Africa: Neglecting Agriculture, 10/24/07

AfricaFocus Bulletin
Oct 24, 2007 (071024)
(Reposted from sources cited below)

Editor's Note

"The central finding of the study is that the agriculture sector has been neglected by both governments and the donor community, including the World Bank. ..The Bank's limited and, until recently, declining support for addressing the constraints on agriculture has not been used strategically to meet the diverse needs of a sector that requires coordinated intervention across a range of activities." - World Bank Independent Evaluation Group

In its World Development Report for 2008, released on October 19 and entitled "Agriculture for Development," the World Bank stressed the importance of a renewed emphasis on agriculture. The report argues that "for the poorest people, GDP growth originating in agriculture is about four time more effective in reducing poverty than GDP growth originating outside the sector.

The report, which was covered extensively in the international press, is available, along with much related material, on the World Bank website at http://go.worldbank.org/ZJIAOSUFU0

In this and another Bulletin sent out today, AfricaFocus presents excerpts from two related reports that have received much less press attention. The first, the executive summary of which is below, is a highly critical report of the World Bank's record on agriculture from its own Independent Evaluation Group. The second, a report from the EcoFair Trade Dialogue on "What the World Bank Missed," is excerpted in another AfricaFocus Bulletin

The U.S. Farm Bill, which the Senate is due to discuss this week, is likely to be renewed with little or no reforms demanded by critics. For background on the bill and its implications for international agriculture, see the resource page from the Wilson Center at http://tinyurl.com/39x6vo

++++++++++++++++++++++end editor's note+++++++++++++++++++++++

World Bank Assistance to Agriculture in Sub-Saharan Africa An IEG Review

2007

World Bank Independent Evaluation Group

The Independent Evaluation Group (IEG) is an independent unit within the World Bank Group. The goals of evaluation are to learn from experience, to provide an objective basis for assessing the results of the Bank Group's work, and to provide accountability in the achievement of its objectives.

http://www.worldbank.org/ieg

Observations

• Agricultural development in Africa is a complex technical, economic, social, and political challenge that has to be overcome if the Region is to reduce extreme poverty and hunger to meet the first Millennium Development Goal.
  
  
• Given the diverse constraints to agricultural development in Africa, the strategy for the development of the sector needs to be multifaceted, with coordinated interventions across a range of activities.
  
  
• The Bank has had limited success in helping address the challenges of agricultural development in Africa.
  
  
• The Bank now has an opportunity, drawing on its comparative advantage as a multisector lending institution and as the single largest donor to African agriculture (during 1990 2005), to help ensure a coordinated and multifaceted approach to agriculture development in Africa.

Executive Summary

[Excerpts only. For full executive summary and full report see http://go.worldbank.org/PPY96H0ES0]

Sub-Saharan Africa is a highly complex Region of 47 countries with 7 distinctly different colonial histories. It is also highly diverse, with more than 700 million people and at least 1,000 different ethnic groups. The Region is a critical development priority. It includes some of the world's poorest countries, and during the past two decades the number of poor in the Region has doubled to 300 million more than 40 percent of the Region's population. Africa remains behind on most of the Millennium Development Goals (MDGs) and is unlikely to reach them by 2015.

A major drag on Africa's development is the underperformance of the agriculture sector. This is a critical sector in the Region, because it accounts for a large share of gross domestic product (GDP) and employment. The weak performance of the sector stems from a variety of constraints that are particular to agriculture in Africa and make its development a complex challenge. Poor governance and conflict in several of the countries further complicate matters. IEG has assessed the development effectiveness of World Bank assistance in addressing constraints to agricultural development in Africa over the period of fiscal years 1991 2006 in a pilot for a wider assessment of the Bank's assistance to agriculture worldwide.

The central finding of the study is that the agriculture sector has been neglected by both governments and the donor community, including the World Bank. The Bank's strategy for agriculture has been increasingly subsumed within a broader rural focus, which has diminished its importance. Both arising from and contributing to this, the technical skills needed to support agricultural development adequately have also declined over time.

The Bank's limited and, until recently, declining support for addressing the constraints on agriculture has not been used strategically to meet the diverse needs of a sector that requires coordinated intervention across a range of activities. The lending support from the Bank has been "sprinkled" across various agricultural activities such as research, extension, credit, seeds, and policy reforms in rural space, but with little recognition of the potential synergy among them to effectively contribute to agricultural development. As a result, though there have been areas of comparatively greater success research, for example results have been limited because of weak linkage with extension and limited availability of such complementary and critical inputs as fertilizers and water. Hence the Bank has had limited success in contributing to the development of African agriculture.

The Challenges of African Agriculture

Agricultural output has grown in Africa, but it is difficult to calculate a reliable growth rate for the Region over the study period because of wide variations across countries and over time. Some countries, such as Gabon, moved from poor performance in 1990 2000 to better performance in 2000 04; others, such as Malawi, moved in the opposite direction. The change has often been dramatic, which makes aggregate growth rates misleading. For example, agriculture in Angola grew at 13.7 percent a year during 2000 04, although growth had retreated by 1.4 percent yearly during 1990 2000. Only about a quarter of the countries in the Region, among them Benin, Burkina Faso, Ghana, Nigeria, and Tanzania, show consistent agricultural growth of over 3 percent in the 1990 2004 period.

Total agricultural output in Africa consists primarily of food crops. Agricultural export crops account for less than 10 percent of total production. While some export crops, including cotton, have contributed to poverty alleviation in countries such as Burkina Faso, food crops have performed poorly in most countries. Cereal yields in Africa, even in 2003 05, were less than half those in South Asia and one-third those in Latin America. Africa also lags behind other Regions in the percentage of cropland irrigated, fertilizer use, and labor and land productivity per worker. While the great strides in South Asia's agricultural production from 1961 to 2001 were mainly the result of increased yields, gains in food production in Africa were produced primarily through the expansion of cultivated land. Meanwhile, crop yields stagnated.

Beginning in 1973, Africa became a net food importer. Since that time, food production has not kept pace with the rapidly growing population, and food imports have grown rapidly. Meanwhile, Africa's exports, which are primarily agriculture-based, declined; for several commodities, including coffee, the Region's share of the world market evaporated. Agricultural subsidies in Organisation for Economic Co-operation and Development (OECD) countries have played a major role in keeping world prices low for several of these crops. This, among other factors, has impacted the adequacy of returns to farmers.

Agriculture in Africa is primarily a family activity, and the majority of farmers are smallholders who own between 0.5 and 2.0 hectares of land, as determined by socio-cultural factors. Women provide about half of the labor force and produce most of the food crops consumed by the family.

Agricultural land in Africa falls into several agroecological zones that run across countries. It is largely characterized by poor soils, highly variable rainfall, and frequent droughts. Transport infrastructure is poor, access to irrigation is limited, and under rain-fed conditions, chronic food insecurity is a reality for millions of small farmers. To survive in this harsh environment, most farmers rely on diversified coping strategies. To ensure at least some produce from their land, African farmers normally plant several varieties of crops (typically 10 or more) with different maturation periods, together with trees. Livestock is also an important source of security for farmers in Africa, particularly in lean years. The average smallholder's access to credit is also extremely limited. Hardy crops such as millet, sorghum, cassava, and other root crops are more important than cereals such as rice and wheat, which were the mainstay of the Asian Green Revolution.

In this environment, for farmers to have an incentive to practice intensive agriculture and take risks with new crop varieties, a number of factors need to come together at the same time, or at least appear in an optimal sequence, including improved seeds, water, credit, and access to markets; good extension advice; and adequate returns through undistorted prices for inputs and outputs. A strategy for development of agriculture in Africa must consider each of these factors in the context of Africa's unique characteristics and specific local conditions.

Past Approaches to African Agriculture

Until very recently, agricultural development in Africa was neglected by both governments and donors. During the 1960s, immediately following independence, governments in several African countries considered agriculture primarily a source of resources for industrialization. Then, in the 1970s, the World Bank led the shift toward a broader development model in Africa that was consistent with a more general shift in the understanding of development. This committed the institution to integrated rural development to directly attack Africa's rural poverty and underdevelopment. In the mid-1980s, when African countries faced severe fiscal crises, donors prioritized improvements in the efficiency of resource allocation and pressed agriculture marketing reforms. But structural reforms also fell short of producing the desired growth effects.

The Role of Aid

Bilateral and multilateral donor aid for development of African agriculture declined from $1,921 million in 1981 to $997 million in 2001 (in 2001 dollars). Lending from both sources has since rebounded with the increasing focus on African development. OECD data show that although bilateral donors as a group have played a comparatively larger role, the World Bank was the single largest donor to African agriculture between 1990 and 2005. The largest bilateral donors were the United States and Japan.

Foreign private sector flows into Africa are modest in comparison with bilateral and multilateral aid (Hazell and von Braun 2006). Private commercial investment in African agriculture has been largely limited to export crops and higherpotential zones. A number of international seed companies have invested in maize seed multiplication, and in September 2006 the Rockefeller and Bill and Melinda Gates Foundations together launched a new partnership to help Africa develop its agriculture.

Agriculture's Potential and the Bank's Strategy

For Africa to meet the MDGs, it will be necessary to realize the potential of the agriculture sector, to provide the support needed for it to contribute to growth and poverty reduction. Research by Dorosh and Haggblade (2003) and IFPRI (2006a) found that investments in agriculture generally favor Africa's poor more than similar investments in manufacturing.

The World Bank has not had a separate strategy for agriculture in Africa except as part of its wider rural development strategies, and over time the agriculture strategy was subsumed in a broader rural focus. More recently, however, the Africa Action Plan has recognized the agriculture sector as a potential driver of growth.

The Bank's Overall Assistance and Its Assessment

Over fiscal years 1991 2006, the Bank provided the countries of the Africa Region with $2.8 billion in investment lending (as distinct from adjustment lending) in agriculture, constituting 8 percent of total Bank investment lending to the Region. A large part of this lending has been in the form of agriculture components in rural projects. In addition, there have been 77 Development Policy Loans with agriculture components, and in 18 of these, agriculture was a significant dimension.

This limited investment lending has performed below par. IEG data show that the percentage of satisfactory outcome ratings for largely agricultural investment projects during 1991 2006 is lower than that for non-agriculture investments in the Region (60 against 65 percent satisfactory). It is also lower than the percentage for similar investment projects in other Bank Regions (73 percent satisfactory). Sustainability ratings are also below average. Although further analysis is needed, the study found that largely agricultural projects in countries with less favorable agricultural conditions have done better than similar projects in countries with more favorable conditions.

The Bank's activities in support of agricultural development in Africa have comprised lending, analytical work, and policy advice. Until very recently the analytical work necessary for the diagnosis of issues and actions and to help shape the policy advice and lending has been limited, scattered, of variable quality, and not easily available. In addition, IEG found that there are no specific procedures in place to ensure that the findings of analytical work are systematically reflected in lending and policy dialogue.

IEG found that the lending support provided by the Bank has not reflected the interconnected nature of agriculture activities. Rather, the lending has been "sprinkled" across an array of activities in rural space, including research, extension, marketing reform, drought relief, seed development, and transport, but with little recognition of the relationships among them and the need for all of these areas to be developed at the same time, or at least in an optimal sequence, to effectively contribute to agricultural development. While the Bank's broader rural focus from the mid-1980s was justified, an unintended result was that it led to less focused attention on the need for various activities that are critical for agricultural development in rural space to come together at the same time or to take place in some optimal sequence.

This review found that none of the top 10 borrowers, among them Côte d'Ivoire, Ethiopia, Tanzania, and Uganda, had received consistent and simultaneous support across all critical subsectors. That is not to suggest that the Bank should do this alone it might well be done better in partnership but the Bank could reasonably be expected to take the lead in fostering such a multifaceted approach, based on its comparative advantage as a multisector lending institution.

Thematic Performance

[see full executive summary for this section on specific topics]

Key Findings on Bank and Country Factors of Performance

Bank factors

• The institution's strategy for the development of the agriculture sector has been part of its rural strategy, and over time the importance of agriculture in the Bank's rural strategy has declined. Both arising from and contributing to this, technical skills to support agricultural development adequately have also declined over time. Data from the Human Resources Department of the World Bank show that there were 17 technical experts mapped to the Agriculture and Rural Development Department in Sub-Saharan Africa in 2006, compared with 40 in 1997.
  
  
• The Bank's diagnosis of a country's development status and priorities in the agriculture sector is carried out primarily through analytical work. Until very recently this work has been limited and not readily available. Nor have the findings from analytical work strategically informed Bank client policy dialogue and lending program design.
  
  
• Bank policy advice appears to have had farreaching implications for the direction of agricultural development in African countries, in particular its policy advice associated with the adjustment agenda. However, results have fallen short of expectations because of weak political support and insufficient appreciation of reality on the ground, among other things.
  
  
• The Bank's data systems and support for M&E have been insufficient to adequately inform the institution's effort to develop agriculture in Africa across a broad front. Current data systems do not allow the institution to track in enough detail how much is being provided for development of specific activities such as seed development and credit. M&E at the project level has been of limited value in answering fundamental questions about outcome, impact, and efficiency, such as who benefited, which crops received support and how, what has been the comparative cost effectiveness, and to what can one attribute gains.

Country factors

• Although the governance environment in several African countries continues to be weak, political commitment for the development of agriculture in client countries appears stronger than in the past. African governments, many of which were allocating less than 1 percent of their budget to agriculture, agreed in July 2003 at the African Union Summit to allocate at least 10 percent of national budgetary resources for programs to support agricultural growth in the next five years.
  
  
• Considerable agricultural research capacity exists, although the sustainability of the activities supported remains uncertain. Overall, government capacity in several countries remains weak, and local agriculture ministries are still relatively ineffective partners in promoting development of the agriculture sector. Though further analysis is needed, the study finding that largely agricultural projects in countries with less favorable agricultural conditions have done better than similar projects in countries with more favorable conditions suggests that other factors such as political economy and country capacity are also a challenge for agricultural development in Africa.

Recommendations

To effectively support the implementation of the Africa Action Plan and its appropriate focus on agricultural development as a key priority, IEG recommends that the Bank:

1. Focus attention to achieve improvements in agricultural productivity:
   
   

• Establish realistic goals for expansion of irrigation and recognize the need to increase productivity of rain-fed agriculture through improvements in land quality, as well as water and drought management.
  
  
• Help design efficient mechanisms, including public-private partnerships, to provide farmers with critical inputs, including fertilizers, water, credit, and seeds.
  
  
• Support the development of marketing and transport infrastructure.
  
  

2. Improve its work on agriculture:
   
   

• Increase the quantity and quality of analytical work on agriculture and ensure that policy advice and lending are grounded in its findings.
  
  
• Support public expenditure analyses to assess resource availability for agriculture and to help set Bank priorities.
  
  
• Rebuild its technical skills, based on a comprehensive assessment of current gaps.
  
  

3. Establish benchmarks for measuring progress:
   
   

• Improve data systems to better track activities supported by the Bank.
  
  
• Strengthen M&E to report on project activities in various agro-ecological zones and for different crops and farmer categories, including women.
  
  
• Develop a system to coordinate agricultural activities in a country with road access, market proximity, and soil conditions.

AfricaFocus Bulletin is an independent electronic publication providing reposted commentary and analysis on African issues, with a particular focus on U.S. and international policies. AfricaFocus Bulletin is edited by William Minter.

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Africa: Neglecting Agriculture, 2

AfricaFocus Bulletin
Oct 24, 2007 (071024)
(Reposted from sources cited below)

Editor's Note

"For the first time in 25 years, the World Bank's annual Development Report (WDR 2008) is dedicated to agriculture. The report is a welcome indicator of renewed interest in agriculture worldwide that is urgently needed... [But] though the WDR 2008 makes a few guarded references to the mistakes made under structural adjustment programs, there is no place that adequately describes the responsibility of countries and firms who made irresponsible loans, or of the Bank itself for its rigid and often misguided programs " EcoFair Trade Dialogue

In its World Development Report for 2008, released on October 19 and entitled "Agriculture for Development," the World Bank stressed the importance of a renewed emphasis on agriculture. The report argues that "for the poorest people, GDP growth originating in agriculture is about four time more effective in reducing poverty than GDP growth originating outside the sector.

The report, which was covered extensively in the international press, is available, along with much related material, on the World Bank website at http://go.worldbank.org/ZJIAOSUFU0

In this and another Bulletin sent out today, AfricaFocus presents excerpts from two related reports that have received much less press attention. The first, the executive summary of which is excerpted in another Bulletin, is a highly critical report of the World Bank's record on agriculture from its own Independent Evaluation Group. The second, a report from the EcoFair Trade Dialogue on "What the World Bank Missed," is excerpted below.

The U.S. Farm Bill, which the Senate is due to discuss this week, is likely to be renewed with little or no reforms demanded by critics. For background on the bill and its implications for international agriculture, see the resource page from the Wilson Center at http://tinyurl.com/39x6vo

++++++++++++++++++++++end editor's note+++++++++++++++++++++++

The World Bank's WDR 2008: Agriculture for Development Response from a Slow Trade Sound Farming Perspective

by Sophia Murphy and Tilman Santarius

The EcoFair Trade Dialogue

Discussion Papers No. 10 / October 2007 / English Version

http://www.ecofair-trade.org

The EcoFair Trade Dialogue is a project carried out by the Heinrich Böll Foundation and Misereor in cooperation with the Wuppertal Institute.

[Excerpts only: for full text see http://www.ecofair-trade.org]

This document has been produced with the financial assistance of the European Union. The contents of this document are the sole responsibility of Misereor and Heinrich-Böll- Stiftung and can under no circumstances be regarded as reflecting the position of the European Union.

Sophia Murphy, currently living in Australia, is Senior Advisor to the US-based Institute for Agriculture and Trade Policy (IATP) and an internationally recognized expert in food and trade issues. ... Tilman Santarius, from Germany, is Senior Research Fellow at the Wuppertal Institute for Climate, Environment and Energy. ...

About the EcoFair Trade Dialogue:

The EcoFair Trade Dialogue is a project carried out by the Heinrich Boell Foundation and Misereor in cooperation with the Wuppertal Institute.... This discussion paper is one out of several "implementation papers" that are based on the perspectives and proposals contained in the full "Slow Trade Sound Farming" report.

Introduction

For the first time in 25 years, the World Bank's annual Development Report (WDR 2008) is dedicated to agriculture. The report is a welcome indicator of renewed interest in agriculture worldwide that is urgently needed. The generation-long silence on agriculture is indicative of how agriculture went out of fashion in development circles. Assistance to agriculture from bilateral and multilateral sources decreased from US$ 6.2 billion to US$ 2.3 billion between 1980 and 2002 (in 2002 prices), a neglect that is all but incomprehensible given that three quarters of the world's population living below the $2 per day poverty line live in rural areas, most of them directly or indirectly dependent on agriculture for their survival. The share of agriculture in the International Financial Institutions' portfolio of loans fell from roughly 20 percent of the total to nearer 9 percent over the 1990s.

... The choice of agriculture as the focus for the WDR 2008 is welcome. The report offers a comprehensive, detailed discussion of many of the facets of agricultural production and distribution, giving space to questions of gender equity, political voice, peasant organizing and unequal market power. The strong focus on institutional issues is welcome, as is the serious discussion of many of the environmental challenges confronting agriculture. Science and technology, in particular, are comprehensively discussed. For all that, we welcome the report and trust the newly revived interest in agriculture's role in development will prove lasting. The following critique is just that: it is focused on where the authors differ with the authors of the WDR 2008. From our perspective, there are still important lacunae in the thinking and analysis that need further debate.

... N.B. The WDR 2008 report referred to in this review is the July 2007 draft edition of the report. The report Slow Trade Sound Farming. A Multilateral Framework for Sustainable Markets in Agriculture (2007) can be downloaded at http://www.ecofair-trade.org.

Overview

The WDR 2008 is comprehensive and detailed, filled with illustrations from different developing country experiences that make for a rich read. Yet there are some important and telling gaps in the story set out, as well as some contradictions. These are sometimes not explicit, but rather remain implicit in an analysis that does not, so to speak, join all the dots. Somewhat glaring, for instance, is the marked lack of historical perspective in the report. The report does not ask how it is that sub-Saharan Africa, for example, came to be as poor as it is today. In the 1960s and early 1970s, commodity trade made the region wealthier than many Asian countries. Then commodity prices fell, and a wave of irresponsible borrowing and lending in the 1970s coupled with poor domestic policy choices left many developing countries in financial crisis, including much of sub-Saharan Africa. The policy prescriptions imposed by the World Bank and IMF in response to this crisis and the further liberalization of trade under the provision of the Uruguay Round Agreements at the World Trade Organization (WTO) did little to help, and in some cases aggravated the already serious situation. Many African countries are still not recovered from the effects of all these events.

Though the WDR 2008 makes a few guarded references to the mistakes made under structural adjustment programs, there is no place that adequately describes the responsibility of countries and firms who made irresponsible loans, or of the Bank itself for its rigid and often misguided programs, which aimed to restore fiscal balance or to open markets to trade and investment but which ignored empirical experience. The lack of historical perspective is evident in the literature quoted, with very few sources from before the mid 1990s.

Unless we understand history, it is difficult to get the next generation of policies right. And without looking at history anew, we can miss lessons that are there for the taking what we are looking for in our historical experience changes as our context evolves. ...

The WDR 2008 also fails to set out a bold vision for agriculture, nor does it set out a vision for rural economies as a whole. The WDR 2008 vision of agriculture implicitly incorporates mainstream development thinking, which has tended to assume that agriculture, once a country is becoming more developed, should not occupy a significant place in a country's economy. Because returns to agriculture are lower when compared to manufacturing and services, economists tend to view agriculture as necessary, but as of marginal interest. ...Yet this minimizing of agriculture is both disingenuous and partial. ...although wealthy economies in our day and age have relatively small agricultural sectors compared to the economy as a whole, their agriculture is nonetheless worth billions of dollars. Small does not mean unimportant: indeed, many OECD countries spend tens of billions of dollars in public money on food and agriculture. Nor is share of GDP the only indicator of agriculture's importance to a country's economy. ...Most [developing countreis] have a significant share of employment in agriculture, even when agriculture's share of GDP is relatively small. ..

... the importance of agriculture is much greater than its economic value. Agriculture underpins the availability of common goods in both the natural and the social sphere. Ecologically, it is mainly through agriculture that humans shape the natural commonwealth and the biodiversity surrounding us. Socially, first and foremost agriculture is the basis for food security and subsistence. In addition, agriculture is the mainstay of the rural world, including its contributions other sectors of the rural economy, as well as to social cohesion, community life, and religion.

The EcoFair Trade Dialogue chose multi-functionality as one of the principles that should underlie any policy prescription for agricultural trade. ... Reading the WDR 2008, agriculture is presented in instrumental terms rather than as an end in its own right. ...It is portrayed as a way to raise GDP; to create jobs; to manage natural resources, but not as a way of life. ... By remaining silent on agriculture's wider contributions to ecology and society, the WDR 2008 limits the vision for agriculture to "its role as an engine for growth and poverty reduction" (p. 39).

The WDR 2008 is structured around three categories of countries: agriculture-based, transforming, and urbanized. The first category is most of sub-Saharan Africa, with countries that have a large share of GDP in agriculture and where most of the people living in poverty live in rural areas. Transforming countries include most of Asia, the Middle East and North Africa, as well as parts of Europe and Central Asia. In these countries, most economic growth is in non-agricultural sectors, but poverty remains overwhelmingly rural. Urbanized countries are mostly in Latin America and some parts of Europe and Central Asia, where poverty is mostly urban and agriculture may be dynamic but is a small share of total GDP.

Given the report's focus on how to use agriculture to reduce poverty, it makes sense to categorize countries according to where poverty is concentrated and to consider the relative importance of agriculture in the economy before making recommendations for policy changes. On the other hand, the framework suggests a somehow inevitable progression from more to less agriculture in a country's economy. It assumes a progression from more extensive, small-scale and labour-intensive forms of agriculture, such as are still prevalent in the global South, to intensive, large-scale and input-intensive forms of farming. This assumption is highly questionable. Despite the detailed discussion of the various environmental challenges facing agriculture worldwide, the WDR 2008 does not clearly point out the real limitations confronting the industrial agriculture model. ...

The EcoFair Trade Dialogue debated the questions these new departures often give rise to: can we feed the world with other technologies than those that have so dramatically increased yields over the past 50 years? How can we increase productivity where we need to (especially in sub-Saharan Africa) without relying on external inputs? Without definitively answering these questions, the EcoFair Trade Dialogue did challenge the assumption that more of the same is an option: developing countries must not imitate developed countries to find the answer to their agricultural needs. The WDR 2008 does not ultimately confront these problems, leaving a tension in the report that still needs to be answered: what conclusions for the future should be drawn from the sad irony that the world basically produces more than enough food to meet the needs of all its six billion people, but hunger is still prevalent? ,,,

The EcoFair Trade Panel explored a different conception of three rural worlds. Our notion was to capture three co-extensive, indeed interdependent, kinds of agriculture: a heavily capitalized industrial agriculture, found everywhere but more typical of developed countries and developing countries with plantation agriculture; an agriculture based on family-owned enterprises, the most common model of agriculture, including in the U.S., Europe and Japan; and, subsistence agriculture and landless agricultural workers, in which even those who own land may depend on selling their labour to survive.

Central to this conceptualization of three rural worlds is the way the worlds interact with one another. For instance, heavily capitalized industrial agriculture depends on a supply of low-cost workers, many of whom have too little or too poor quality land to support a household. Industrial agriculture, besides its parasitic relationship to nature, has unfortunately a well-deserved reputation for exploitative levels of pay and for taking advantage of workers with very few choices who sell their labour for nearly nothing. The WDR 2008 does acknowledge a "dualism" in the agriculture of many developing countries.... It does not, however, consider how these sectors relate to one another, or how, for instance, the investments to meet the needs of the modern sector (such as port terminals, and roads or locks and dams to get produce to the terminals) come at the expense of infrastructure to meet domestic demand or to build regional markets. ...

The WDR 2008 describes the poorest countries as "agriculture-based" nations, which under-plays the role of large-scale and modern farm operations in these countries. The large, modern farms often produce with high external social and environmental costs, at the expense of their smallholder counterparts. For example, commercial tomato growers that export from Sénégal have seriously depleted ground water levels in one of the most prosperous agricultural regions of the country. At the same time, describing richer countries as "urbanized" or "industrialized" hides the presence of (poor) farmers in these countries. In many "urbanized countries" of Latin America, poverty is widespread; in the U.S., the worst poverty is found in rural areas, not in the urban centres where much of the population lives.

The three rural worlds framework used by the EcoFair Trade Panel avoids the assumption that there is an inevitable progression from agriculture-dependence to urbanization. The framework allows the possibility that countries' economic well-being, developed and developing, is inter-related. Without suggesting a simple zero-sum distribution, it is clear, for instance, that processing firms such as Sarah Lee and Nestlé take a much larger share of the value of coffee than do the farmers who grow the coffee. In the current market structure, consumers in developed countries are able to buy relatively cheap coffee. With higher tariffs on processed coffee in most rich countries, which reinforce the market power advantage of the processing firms, Nestlé and like firms make good profits from these sales. But coffee producers do not earn enough to make a decent living or to invest in the future of their families and communities. Meanwhile, exporting countries are short-changed on their foreign exchange earnings. This makes coffee growers, and coffee exporting countries poorer than they should be, while increasing the returns to food processing based in developed (urbanized) countries the actual value of the commodity production is not realized by producers in the agriculture-dependent country, because they are exploited by firms based in urbanized countries. Understanding this inter-relationship is central to any policy analysis of agriculture. It is not absent in the WDR 2008, but its implications for countries' agricultural development strategies is strangely lacking.

Global agriculture is marked by deeply unequal distribution, which reduces farmers' returns from the market in both developed and developing countries and affects what developing countries earn for their agricultural exports. The WDR 2008 gives important space to the differentiated impact of different policies on women. It also acknowledges differences among rural populations and how they might be affected by various policy measures. The WDR 2008 discusses the violence that unequal access to land gives rise to and gives due importance to peasant organizing and the need for political empowerment at the local level to allow rural communities some political control. The report does not talk about political power at the global level, however, nor about the power of transnational corporations and their ability to extract a disproportionate share of the benefit of agricultural production and processing, as a result both of market distortions and uncorrected market failures. ...

Conclusion

We are living in a period of great uncertainty related to agriculture. We know that climate change is real and that temperatures are rising more rapidly than most scientists at first predicted. We know that many of the technologies developed during the Green Revolution have run out of steam, while the social and environmental problems they have created, including the debt crisis of resource-poor farmers and their loss of land, the over-use of water, soil salinity, polluted waterways, and loss of biodiversity, have reduced the options for the next generation of technologies. ...

There are a number of hopeful signs that a new paradigm will emerge for agriculture. The signs are there in the WDR 2008, although the report as a whole leans towards a better-thought- through version of more of the same. This will not do if we are to meet the challenges we face. The WDR 2008 provides a lot of illustrative examples but no vision for the next decades of agriculture. . ..

a new paradigm for agriculture is needed. The strong assumption underlying the WDR 2008 recommendations is that all countries are at different points on a road that culminates in an economy such as that of the U.S. or Western Europe. The heavily polluted, economically distorted nature of that agriculture, which nests in depressed rural economies which see little benefit from agriculture because the profits are mostly captured off-farm and in metropolitan centres rather than local market towns, is not any kind of model to emulate.

Mainstream agriculture in developed countries is not a good example to follow. First, the land's productive potential should be assessed from the perspective of diversity not yield per plant. ...

Second, we need to move beyond the fossil fuel age. Global demand for oil will soon outpace global supply, resulting in unprecedented price peaks. Oil will not be available as cheaply as the oil that has fuelled economic growth for a century or so. ... the WDR 2008 at no point factors in the mounting expense of fossil fuel inputs as a real brake on agricultural production as we now know it. Already, oil imports are a significant drain on foreign exchange reserves in many developing countries. The widely anticipated significant increase in oil prices will make it impossible for many developing countries to pursue the agricultural development path mapped out by developed and transitional economies. ... Planning ahead, especially for low-income resource poor farmers, opportunities would best be developed in local and regional markets, where transportation needs are reduced and local crops, appropriate to the prevailing water and soil conditions as well as local tastes, will find buyers.

Linked to this need to curb dependence on fossil fuels is the need to respond to climate change. ...The WDR 2008 focuses on the issue in its chapter on the environment and in Focus F. Yet the issue is so significant that it ought to have shaped other chapters as well, particularly the question of science and technology. Countries should be investing in preparedness for uncertainty. ...

Ultimately, just as there are more satisfactory measures of poverty than dollar per day income, there are also other ways out of poverty than increasing that income. As UNDP has documented in its Human Development Reports since 1990, money matters, but human welfare is about much more. The poverty of someone who has no money in a developed economy is very different to the poverty of someone without money in an economy that is still significantly reliant on subsistence production, barter and exchange, and where there are resources held in common that everyone can access. Agriculture and rural cultures more broadly have paid a price, sometimes a heavy price, with the commodification of not just their produce but also their production systems. ...

Poverty lies not just in lack of income, but in the loss of culture and loss of diversity. This tension, and the failure to consider development from a wider perspective such as Amartya Sen's notion of entitlements leaves the WDR 2008 without an anchoring vision from which to advocate some of the really radical changes needed to move agriculture beyond reliance on fossil fuels and beyond servicing the markets of a few wealthy countries and social groups, towards a sustainable, locally- owned and locally accountable sector that neither excludes trade nor makes trade the focus of infrastructure and technology investments.

The WDR 2008, just as it is by and large silent on the past and the question of how things came to be as they are, is also silent about the role of the World Bank and other development funders and investors in meeting the challenges and seizing the opportunities described in the report. Given the prominent role of the World Bank in promoting and financing structural adjustment; in promoting a trade agenda that is now acknowledged to have paid insufficient attention to developing countries' supply constraints and the concentrated power of the firms that operate in world markets; and, in financing projects that caused significant environmental damage, it would be good to see the World Bank setting out a new agenda for itself. ...

The reader is waiting for an annex to the WDR 2008, perhaps to be entitled, "The role of the World Bank in Building Sustainable and Fair Agricultural Systems for the Future".

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from            "africafocus@igc.org" <africafocus@igc.org>             date            Oct 24, 2007 7:20 PM
        subject         Africa: Neglecting Agriculture, 1

Page Editor: Ali B. Ali-Dinar, Ph.D.