Save and Grow

Chapter 7
Policies and institutions

To encourage smallholders to adopt sustainable crop production intensification, fundamental changes are needed in agricultural development policies and institutions

Unprecedented challenges to agriculture – including population growth, climate change, energy scarcity, natural resources degradation and market globalization – underscore the need to rethink policies and institutions for crop production intensification. Models used for intensification in the past have often led to costly environmental damage, and need to be revised in order to achieve greater sustainability. While “business as usual” is clearly not an option, what alternatives are available?

The focus here is on defining the conditions, policies and institutions that will enable smallholder farmers – in low-income developing economies in particular – to adopt sustainable crop production intensification. It also considers overarching issues that affect not only SCPI, but are important for the development of an agricultural sector in which SCPI is facilitated and supported. It recognizes that programmes to promote SCPI may need to go beyond “agricultural” institutions and involve other centres of policymaking.

Past experience, future scenarios

The Green Revolution was supported largely by public sector investment, with almost all of the research and development (R&D) on modern varieties being carried out in international and national research centres. Seed and agrochemicals were disseminated through government-sponsored programmes at subsidized prices.

Since the mid-1980s, the locus of agricultural research and development has shifted dramatically from the public to the private multinational sector1. Greater protection of intellectual property in plant innovations, rapid progress in molecular biology and the global integration of agricultural input and output markets have generated strong incentives for the private sector to invest in agricultural research and development2. So far, investments have targeted agriculture mainly in developed countries. Meanwhile, overall growth in public sector investment in agricultural research and development in developing countries has declined significantly. In sub-Saharan Africa, investment actually decreased during the 1990s3.

Throughout the 1980s and until the mid-1990s, many developing countries implemented structural adjustment programmes aimed at eliminating inefficient public sector activities and allowing a dynamic private sector to reinvigorate agriculture. The results have been mixed: in many cases a dynamic private sector failed to materialize, or developed only in high potential and commercialized production, while access to agricultural services and inputs declined in more marginal areas4. More recently, there has been a shift towards redefining the role of the public sector to support the development of the private sector, and to provide the public goods required for development5.

Growth in organized and globalized food value chains is another major transformation with important implications for SCPI. These chains create new income opportunities for smallholders but also generate barriers to market access. There are concerns that the concentration of market power at specific points in the chain reduces the incomes of other actors in the chain, particularly small farmers6, 7.

Considerable potential exists for improving the economic returns to farming systems while also reducing environmental and social impacts. However, that will require alternative models of agricultural technology and marketing development. Although productivity increases may be achieved faster in high-input, large-scale, specialized farming systems, the greatest scope for improving livelihood and equity exists in small-scale, diversified production systems8.

Given the uncertainty of future demand and supply conditions, a range of scenarios for sustainable intensification in developing countries is possible. Important factors that could constitute major deviations from the baseline growth path are:

  • Climate change. The impact of climate change on global agriculture is potentially enormous. Assessments are complex, involving projections of potential changes in climate and their impacts on production, interacting with demographic growth and dietary patterns, and market, trade and price developments9. A recent IFPRI analysis10 of climate change impacts on agriculture up to 2050 indicated dramatic negative effects on productivity, with reduced food availability and human well-being in all developing regions. Together with increased demand owing to income and population growth, this was likely to contribute to a more or less significant increase in real agricultural prices between 2010 and 2050, depending on the scenario. The report estimates that public funding of at least US$7 billion annually is needed on three categories of productivity-enhancing investments – biological research, expansion of rural roads, and irrigation expansion and efficiency improvements – to compensate for the productivity losses associated with climate change by 2050. Other studies show less dramatic outcomes, with the overall impact of climate change on global food prices ranging between 7 percent and 20 percent in 205011. Since agriculture is also a major source of greenhouse gas emissions, financial support and incentives to promote the adoption of low emission agricultural growth paths will become increasingly important. Reducing emissions per unit of production will be a key aspect of SCPI12, 13.
  • Natural resources degradation. The quality of land and water resources available for crop intensification has major implications for the design of SCPI in many areas. In the past, favourable production areas were given priority for crop intensification14. Increasingly, intensification will be required in more marginal areas with more variable production conditions, including soil and water quality, access to water, topography and climate. In this context, an important issue is ecosystem degradation, which reduces the availability and productivity of natural resources for SCPI. Restoration of degraded ecosystems can involve considerable expense and time, and will need long-term financing.
  • Reduction of food losses and changes in food consumption patterns. FAO has reported post-harvest food losses of as high as 50 percent. Because action to prevent those losses would reduce the need for productivity increases, reduce costs throughout the supply chain and improve product quality, it should be part of SCPI policies and strategies. An alternative scenario, which favours environmental sustainability as well as human health, is a slowdown in growth in demand for animal products, which would reduce demand growth for feed and forage.
  • Market integration. To be attractive to farmers, SCPI must lead to remunerative market prices. A rising trend in agricultural prices, stimulated in part by the resource constraints that are driving the move to SCPI, will enhance the profitability of investments in intensification. On the other hand, rapid productivity growth at local levels and under conditions of closed markets could generate market surpluses, driving down local prices. Price effects will also be mediated by the state of the value chain. The development of agricultural value chains must aim at enhancing smallholders’ capacity for SCPI adoption and provide incentives.

Policies that save and grow

A successful strategy for sustainable intensification of crop production requires a fundamental change in the management of traditional and modern knowledge, institutions, rural investment and capacity development. Policies in all of those domains will need to provide incentives to various stakeholders and actors, especially the rural population, to participate in SCPI development.

Input and output pricing

To be profitable, SCPI requires a dynamic and efficient market for inputs and services as well as for the final produce. The prices farmers pay for inputs and are paid for agricultural outputs are perhaps the main determinant of the level, type and sustainability of crop intensification they adopt. Input prices are of particular importance for SCPI strategies, and creative policies will be needed to promote efficiency and influence technology choices. One example is the reintroduction of “market smart” subsidies, aimed at supporting the development of demand and participation in input markets using vouchers and grants. The approach seeks to avoid past problems with subsidies, such as inefficiency, negative effects on the environment, and the waste of financial resources that are needed for investments in other key public goods, such as research and rural infrastructure5.

In contrast, environmentally harmful (or “perverse”) subsidies, which encourage the use of natural resources in ways that destroy biodiversity15, need to be carefully evaluated and, when appropriate, reformulated or removed. Perverse subsidies worldwide have been valued at from US$500 billion to US$1.5 trillion a year, and represent a powerful force for environmental damage and economic inefficiency16.

Of course, most incentives are not designed to be “perverse” but rather to benefit a particular social or economic sector. When planning their removal, it is important, therefore, to consider the multiple objectives of incentives and to take into account the complexity of interactions among the different sectors affected positively and negatively by them17. Some countries have done so successfully: New Zealand abolished agricultural subsidies, starting in the 1980s18; Brazil has reduced livestock farming in the Amazon basin; and the Philippines has abolished fertilizer subsidies17, 19.

Stabilization of agricultural output prices is an increasingly important condition for sustainable intensification of crop production, given the volatility experienced in commodity markets in the past few years. For farmers dependent on agricultural income, price volatility means large income fluctuations and greater risk. It reduces their capacity to invest in sustainable systems and increases the incentives to liquidate natural capital as a source of insurance.

Short-term, micro-level policies to address price volatility have frequently failed. Greater coherence at the macro policy level – for example, transparency over export availabilities and import demands – is likely to provide much more effective solutions. Reform of existing instruments, such as the Compensatory Financing Facility and the Exogenous Shock Facility of the International Monetary Fund is also needed. Through the provision of import financing or guarantees with limited conditionality, they could serve as global safety nets20.

Seed sector regulation

Achievement of SCPI will also depend on the effective regulation of the seed sector in order to ensure farmers’ access to quality seeds of varieties that meet their production, consumption and marketing conditions. Access implies affordability, availability of a range of appropriate varietal material, and having information about the adaptation of the variety21.

Most small farmers in developing countries obtain seed from the informal seed sector, which provides traditional farmer-bred varieties and saved seeds of improved varieties. One of the main reasons farmers rely on the informal seed sector is the availability of germplasm adapted to their production conditions. Some local varieties may outperform improved varieties in marginal agricultural environments22. Supporting the informal sector is, therefore, one way of improving farmer access to planting material suitable for SCPI.

However, the informal seed sector lacks a viable means of informing farmers about the adaptation and production characteristics of the variety embodied in seeds, as well as their genetic purity and physical quality23. In some cases, the necessary information is supplied simply by observing the performance of crops in a neighbour’s field. But that is not a viable option in exchanges involving strangers and non-local seed sources. Seed in formal systems is genetically uniform, is produced using scientific plant-breeding techniques, and must meet certification standards. Seed from this sector tends to be sold through specialized agro-dealers, agri-businesses or government outlets, which are subject to regulation. Any comprehensive strategy for improving farmers’ access to new varieties and quality seed needs to support and expand the formal seed sector, and improve its links with the informal sector.

Payments for environmental services

The lack of market prices for ecosystem services and biodiversity means that the benefits derived from those goods are neglected or undervalued in decision-making24. In the agriculture sector, food prices do not incorporate all the associated costs to the environment of food production. No agencies exist to collect charges for reduced water quality or soil erosion. If farmgate prices reflected the full cost of production – with farmers effectively paying for any environmental damage they caused – food prices would probably rise. In addition to charging for agricultural disservices, policies could reward those farmers who farm sustainably through, for example, payments for environmental services (PES) schemes.

Support is growing for the use of payments for environmental services as part of the enabling policy environment for sustainable agricultural and rural development. The World Bank recommends that PES programmes be pursued by local and national governments as well as the international community5. PES are being integrated increasingly as a source of sustainable financing in wider rural development and conservation projects in Global Environment Facility and World Bank portfolios25. FAO says that demand for environmental services from agricultural landscapes will increase and PES could be an important means of stimulating their supply. However, effective deployment will depend on enabling policies and institutions at local and international levels which, in most cases, are not in place26.

Currently, the role of PES programmes in support of sustainable agriculture is rather limited. PES initiatives have focused mainly on land diversion programmes, and there is relatively little experience with their application to agricultural production systems. To realize their benefits, PES programmes will need to cover large numbers of producers and areas, which would achieve economies of scale in transaction costs and risk management. Better integration of PES with agricultural development programmes is an important way of reducing transaction costs.

Given the limits on public finance, creative forms of alternative or additional funding from private sources will need to be developed, especially where private beneficiaries of PES can be identified. For example, a recent FAO feasibility assessment of PES in Bhutan found that the government’s support for forest protection and reforestation amounted to about a third of the Ministry of Agriculture’s budget27. Half of the funding for watershed management was assigned to plantations28. Were more of this investment responsibility shifted to the companies that benefit from forest protection, additional public funding could be released for under-funded activities – such as crop diversification, livestock improvement and sustainable land management – which would improve farm productivity and increase resilience to climate change29, 30.

Agricultural investment

To engage in SCPI, the private sector – including farmers, processors and retailers – needs adequate public infrastructure and services. These are essential not only to ensure that local farming and marketing can compete with imports, but also to ensure that consumers have access to affordable, locally produced food. It is particularly important that governments ensure low transaction costs for input acquisition, produce marketing, and access to natural resources, information, training, education and social services. That will require adequate funding for both maintenance and net investment.

The agricultural sector in developing countries will need substantial and sustained investment in human, natural, financial and social capital in order to achieve SCPI. According to FAO estimates, total average annual gross investment of US$209 billion, at constant 2009 prices, is needed in primary agriculture (such as soil fertility, farm machinery and livestock) and in downstream sectors (storage, marketing and processing) in order to achieve the production increases needed by 2050. Public investment would also be needed in agricultural research and development, rural infrastructure and social safety nets21.

Current investment in the agriculture of developing countries is clearly insufficient. Inadequate levels of domestic funding have been exacerbated by the reduction in Official Development Assistance to agriculture since the late 1980s. Together, these shortfalls have led over the last two decades to a drastic decline in capital for agricultural development. If SCPI is to succeed, agricultural investment must be significantly increased.

Funding for climate change adaptation and mitigation is highly relevant to SCPI. For example, one key means of adapting to climate change – increasing resilience in agricultural production systems through the use of new varieties generated by expanded plant breeding and seed systems – is an essential component of sustainable intensification. SCPI could thus benefit from funding allocated to climate change adaptation. Sustainable intensification could also play an important role in climate change mitigation, through increased carbon sequestration in sustainably managed soils and reduction of emissions owing to more efficient use of fertilizer and irrigation.

At present, there is no international agreement or framework for channelling mitigation funding on a significant scale to agriculture in developing countries. However, it is one area of discussion in the UNFCCC negotiations within the context of developing countries’ Nationally Appropriate Mitigation Actions12, 21.

Enabling institutions

A lack of institutional capacity and functioning is a common constraint on agriculture in developing countries, and limits the effectiveness of policies at local level. Institutions for SCPI will have two basic functions: to ensure the necessary quantity and quality of key resources – natural resources, inputs, knowledge and finance – and to ensure that small farmers have access to those resources. In the following, institutions are divided into two main categories: those related to key resources for SCPI, and those that influence the functioning of agricultural product markets, including value chains.

Access to key resources

Land. The shift to SCPI requires improvements in soil fertility, erosion control and water management. Farmers will undertake them only if they are entitled to benefit, for a sufficiently long period, from the increase in the value of natural capital. Often, however, their rights are poorly defined, overlapping or not formalized. Improving the land and water rights of farmers – especially those of women, who are increasingly the ones making production decisions – is a key incentive to adoption of sustainable intensification.

Land tenure programmes in many developing countries have focused on formalizing and privatizing rights to land, with little regard for customary and collective systems of tenure. Governments should give greater recognition to such systems, as growing evidence indicates that, where they provide a degree of security, they can also provide effective incentives for investments31. However, customary systems that are built on traditional social hierarchies may be inequitable and fail to provide the access needed for sustainable intensification. While there is no single “best practice” model for recognizing customary land tenure, recent research has outlined a typology for selecting alternative policy responses based on the capacity of the customary tenure system32.

Plant genetic resources. Crop improvement is fundamental to SCPI. During the Green Revolution, the international system that generated new crop varieties was based on open access to plant genetic resources. Today, national and international policies increasingly support the privatization of PGR and plant breeding through the use of intellectual property rights (IPRs). The number of countries that provide legal protection to plant varieties has grown rapidly in response to the WTO Agreement on Trade Related Aspects of Intellectual Property Rights, which stipulates that members must offer protection through “patents or an effective sui generis system”33.

Plant variety protection systems typically grant a temporary exclusive right to the breeders of a new variety to prevent others from reproducing and selling seed of that variety. They range from patent systems with rather restrictive rules to the more open system under the International Union for the Protection of New Varieties of Plants, which contains the so-called “breeders’ exemption”, whereby “acts done for the purpose of breeding other varieties are not subject to any restriction”.

IPRs have stimulated rapid growth in private sector funding of agricultural research and development. Only 20 years ago, most R&D was carried out by universities and public laboratories in industrialized countries and generally available in the public domain. Investment is now concentrated in six major companies34. There is evidence of a growing divide between a small group of countries with high levels of R&D investments and a large number with very low levels3, 35. More importantly, technology spillovers from industrialized to developing countries are driven by research agendas that are oriented towards commercial prospects rather than maximum public good.

Increasing concentration in the private plant breeding and seed industry, and the high costs associated with developing and patenting biotechnology innovations, raise further concerns that the introduction of inappropriate IPRs will restrict access to the plant genetic resources needed for new plant breeding initiatives in the public sector34, 36. It has been argued that decentralized ownership of IPRs and high transactions costs can lead to an “anti-commons” phenomenon in which innovations with fragmented IPRs are underused, thus impeding the development of new varieties37.

Mechanisms are needed, therefore, to safeguard access to plant genetic resources for SCPI, at both global and national levels. The emerging global system for the conservation and use of plant genetic resources will provide the necessary international framework (see Chapter 4, Crops and varieties). There are several kinds of national IPR regime, with varying degrees of obligations and access38. Countries should adopt IPR systems that ensure access of their national breeding programmes to the plant genetic resources needed for SCPI.

Research. Applied agricultural research must become much more effective in facilitating major transformations in land use and cropping systems for SCPI. Many agricultural research systems are not sufficiently development-oriented, and have often failed to integrate the needs and priorities of the poor in their work. Research systems are often under-resourced, and even some that are well-funded are not sufficiently connected with the broader processes of development39. The following are the most important steps needed for strengthening research for SCPI:

  • Increase funding. The decline of public investment in agricultural R&D needs to be reversed. Funding for the CGIAR Centers and national research systems must be substantially enhanced, and linkages between public and private sector research strengthened.
  • Strengthen research systems, starting at local levels. To generate solutions that are relevant, acceptable and attractive to local populations, research on SCPI practices must start at the local and national levels, with support from the global level. While important, the research efforts of the CGIAR “can neither substitute, nor replace the complex and routine strategizing, planning, implementing, problem-solving and learning needed on multiple fronts, which only national institutions and actors can and must do”39. There is a huge, underutilized potential to link farmers’ traditional knowledge with science-based innovations, through favourable institutional arrangements. The same holds for the design, implementation and monitoring of improved natural resource management that links community initiatives to external expertise.
  • Focus research on SCPI in both high and low potential areas. High-potential areas will continue to be major providers of food in many countries. However, the productive capacity of land and water resources is reaching its limits in some areas, and will not be sufficient to guarantee food security. Therefore, much of future growth in food production will need to take place in so-called low potential or marginal areas, which are home to hundreds of millions of the poorest and most food insecure people. SCPI and related rural employment offer the most realistic prospects for improving those people’s nutrition and livelihoods.
  • Give priority to research that benefits smallholders. In low-income, food importing countries, small-scale producers, farm workers and consumers can benefit directly from SCPI research focused on staple food crops, which have a comparative advantage. Priority should also go to agricultural productivity growth and natural resources conservation in heavily populated marginal areas, diversification to higher value products in order to increase and stabilize farmers’ incomes, and improved practices that increase returns to labour of landless and near-landless rural workers40.
  • Learn from failures and successes. A recent IFPRI study of proven successes in agricultural development10 highlights the breeding of rust-resistant wheat and improved maize worldwide, improved cassava varieties in Africa, farmer-led “re-greening of the Sahel” in Burkina Faso (see Chapter 3, Soil health), and zero-tillage on the Indo-Gangetic Plain (see Chapter 2, Farming systems). Those successes were the result of a combination of factors, including sustained public investment, private incentives, experimentation, local evaluation, community involvement and dedicated leadership. In all cases, science and technology were a determinant.
  • Link research with extension. Solutions to the problems of low productivity and degradation of natural resources are needed at large scale, but replication of SCPI practices is constrained by the vast range and diversity of site-specific conditions. Linking local, national and international research and site-specific extension services is, therefore, particularly important. To be relevant for the advancement of SCPI, research and extension systems must work together with farmers in addressing multiple challenges.

Technologies and information. Successful adoption of SCPI will depend on the capacity of farmers to make wise technology choices, taking into account both short- and long-term implications. Farmers also need to have a good understanding of the role of agro-ecosystem functions. The wealth of traditional knowledge held by farmers and local communities all over the world has been widely documented, in particular by the report of the International Assessment of Agricultural Knowledge, Science and Technology for Development8. Institutions are needed to protect this knowledge and to facilitate its exchange and use in SCPI strategies.

Institutions must also ensure farmers’ access to relevant external knowledge and help link it to traditional knowledge. Rural advisory and agricultural extension services were once the main channel for the flow of new knowledge to – and, in some cases, from – farmers. However, public extension systems in many developing countries have long been in decline, and the private sector has failed to meet the needs of low-income producers12. The standard, public sector and supply-driven model of agricultural extension, based on technology transfer and delivery, has all but disappeared in many countries, particularly in Latin America41.

Extension has been privatized and decentralized, with activities now involving a wide array of actors, such as agribusiness companies, non-governmental organizations (NGOs), producer organizations and farmer-to-farmer exchanges, and new channels of communication, including mobile phones and the Internet42. One key lesson from this experience is that the high transactions costs of individual extension contacts are a major barrier to reaching small and low-income producers. Advisory services to support SCPI will need to build upon farmer organizations and networks, and public-private partnerships12.

FAO promotes farmer field schools as a participatory approach to farmer education and empowerment. The aim of the FFS is to build farmers’ capacity to analyse their production systems, identify problems, test possible solutions and adopt appropriate practices and technologies. Field schools have been very successful in Asia and sub-Saharan Africa, notably in Kenya and Sierra Leone, where they cover a broad range of farming activities, including marketing, and have proved to be sustainable even without donor funding.

To make wise decisions about what to plant and where and when to sell, farmers need access to reliable information about market prices, including medium-term trends. Government market information services suffer many of the same weaknesses as extension services43. There is now renewed donor and commercial interest in market information, taking advantage of SMS messaging and the Internet.

Financial resources for farmers. Credit will be essential for creating the technical and operational capacities needed for SCPI. In particular, longer term loans are needed for investment in natural capital, such as soil fertility, that will increase efficiency, promote good agricultural practices and boost production. Although many new types of institutions – such as credit unions, savings cooperatives and micro-finance institutions – have spread to the rural areas of developing countries in recent years, the majority of small farmers have limited or no access to them. The inability of local financial institutions to offer longer term loans, coupled with farmers’ lack of collateral, hampers sustainable crop intensification.

Insurance would encourage farmers to adopt production systems that are potentially more productive and more profitable, but involve greater financial risk. In recent years, pilot crop insurance programmes have been introduced as a risk management tool in many rural communities in developing countries. Index insurance products – where indemnities are triggered by a measurable weather event, such as drought or excess rain, rather than by an assessment of losses in the field – have found enthusiastic support among donors and governments. Assessments by IFAD and the World Food Programme of 36 weather-based index insurance pilot programmes have demonstrated their potential as a risk-management tool44.

Alternatives to insurance, especially the accumulation of savings and other saleable assets, are often overlooked. Also, preventive, onfarm measures and instruments to reduce exposure to risk should be seriously considered.

Productive social safety nets. Social safety net programmes include cash transfers and distribution of food, seeds and tools45. They ensure access to a minimum amount of food and other vital social services. Recent initiatives include Ethiopia’s Productive Safety Net Programme and the Kenya Hunger Safety Net Programme. There is debate about whether such programmes risk creating dependency and weakening local markets. However, recent evidence indicates that trade-offs between protection and development are not pronounced46. Instead, safety net programmes can be a form of social investment in human capital (for example, nutrition and education) and productive capital, allowing households to adopt higher risk strategies aimed at achieving higher productivity27.

Policymakers need to understand the determinants of vulnerability at the household level and to design productive safety nets that offset the downward spiral of external shocks and coping strategies. The latter include selling assets, reducing investments in natural resources and taking children out of school, all of which undermine sustainability. Safety nets are also increasingly being linked to rights-based approaches to food security47.

Agricultural marketing institutions and value chains

Growth of the food marketing sector offers new opportunities for smallholder farmers by broadening their choice of input suppliers and of outlets for produce, as well as increasing their access to credit and training48, 49. However, access to both input and output markets has proved problematic for many smallholders, who remain at the margins of the new agricultural economy50-53.

How smallholders fit into a specific agricultural value chain depends largely on the underlying cost structures of the chain and of their farm production processes54. The primary cost advantage of smallholders is their ability to supply low-cost labour for labourintensive crops. When smallholders have no apparent comparative advantage, agribusinesses may seek alternative structures for organizing production, such as vertical integration or buying directly from large holders. In those cases, the challenge is to create comparative advantages for smallholders or to reduce the transaction costs associated with purchasing from large numbers of farmers producing small quantities. To forge links to high-value markets, small farmers need to be organized in institutions that reduce transaction costs, and given access to information on market requirements48, 49, 54, 55.

Contract farming provides mechanisms of vertical coordination between farmers and buyers, which allows for an evident degree of assurance in some of the main negotiation parameters: price, quality, quantity and time of delivery56. While farmers have benefited from contractual agreements, substantial evidence suggests that the smallest farmers are often unable to enter formal arrangements55. Improving the legal and institutional framework of contracts would dramatically reduce transaction costs55, 57. However, farm consolidation, resulting from increased off-farm rural employment or migration to urban areas, appears inevitable.

Small farmer access to markets can also be improved through better organization and greater cooperation, which may involve not only farmers but also a larger number of stakeholders, including agricultural support service providers, NGOs, researchers, universities, local government and international donors. One example is the Plataforma de concertación in Ecuador, which has helped farmers to achieve higher yields and gross margins, while reducing the use of toxic pesticides. Nevertheless, its self-financing capability has still to be verified54.

The way forward

From the outset, policymakers should take a long, hard look at past and current experiences in order to identify clear options and steps that need to be taken now to foster sustainable crop production intensification. There is no “one-size-fits-all” set of recommendations for choosing the most appropriate policies and institutions. However, it is possible to identify the key features of a supporting policy and institutional environment for SCPI:

  • Linking public and private sector support. The private sector and civil society have an important role to play in increasing the availability of investment funds, promoting greater efficiency and accountability of institutions, and ensuring a participatory and transparent policy process. Resource mobilization should take into consideration the full range of services and products that SCPI can generate. Payments for environmental services generated by a sustainable production system may prove to be an important source of investment resources.
  • Incorporating the value of natural resources and ecosystem services into agricultural input and output price policies. That can be achieved by establishing realistic environmental standards, eliminating perverse incentives, such as subsidies on fertilizer and pesticides, and by creating positive incentives, such as payments for environmental services, or environmental labelling in value chains.
  • Increasing coordination and reducing transaction costs. Involving small farmers in SCPI development requires coordinated action to reduce the transaction costs of access to input and output markets, extension and payments for environmental services. Institutions and technologies that facilitate participation – including farmer groups, community organizations, customary forms of collective action, and modern communication technologies – are therefore a key requirement for SCPI.
  • Building regulatory, research and advisory systems for a very wide range of production and marketing conditions. SCPI represents a shift from a highly standardized and homogeneous model of agricultural production to regulatory frameworks that allow for and encourage heterogeneity – for example, by including informal seed systems in seed regulatory policies and integrating traditional knowledge into research and extension.
  • Recognizing and incorporating customary access and management practices into SCPI initiatives. Assessing and strengthening the current capacity of customary systems of access to the inputs needed for SCPI, and of indigenous systems of agricultural management, will both be important.

Policies and programmes for sustainable crop production intensification will cut across a number of sectors and involve a variety of stakeholders. Therefore, a strategy for achieving sustainable intensification needs to be a cross-cutting component of a national development strategy. An important step for policymakers in achieving SCPI adoption is to initiate a process of embedding or mainstreaming strategies for sustainable intensification in national development objectives. SCPI should be an integral part of country-owned development programmes, such as Poverty Reduction Strategy Processes and food security strategies and investments, including follow-ups to the commitments to support food security made at the Group of 8 summit in L’Aquila, Italy, in 2009.

The roll-out of SCPI agendas and plans in developing countries requires concerted action at international and national levels, with the participation of governments, the private sector and civil society. Multi-stakeholder processes are now considered the key to food security at all levels. At the global level, FAO and its development partners will play an important supporting role.



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Save and Grow: Cassava
The first guide to the practical application of "Save and Grow" to a specific smallholder crop