultural lending as share of agricultural GDP 270 high-value crops 187–9 Himalayan Action Research Centre (HARC) 201–2 INDEX 565 Horticultural Producers’ Co-operative Marketing and Processing Society Limited (HOPCOMS) 193–4 imports fertilizers 259–61 sub-Saharan Africa (SSA) 42 income diversification 529–31 remittances 382–3, 392–3, 396–7 sources 187, 389, 390–92 rural non-farm economy (RNFE) 483–7, 491–3 wage employment 391 India agricultural growth 185 average farm size 70 Bayer Crop Science’s Food Chain Partnership 189 bio-energy production 296 climate change impacts 460 contract farming 188, 233 corporate agribusiness 292 Dhruva 196 economic growth 512–13 fairtrade system 185 farmer companies 207 financial services informal sector 216 insurance contracts 232 the Green Revolution 73, 262, 324 Horticultural Producers’ Co-operative Marketing and Processing Society Limited (HOPCOMS) 193–4 horticulture production 76 Indian Tobacco Company (ITC) 196 Karnataka 193–4 KNIDS Green Pvt Ltd (KGPL) 202–3 land distribution 38, 71 Mahagrapes 201 Maharashtra State Agricultural Marketing Board (MSAMB) 201 market access role of intermediaries 196 role of private sector 197–9 state support 193 Namdhari Fresh (NF) 199–200 National Bank for Agriculture and Rural Development (NBARD) 218 National Co-operative Development Corporation (NCDC) 201 National Horticulture Board (NHB), India 201 National Sample Survey (NSS) 70 non-farm economy 392 poverty and marketed surplus study 80–83 public-private partnerships 200–203 Rural Economic and Demographic Survey (REDS) 81 rural non-farm economy (RNFE) 490 Safal 194 self-help groups, finance (SHG) 217–18 Shakti Sudha Industries 197–8 small farms, number of 69 smallholder agricultural output 72 subcontracts to rural areas 384 Turmeric Cooperative (FAPRO) 194–5 Indian Tobacco Company (ITC) 196 Indonesia horticulture production 76 rural poverty 388 small farms, number of 70 sugar-cane production 293–4 informal finance 216–24, 242 Community-managed Village Savings and Credit organizations 219 credit unions 219 developments and limitations 223–4 membership group structures 218–19 rotating savings and credit associations (ROSCAs) 219 savings and credit cooperative (SACCOs) 219, 273 self-help groups (SHGs) 217–18, 219 trade credit 218 infrastructure capital development and maintenance 317–18 investment against climate change 457, 475, 477–8 investment to reduce poverty 156 market access 53–6 road networks 53 rural non-farm economy (RNFE) 504 rural sector 382 sub-Saharan Africa (SSA) 39–40 input supply systems 254 affordability improvements packaging 264–5 subsidies 261–4, 281 agro-dealers 265–9 challenges faced 267–9 impact on rural input supply, 269 networks 266–7 farm credit AGRA/bank partnerships 279–80 agricultural development banks 271–2 context and challenges 281–2 566 INDEX input supply systems (cont.) microfinance, saving, and credit associations 272–3 value-chain finance (VCF) 273–6 fertilizer demand side constraints 257–9 supply side constraints 257–61 productivity challenges 250–51 seed direct distribution systems 252–3 improved supply initiatives 255–7 market-based approach 253–4 seed fairs 254 supply bottlenecks 254–5 voucher schemes 253–4 insurance climate change risk 462, 463–4 weather index insurance (WII) 230–6 Intellectual Property Regime (IPR) 189 intensive farming 39, 45–7 Intergovernmental Panel on Climate Change (IPCC) 459 interlocked credit market arrangements 273–6 International Centre for Tropical Agriculture (CIAT) 334 International Fertilizer Development Center (IFDC) 39 International Finance Corporation 43 International Food Policy Research Institute (IFPRI) 75 International Fund for Agricultural Development (IFAD) Rural Poverty Reports 36, 47, 62 sanadiq system 219 Small Farmers Development Project, Bangladesh 443 International Institute for Environment and Development’s (IIED) 466, 467 International Land Coalition 45 International Rice Research Institute (IRRI) 334 international trade 41–2, 75 Internet 513 intra-regional trade 42–3 irrigation 46, 52 Ivory Coast corporate agribusiness investment 313–14 Japan agricultural growth 185 Jatropha 296, 308 Karnataka 193–4 Kenya adoption rate of improved maize varieties 253 agricultural lending 270, 279 agricultural performance 41 agro-dealers 266, 267, 269 Equity Bank 278–9 export-oriented value chains 275 Farm Inputs Promotion Service (FIPS) 265 informal finance 216 mobile banking 381–2 self-employment 392 smallholders and green beans 304 Sustainable Community-Oriented Development Program (SCODP) 265 Tea Development Agency 295 water management schemes 262 Kenya Tea Development Agency 295 KNIDS Green Pvt Ltd (KGPL) 202–203 Korea agricultural growth 185 Kyoto Protocol Clean Development Mechanism 468 labour force participation see also employment men 439, 440–2, 450–1 women 439 agriculture and non-agriculture 440–2 economic activities 439–40, 450–1 survey data 438–43 labourers 70 land availability and quality 38–40 acquisition by large-scale investors 378 degradation 379–80, 387 land fragmentation 378 ‘land grabs’ 294–5 landlessness 378–9 local resource rights 473–4 ownership patterns 378–9, 387 policy and legislation 546–7 power relations 405–6 concessions (Cambodia) 79–80 degradation 30 distribution 37–8 Asia and the Pacific 70–71 Latin America and Caribbean (LAC) 156 INDEX 567 sub-Saharan Africa (SSA) 37–8 governance 410–16 enforcement and dispute resolution 412–14 public ownership 414–19 registration of individual rights 419–23 securing, enforcing, and allowing transferability 410–12 irrigation and water management 46–7 property rights, securing background and motivation 401–3 benefits of existing systems 408 costs 409–10, 423–5 distributional challenges 406–7 gender equity 425–7 investment incentives 404 land transfers and financial markets 404–5 power relations 405–6 seed and fertilizer use 46 Laos poverty 72 large-scale farms corporate interest in 294–6 foreign direct investment 295 Latin America and Caribbean (LAC) agricultural performance 40, 155 average farm size 515 corporate agribusiness 292, 295 income sources 389 intra-regional trade 42 irrigation and water management 46 land distribution 38, 156 non-farm economy 392 non-farm income shares 529 rural access to market towns 53 rural demographics 384–5 rural non-farm economy (RNFE) 484–5 growth in total rural employment 2000-8 487 rural poverty 389 uncultivated land 39 livelihood strategies 389–93 income sources 389, 391 migration 392–3 opportunities and risks 389–90 role of agriculture 390–91 support for 393–8 migration policy 396 risk management 394, 397–8 role of member-based organizations 397–8 rural finance innovations 395, 396–7 loans see also finance AGRA/bank partnerships 278, 282 Equity Bank, Kenya 278–9 National Microfinance Bank, Tanzania 279–80 Standard Bank, Africa 280 agricultural development banks 271–2 to cooperatives 59–60 credit guarantee schemes 276–8 credit risk 276–8 for marketing purposes 59–60 rural non-farm economy (RNFE) 505–6 as share of agricultural GDP 270 Madagascar high-value commodity chains 275 Maendeleo Agricultural Enterprise Fund 318 Mahagrapes, India 201 Maharashtra State Agricultural Marketing Board (MSAMB) 201 maize 42, 252 Malawi adoption rate of improved maize varieties 253 Agricultural Input Subsidy Programme 263 agricultural performance 40–41 agro-dealers 266, 269 Citizens’ Network for Foreign Affairs (CNFA) 269 insurance services 232 migrant remittances 383 tobacco sector 295 Malawi Agricultural Input Subsidy Programme 263 Malaysia contract farming 192–3 informal finance 216 Sarawak Economic Development Corporation (SEDC) 192–3 Mali adoption rate of improved maize varieties 253 agricultural lending as share of agricultural GDP 270 mangoes 196 market access in Asia 185–6 conceptual framework 189–90, 191 constraints and challenges 186–7, 208–10 farmer companies 204–7, 210 female farmers 449–50 and food demand and supply 380–81 568 INDEX market access (cont.) for high-value crops 187–9 impact on productivity 53–6 intermediary role non-governmental organizations (NGOs) 196 private sector 197–200, 209–10 linkages 543–4 models 207–10 Producer Organizations (POs) 203–4 and public–private partnerships 200–203 state support 190–5, 208–9 transportation costs 53–8 market risk 186–7 and access to markets 188 new crops 191 marketed surplus poverty and marketed surplus study (India) 80–83 marketing loans 59–60 marketing systems and indicative risks 48, 51 Mars Inc 313 Mexico growth in total rural employment 2000-8 487–8 informal finance 216 migrant remittances 383 subcontracts to rural areas see also under individual countries microfinance 220–22, 272–3, 396–7, 437–8, 453–5 Northwest Crop Diversification Project (NCDP) 443–54 rural non-farm economy (RNFE) 505–6 weather index insurance (WII) 230–6 micro-regions 160–61 typology analysis 157–9 cluster analysis 160–61 environmental variables 166–7 estimation 163–4 farm level to spatial analysis 164–6 model 162–3 poverty maps 159–60 production inputs and environmental factors 164 stochastic profit frontier model 157–9 Middle East and North Africa (MENA) agricultural performance 40 equality of land distribution 38 land degradation 379 rural access to market towns 53 migration 382–3, 392–3 impact on rural non-farm economy (RNFE) 509–10 policy 396 mining products 42 Mission NewEnergy 296 mobile technology 221–2, 223, 381–2, 473 Mother Dairy 194, 201–2 Mozambique 166–7 adoption rate of improved maize varieties 253 agricultural lending 280 average farm size 37 corporate farming ventures 294 M-PESA 222, 381–2 MTN Uganda 381 mushrooms 197 Namdhari Fresh (NF) (India) 199–200 National Agricultural Research Institutes (NARI) 325 National Bank for Agriculture and Rural Development (NBARD) 218 National Co-operative Development Corporation (NCDC), India 201 National Horticulture Board (NHB), India 201 National Microfinance Bank, Tanzania 279–80 National Sample Survey (NSS) (India) 70 Nepal average farm size 70 climate change impacts 460 informal finance 216 Network of Farmers’ and Agricultural Producers’ Organisations of West Africa 51 Niger agricultural lending as share of agricultural GDP 270 Nigeria adoption rate of improved maize varieties 253 agricultural lending as share of agricultural GDP 270 average farm size 37 seed laws 256–7 water management schemes 262 non-governmental organizations (NGOs) 315, 319 Himalayan Action Research Centre (HARC) 201–2 INDEX 569 market access intermediation 196 Bangladesh Rural Advancement Committee (BRAC) 196 Basix, India 200–201 Dhruva 196 Proshika (Bangladesh) 196 micro-credit projects, Bangladesh 443–4 role in SSA development projects 64 NorminCrop, Philippines 207 North Africa uncultivated land 39 Northwest Crop Diversification Project (NCDP) 443–4, 453–5 data and methodology 444–5 objectives 444 participation, by gender 450–51 project impact crop diversification 448–9 market access 449–54 on social empowerment 451–2 women’s empowerment 452–3 project interventions credit provision 447 training provision 447–8 socio-economic profile of farmers 446–7 nucleus estate model 45 Official Development Assistance (ODA) 237 oranges 42 outgrower 292, 297, 299, 301, 304, 310 Pakistan average farm profit inefficiency 161 average farm size 70 climate change impacts 460 horticulture production 76 informal finance 216 land distribution 71 transportation costs 56 Palli Karma Sahayak Foundation (PKSF) 443 palm oil 42, 292 Panama migrant remittances 383 patient capital 297, 318 Pepsico, India 200–201, 233 Phatisa Fund Managers 297 Philippines average farm size 70 farmer companies 204, 207 informal finance 216 mobile banking 381 plantations 44, 45 policy land governance 410–16 enforcement and dispute resolution 412–14 public ownership 412–14, 415–19 securing, enforcing, and allowing transferability 410–12 small farm assistance access to finance 545–6 access to improved technology 542–3 access to land 546–7 access to seeds and fertilizer 544–5 building resilience 549 country context 535–7 delivering assistance 553–4 entrepreneurship support 547–8 by farm type 537–42 farms in transition 550–51 market access 543–4 potential benefits 541 priorities for small farms by country economic characteristics 536 subsistence-oriented farms 551–2 targeting assistance 552 sub-Saharan Africa (SSA) expenditure allocation for agriculture 44 intensification strategy 45–7 land extensification strategy 39 land intensification strategy 39 post-harvest losses sub-Saharan Africa (SSA) 47 poverty 386–9 cluster analysis 160–61 decline in rural populations 385 and demographic change 384–6 impact of land degradation 379–80, 387 impact of remoteness to market 53–8 land issues acquisition by large-scale investors 378 land fragmentation 378 ownership patterns 378 livelihood strategies 389–93 income sources 187, 389, 390–92 opportunities and risks 389–90 role of agriculture 390–91 support for 393–8 maps 159–60 reduction instruments infrastructure development 156 partnership institutions 156 risks 386–9 rural populations in developing countries 155 570 INDEX poverty (cont.) typology framework access to markets and income generation 157 geographical interdependence 157 production efficiency 157 poverty maps 159–60 price volatility and climate change 44 Primary Marketing Organisation (PMO) 199 private equity 297 private sector see also corporate agribusiness interest in agriculture as ‘growth industry’ 293 market access intermediation 197–9, 209–10 role in SSA development projects 64 Private Sector Window (GASFP) 241 Producer Organizations (POs) 203–4 production risk 186–7 adoption of new crops 192 productivity foodgrains 76 the Green Revolution 74 high-value commodities 75–6 profit inefficiency 161 profit efficiency environmental variables 166–7 property rights background and motivation 401–3 benefits of existing systems 408 costs 409–10, 423–5 distributional challenges 406–7 gender equity 425–7 importance of securing land rights 403–4 investment incentives 404 land governance 410–16 enforcement and dispute resolution 412–14 registration of individual rights 419–23 securing, enforcing, and allowing transferability 410–12 land transfers and financial markets 404–5 public ownership 414–16 registration and mapping 415–19 Proshika 196 public sector finance 236–43 public-private partnerships for finance 242 investment in poorly functioning investment in poorly functioning value chains 317–19 for market access 200–203 Sierra Leone 61 sub-Saharan Africa (SSA) 45 Rahman, Atiqur 36n rainfall 458, 460 see also irrigation sub-Saharan Africa (SSA) 39, 46 rain-fed farming systems 333 rain-fed systems 542–3 adaptive research sites 335–6 fertilizer use 339 research 324–5 scale economies in increased productivity 338–9 technology design 327 Reducing Emissions from Deforestation and Forest Degradation (REDD) 31, 467, 470–71 refinancing 242 remittances 382–3, 392–3, 396–7 renewable energy 296 renewable sources 44 research climate change adaptation 472 research and development adaptive research 326, 333–8 decision-support systems 335 demonstration trials 335 dissemination strategies 336 experimental designs 334 farm classification 335–6 farmer-led research 334 scaling-up processes 336–7 biotechnology 329–30 CGIAR Centres 325, 331, 333 crop research 328–31 dissemination 326 extension approaches 339–44 models 326 National Agricultural Research Institutes (NARI) 325 organizational frameworks 349–51 outcomes 326–7 production systems 332–3 R&D institution design 344–7 organizational constraints 347–8 research hierarchies and the smallholder 348–9 rain-fed farming systems 333 rain-fed systems 324–5 smallholder adoption 335 technology design 327–33 resource management and systems 335 technology design 326, 327–33 research institutions INDEX 571 role in SSA development projects 64 resource management 330–1 retail sector Asia-Pacific 77–8 rice 42, 55–6 risk climate risk 261–2 management mechanisms 462–5 commercial 186–7 commercial risk 186–7 corporate agribusiness investment in general 308–9 projects involving small farmers 309–10 credit risk 276–8 fertilizer use 259 market risk 186–7, 188 new crops 191 minimization 386–9 production risks 186–7 rural livelihood strategies 389–90 and weather index insurance (WII) 230–36 risk management 47–53 agro-ecological contexts 49–50 associated with smallholder supply chains 51 and default risk 278 and investment 62 and marketing systems 48, 51, 156 ‘risk–return’ ladder 47 rural livelihood strategies 394, 397–8 rotating savings and credit associations (ROSCAs) 219 Rural Development Strategy (World Bank) 69 Rural Economic and Demographic Survey (REDS) 81 rural finance see finance rural non-farm economy (RNFE) agrarian rural economy 514 contribution to jobs and income 483–7 definition 484 development under differing conditions 499 linkages and multipliers 496–7 links to urban areas 495–6 patterns 498–9 stagnation 497–8 supply of non-farm goods and services 498 tradeables and the economic base 494 financial services 505–6 growth 482–3 importance 487–8 impact on poverty and inequality 491–3 industrial clusters 507–8 infrastructure 504 local agglomeration economies 506–7 measurement 484 opportunities and risks demographic transitions 510 environmental services 513–14 globalization and liberalization 510–12 large emerging economies 512–13 migration 509–10 technology advances 513 urbanization and national economic growth 508–9 peri-urban economy: 514–15 policies 500–508 remote regions 506–7, 515 sectors 488–91 manufacturing 488, 490–1 public services 488, 490 seasonal employment 490–1 and urban hierarchies 506–7 rural populations 81 typology framework access to markets and income generation 157 geographical interdependence 157 production efficiency 157 stochastic profit frontier model 157–8 Rural Poverty Report (IFAD) (2011) 36, 47, 62 rural sector demographics 384–6 dependency ratios 385 development agenda 394–8 finance 396–7 impact of globalization 383–4 infrastructure 382, 383–4 land acquisition by large-scale investors 378 environmental degradation and climate change 379–80, 387 land fragmentation 378 ownership patterns 378–9, 387 livelihood strategies 389–93 income sources 389, 390–2 migration 392–3 opportunities and risks 389–90 role of agriculture 390–91 support for 393–8 market access 380–81 migration 382–3 572 INDEX rural sector (cont.) mobile phone ownership 381–2 non-farm economy see rural non-farm economy (RNFE) opportunities and risks 386–9 poverty rates 385 structural transformation 377–8 Rwanda business climate 43 farm subsidies 263 loans to cooperatives 59–60 trucking industry 57 SABMiller 314, 319 Safal 194 sanadiq system 219 Sarawak Economic Development Corporation (SEDC) 192–3 savings 222 savings and credit cooperatives (SACCOs) 219, 273 seeds distribution 544–5 direct distribution systems 252–3 improved supply initiatives 255–7 market-based approach 253–4 seed fairs 254 supply bottlenecks 254–5 voucher schemes 253–4 laws and regulations 256–7, 544–5 packaging 264–5 self-employment 391 self-help groups, finance (SHG) 217–18, 219 Senegal agricultural lending as share of agricultural GDP 270 agricultural performance 41 export-oriented value chains 275 self-employment 392 water management schemes 262 Shakti Sudha Industries 197–8 sharecropping 463–4 Sidai Africa Ltd 318 Sierra Leone public–private partnerships (PPPs) 61 Silver Street Capital LLP 297 Small Farmers Development Project 443 social enterprise 297 social learning 337 social mobility 451–2 social networks 337 south–south investment 296 soybeans 42, 45 Sri Lanka average farm size 70 farmer companies 204–6 major commercial activities 206 informal finance 216 Standard Bank, Africa 280 stochastic profit frontier model 157–8 structural transformation 377–8 and demographic change 384–6 domestic market growth 380–81 environmental degradation and climate change 379–80, 387 and globalization 383–4 impact of technology 381–2 and improved infrastructure 383–4 and migration 382–3 opportunities and risks 386–9 sub-Saharan Africa (SSA) 45–7, 46, 47 agricultural growth 40–41, 62, 155–6 agro-ecology 39, 49–50 average farm size 37–8 business climate 43, 47 business management 51–61 donor financing 52 risk management 47–53 supply chain integration 51–2 cash-crops 42, 46 climate 39, 46 corporate agribusiness 294, 295 development projects 52–3 fertilizer subsidy programmes (SSA) 59 loans to cooperatives 59–60 stakeholder roles 63–5 temporal and spatial coordination 58–61, 63–4 trade 41–3 extensification strategy 39, 45–7 geographic isolation 53–6 income sources 389 informal economy 43 infrastructure communications 40 electricity 39–40 road networks 53 roads 39, 52 transportation costs 53–8 land availability and quality 38–40 distribution 37–8, 379 cultivation costs 39–40 irrigation and water management 46 seed and fertilizer use 46, 52 soil types 39 uncultivated land 45–7 INDEX 573 low technology adoption, factors 250–51 market access 53 plantations 44, 45 population density 53 rural access to market towns 53–6 smallholder opportunities intensification strategy 45–7 public expenditure support 44 public–private partnerships 45 uncultivated land resources 44 trade 41–3 imports and exports 41–2, 55 intra-regional 42–3 transportation costs 53–6 high price factors 56–8 impact on productivity 53–6 subsidies 237–8, 261–4, 281 Sudan corporate farming ventures 294 sugar 42, 293–4 supermarkets 78, 380 supply chains corporate linkage for smallholders 199–200 and indicative risks 51 integration 51–2 management 197–9 sustainability environmental degradation and climate change 379–80 Sustainable Community-Oriented Development Program (SCODP), Kenya 265 Syria sanadiq system 219 Taiwan adoption of new crops 191 agricultural growth 185 Tanzania adoption rate of improved maize varieties 253 agricultural lending 280 corporate farming ventures 294 farm subsidies 263 mobile banking 381 National Microfinance Bank 279–80 seed laws 256–7 water management schemes 262 tea 42, 295 technology adoption factors 250–1, 280, 325, 327–8, 335–8 assisting small farms 542–3 biotechnology 329–30 for climate change adaptation 472–3 Internet 513 mobile banking 221–2, 223, 381–2 mobile phones 473, 513 packaging systems 264–5 rain-fed systems 542–3 technology design crop research 328–31 production systems 332–3 rain-fed farming systems 333, 324–5, 327–33 tailored to needs 327 telecommunications 40 Thailand adoption of new crops 191–2 average farm size 71 contract farming 191–2 corporate agribusiness investment 313–14 informal finance 216 land distribution 71 tobacco 295 tomatoes 201–2 trade imports and exports 41–2, 55, 259–61 intra-regional 42–3 liberalization 75, 102 sub-Saharan Africa (SSA) 41–3 trade credit 218, 225, 269 Training and Visit (T&V) systems 339 Transaction costs 295, 299, 301, 310, 311, 314, 320 Transparency International (TI) corruption perception index 43 transportation costs corrupt practices 57–8 fertilizers 259–60 global comparison (2007) 55 high price factors 56–8 impact on fertilizer prices 54–5 impact on productivity 53–6 trucking industry 56–8 Tropical Soil Biology and Fertility Programme (TSBF) 335 turmeric 194–5 Turmeric Cooperative (FAPRO), India 194–5 Uganda adoption rate of improved maize varieties 253 agricultural lending 280 574 INDEX Uganda (cont.) agro-dealers 267, 268 equality of land distribution 38 informal finance 216 mobile banking 381 rural poverty 388 services offered by stockists to farmers 266 uncultivated land East Asia and Pacific (EAP) 39 sub-Saharan Africa (SSA) 39, 44 extensification strategy 45–7 urbanization Asia-Pacific region 75 and food demand and supply 380–1 impact on rural non-farm economy (RNFE) 495–6 rural-to-urban migration 382–3 value chains access to finance and agricultural inputs 275 constraints and challenges 186–7 coordination 292, 300, 301, 309, 319 corporate agribusiness see corporate agribusiness and food demand and supply 380–81 small farmers’ participation 300–3 value-chain finance (VCF) 224–30, 273–6, 545 financial instruments 225 model 226 243 Vasundhara 196 venture-capital 297 vertical integration 300, 301 Vietnam horticulture production 76 small farms, number of 70 Vodacom Tanzania 381 warehouse receipt finance 229, 546 water management 46, 261–2 weather index insurance (WII) 230–6, 243 Weather Risk Management Services (WRMS) 233 West Africa Agricultural Investment Fund (WAAIF) 256 wheat 42, 184 wholesale sector Asia-Pacific 77 women decision-making, involvement in 452–3 employment opportunities 391–2 empowerment 434, 452–3, 548–9 labour force participation 435–8, 439, 453–4 agriculture and non-agriculture 440–2 decision-making 437 economic activities 439–40 financial considerations 437–8 rates of engagement 436 survey data 438–43 micro-credit projects, Bangladesh 443–4 data and methodology 444–5 objectives 444 project impact 448–53 project interventions 447–8 socio-economic profile of NCDP farmers 446–7 property rights 425–7, 436–7, 548–9 smallholders 38 socio-economic status 434–8, 446–7, 454 Women’s Empowerment Index (WEI) 452–3 World Bank Awakening Africa’s Sleeping Giant study (2009) 45, 46, 55–6 rural development strategy 69 rural finance strategy 237 Training and Visit (T&V) systems 339 World Development Report (2008) 389 Zambia adoption rate of improved maize varieties 253 average farm size 37 Fertilizer Support Program 263–4 water management schemes 262 Zimbabwe adoption rate of improved maize varieties 253 .. .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