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Global Forum on Food Security and Nutrition • FSN Forum

Re: Eradicating extreme poverty: what is the role of agriculture?

Taibat Moji Yusuf
Taibat Moji YusufKwara State University, MaleteNigeria

1. Under what conditions can agriculture succeed in lifting people out of poverty? particularly those households with limited access to productive resources

Agriculture can succeed in lifting people out of poverty through contract farming,

1. Contract farming: There are many constraints facing small farmers in developing countries including Nigeria that limit their potential to increase productivity and income. First, they lack information about production methods and market opportunities, particularly for crops that they do not normally grow. Second, even with sufficient information about profitable investments, small farmers often lack the necessary financial reserves.  Access to credit is limited by the lack of collateral and/or by the high interest rates demanded. Third, small farmers operating near subsistence are more risk averse than large farmers. They generally prefer to assure themselves a minimum supply of food before expanding commercial production for an uncertain market. (Bijman,2008).

One institutional form which deals with many of these constraints in an integrated manner is the  contract farming (Minot, 1986). It constitutes a potential way of overcoming market imperfections, minimizing transaction costs and gaining market access by smallholder farmers.

Contract farming as defined by Will (2013) is a forward agreements specifying the obligations of farmers and buyers as partners in business, specifying farmers’ (sellers’) legal obligation to supply the volumes and qualities as specified, and the buyers’ (processors’/ traders’) obligation to off-take the goods and release the payments as agreed and buyers providing embedded services such as: upfront delivery of inputs (e.g. seeds, fertilizers, plant protection products)); pre-financing of input delivery on credit and other non-financial services (e.g. extension, training, transport and logistics)

In many developing economies, contract farming has been recognized by both policy makers and analysts as a new development model or paradigm for linking small-holders to markets. (ActionAid, 2015). It has become an attractive policy instrument to assist small farmers to gain access to markets, information, credits, and necessary services to manage their risk.(Minot, 1986). Nigeria is one of the developing countries where contract farming practices has been gaining importance, as agriculture remains critical economic sector in terms of its contribution to the economy and employment opportunities. The agricultural sector in Nigeria is dominated by smallholder farmers who operate at the subsistence level with minimal level of commercialization while producers with larger landholdings may have access to capital, marketing information and institutional support.

In this view, contract farming can help farmers move from subsistence production of low-value staple foods to commercial production of higher-value crops, allowing them access to the wider economy and raising their income (Eaton and Shepherd 2001).

2. What is the role of ensuring more sustainable natural resources management in supporting the eradication of poverty?

Poverty is more dominant in rural area where a larger proportion of population depends on natural resource such as land, water, forest and livestock for their livelihood. Unproductive use of resources has led to resource degradation which appeared to be major cause of poverty. Sustainable natural resource mgt leads to growth of food and also enhanced income of poor. Income is one of the most important routes to exit from poverty

3. Can those without the opportunities to pursue agricultural production and to access resources such as fish, livestock, forest, find pathways out of extreme poverty through these sectors?

The answer is yes. They can find pathways out of extreme poverty through participation in agricultural value chain. An agricultural value chain is a way of describing the different ‘links’ required to take a product from the farm to the end consumer

A basic agricultural value chain involves a Production – Distribution – consumption schema

Production is concerned with producing agricultural produce which may be  crop, fish, livestock or forest by farmers with adequate access to productive resources.

Distribution is concerned with many activities including: gathering, transporting, sorting, processing, packaging, preserving wholesaling and retailing among others before the product finally gets to the user.

Those without access to productive resources can become  actors in any of the distribution schema and make substantial income

4. What set of policies are necessary to address issues connecting food security and extreme poverty eradication

Education reform which aims at enhancing skill acquisition of rural dwellers will lead to adoption of improved technology and enhance all farm employment

  1. Monitoring of special poverty eradication intervention  programmes to ensure full implementation
  2. Protection of natural resource management though integration of activities of ministries such as agriculture, health, environment and education.
  3. Promotion of cash crops in the primary sector
  4. Adoption of integrated farming system (agro forestry with animal rearing))
  5. Can you share any examples of experience that succeeded in reducing (or eradicating) extreme poverty through an agricultural pathways 

Out- grower – Scheme organized by AMO a poultry industry in Nigeria. The scheme is centered on broiler production and has many registered farmers. AMO supplies  day old chicks , feeds and other supports such as equipment,  drugs and vaccines and extension education to interested members who will rear the birds for six or seven months and then return them to the company. The birds will then be weighed in kg and the farmer will be paid according to the agreement made. The group has made millionaires out of many poor farming households  in Nigeria including; the transporters, the distributors of the chicks, people working in the feeds, drugs and vaccines  sections of the industry among others.