Recent increases in the levels and volatility of food prices have created significant challenges to efforts to reduce levels of food insecurity both at national and household levels. As a result, significant political attention has been given to the promotion of improvements in food staples productivity in developing countries, both to offset the rapidly increasing costs of food imports, and to stimulate increased incomes and hence food security status at the household level. This attention has been manifested both at country level, with many developing countries placing food staples at the centre of their agriculture development programmes, and at the global level, for example in the context of the recent G20 initiatives.
A central focus of these initiatives has been to develop and advocate mechanisms that will result in increased levels of production by smallholder producers through the adoption of productivity —enhancing technology underpinned by improved research and development, facilitated access to critical inputs and production — related risk reduction measures. Less attention has been given to the significant heterogeneity of smallholder producers, both in terms of their access to the productive assets required to be able to increase production and, perhaps more importantly, in terms of their willingness to increase production for sale. A key message of this report is that without better understanding the determinants of smallholders’ participation in agricultural markets, and formulating appropriate measures to facilitate improved participation, initiatives seeking to promote the adoption of productivity enhancing technology by smallholder producers are likely to have limited success.
Part 1 examines the characteristics of smallholder farming from a market perspective, explaining that different categories of smallholder producer face widely different sets of issues and constraints to market participation, stressing the mutual reinforcement of productivity growth and market integration, and setting this in a dynamic context of the constrained choices facing different producers. It then sets up the policy challenges facing governments in attempting to alleviate the constraints facing these producers.
Part 2 considers the determinants of smallholder participation in rapidly evolving agricultural markets, considering the categories of constraints and risks faced in increasing levels of production for sale in different market outlets and the mechanisms through which the choices made by different market participants shape smallholders’ integration into markets.
Part 3 introduces examples of the types of solutions that may be required to facilitate the participation of smallholders in markets at different levels of formalization, considering arrangements such as producer organizations in aggregating smallholder production to market, and then the potential of mechanisms, or support services, such as market-based risk management instruments, market information systems and extension.
Part 4 then turns to examine how such arrangements and mechanisms might best be delivered to the smallholder sector, with prominence given to the role of the public sector, broadly defined to include government, donors and civil society
FAO’s studies on foreign investment in developing country agriculture suggest that the disadvantages of large-scale land acquisitions often outweigh the few benefits to the local community. In countries where local land rights are not clearly defined and governance is weak, large scale land acquisition raises particularly high risks for the local community. Even from the perspective of the investor, land acquisition is unlikely to be the most profitable business model due to the high potential for conflict and damage to reputation.
Conversely, the studies suggest that investments that involve local farmers as equal business partners, giving them an active role and leaving them in control of their land, have the most positive and sustainable effects on local economies and social development. These inclusive business models need strong external support for supporting farmers and facilitating the investor-farmers relationship in order to succeed. They also require ‘patient capital’, as financial returns to investment are unlikely to materialize in the first years.
Beside the business model, other important factors include the legal and institutional framework in the host country, the terms and conditions of the investment contract and the social and economic condition in the investment area. Strengthening the governance and capacity of institutions in host developing countries is essential to enhancing the developmental impacts of foreign agricultural investment.
Developing country food systems have changed dramatically since the Green Revolution period. At the same time, malnutrition still represents a challenge and is now understood to encompass the three simultaneous dimensions of undernourishment, micronutrient deficiencies, and over-nutrition manifest in overweight and obesity. These changes in food systems and in the understanding of the global malnutrition challenge necessitate fresh thinking about food systems-based strategies to reduce malnutrition. This paper introduces a special section that offers such new perspectives. We discuss trends with respect to indicators of the triple burden of malnutrition to understand the extent of global malnutrition challenges and then relate those to food systems transformation in developing countries.
a Charles H. Dyson School of Applied Economics and Management, Cornell University, Ithaca, NY 14853-7801, USA
b Department of Economics, Cornell University, Ithaca, NY 14853-7801, USA
c Agricultural Development Economics Division, Food and Agriculture Organization of the United Nations, Viale delle Terme di Caracalla, 00153 Rome, Italy
d Division of Nutritional Sciences, Cornell University, Ithaca, NY 14853-7801, USA
e Nutrition and Consumer Protection Division, Food and Agriculture Organization of the United Nations, Viale delle Terme di Caracalla, 00153 Rome, Italy