IX. EMPOWERING THE SMALL-HOLDERS

Off-Farm Employment
Agrarian Reform
Education
An Expanded Role for Information Technology
Development and Diffusion of Appropriate Technologies
Co-operative Farming and Farming Co-operatives
Institutional and Infra-Structural Supports
Risk Management

Off-Farm Employment

Small-holders are under continuous pressure to increase production from their limited land resource. Thus, the sub-marginal- and marginal-size farms cannot remain “subsistence-oriented”. Policies and strategies - existing and new - must help diversify on-farm and off-farm activities and thereby enhance sustainability and productivity. The income from off-farm and non-farm employment assists the small-farm households to become or remain hunger-free. Through effectively-managed “monetization”, small-farm households could benefit from globalization and avoid poverty. In China, agricultural renewal was complemented by the creation of gainful non-agricultural employment: almost 100 million persons were withdrawn from the agricultural sector and employed in non-agricultural enterprises in rural townships. This transfer was facilitated by government-initiated programmes of human-resource and skills development; the people thereby trained are now a major force in the production of several non-agricultural goods and items.

Amartya Sen (1999) demonstrated that during years when non-agricultural rural employment increases, rural poverty declines, and that the converse also holds. Thus, on-farm, off-farm, and on-off-farm rural employment is essential to combat rural poverty and to secure adequate livelihood within the households of small-holders and land-less agricultural labourers. Such employment would lessen the urban migration of the rural poor, and thereby help prevent the urbanization of poverty.

There had been expectation that trade liberalisation would promote non-agricultural rural employment and hence enable many under-employed small-holder farmers to engage part-time in off-farm income-generating activities. Through such additional income, the small-holder households would have an increased ability to purchase food, and an enhanced social status; some part of the additional income might expect to be invested in the household farm to intensify, diversify, and enhance productivity. Regrettably, and generally, this has not come to pass; in the interest of the nation - in both its rural and its urban sectors - the reasons and the remedies must be determined.

In India’s peri-urban areas and in the off-seasons, small-holder farmers engage in off-farm paid work. Such work may be in the tourism and eco-tourism industry, in off-shore assembly, or in various agriculture-related or non-agriculture-related enterprises. In comparison to rural (often remote) areas, the peri-urban areas are usually better endowed with road, transport, market, and other infra-structures; they thereby have easier access to off-season employment opportunities, and their poor people are less poor than the rural poor. For the rural poor, strengthened rural infra-structures - particularly connections to major roads and highways - would facilitate the development of small enterprises, agro-based activities, and markets, and increase off-farm and non-farm employment opportunities. Small and medium-size rural enterprises are likely to be more successful when buttressed by strategic alliances - among themselves and/or with larger, possibly urban-based, enterprises (as in China).

FAO’s Investment Centre helps FAO-Member countries to mobilize investments that facilitate the growth of rural enterprises and employment. Assistance includes:

• Decentralizing public-revenue use, and providing resources for local priorities;
• Developing rural infrastructure to meet the needs of rural enterprises;
• Facilitating flexible financing for new and growing enterprises;
• Strengthening local rural-enterprise-development organizations;
• Supporting rural-area export and marketing associations;
• Developing guidelines for small enterprise management and administration; and
• Providing planning tools to increase the quality for small and medium-scale investment proposals.

The small-holder contributions to India’s food security have during recent decades increased considerably - notwithstanding that the small-holder households are them-selves highly vulnerable and insecure. For these households - and particularly for those dependent on marginal- and sub-marginal-size farms - off-farm and non-farm employ-ment can be vital in lessening hunger and poverty. However, and as was previously indicated, liberalization of agricultural trade has not increased rural-area non-agricultural employment. Remedies might include increased budgetary allocations and expanded banking-system rural credit for non-farm employment-creating rural enterprises.

Correspondingly, the rural-household members - males and females - shall require skills-development programmes to strengthen their decision-making capabilities and to increase their labour productivity. Such human-resource development - in agricultural and in non-agricultural aspects - has high priority, and shall be essential if economic and social goals are to be attained. The rural farm- and non-farm economies are intimately inter-connected; there shall thus be crucial need to maintain balance between the agricultural and the non-agricultural employment sectors.

Agrarian Reform

The major endowment of a poor small-holder household is its labour. Thus, if there is to be national economic growth with equity, those households’ entitlements must be increased by the availability of more and new employment opportunities (Sen, 1999). If national economic growth is not managed suitably, there can be increased inequality. It is therefore encouraging that previous and ongoing agrarian reforms have lessened the inequality in access to land, water, credit, knowledge, and markets, and in income distribution; simultaneously, they have increased agricultural productivity. Such reforms must be adopted to the widest possible extent. Secure access to natural resources encourages sustainable production; it also helps insulate small-holders against displacement from their holdings as a result of encroachment by agricultural or non-agricultural entities. It is relevant for India that the strong economic growth and poverty eradication in the Republic of Korea and in Taiwan were each triggered by effective redistributive agrarian-reform programmes. In India, as elsewhere, agrarian reform shall be most effective when complemented by interventions to strengthen infra-structures and access to health care and other social services, and to agricultural inputs.

Notwithstanding that India’s land reforms have been generally effective, there have been demands that land ceilings should be raised in order to attract increased capital investment in agriculture. However, Tables 10, 14, 15 preceding indicate that the largest farms have lower cropping intensity, apply less manure per hectare, and have proportionately less irrigation than the farms smaller than 1.0 ha. The larger farms are thus likely to have lower productivity than those smaller ones. It can be logically argued that large-farm productivity would be raised if increased farm size encouraged additional capital investment. Conversely, it may also be reasoned - perhaps more cogently - that the same capital directed to the smallest farms would have an equal or greater effect on productivity; it would certainly there have a more-desirable social effect.

There are, however, opportunities in Indian agriculture where investment to gain benefit from economies of scale is both feasible and worthwhile. Notable such opportunities arise in processing, value-addition, and distribution of produce. There are successful experiences of large-scale (co-operative) milk processing in Gujarat and of sugarcane processing in Maharashtra. Such examples should be replicated in other states, and the methodology adapted for should be adopted for other commodities and products.

Socially, a policy of raised land ceilings may result in an undesirable increase in rural-urban migration. Notwithstanding that ownership of land (however little) lessens hunger and poverty (Agarwal, 1994) and constitutes a major livelihood-security asset (Swaminathan, 2000), many farmers of marginal- or of sub-marginal-size holdings may consider their holding to be too small to support a household livelihood, and in consequence abandon their food-security base, and seek alternative livelihood in the conurbations. Many thereby transform themselves from rural poor to urban destitute. That tendency must not be encouraged by land-ownership policy.

Nonetheless, and recognizing a justified concern among those would-be migrants, a possible remedy would be to liberalize - with appropriate safeguards - the land-lease market. There could thereby be a mechanism of exit - but with right of return - for those who wish to explore alternative livelihoods. The mechanism would also provide opportunity to other small-holder families to augment their holdings and render them more viable. Liberalization of the lease market should feature prominently among options for economic reform of Indian agriculture.

Education

Table 28 quantifies the associations of educational attainment (a proxy for literacy and numeracy) with poverty and under-nourishment on farms of various sizes at 1983 and 1993; education is here specified for the head of household only. The general importance to agriculture of literacy and numeracy is in the correlation of those attainments with the utilization of new or/and existing technologies (Fan et al, 1999; Kumar and Mittal, 2000).

Table 28 indicates that education - even if primary education only - was at both samplings strongly associated with lesser incidence of poverty. An association was apparent also for under-nourishment at the 1993 survey, but not at 1983. However, it is necessary to emphasize that in interpretations from Table 28 it is not possible to assign effect and cause: education may have assisted in income generation and in lessening of poverty, but equally probably, increased income and wealth may have financed the purchase of education. But we may indeed conclude - specifically from the entries for the non-educated category - that between 1983 and 1993 there was a substantial decrease in poverty incidence, and a lesser decrease in under-nourishment, that were not associated with educational attainment. The associations apparent in Table 28, notably for poverty, do however indicate that associations - whatever be cause and what be effect - were pronounced not only when education increased from “none” to “below primary”, but also when it increased from “below primary” to “above primary”.

Table 28: Education: Relations to human poverty and hunger: 1983 and 1993: Various farm-size categories; (Rural India only)

Farm-size category	Education attainment of head of household	Percentage of population
		Poor		Under-nourished
		1983	1993	1983	1993
Sub-marginal	None	61	48	44	35
	Below Primary	52	35	51	33
	Above Primary	40	26	43	27
	Graduate/Technical	17	11	18	17
Marginal	None	50	37	31	28
	Below Primary	46	22	34	22
	Above Primary	36	18	30	20
	Graduate/Technical	21	8	23	11
Small	None	46	27	26	23
	Below Primary	38	16	24	16
	Above Primary	31	12	24	14
	Graduate/Technical	18	6	20	5
Medium	None	41	21	23	15
	Below Primary	33	14	23	15
	Above Primary	24	9	18	9
	Graduate/Technical	16	7	15	4
Large	None	31	20	17	14
	Below Primary	23	16	15	15
	Above Primary	15	6	12	9
	Graduate/Technical	11	10	13	8
All farms	None	48	40	30	30
	Below Primary	40	26	31	25
	Above Primary	30	19	26	20
	Graduate/Technical	17	8	18	11

Source: Kumar and Mittal, 2000

An Expanded Role for Information Technology

People need information to make decisions about their livelihoods. In poor rural areas, where agricultural productivity is low and unreliable and there is food insecurity, better information and knowledge-exchange can be important in lessening poverty. In an enabling environment, information can empower poor people to determine their own livelihoods. However, the required information must be exchanged in a way that enables poor people to participate in the design and selection of those information tools, media, and content that are appropriate to their specific needs.

Understandably, the current generation of small-holder farmers has little inclination and capability to access and to absorb electronically-distributed information on agricultural technology. However, their more-educated children may be expected to be both capable and enthusiastic so to do. Thus, up-to-date agriculture-related information and data, and their dissemination through cyberspace informatics tools, can and must equip the future small-holder farmers with the knowledge they shall need to help them organise themselves and their farms for collective action within their “agricultural-production watersheds”.

In India, the National Information Centre (NIC) of the Ministry of Information Technology - through initiatives such as the DISNIC-Agris Project, and AGRISNET (a NIC-net based Agricultural Informatics and Communications Network) - seeks to reach all agricultural districts and blocks through its massive “Gateway Networks”. Through these networks, farmers will have opportunity to learn of and benefit from new and improved agricultural practices, to have weather-forecast-based guidance for timely agricultural operations, to be alerted by satellite surveys of pests and diseases, and to access crop-output forecasting and marketing strategies for domestic and for export trade.

Globally, the FAO-facilitated World Agricultural Information Centre (WAICENT) is a strategic facility for management and dissemination of information for agriculture - particularly for developing-country agriculture. WAICENT has four priorities: human- resources development, community development, information content, and systems development. Specific collaborative programs are being established in FAO Member Countries to enable national agencies to incorporate international information within their national information systems.

The WAICENT-Outreach Program is the platform wherewith FAO helps create systems for knowledge exchange in Member Countries and throughout the international community. This Outreach Program strives to enhance the ability of individuals and communities in Member Countries to improve the efficiency, quality, and relevance of information and knowledge exchange. Particularly it seeks to facilitate information exchange among the various stakeholders concerned with agricultural development and food security, and has focus on the world’s most vulnerable and deprived people. Thus, an early and important example of a system wherewith national agencies incorporate international information within their national system is the Food Insecurity and Vulnerability Information and Mapping System (FIVIMS). This system is building national capacity to generate and to use accurate and timely information on the incidence, nature and causes of food insecurity and vulnerability.

Rural-community knowledge systems can be created using a series of modules. These modules comprise specialized information systems and communications networks based on ICTs (Information Communication Technologies). FAO has developed the Virtual Extension, Research, and Communication Network (VERCON) and the Farmer Information Network for Agricultural and Rural Development (FarmNet). These networks have been developed to help improve co-ordination and collaboration between national extension services and agricultural research institutions. Linkage of a FarmNet to a VERCON will provide to farmers an improved access to technical expertise; correspondingly, it will help researchers and extensionists to understand the local, site-specific problems faced by small-holders, and to appreciate the practices that farmers apply in their farming systems. In India, FAO WAICENT and the UK’s Department of International Development are helping develop and operate a “strategic programme for information in support of sustainable livelihoods”.

Development and Diffusion of Appropriate Technologies

Improved agricultural technologies are “size-neutral”; however, some of them are not “resource-neutral”. Hence in generating improved agricultural technologies, small-holder-oriented research and extension should emphasize “cost reduction without yield reduction”. This might be pursued through integration of non-monetary inputs, low-cost technologies such as integrated pest management, integrated plant nutrition systems, water harvesting and recycling, and monitoring of efficiency of use of natural and purchased resources. There shall thus be need - as stressed in preceding sections - for enhanced and sustained investment in research, technology development, human-resource development, and especially extension. These investments have diminished in recent years, and there is urgent need for re-invigoration and for a paradigm shift towards farmer participation - particularly in relation to non-monetary technologies (Singh, 1996).

Thorough characterization of production environments is essential in defining appropriate production systems. These defined systems and their technologies shall need to be location-specific and farmer-driven if they are to improve nutritional security of vulnerable rural populations. Improved agricultural technologies shall be key ingredients in raising productivity, competitiveness, and hence nutritional and income security. For the non-irrigated areas, these improved technologies shall feature watershed development and water-saving techniques.

Livestock have a major and increasing role in small-holder mixed-farming systems. Towards the objectives of diversified agriculture and of income and nutrition generation, priorities for livestock-technology development are animal health, nutrition, and reproduction.

To enhance labour productivity on small-holdings, priority needs are tools - small, but perhaps mechanized - wherewith drudgery can be lessened but employment maintained. Such tools will add value to the work hours. In post-harvest handling, agro-processing, and value-addition activities, the priority intervention is to disseminate more widely various available, proven technologies. These available technologies serve not only to reduce post-harvest losses, but also to improve produce quality through effective storage, packaging, handling, and transport, such that export-quality items can be marketed.

Biotechnology can and should benefit small-holders. However, biotechnological products must be available at affordable prices, and they must be appropriate to the agriculture and the food of the small-holders and the rural poor. Targets for biotechnological development - already being addressed through biotechnological procedures and through conventional methods - are cultivars of small-holder food crops that are resistant to insect pests, diseases, and other biotic stresses, and that are tolerant of drought, waterlogging, soil toxicity, and other abiotic stresses. Such cultivars would not only lessen the costs of production and increase productivity, they would additionally lessen environmental pollution (Singh, 2000).

Globally, genetically-engineered crops are commercially grown on several million hectare, mostly in North America; and in Asia, on some few thousand hectare, mostly in China. For poor people, in India and elsewhere, transgenic cultivars hold promise of cost-effective solutions to human-nutritional deficiencies. Among candidate cultivars are golden rice - rich in vitamin A, and others having desirable concentrations of protein, minerals, and amino acids and fatty acids. In the longer term, biotechnology has pro-poor potential (Persley, 2000) to incorporate a nitrogen-fixing ability into cereals, and to enhance products durability following harvest and during storage

Access by small-holders to biotechnology-derived seeds, products, and technologies must be ensured through the WTO/TRIPS Agreement. The world’s small-holders are not merely the recipients of technologies developed through formal national and international systems, they are also developers and donors of valuable products and knowledge - particularly in relation to plant and animal genetic resources. These small-holder contributions must be accommodated - and their benefits recognized and compensated - within future developments of TRIPS and of patent regimes.

Co-operative Farming and Farming Co-operatives

India has a long and successful history of farmers’ co-operatives, through which small-holders increased their bargaining power as buyers of inputs and sellers of products. Such bargaining power shall become increasingly important as trade globalization expands.

An expansion of the historic role of the farmers’ co-operatives is the fore-mentioned creation of large-scale co-operatives that undertake commercial-scale processing - as of milk in Gujarat and of sugarcane in Maharashtra. A feature of these enterprises is their adoption of corporate, professional management. Other sectors of India’s agriculture, and other states, may offer similar opportunities. To the extent that is appropriate, national and state governments - perhaps with private-sector consultants - may support such initiatives through education and advice, and if necessary through development of an enabling administrative environment.

A newer development is the co-operative group-farming enterprise, wherein households retain their land-ownership rights, but pool and share their farming resources, operations, and benefits. In appropriate circumstances, such group-farming has potential to transform subsistence agriculture to demand-driven, commercial agriculture, and perhaps to increase rural-community post-harvest enterprise, employment, and income. There is likely to be a strengthening need for the government - through policy and by intervention - to assist and nurture this nascent development.

Globalization shall encourage corporatization of agricultural trading entities. Considering their costs of individual transactions, such entities shall find it uneconomic to trade with small-holders and with small-scale rural enterprises. However, an array of professionally and capably managed large-scale small-holder co-operatives that commanded a large fraction of regional or national output of agricultural commodities and products could ensure that the trading entities find it both essential and profitable to trade with the small-holder sector. Such entities would recognize (as do our Tables 3 and 4) that the small-holder sector shall generate an increasing proportion of national output of most commodities - including higher-value ones. National and state governments would need to ensure an operational environment in which small-holders had a choice among competing co-operatives that sought their custom and membership.

As a crucial socio-economic contribution to rural development - and in their own financial interest - such large-scale private-sector co-operatives should expect to provide insurance, micro-finance, and safety nets to their members, and to provide to them awareness and skills-training for existing and emerging technologies - both for pre- and for post-harvest technologies. Successful co-operatives would - inevitably - generate and conserve on-farm and off-farm rural employment.

In the medium-term - and addressing a crucial national interest - successful large-scale rural co-operatives, with attendant private-sector enterprises, should expect to create rural centres of production and processing. Such centres could prevail against the migratory trend whereby rural poor become urban destitute - with dangerous potential for social and political interest. Investors - public or private - will appreciate that the investment-plus-recurrent cost for a rural workplace is substantially less than for an urban workplace.

Institutional and Infra-Structural Supports

As previewed in the preceding section, the proposed large-scale rural co-operatives would expect to provide a cost-effective “single-window-delivered” array of technical and financial services. For the individual small-holder producers of primary products, the technical services would expect to include custom-hire facilities and operators wherewith to undertake timely and efficient pre- and post-harvest field-crop-production activities, and on-farm guidance and assistance in horticultural and in livestock husbandry. For contiguous small-holdings, communal services would include crop- and livestock-marketing support, and irrigation-water supply - in partnership with water-users’ associations where appropriate. It is thus re-confirmed that institutional and initial financial support - from national or/and state agencies - must be provided to the embryonic large-scale co-operatives.

Pending the establishment and functioning of large-scale co-operatives, small-holders shall increasingly require a range of financial services - for micro-scale savings and loans, and for crop and livestock and household-emergencies insurance. In many rural areas - especially remote areas, there shall be need for public-sector strengthening of institutional and infra-structural supports in order to attract the private-sector and the civil-society micro-finance agencies. FAO has extensive expertise and experience in assisting Member Countries - including India - with their micro-banking and rural-credit programmes. This assistance could be expanded - should India so wish - to support the increasing number of rural community-based organizations and self-help groups - especially the women-comprised groups.

FAO has the mandate and expertise to assist also with long-term strategies and planning for land-ownership. In the near- and medium-term, however, and as a powerful contribution to the armoury that must confront India’s hunger and poverty, the more-tractable institutional issues of land-leasing can perhaps be resolved, and the skills and energies of the land-less and of the sub-marginal-size farm households thereby engaged more fully in the national cause.

Risk Management

For the Indian small-holder, poverty entails not only a meagre-ness of capital resources to invest, but also that any investment from those meagre resources involves a higher risk than would a similar investment by a wealthy farmer. In a rational assessment of a contemplated risk, the assessment depends not only of the balance of potential loss and potential gain, but whether, also, the potential loss is manageable from the assets owned.

Regrettably, there have been all-too-many instances of small-holder suicide as a conse-quence of excessive loss through mis-fortunate risk taking. The remedies require an institutional and financial environment that lessens risk to small-holder families: perhaps including options for farm-system diversification and for off-farm rural employment, improved access to technologies and their requisite inputs and to information and advice, and available and affordable micro-credit and crop and livestock insurance.

Families dependent on non-irrigated small-holdings are additionally vulnerable during seasons of adverse weather. Fortunately, India now has ground-and-satellite-based systems for forecasting medium-term weather and seasonal agricultural output. The greater reliability - compared to heretofore - of these forecasts permits a responsible and actuarial development of crop and livestock insurance products for farmers both of irrigated and of non-irrigated small-holdings.

Additionally, FAO operates a Global Information and Early Warning System (GIEWS), which provides information on food production and food security - at global, regional, national, and sub-national scales. It can thereby empower decision makers to take timely action in the event of forecast food shortages. India can link strongly to this system - and also to the complementary Food Inventory and Vulnerability Information and Mapping System (FIVIMS) - and thereby maximise its capability to lessen the risk-exposure of its small-holder and rural-land-less farm families.