全球粮食安全与营养论坛 (FSN论坛)

Dear all

On behalf of the HLPE Project Team, we would like to thank all of you for your contributions in reviewing the V0 draft of the report.  We are grateful to you for the time taken to review and make proposals.

Missing points or internal coherence have been pointed out, so we will adjust and integrate the comments and suggestions to move forward. In any case there is enough space to take all the comments on board, we will need to select according to the orientation we give to the report.

Thank you for your contribution to this important dialogue

Best regards

Pierre-Marie Bosc

HLPE Project Team Leader

Summary and Recommendations

• P8, #2 – While we understand the desire to refrain from excessive use of technical language, it might be helpful to reference the concept of nonseparability – where production and consumption decisions are closely linked – a common feature of smallholder agriculture. Where decisions are not separable we see quite different behavioural responses than one might otherwise expect.
• P8, #5 – The discussion of smallholders and markets is helpful – all engage in market transactions in one way or another.
• P9, #9d – This is an important point, but it would also be important to mention another are of institutional weakness: the general institutional or cultural or governance context can sometimes impinge on the ability of smallholder farmers to act individually or collectively to effectively manage their resources
• P9, #10a – It is not only the productivity of resources that is impacted by secure access. We need to also recognize that the quality of the resources are as or more important as the quantity. The quality of those resources impact their productivity, sustainability and resilience – and each can be improved with the right decision-making context.
• P11, #s 19-25 – These points are difficult to follow.
• P12, section headed by “ensuring and enabling environment and adequate incentives”. In addition to the 3 points mentioned (banking, policy investment code, market regulation mechanisms) it would seem appropriate to mention that the importance of an enabling environment for sustainable land use.
• P12, #29 under “technical and organization proposals”, not only is it “Strengthen the collective action processes to support smallholder technical innovation and increase market power”, but also to enable sustainable land management at the watershed or landscape scale.
• P14, #32 – We agree that productivity and resilience are very important, but most of the discussion has referred to things which target productivity directly. However, productivity has often been compromised in part by lack of attention to the health of the agro-ecosystem on which productivity depends. Putting resilience of the agro-ecosystem high on the agenda will do a lot for improving (restoring) its productivity. The reverse is not true. A narrow, short term focus in productivity will only see short term gains that compromise long term sustainability as well as resilience.
• P14, #36 – The discussion on contract farming is helpful. Elsewhere there is mention of the problem of market power – especially where there are few buyers and many sellers (smallholder farmers) – and the need for various forms of farmer organization to help counter this one-side market power. This is good. In addition to this, it would be helpful to mention the importance of prices which ensure adequate returns to household labour – this means, enough to live on when working full time. The alternative is to have families struggling to grow their own food on the side using unsustainable farming practices to the detriment of the local environment and the well-being of the population.

Chapters 1 and 2

• We actually know very little about smallholders. We don't really have definitions for how small 'small' is, we don't know that much about the complex ways in which they interact with various markets (upstream, downstream, labour, financial), and how they interact with other farming systems in different places. Consequently, the recommendation 'the sole issue of defining smallholders - just counting and giving an accurate picture of the structural characteristics of this heterogeneous sector - should receive the highest priority' is important.
• While talking about smallholders in aggregate may be useful for advocacy purposes but specific policy recommendations would need to be national or even sub national in order to really benefit smallholders. The idea raised in the paper of 'National Vision and Strategic Framework for Smallholder Agriculture' to be developed at national levels is obviously moving in this direction.
• The report acknowledges that the idea of an 'exclusive subsistence' farmer does not really exist; all smallholders require cash and therefore need to be more embedded in the local economy. However, the cash requirements, and the best source of that cash (and credit) is likely to differ across different types of smallholders.
• The statistic that worldwide, 73% of all farm units dispose of less than 1ha of land is something that is probably not widely appreciated.
• The commentary around demographic shifts over time was interesting - contrasting growing population and shrinking land holdings in the developing world with the increase in the size of farms and reduction in the number of people in the sector as it modernizes in the west. The trade-off between providing employment for people and having farms of optimally efficient size could be more clearly drawn out.
• The discussion of markets would be helped by further mention of the relative power of smallholders in the market place as well as the differences between those who are net buyers and net sellers and how those positions might vary seasonally. With respect to market power, there are important considerations for smallholders who face situations of few sellers in input markets and few buyers in output markets.
• There is a boxed text on low levels of contractualization (i.e. most farmers are not integrated into global supply chains), but this doesn't really develop into anything in terms of recommendations.
• Commentary around the idea of efficiency in smallholdings vs. larger farms is interesting. Smallholdings can be much more efficient in terms of calories produced for energy used, and also for labour-intensive crops, but they are also often not on an even playing field in terms of access to inputs etc so they can perform very badly when compared to larger farms. In short - it all depends on context.

Chapter 3

p.36 – last two dot points – the importance of hope and security is rarely recognized – the fact that the authors have included it is greatly appreciated.

p.37 first dot point. Relative stability in upstream (input) markets could also be important in some situations. While smallholders typically do not use a large amount of purchased inputs, strategies that encourage increased use of such inputs – e.g. commercial fertilizers or purchased higher quality seeds – risk failure if there is either considerable price volatility or sustained real price increases.

p.37 paragraph following the first dot point – there is mention of the importance of collective action and crafting appropriate governance rules. This is very important and more discussion of the subject would be very helpful.

p.37 section on Social Capital under 3.2 – where customary ties that influence access to natural resources are mentioned, it would be good to also include the management of those same natural resources. In addition to this, it would be good to mention the importance of understanding and influencing cultural norms and values that influence the management of natural resources and both the household and community levels.

p.38 first paragraph under 3.3.2 Farm level. This paragraph is rather confused. It mixes a few issues including productivity measurement, adoption of particular combinations of technology, and complementary investment to improve output per unit of inputs used by farmers. This paragraph and the following one also mix static and dynamic elements of productivity. It would help to consider each of these issues separately. So, for example

• Explain that value is used in productivity measurement because inputs are typically not homogeneous. If, for example, the only input was a small powered cultivator, and all were the same, then it would be reasonable to talk about output per cultivator. But with multiple inputs of varying types, value has to be used to combine them and adjust for quality differences.
• Investing in infrastructure and human capital as ways of improving productivity are somewhat different in that the human capital of the farmer is a direct input and will directly influence the farmer’s output per hour worked. The main productivity measures of a smallholding – output per unit of land, hour worked, or unit of intermediate input – may not be affected much or at all in the short run by infrastructure investments, but these investments in turn may have a big impact on the willingness of small holder farmers to invest more of their own assets to either increase their production  (e.g. by buying more land) or improving their productivity (e.g. by buying a piece of machinery). It would also be helpful to clearly mention that output per unit land area is not the only relevant measure of productivity – output per unit of labour may be more relevant to the resource-constrained household in some cases.
• Productivity also depends on the “health” of the agricultural ecosystem – for example, the level of soil carbon and its influence on infiltration of rainfall and soil water holding capacity and resilience to variations in precipitation.

p.38 last paragraph (extending to the top of p.39 – It would seem appropriate to also mention here the impact on productivity and resilience of improving the quality of land resources through the adoption of various soil and water conservation practices (SWC), forms of Conservation Agriculture and Agroforestry practices (including FMNR – Farmer-Managed Natural Regeneration) – see for example ICRAF’s work on Evergreen Agriculture.

p.39 first two paragraphs. Collective action is also a way of reducing risk.

second paragraph under 3.3.3. Collective action can also increase human capital through knowledge sharing.

p.39 last 4 paragraphs – these are excellent – it would also be worth noting that farmer organizations and collaborative networks also help to counter-balance power relationships in markets with few buyers – a not uncommon situation in rural areas in many developing countries

p.40 second paragraph under 3.3.4. While social safety nets can impact productivity through their impact on health and nutrition, there are other positive impacts as well. They can also stop productivity actually falling due to the farmers having to sell assets in extreme situations. In addition to this they can also contribute to increased productivity through other channels. Hoddinot et al (http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1661284) provide evidence that safety nets are growth/productivity supporting (i.e. they don’t just reduce asset reduction, both indirectly (by promoting visits to health centers thereby reducing disease, by increasing educational attainment) and directly (through helping poor families to purchase agricultural inputs after a drought). An evaluation of WVI safety nets programmes in Lesotho also showed that safety net programmes (particularly cash and/or cash-food mix) also promoted greater investments in agricultural productivity (http://www.ids.ac.uk/files/cashtransfers-lesothoWVI-evaluation.pdf).

p.42 line 7 ‘and in regions like Africa market access is far more expansive ...’ Is Africa in a meaningful sense a region, and should it be ‘expensive’?

                Section 3.3.6 Not all of the areas of investment discussed in this section need necessarily be public. Indeed, the fiscal position of some developing countries may mean that provision of improved communications and other infrastructure will need to be done by the private sector. A key issue in this case will be transparency of arrangements between governments and private suppliers. Also, should there be some discussion of government agricultural extensions services in this section?

p.43 line 14 ‘disjoint’? Should this be ‘separate’?

In general, the categories of investment in Chapter Three need to be made clearer. Productivity improvement is the thread that runs through them, so a clearer statement at the start of the chapter about what productivity is and how it is measured would be useful. This would make clearer the range of variables that can influence productivity, which could then be discussed. There also should be consideration of the fact that increasing investment without increasing productivity may also be desirable, and many of the things that can influence productivity will also influence investment decisions more generally. For example, improving security of land tenure may encourage smallholders to make productivity enhancing investments in their existing holding, or increase the size of their holding, or some combination of the two.

Chapter 4

p.45 Box 5 The contents of this box is not particularly useful without further explanation.

        Para 2. ‘there is an obvious need to enlarge total agricultural production’. The report places a lot of emphasis on increased production and increased productivity , and both are extremely important. But there is little attention given to reducing waste at the farm gate or in the distribution change. Given the recent report on global food waste (by the British Institution of Mechanical Engineers http://www.imeche.org/knowledge /themes/environment/global-food?WT.mc_id=HP_130007) reinforces the general view that 30-50% of all food is wasted, this issue deserves more attention as a response to current and medium-term food security pressures.

p.46, last paragraph – this discussion of the close forward and backward linkages between agriculture, poverty and nutrition (of both children as well as the household adult labour resources) is very important and greatly appreciated. A systems approach that recognizes these interconnections and feedback effects is very important as in many (if not most) cases there will be two or more necessary conditions that must be met in order to effect change in household well-being measures (especially in the area of household (and especially child) nutrition).

p.47 The discussion of microfinance does not consider savings groups as vehicles for mobilising funds. While savings groups are unlikely to provide sufficient loan funds for larger investments, there is a growing amount of evidence that they are very effective for facilitating small investments or income smoothing, and have the added advantage that they frequently are operated by women who play a major role in small holder agriculture.

p.48 The section on risk beginning on this page does not really discuss the area of micro-insurance (including crop and weather insurance). This is a developing area and while it remains to be seen how important it will ultimately be in reducing smallholder risk, it should be considered.

p.49, second paragraph – in other words household decisions about production and consumption are nonseparable. It might be useful to mention the household modelling literature that discusses this and the importance of recognizing it when trying to understand household decisions and the possible policy options that will have the desired impact on them.

p.51. The typology developed beginning p.51 is of use in identifying important categories of variables, but it still leaves us with the problem of determining the relative importance of different missing/weak components and the best sequence of actions to help remove the barriers they create to greater food security. The real risk is that the mix of strengths and weaknesses in each country or region will be sufficiently different as to make the program and policy response essentially unique to that place. As the report acknowledges ‘It is specific forms of interaction and combination that produce the undesirable effects.’ (p.52), and some examples of the numerous country specific responses are noted on p.55. The complexities of land tenure in many countries is an example. Even a relatively straightforward approach like farmer managed natural regeneration needs to tailored to each situation it is used in.   

Chapter 5

p.58, section 5.2.2 – the title of this section is “Improving productivity and resilience”, but there is really very little mention of anything that would contribute to increasing the resilience of agricultural systems. As it stands now, this section is very weak for that reason. With respect to improving productivity, it is not only a matter of new technology but also of more widespread adoption of some very good existing practices. In many cases some of these practices are also very positive in terms of their impact on resilience (a very important dimension of sustainability) and productivity. When the primary focus is on improvements to productivity, the focus shifts to short term solutions that can actually negatively impact resilience (and sustainability) since they almost invariably neglect soil and water conservation practices and agroforestry practices. When the focus shifts to an emphasis on building/restoring resilience of the agricultural system, then one has a longer term perspective – one that puts more emphasis on adopting practices which lead to major improvements in the natural capital on which productivity ultimately depends. With these sorts of practices more widely adopted, then the stage is set to make much better use of other options – such as purchased inputs (after all fertilizer use efficiency, for example, is much higher on high carbon soils).

p.58, section 5.2.2.1, first paragraph – in addition to “investments to enlarge the natural resource base of smallholders” consider revising to read “investments to enlarge or improve the natural resource base of smallholders”

p.69, section 5.3.2.2 , second paragraph, point (c) – not only do more efficient producer organizations help in this way, but they would hopefully counterbalance the market power in contract negotiations in situations where there are few buyers – provided that there is appropriate legislative and institutional support and that buyers negotiate in good faith.

Some other points

• More consideration of how behavioural change can be achieved would be useful. The fact that smallholders are often very conservative in their farming practices is well understood, and the logic of this conservatism is understandable. However, technical change and climate change among other pressures make adopting new practices increasingly important. Discussion of what evidence we have on effective incentives would be very useful. 

• There is not much attention given to the role of traditional public sector approaches to smallholder agriculture through publicly funded agricultural R&D and extension services. How successful has their contribution to productivity growth in developing country agriculture been? What should their role be in the future? Are they attracting sufficient funding?

• The issue of income versus food security is rather blurred in the report. The conventional economic response of produce in line with comparative advantage, while not fatally flawed, was shown to have important weaknesses in 2008. Small scale producers focusing on a particular crop were very exposed because of the big difference in movements of prices of different crops. So, for example, specialising in coffee production and using the income earned to buy food staples did not necessarily prevent exposure to food security given the massive movements in, particularly rice, prices at that time. So specialisation probably needs to be tempered with some direct production of food crops to better diversify risk.

• The report probably attempts to consider too many issues. As it acknowledges, the smallholder sector is very heterogeneous, and the problems of, and responses to, the poorest and most food and nutritionally insecure will be different in some important ways responses to smallholders looking to supply to Wal-Mart or increase production for export. Also the range of possible responses contain a fair degree of complexity. A comprehensive report just focusing on the various dimensions of financing smallholder agriculture is not an insignificant undertaking.

This document presents a wide overview of current situation of smallholders’ situation around the world. It was a difficult challenge to prepare such a draft in such a short time and it is a good basis for further discussions. Thanks you for all this work.

The followings points are just proposals to help improve the deliveries of the groups.

1. Don’t you think that the overall objective of the report itself should be more focussed? If the aim is to provide a basis for evidence-based policies, then I feel that the document should provide an analysis of the available evidence regarding the feasibility and the effectiveness of various interventions aiming at improving investment situations for small-holders.

For the time being, the document is very much focussed on the context (the need for investments) rather than the possible solutions.

If the document wants to be a tool for evidence-based policy approaches, then it should provide governments and various stakeholders with adequate analysis to inform their policies (i.e. the tool box of EBP). At least for the sections dealing with the feasibility of the investments interventions. In particular, the analysis of the literature should use systematic procedures to select the different papers and documents used to support the analysis, the quality of the papers (and their limits) should be assessed with explicit criteria; the reference list should be presented in a more explicit way (table stating the reasons why the papers were integrated into the analysis).

It should make also clear the reasons why other papers were not considered in the analysis and/or rejected (with reference list of the papers considered but not kept for the analysis because of flaws considered as misleading). For instance, Banerjee, Duflo; or the many papers form J. Pretty, etc.

Of course it is a big work to be done. As long as the procedures and limits are explicit, it is acceptable that the analysis has limits and should be complemented and up-dated.

Maybe such a systematic procedure is not feasible in the time frame of this expertise. In that case, don’t you think that it should aim at providing very precise recommendations regarding the specific questions that should be investigated with systematic reviews?

2. The topic of the document is sometimes very wide. I agree that, at the end, every aspect of the life of the household associated to a small farm can be considered as part of small-holders investments, but don’t you feel that it might weaken the messages of the reports to have such a general approach? As a matter of fact, the two traditional items that are usually considered under this issues of ‘investments”, i.e. financial investments (and all the possible measures to reduce inequalities to access credit), and intangible investment (and measures to reduce inequalities to access agricultural technical knowledge) are diluted if all issues are considered. In particular, little specific attention is given to national extension systems.

3. The core entity of the report is unclear: smallholder? (= the farmer?) Household of the small holder? (the farmer and his/her family living on the farms? Small farm? (= the economic entity).

There are not synonymous but there are considered as such in many parts of the reports and I feel that this may be deeply misleading.

For instance, I agree that the “exclusively subsistence farmER” is a fiction, but the “exclusively subsistence FARM” is not. There are million of farms that are kept by their holder to provide only subsistence, even in the developed countries (i.e. small farms of old people whose monetary income are covered by remittance, farms of poor households having other gainful activities…). They have been eliminated too fast from this report.

Example of misleading conclusion that could be generated this wrong appreciation: if all farms are integrated into the market, thus intangible investment could be provided to all of them through the economic operators of the supply chain (inputs sellers, contracts with retailers etc.). This is not true.

4. In the same line, the farm typology that is proposed is very interesting. But, here too, I feel that, “farm”, “farmer” and “households” deserve to be better identified. I feel that the actual typology should be complemented with an additional criterion that gives information on the role assigned by the household to the farm (subsistence, medium term food/patrimony security for a whole family [the buffer role that was demonstrated before by FAO and is very important today[1]] as mentioned p.34, supplementary income in a complex system of activities and income, core economic activity to generate income for the whole household….).

To discuss the effectiveness of various modalities of interventions it is absolutely necessary to take account of these differences. For instance, some credit schemes are affordable only for people who have extra non-agricultural sources of monetary income (ex. Anseuw, Laurent 2005).

5. I feel that there is a danger to talk of “agriculture” in a broad way, without clearly identifying the national situations and the new issues.

51. First, according to the type of country the role devoted to agriculture differs. It is not possible to extrapolate learning from Japan to Africa, etc. The Japanese small scale agriculture is well known for its embedness in the Japanese welfare system (complementary income for people retired form the industry), with all the consequences it has on the policy positions of Japan in various settings (e.g. its position on the multifunctionality of agriculture). All agricultures are embedded. Of course we know it. But I feel that it is better to write it clearly. I feel that it would be wise also to always specify to which country it is referred to when a result is discussed. At least in a foot note. Even if the resulting text is less appealing form an aesthetical view point.

52. The situation of the small holders has dramatically changed over the last decade because of demographic evolution and resource scarcity. Some situations are totally new and should be considered as such (e.g. the pressure on land, on water, the impact of pesticides pollution on human health and the environment, the many market failures, etc) (see results of rural Struc). Many sentences of the report praise the qualities of small scale agriculture (e.g. “smallholder agriculture often shows an impressive productivity” p. 29, 1st par., they generate employment, “they represent an amazing capacity to adapt to the specificities of local-ecosystems and societal pattern, and to turn agriculture into a highly productive system that is essentially based on local resources” p28, etc.), without giving the limits of theses statement (where? Which reference? Which reliability of theses results? How can they be extrapolated so as to say that small scale farming is “often” like that? I feel that one should be very cautious with this type of formula that can be interpreted as a call for no support policy. Unless this level of generality is supported by robust evidence.

53. Several proposal are made regarding macroeconomic changes, e.g. to stabilize commodities prices. OK. But how? Don’t you think that the current situation of economic competition is concerning also because of the level of the price offered to small holders? Would not it be necessary to have a first step to prove, with a systematic review, the limits of investment policies when prices are fluctuant and low for several commodities? And then to discuss the possibilities (or impossibility) to support small scale farming in such a context? Why should we assume that efficient investment is possible for all smallholders, in all situations? Which evidence are they supporting this assumption?

6. Regarding the types of interventions, it could be useful to provide more evidence on statements that are quite controversial. e.g. p.40 “it is obvious that the diversity of natural and socio-economic conditions makes it impossible to define from a national level the actual investments needs of local groups or individuals”. Is it so obvious?

61. It can be very necessary to have national coordination bodies. There is no autonomy of the demand for services (Labarthe, Laurent, in Press food policy on intangible investments for small scale farms). Farmers and various stakeholders have to be informed of existing technical possibilities to efficiently interact. Neither strict top down, nor strict bottom-up are sufficient. 

62. There is an urgent and extremely important need of good knowledge bases for informing the various stakeholders (statistics, data on production situations, technical knowledge, etc.) (e.g. IAASTD…). In most of the cases, it is necessary to joint efforts at national level to create this knowledge base. It makes sense to analyse the diversity of investments needs at national level and discuss it with various stakeholders at local level.

63. To build capacities of Rural producers organizations. Yes. But which evidence is it demonstrating that the lack of producers’ organisations is the source of the problem? (And thus that’s these organisations will be the solution?) Of which problem exactly? What is at stake? The technical aspects of interventions to support investments in the small holder sector? Or the political power of various social groups to reduce basic economic inequalities? Why should we assume that if a country cannot develop adequate measures to support investments in the small holder sector it is due to an organisational failure rather than a lack of assets resulting from more fundamental sources economic inequalities at international level?

6.4. The report states that “the economic and institutional environment may enable smallholder agricultural investments or act as a profound disincentive in smallholder decisions to invest in productive dynamics” (p.49). Which is the evidence supporting this statement of “profound disincentive”?

7. Regarding the references, I can provide a set of references; but to me the main issue is to clarify the type of references that is needed and way theses references will be used (which are the criteria to assess their quality, for instance we cannot consider results form a monograph on a limited number of farms the same way as results from a large observation framework (e.g. ruralstruc)). EB tool box gives some guidelines, but here again it all depends upon the objectives of the expertises.

Thank you again for this stimulating document.

I hope I have answered to the main questions that were asked.

The draft is certainly moving in the right direction.   But at several places, the language is ambiguous, with technical-administrative type jargon—as in some of the strategic the recommendations—which gives the impression that the writing team recognize the challenges but are nervous about clearly stating solutions to address these challenges.

The following issues should be emphasized (they have been mentioned in the draft but could do with more attention).

·      The poverty situation is complex; many smallholders are in debt traps with their only real assets—land and cattle—mortgaged to local money lenders or banks;  in such cases, family members often move away to find wage employment to repay debts and protect these assets;  the issue is not only of low labourproductivity, but the absence of adequate labour, inputs, etc. to do do any kind of production at all.

·      Majority of the world’s smallholders do not have security of tenure over their farmlands and secure access to forests, water, woodlots, grazing lands, etc.  The situation is even more precarious for upland swidden cultivators; investments become very costly propositions under such insecure conditions.

·      Important to recognize the near absence of publicly provided financial risk mitigation measures for smallholders; medium sized producers and traders are able to hedge risks and avail of appropriate insurance schemes but not smallholders.  The  “environment” did not appear out of the blue; this is a policy environment and states/governments ts have either not enacted appropriate/adequate policies, or they have dismantled them…

·      Continuing feudal/semi-feudal social –economic structures and racial-cultural factors in many parts of the world act as barriers to smallholders being able to organize themselves into effective advocacy groups; particularly vulnerable here are women producers who also have to face gender based strictures and prejudices.

·      Economic planners tend to not understand the smallholder system of agriculture, and do not recognize the value and potential of smallholders’ outputs (productive and non-productive); national agricultural development plans are generally oriented towards doing away with smallholder agriculture altogether, or transforming it into a production stage for market driven regional-global value chains.  Agriculture development strategies by the World Bank, FAO and most governments entail capture of smallholder agricultural systems by large, powerful market actors, particularly agribusiness corporations.

·      The particular constraints faced by women farmers must be brought out clearly and positive measures to address their constraints must be formulated.

·      Also, particular constraints of smallholders in different contexts and situations must be elaborated and positive measures to address these constraints must be formulated.

·      True, smallholders exist alongside other agricultural arrangements; but large-scale, corporate, agribusiness led agriculture get disproportionately more policy, institutional and financial support than smallholder agriculture.  Smallholder agriculture on the contrary, gets negative incentives – the economic odds are stacked against it.

·      I understand the importance of elaborating the role of markets. But the role of smallholder centred, smallholder driven public investment  and investment regulations are far more important than market mechanisms.  There is enough evidence to show that with regard to market integration, smallholders overwhelmingly face adverse incorporation/inclusion.   Past-current trends show that governments are not able to or willing to reign in finance and agribusiness corporations.  But at least we can push governments to direct their resources and regulatory power towards meaningful support for smallholders…

·      Meaningful public investment should include essential services such as education, health, water and sanitation, transportation, housing, legal protection, etc. etc.

·      Agree that coordinated strategy very important, especially between positive actions and damage control.  For example, there are proposed actions for increasing smallholder resilience to natural disasters and economic crises; but these should complement measures to protect smallholders from evictions, loss of lands because of debt, contaminations of water sources by industry and industrial agriculture, destruction of diverse landscapes for monocropping, etc. 

·      Support for smallholder agriculture has to be systemic; it is meaningless to create small pockets/islands of smallholder production amidst massive oceans of industrial monocrops; unfortunately, these are the trends we see, and these lead to adverse incorporation and smallholders abandoning agriculture altogether.  This is not an issue of markets alone but of the entire production-distribution-consumption system.

·      It is not possible for smallholder and industrial agriculture to be in symbiosis with each other in the same space and time.  The central question here is what type of agriculture we want to promote-which must assess what type of agriculture the planet can absorb, given the climate and environmental crises we are facing.

·      Regarding rights to land and resources, recognition and support should go beyond “existing rights”; many smallholders have already lost their lands and/or are compelled to survive on very marginal holdings, degraded environments, depleted water sources, etc.  What are their “existing rights” in such conditions?  In many countries, rights to natural assets are rarely formalized and smallholders do not have proof of the extent of land, forest, water, eco-system losses.  Even if they have proof, states use eminent domain to claim assets at any time.  Resdistributive reforms are very important, but they need to be accompanied by meaningful, smallholder centred systems of resource governance.

Farmers and agricultural workers organisations have their own policy positions. The HLPE writing team should incorporate them as best as possible in this report.   I have pasted below a compilation of policy reccomendations from the documents of different farmers organisations:

Some Principles and “Bottom-lines” related to Agricultural Investments

1.     Small-scale food production is the dominant and most important form of food production world-wide. 85% of the food that is grown is consumed on local- national domestic markets and most of it is grown beyond the reach of multinational food chains.

2.     Small farmers have been struggling to maintain their autonomy, improving the soil, the water system, the seeds and the animal breeds. Peasants women and men play a central role in a model of food production that is based on local resources and that strengthens local economies.

3.     Peasant based agriculture uses and develops sustainable and agro-ecological  production methods and functions in harmony with the environment. It is based on the diversification of production to minimize risks. It creates sustainable employment on farms and in rural areas. A first priority is to produce food for the family and the larger community and only part of it is sold on formal local and national domestic markets.

4.     By far the largest part of the investment in agriculture in terms of labour, knowledge and capital is done by small-scale food producers themselves.

5.     Food and agricultural investment policies should be based on food sovereignty that will strengthen local, sustainable food systems, realise the right to food and increase food security.

6.     Policies aiming at strengthening food production have primarily to support and facilitate investment by small-scale food producers themselves. This means:

·      Putting in place adequate price and market policies which will generate revenues for  them that can be reinvested in agricultural production, processing and marketing.

·      Policies that enable small-scale food producers’ access to land, water, grazing, rivers, lakes and coastal waters, seeds, livestock breeds, aquatic resources, agricultural biodiversity, among others - the productive resources they need to produce food.

7.     Public investment and support for peasant based food production is crucial and has to be increased. This should include: 

·      peasant led research and strengthen their existing that are essential for innovation,

·      strengthen training for peasants and small holders,

·      increase local capacity to conserve food producing, ecological and genetic resources on-farm, on the range and in water bodies;

·      strengthen basic services,

·      support local processing and storage facilities

·      improve access to local and national markets,

·      implement genuine agrarian reforms,

·      implement the results of the International Conference on Agrarian Reform and  Rural Development,

·      Setting up credit facilities for small holders and support credit cooperatives, and assure that especially women have access to it,

8.     The share of public investments in agriculture, pastoralism and artisan fisheries that goes to women should be increased. Public services (such as extension and training services) should be tailored to address the particular needs faced by women small-scale food producers.

9.     Peasant based agriculture has to be protected against corporate investments and resource grabs.

10.  Farmers organisations and other small food producers should be effectively involved in the formulation, implementation, review and evaluation of national and sub-national policies on agriculture, investments, governace of land, natural resources and territories, etc.

11.  The primary responsibilities of national governments are to eradicate hunger, food insecurity, poverty and unemployment, and esnure the rights of its peoples, especially those whoe are vulnerable.  They should implement effective policies and devote an adequate percentage of their budget to supporting sustainable, small-scale food production, processing and marketing instead of channelling all the support to the export of cash crops.

12.  States should be accountable for ensuring that agricultural investments are useful and relevant to small scale food producers, and that they are coherent with the visions of peasant-friendly agricultural policies.

13.  Agricultural investments should be directed towards family farms, and particularly towards women and young people and other marginalized groups.

14.  In the UN Committee on World Food Security (CFS) effective criteria should be developed on how to effectively support peasant based and small holder food production. The CFS should coordinate any support from donor countries and make sure that these funds indeed contribute to a strengthening of peasant based, small holder food production and not to support corporate investment.

15.  The World Bank is not an appropriate institution to channel these funds. An autonomous fund has to be set up under guidance of the CFS.

16.  IFAD should focus its programs on its original mandate, search for effective ways to support peasants and small-scale food producers instead of supporting and facilitating private sector, corporate investment.

17.  Farmers cooperatives and small rural enterprises are important actors of local economies and have important roles to play in strengthening local food systems.

18.  The influence of the corporate sector (national and international) on agriculture, food production and food systems and social servives must be reduced. The corporate sector should not be allowed to control key productive resources such as land, water, seeds end credit.

19.  Governments, UN Agencies, IFIs, multilateral and inter-governmental bodies (including the CFS and GAFSP) must stop promoting Public/Private Partnerships which, as they are now conceived, are not suitable instruments to support family farms which are the very basis of food security and sovereignty in most countries.

20.  Governments should  speed up the proactive participation of small-scale producers and other members of civil society in the decision-making mechanisms of CAADP, as is the case in the CSF.

21.  Agricultural research be financed by the public sector and take into account local knowledge, practices and capacities. Corporate control over agricultural knowledge must be dismantled.

22.  FAO and governments provide Technical Cooperation Programme (TCP) resources to support capacity building and the establishment of multi-actor platforms in the context of consultations on principles of responsible agricultural investment and the implementation of the Voluntary Guidelines on Responsible Governance of Tenure of Land, Fisheries and Forests.

Introduction

The Committee on World Food Security (CFS) is to be commended on a comprehensive and well informed report that will clearly contribute to the on-going debate on how smallholder agricultural production can contribute to the world’s demand for food.  However, save the children wishes to make a number of comments, which will further strengthen the paper’s breath of coverage and quality. 

Save the Children (UK) has prepared this submission to inform the report on Smallholder Investments on Agriculture which has been prepared by a High Level Panel of Experts on Food Security and Nutrition, for consideration by the Committee on Food Security (CFS).  Outlined below are Save the Children’s responses to the issues and questions raised, both at a technical level and at a political level. 

Save the Children is focused on reducing child mortality and levels of child malnutrition, which are seen as a significant impediment to the future development progress in many developing countries.  Save the Children sees cost effective investment in small scale agriculture as a cornerstone to the eradication of poverty and hunger; in addition towards building countries with equal access (both women and men) to resources. 

About Save the Children

Save the Children works in more than 120 countries, saving children’s lives, supporting the rights of children, helping children fulfil their potential.  Save the Children has a vision of a world, in which every child attains their rights to survival, protection and development.  Through our vision, we seek to inspire breakthroughs in the way the world treats children, making lasting changes to their lives. 

For further information on this submission please contact Hugh Bagnall-Oakeley  or David McNair.

Smallholder Business model:

The paper discusses at length the need to engage smallholders with the market for the sale of agricultural commodities.  The importance and centrality of markets is recognised on page 63 and in the recommendations (page 12).  The document appears to have taken the view that smallholders are “fully part of the market economy”.  The paper explains market types.  At no time within the paper have the different smallholder business models been considered, nor how smallholders currently engage with the market; on an ad hoc basis or in a regular systematic way. 

A number of business models have been discussed, such as the “Teikei” system in Japan or contract farming.  Different business models have evolved, some smallholder farmers have engaged with large wholesale or retail organisations, haricot beans from Kenya, Zimbabwe frequently end up on supermarket shelves in UK and Europe.  Nevertheless, for those smallholder farmers with limited access to resources and only partial engagement with the market, need to be mapped.  A better understanding of the business model and how smallholder’s engage with this market will yield information on the infra-structural and institutional constraints.  A more bottom up and investigative approach is advocated. 

Save the Children strongly recommend that the different smallholder business models are researched; business models based on different gradations of access to resources, particularly access to labour be developed.  The business models will identify the markets that smallholders are engaged with, the constraints to market access, providing insight into likely strategic interventions that may lead to increased market access (less regulation and blocks, thus greater smallholder engagement).

Quality Standards

Poor grain quality (frequently excess moisture content), is a significant constraint to trading grain, both regionally and internationally.  Many trading blocs and world markets have set minimum quality standards.  A frequent problem is that smallholders are offering commodities that fall outside these quality standards, representing a huge constraint to smallholder market engagement.  A number of project and organisations are actively pursuing the attainment of quality standards Purchase for Progress (P4P) and many business oriented development projects/programmes.  Save the Children suggest that any investment in the smallholder sector must include quality standard attainment as a significant programme design criteria. 

The issue of agricultural quality standards (grain, livestock fat class and fish quality standards) goes unmentioned in the report, a serious lacuna.  Attainment of quality standards will by definition make smallholder produce tradable on the world market, greatly facilitating the process of smallholder market engagement.  Providing a strong incentive to the private sector to invest in a market infrastructure and supply chain, through which to bulk and sell quality proven products.

Land Market

Throughout the document, a fully functional land market appears to be assumed.  In Africa, and in many Asian (including South East Asia) countries, the land markets are not functional or are only accessible to the wealthy and politically powerful.  It has to be emphasised that no legal framework or land markets exist in the majority of these countries.  The absence of a functional land market is a huge risk to smallholders and directly threatens many smallholders security of tenure on land that they technically own.  The absence of a land market, to prove title and ownership is a significant investment constraint, not fully articulated in the report. 

The report must recognise that a number of countries have recently developed a legal framework (Uganda Land act 2004 or the Kenya Land acts 2012 ).  Within these legal frameworks, there are considerable hurdles to address; legislation may be in the process of being promulgated or the expertise to survey and demarcate land may be unavailable, slowing the whole process of ownership of land title. 

As many African or Asian smallholders do not technically hold title to their land, which they may have farmed for century’s poor security of tenure undermines livelihoods and is a constraint to obtaining credit and consequently a significant block to further investment.

Save the Children recommend that the report should emphasise the importance of land tenure for poverty reduction in the context of negotiations around the Principles for Responsible Agricultural Investment.

Nutrition and smallholder investment

The recommendations and summary outline the main constraints to smallholder agriculture, as well as articulating the types of situation where the investment climate may stimulate discourage or block investment. 

The overwhelming emphasis of the paper is towards production and productivity, emphasising models and market engagement.  The paper does not give sufficient prominence to the role of nutrition in the smallholder paradigm.  Pages 46 & 47 give reference to persistent poverty and the lack of resource access.  The paper acknowledges that agriculture plays a role in “increases of overall production”, while simultaneously “contributing to poverty alleviation”.  Three coordinated pillars are emphasised; social protection, technical and organisational proposals and market infrastructure.  At no place within the document is nutrition dealt with or advocated.  This is an oversight.

The individual smallholders’ nutrition, and that of his/her family is critical; they will consume the food they cultivate, household food items that they purchase from the market will be funded by what agricultural commodities they sell.  It is regrettable that no or very little mention of nutrition is made; it appears to be assumed, symptomatic of the current smallholder debate.  Agricultural policy is strongly oriented towards cash crop production.  Some cash crops can be sold as food, or processed into food products (posho, Maize oil). 

A significant body of evidence shows that good nutrition during the period minus 9 months (conception) to + 24 months is critical for human physiological and the development of mental acuity. 

Any development or further commercialisation of the smallholder sector should not omit nutrition for both the unborn, young children and juveniles. The cost to developing countries in lost potential is as much as 2-3% of GDP.  Human capital needs to be conserved, as good and balanced human nutrition under pins it.  Individual smallholder nutrition throughout their lives is important and must be considered to be an integral part of any investment plan for smallholders.  Whilst peripheral in the report, it is central to their livelihoods and wellbeing.  Good health is the best social capital to have.  Save the Children strongly emphasises the importance of addressing nutrition within the report particularly in the context of smallholder investment plan/opportunities. 

National Vision and Strategic Framework for Smallholders

It is uncertain why a national level document (the national vision and strategic framework) is being called for in an international document.  It is contended that the national Vision and strategic framework for smallholders is outlined in the many country (National) economic development plans.  Kenya has a vision 2020, Rwanda and Zimbabwe has a vision 2030, as does Malawi.  In all these documents, Governments have outlined vision of what they want to achieve in the economic development of their country. 

The vision is translated into the national economic policy and the different agricultural policies and strategies.  In Kenya, Rwanda, Malawi and Zimbabwe the smallholder sector comprises 70 – 80% of the agriculture sector.  Many National Economic Development strategies and the different National Agricultural Policies frequently articulate a vision and strategic framework for the development of their country’s smallholders.  In many cases, a vision and strategic framework is already outlined; in the Kenya Vision 2020 document, the privatisation policy (Rwanda) and the Plan for the Modernisation of Agriculture, Uganda.  These are all examples of individual African countries which have through different strategic plans articulated a vision and a strategic framework for the development of their smallholders

Thus the call for a national vision and strategic framework for smallholder agriculture is out of place.  Its utility is questioned, as is its relevance across the different national contexts.  Save the children recommend that reference to a national vision and strategic framework for smallholder agriculture be dropped. 

Typology

The paper, early on, acknowledges that the smallholder sector is “highly heterogeneous”.  That being the case, the idea of running a typology on something that is described as “highly heterogeneous” appears to be inadvisable.  A typology is a useful research tool that may in this case; arrive at a highly fragmented typology.  The paper does not make clear, how the typology will be used.  It is probable that on a country basis, that each smallholder will have varying access to resources and differing access to markets.  Many civil society organisations, government departments, particularly the Extension service and donor sponsored projects (or programmes) may have undertaken a basic typology already.  Consequently a typology may already be available at District and National levels. 

Save the Children suggests, that if a typology is to be used, a stronger case needs to be made.  The emphasis must be on how the typology will enhance the analysis already undertaken. 

Smallholder Institutions

The paper proposes the support and further development of sustainable producer associations.  Experience has shown that for such institutions to be sustainable, they need to overcome the basic problem, of what value addition do individual smallholders receive from such organisations.  The European Union sponsored the Zimbabwe Farmers Unions; the project ran into difficulties as the fundamental problem was there was no tangible benefit to individual smallholder farmers.  Consequently, many smallholder farmers were not renewing their membership.  A similar situation has been found in Uganda. 

Box 5 outlines a number of lessons learnt from the World Bank, none of these lessons outline how to deliver on the needs of smallholder farmers.  A number of rural producer organisations sell inputs, in competition with the private sector outlets.  Demand in a smallholder environment is notoriously difficult to predict.  It is a risk to both producer and producer organisation.  There are significant logistics issues to overcome. 

The procurement of seeds, fertilisers and agro-chemicals, means the procurement plan must have a clear idea of seed varieties (those preferred by famers) and fertiliser brands (again those preferred by farmers).  To have the aforementioned in stock, assumes the availability of operating capital (or credit), to procure and transport the goods to the point of sale.  Experience has shown that Producer Organisations are uncompetitive with the private sector; inputs frequently arrive late and are more expensive than local private sector outlets. 

Civil society has invested in producer organisations, as have individual governments and donor funded projects.  A survey of producer organisations (or farmer groups), by a Hyderabad based NGO in India, showed that 90% of Producer Organisations on a project were inactive.  The support required to launch a rural producer association is usually vastly under-estimated.

Most Civil Society Organisations and donor funded projects provide support to rural producer associations for about a 2 year period.  Experience has shown that support is required for an extended period often greater than 5 years.  The paper seems to be working on a much shorter timescale.  Whilst the paper clearly states that the changed institutional landscape has resulted, that is true.  But the fact that the producer organisations can influence policy is a more dubious claim.  Considerable support will be required before many producer organisations can make this claim. 

Whilst there is huge potential, sustainability remains a significant challenge.  Some farmer organisations have become highly politicised.  The most successful producer organisations are those that bulk up agricultural commodities, apply a quality standard and sell into intermediary and terminal markets.  For those Producer organisations that do achieve the required quality standard, there will be traders pay premium prices.  But inherent suspicion between different members is a handicap. 

Save the Children suggests that the paper focuses on producer organisations becoming sales outlets for bulked quality assured agricultural products, assuring the business base and the sustainability of the organisation.  Political advocacy and social support will be organic developments and is part of the maturation process. 

Prioritisation

The paper has an excellent analysis of the smallholder producer situation.  There are a number of recommendations emerging from a recommendation framework.  It is regrettable that no prioritisation process has been developed and implemented.  There is a need to have some assessment of the recommendations made, that if implemented will have the greatest impact on smallholders.  Save the Children recommends that the second and subsequent versions of the document, the recommendations made, require to have some assessment of impact and cost, thus a process of prioritisation.

Credit and banking systems

For many smallholders, taking credit is an unacceptable risk.  Many smallholders are highly credit averse.  Para 33, specific recommendations (P14) state that there is an “urgent need to reconnect financial and banking systems to smallholder agriculture”.  We concur fully with this statement.  However, experience with credit and banking systems in their support to smallholder agriculture has been chequered, notwithstanding that the smallholder producers themselves are averse to taking credit.  The problems with credit in the rural environment have been well documented, and include problems with repayment system, repayment period, mitigation of risk (poor harvest) and high transaction costs. 

Box 8 provides an excellent analysis of the risks and reasons why private finance institutions and banks do not provide credit facilities.  Linking finance with the value chain is a way of introducing credit to the smallholders.  High levels of delinquency make the provision of credit unattractive.  Side selling is another unacceptable risk. 

Furthermore in a number of countries, particularly African Countries, the legal framework does not provide a necessary legal context, from which credit and banking institutions can operate.  The absence of land as collateral has already been cited as a handicap (see land market section).  The introduction of a transparent and free land market would remove a significant constraint to the finance and credit markets.  Over-riding, these consideration, the financial viability of providing small loans to many producers, a critical mass is required, something that is present in Asia, but may not be present in more sparsely populated countries.  Nevertheless, the use of business models for the provision of credit that are viable and are likely to be unique to the country is to be encouraged and promoted.  Save the children recommends that consideration needs to be given to the overall viability and sustainability of providing credit and banking facilities in more remote parts of the world.  There are some very successful examples of agricultural credit, in areas of over-population, under-population and of extreme poverty (E.g. Grameen bank model).

•      La   question   posée   dans   l'introduction   sur   la   nature   et   la   direction   des investissements (dernier paragraphe page 16) n'est que partiellement traitée dans le rapport :

•      la  nature  de  l'investissement  (privé,  publique,  type  de  partenariat  …)

pourrait être développée davantage.

•      Les  partenariats  public­privé,  qui  ne  sont  pas  réellement  abordés  ni analysés dans le rapport. Ces nouvelles formes d'investissement sont en développement, et leur pertinence, leur efficacité vis a vis des petits producteurs mériteraient d'être analysées.

•      La complémentarité entre les différents types d'investissements dans la chaine    de    valeur    mériterait   d'être   abordée :    en    particulier   des investissements dans l'amont  de la production pourrait améliorer l'accès aux outils de productions (et aux connaissances associées), et des investissements dans l'aval (transformation...) pourraient permettre une valorisation de la production, un meilleur accès au marché et une réduction des pertes.

4)       The issues that this report needs to cover may comprise some controversial points. Do you think these are well highlighted in the report in order to feed the debate? Are those presented with sufficient facts and figures to elicit their rationale? Did the current draft miss any of those?

•      La notion d'économie  d'échelle   n'apparait pas dans le rapport. Or elle est la principale source de controverse en économie sur la pertinence d'un soutien aux petits producteurs. Divers auteurs ont montré les limites de l'application de la notion d'économie  d'échelle  à  l'agriculture.  Ce  sujet  mériterait  d'être  abordé  dans  le rapport.

The draft is strong in highlighting the need/demand for affordable and accessible financing for smallholders.  It  also presents well the difficulty in defining what constitutes a smallholder farmer and thus the difficulties in prescribing a ‘one-size’ fits all way forward.  From the perspective of P4P these are the following areas that could be enhanced:

• Gender is an important area to consider when discussing the future of smallholder development, yet references to gender are not made until page 54 and subsequent references are rather adhoc in nature.
• The synergies between different levels of stakeholders and partners could be tightened in order to highlight the need for greater cross sectoral cooperation.
• The focus on corporations supporting  smallholders in accessing markets is valuable, but there could be a stronger focus on the more accessible markets at country level such as local commodity exchanges.
• The geographical representation seems a little off balance at times.  For example,  section 1.3 ‘Diversity of situations’ uses the USA, Japan, Africa, China and the European Union as examples of how it’s difficult to define ‘how small is small’ but there is a noticeable absence of LAC from this section.

Investing in smallholder agriculture for food and nutrition security

V0 DRAFT

A zero-draft consultation paper

Notes from Birgit Müller LAIOS-IIAC, CNRS France

21 January 2013

The first draft of the HLPE report lets transpire the profound differences of opinion about smallholder farming that exist in the group of experts without explicitly spelling them out.

The report is thus full of contradictory statements about the role of markets, credit, contracts, modern retail systems (value chain) for improving the situation of small holder farmers. Also there does not seem to be an agreement what a smallholder actually is and who should be included in the study (only farms of less than two ha, family farms of upto 50 ha?, farms earning less than 1000 U$ a year, a different income limit and a different size for different countries)

Thus for a statement concerning Brazil: “The smallholders units only dispose of 24.3% of the total area, whilst the large corporations control 75.7% of all land. Nonetheless, smallholders produce 38% of the total value of production.” It remains unclear what a small holder unit is in Brazil.

Farming model and energy use:

While the report acknowledges that

p. 32“smallholder agriculture of the ‘peasant type’ generates for each calorie consumed, 4 to 10 calories of food. For smallholder agriculture of the ‘Green Revolution type’ this is 2- 5 calories of food produced per calorie of energy consumed. Large-scale corporate agriculture of the high-tech type only produces 1/10th to 1/20th calorie per calorie consumed”

and that smallholder energy efficient agriculture that uses more man power per hectare is an alternative that has to be seriously considered in a world with finite fossil resources

this insight is brushed away stating that industrialized countries do not need to increase the number of people employed in agriculture

p. 28 “In industrialized countries and in countries in successful transition towards industrialization there is less need to enlarge rural employment. “

contracts:

The report acknowledges that smallholder producers generally do not profit from contracts; And if they are concerned by contracts then indirectly

p 30 “contractualization is not occurring at the producer-level segment of the value chain; rather, it is downstream, between the wholesaler or cooperative and the processing firm or procurement service. “

but then the report states suddenly:

p; 68 “Contract agriculture offers important opportunities for a growing number of smallholders in dozens of developing countries, without specifying what they are..”

Public Procurement

Hope for smallholder farmers is set in public procurement schemes (p. 31 new collective procurement schemes could emerge,)

without mentioning the limits put on public procurements through a number of bilateral and multilateral free trade and investment agreements

Investment:

 While the report emphasizes the need for investments it also acknowledges that investments don’t have necessarily positive consequences for smallholder farmers without specifying this statement in contradiction with most of the rest. Quote:

p. 38 There is a widespread mythology that investment is good and the more investment the better.

p. 40 Role of corporations:

The reports equates uncritically the role of corporations with the role of state extension services

“Corporations can provide access to technology just as extension services did and still can - but they differentiate in a sense that they combine information with access to means of production under varying conditions according to contexts [loans, direct payment, credit based on harvest].”

What the report does not see is that the objective of the corporations differs from a public extension service. it is not to serve the farmer but to extract surplus from him.

However the report wants to “focus our discussion on those cases where the presence of corporations is needed and wanted as a matter of policy.” And then continues to enumerate the public investments needed so that the corporations become willing to interact with smallholder farmers because it becomes profitable for them.

Investment in Public Goods:

absence of critical evaluation of the impact of central electricity grids (versus solar panels), roads and land appropriation (see for instance Murray LI), the very problematic nature of many irrigation schemes in arid regions

p. 45 Rural Producer Organisations

extremely problematic to transform political rural producer organisations that defend on the political level the interests of farmers in land reform, access to seed, credit etc. into service providers for undefined others (are they corporations?) parallel to the problematic nature of eco-system services

p. 48 Natural and technical risks

The report states :

« Policies and tools are needed to monitor, prevent and manage technical risks (climatic, plant pests and animal diseases). »

Technical risks seem to be different from the not the risk of the technology itself (agrochemicals, GMOs) which are not at all mentioned althouygh they are very real in the investment programs involving GMOs in Africa

Credit:

p. 65

Very ambivalent and contradictory statements about credit

First the report states that farmers could be easily pushed out of farming by credits. Quote : “If they (farmers) could luckily have loans, high interest rate and heavy repayment can push them to get out of farming.”

“Too small loan size and prohibitively high interest rate are also imposed as barriers against smallholders’ investment”

And then it suggests that the solution would be the anticipated sale of the crop, so that at harvest time the smallholder farmers will already have to sell anymore, which supposedly improves food security

Quote: “Usually credit is guaranteed by the anticipated sale of the crop in the future. Value-chain approach which are well adopted for export crops and linked with governmental development banks, can be oriented to local food staples to improve food security conditions.”

Recommendation: there is an ideological controversies going on inside the HLPE report:

between a position advocating global free market, corporations as providers of appropriate technology (p.40), smallholder organisations as service providers and not as political representations of smallholder interests (p. 45), contracts between smallholders and corporations

versus public procurement schemes (without recogniszing however that these are currently endangered by bilateral and multilateral trade and investment agreements), local and regional markets, energy efficiency of low input smallholder farming, resilience of diverse smallholder farming models

I don't think it makes sense to harmonize these contraries into common recommendations. It would indeed be much more useful to elaborate the arguments of the contrary positions.

It would be important to make the dissenting voices in the report visible and allow for dissenting recommendations clearly attributable to different experts,

In that way you could have recommendations that all experts agree on.

and then dissenting sets of recommendations that different groups of experts make. The reader of the report can then link back the type of recommendations made and the background of the authors of the recommendations.

There should be a clear distinction between expert opinions and stakeholder consultations. Experts should not act as stakeholders. Their role is to provide material for the stakeholders with the help of which they can make up their opinion

CARE International – submission to HLPE consultation on investment in smallholder agriculture

January 31, 2013

Introduction

CARE International (hereafter, CARE) welcomes the invitation to comment on this draft report by the HLPE and commends the Committee on Food Security for carrying out such an important and relevant consultation. CARE considers itself in a good position to be able to provide critical comment and evidence to this process given many decades of experience in food and nutrition security work, particularly among smallholder farmers. Our feedback is provided through the questions posed in the consultation though we have added points where we feel more detail is required.

1) Definition and significance of Smallholder agriculture: is the approach in the report adequate?

1.1          CARE believes that the case for the significance of smallholder agriculture is well made in the paper. The statistics and evidence used adequately captures the importance of smallholder agriculture in terms of livelihoods and economics. The definition per se, is not problematic and we agree that context and circumstance are always important variables but we feel that the paper does not adequately capture some social and cultural dynamics among smallholder communities. Of most concern to CARE is the inadequacy of attention paid to gender.

The ‘smallholding’ or smallholder unit is portrayed as a singular or family unit and while there is a need to generalise, it will be very important for the paper to explore the non-heterogeneity not just of smallholder agriculture in general, but of the household structures within smallholder communities. Gender inequalities and other socio-cultural and socio-economic differences below household level as well as dynamics of fragmentation of communities and households  (e.g. seasonal or permanent migration of parts of a household) are not given due weight, or not addressed at all. While section 5.2.1 addresses rights and the need to consider social difference is mentioned, this is totally inadequate and far too late in the paper to be taken seriously. Some analysis of social exclusion and marginalisation of women in the initial problem statement would be an important addition to the paper.

Women and children are not explicitly referenced until page 14, and this is only in the context of a welfare-oriented element of the proposed framework i.e. the 'wellbeing' aspect (i.e. special attention to women and children in social protection and access to basic public goods). While CARE strongly supports policy and investment in such interventions, what is completely missing from the analysis is the role that gender inequalities play as part of the substantial barriers for smallholder agriculture, and the role that reducing gender inequalities must play as part of the solutions proposed - for example (but not only) in the context of these recommendations the paper makes: 

• social, legal and political recognition of smallholders as a business and social sector opening rights and duties
• strengthening of collective capacities of representation of smallholders
• recognition and enforcement of land rights

1.2          Notwithstanding good analysis, point 2 on the importance of smallholder agriculture which identifies two sides of reality for smallholders ‘economic ‘ and ‘domestic’ is unconvincing. CARE’s experience working with smallholders tells us that economics is very much a domestic issue and that differentiating them is not helpful. On point 6, we would add that other conditions (further to favourable markets) are also necessary for positive smallholder response. We would also contest the assumption in point 7 that smallholder agriculture ‘represents resilience when it comes to shocks of whatever type’. This point is not clear and appears to present resilience in a narrow humanitarian light. In point 12, it is worth noting that the economic dimension of smallholder contributions to food security is also associated with inequalities. Inequity and injustice is not exclusive to social dimensions of individual, household or community livelihoods.

2) Framework for Smallholder agriculture and related investments: is the typology useful, adequate and accessible for the problem at hand?

The typology is interesting and necessarily complex as this is difficult area. However, we feel that it is somewhat biased towards markets and production aspects – notwithstanding the convincing analysis on the importance of these areas. The paper succeeds in addressing the issues of investment of labour and labour productivity, credit, agricultural inputs etc. for increased productivity, and creating more favourable market conditions to market yields. But various access and nutrition issues are considered only in so far as they represent a barrier to or an enabler of smallholder investments in the form of labour/ and other forms of livelihood capital. CARE questions the appropriateness of the title 'investing in smallholder agriculture for food security and nutrition' – because nutrition is not at all part of the equation and is underestimated or ignored in areas of both the analysis and the typology.

CARE believes, as in many papers aimed at addressing the challenges faced by smallholders, that nutrition is thus again neglected as a critical lens through which to seek solutions. There is very little attention provided to actual nutrition-sensitive agricultural interventions and the typology narrative in section 4.5 does not include any direct or even indirect connection to nutrition – focusing instead on a somewhat tired nexus of assets/endowments, markets, productivity and relationships. While we agree these are important, our evidence from Bangladesh demonstrates that it is indirect interventions, in combination with direct traditional livelihoods interventions, that better nutrition outcomes are achieved. 

Other gaps in the analysis – reflected to some degree in the typology, is the lack of attention to recent and alarming climate science. In this regard, the absence of attention to adaptation and specifically community-based adaptation, is a serious deficit in the paper. Recent evidence published by CARE from research in agro-pastoral communities in east Africa demonstrates for example that, even under the most severe climate scenarios, the return on investment in community based adaptation (for smallholder agriculture and pastoral livelihoods) is positive. Though the paper cites the climate threat, there is inadequate attention in the analysis and the typology to adaptation-based solutions or the need to invest in the adaptive capacity of smallholders.

3) Constraints to smallholder investment: are all main constraints presented in the draft? Have important constraints been omitted?

The problem definition is centred on imperfect market conditions, and the focus here is on volatility which is sound. However, the paper seems to neglect wider systemic/political economic issues constraining smallholders. There is no discussion, for example, of the transformative changes needed in the face of rapidly changing climate prospects and the political economy of climate finance and carbon markets. Climate change is an externality and the injustice it brings on smallholders is not discussed. As mentioned above, the more glaring omission is that of adaptation – particularly community based adaption – to climate change.

Comments by the Institute for Agriculture and Trade Policy, Grassroots International and International Development Exchange (IDEX) for the HLPE consultation on the V0 draft of the Report: Investing in smallholder agriculture for food and nutrition security

Thank you for giving us the opportunity to provide input into the zero draft. We congratulate the HLPE and the project team in undertaking this study at a critical time. High and volatile food prices, climate change and increasing financialization of agriculture and agricultural land make this a crucial endeavor.

We hope this report will build on the work the HLPE has already done on food price volatility, land tenure, international investments, and social protection for food security, as they are all relevant to constraints facing smallholder agriculture investment. The CFS’s approved Voluntary Guidelines on Responsible Tenure, the Voluntary Guidelines on the Right to Food as well as the IAASTD Recommendations are existing and critical tools that can help provide the basis for addressing agriculture investment in smallholder agriculture.

Overall Framework of the Report

The report’s starting points that small-scale producers are not only embedded in agriculture markets, but also central to providing food security are critical for understanding their investment needs. The authors are therefore right in presenting a Rights-based perspective. In addition, the authors can strengthen this framework by discussing the notion of food sovereignty and its relevance for small-scale producers. The principles of food sovereignty[1] and the acknowledgement that agriculture is “multifunctional”, meaning that it is not only a commercial sector, but also provides social, cultural and environmental goods, is essential. A brief discussion of the meanings and values ascribed to agriculture and food sovereignty by smallholder communities would provide a good framework for chapter 1 and the analysis in chapters ahead.

The report needs a better articulated analysis of food security, however, and the role small-scale producers play in providing it. Investment is needed for all small producers, not just those who own land. In this regard, we strongly support the comments submitted by Mr. Timothy Wise (Tufts University) and encourage the authors to draw upon the literature referenced in his submission. Small-scale producers can “feed the world” because they produce locally for local consumption.[2] Most of what we eat to ensure food security does not come from international markets.[3] This needs to be clearly spelled out in the report.

It is critical to articulate that the challenges for national and global food security in light of climate change and high and volatile prices in international and domestic food are not fundamentally about the size of landholdings. They involve the governance of complex food and agriculture systems that marginalize those who are central to providing food security. Multilateral rules and government regulations, in most countries reinforced by domestic laws, promote an agriculture system and a vision of food security that is industrial and export-led. It has its own investment patterns, distribution channels, and consumers. This vision of food security is demonstrably unviable. It nonetheless drives investment towards powerful actors that shape the system and away from those who actually provide food on the table. It is essential to understand how this dominant model undermines small-scale producers. Governments need to accurately assess the contribution of small-scale producers to local, national, and global food security and propose how they can be supported amidst the challenges of the 21st century. This also means that special and specific attention should be given in the report to assess the resources needed to invest in small-scale producers’ adaptation to climate change. The HLPE report on climate change does not adequately focus on this investment need of small-scale producers.

Understanding the power structure of the global food and agriculture system and how small-scale producers contribute to food security also helps explain why they cannot simply be incorporated into a contract farming system or a corporate farm that supplies food globally. Corporate farming is not a simple solution for small-scale producers and its constraints and disadvantages should also be discussed in the report.

The report should focus on the importance of empowerment, agency and dignity for small-scale producers. In particular, the discussion of women small-scale producers is almost entirely lacking. Paragraph 31 of the summary refers to “women and children” in the context of wellbeing and social protection which is an inadequate and incomplete understanding of the role women play in small-scale agriculture and their investment needs. Women are a vital part of agricultural production, processing and distribution and an analysis of their contribution to the sector must be added to the report (see references listed at the end).

Agroecology as a Major Thrust of Report

Agroecology is a critical issue that the report neglects. The report can provide a valuable contribution to the small-scale producer investment debate by providing examples of policy frameworks that have enabled successful, peasant-led agroecology initiatives. (See the three Grassroots International case studies appended to these comments.) Numerous examples exist around the world that show how they not only improved the livelihoods and the environment of those growing food, but enabled these producers to become more resilient in the face of new threats. The report should help guide policy makers to learn how they can multiply these approaches and ensure that they are peasant-led.

The current draft first mentions this approach on page 55 (c). The issue deserves a special chapter; a framework for smallholder investment that promotes agroecology could be elaborated in chapter 3. On page 59, agroecology is mentioned but we agree with Mr. Jacques Loyat’s comments (CIRAD) that the discussion is framed in a way that makes it an unviable option for most small-scale producers. Access to cheap inputs and time saving devices seem to be portrayed as key priorities for small-scale producers, rather than risk-reduction and stable incomes.

Here are some points about agroecology to consider and some constraints to small-scale producer investments:

• Investing and the expansion in the use of agro-chemicals. In the past, investment programs for small scale farmers favored agribusinesses companies (producers of agrochemicals and hybrid seeds). Lending programs often compelled farmers to purchase specific pesticides and chemical fertilizers, even against the borrowers’ will. Bank managers made the use of certain inputs a condition of lending in order to “protect the investment.” As result, many small scale farmers were forced to change their agricultural practices and became dependent on externally purchased agrochemicals.
• Investing in agroecological practices: The agroecological path to economically viable agriculture revives training and technical support in a very different manner to dependence on agro-chemicals, using low input, locally and ecologically appropriate practices that reduce risks for small-scale producers in the long term.

In the document, these two pieces are somewhat missing. Because of structural adjustment programs, technical assistance programs and research programs dedicated to small-scale farming and agroecology have been dismantled. Some governments tried to revive technical assistance through market-based solutions, e.g. debiting a percentage of the agriculture loan to pay for technical assistance. In the end, farmers paid with their own money for technical assistance that often did not meet their expressed needs. While much could be done to expand knowledge through farmer-to-farmer exchanges (as in the case of the Cambodian experience with the System of Rice Intensification), investments are also needed to provide training and technical assistance from specialized practitioners in agroecology (farmers and agronomists).

• Long-term investing vs. market-based investing: Small scale farmers are often skeptical of investment programs because too many of them focus only on the financing aspects or short-term, market-based gains. This view has created a deep lack of trust on those programs among peasant farmers. In the HLPE report, a distinction between and analysis of long-term investment in small scale agriculture versus short-term market-based solutions should be included. Investing in agroecology requires a long-term strategy coupled with the financing of appropriate technical assistance, training and basic infrastructure. Such a framework can be developed through analysis of the positive agroecological examples that are working for small-scale producers in different localities around the world.

In chapter 3, the definition of investment includes “human and ecological capital” but initially with narrow references to building soils, improved varieties or larger sizes of herds or creating “better cows.” In reality, and as the authors acknowledge in different parts of the report, small holder systems are more complex in that they are not narrowly geared towards more production of one particular crop or animal, but instead invest in a varied set of interests in the hope of an overall improved quality of life and wellbeing. Small-scale producers must grapple with their own position of power, resource tenure, input costs, labor, income, exposure to various risks including climate change and the economic context in which they function to achieve their desired quality of life. This should come out more clearly. The writers could therefore improve their analysis of the multifunctionality of agriculture and how the varied cultural, ecological, economic and social objectives of small-scale producers play into their investment decisions.

Also in chapter 3, the section on “natural capital” downplays the constraints associated with genetic material and its expropriation through increasingly stringent intellectual property rights regimes at the global, regional and national levels. These constraints have not only inhibited farmers’ own breeding efforts and seed sharing, but also pushed research and development into exploring an ever narrower spectrum of seed varieties and animal breeds to the detriment of biological diversity, food security, and to the interests of small-scale producers. These trends have not only increased input costs, but also left small-scale producers more exposed to climate change by reducing the tools available to them to allow them to adapt.

Similarly, a discussion of these assets deserves examination of the legal and regulatory steps needed to ensure tenure rights. Investment goes where money can be made–and that is determined by trade, investment and other rules. While the report puts a lot of emphasis on strengthening farmers’ voices and representation, the report must acknowledge the power of oligopolies in the global agriculture system, its excesses and how they prevent small-scale producers’ markets from flourishing and stop their voices from being heard. Real changes will only be made when other much more powerful interests are not given the best seats at the policy and governance decision-making table.

Small-scale producers’ assets also include their knowledge systems. Small-scale producers cannot easily access credit or grants because their knowledge about natural resource management, agronomic practices, local marketing channels, traditional seed breeding and so on are not appreciated by government lenders or intergovernmental agencies. Governments must affirm the value of small-scale producers’ knowledge of food and agricultural systems and invest in them.

As such, the discussion on markets should also include alternative markets and those created through government procurement in boosting investments (in addition to school feeding programs) into local food production. Dominant trade and investment policies pose genuine constraints to the existence of local and traditional markets. These challenges and solutions should be spelled out.

Finally, a reference to Payment for Ecosystem Services (PES) is made in the paper. Many controversial proposals are emerging under the general rubric of PES—it is essential the report not mention these ideas without an in depth analysis of these proposals and their pros and cons for small-scale producers.

Framework for Smallholder agriculture and related investments: is the typology useful, adequate and accessible for the problem at hand?

The description and framing of the typology in the summary and particularly in the main body is confusing and it is not entirely clear what the purpose of the typology is. It would be good if the authors could reframe it in a way that is easily accessible to policy makers and that would help to draw out 1) key investment constraints facing farmers and/or 2) key recommendations for promoting sound agroecological investment in small-scale agriculture. The term “territoriality” is used in the summary without defining it. There is a definition on the last page of the draft, but it is potentially problematic. The definition: “land occupied and appropriated by a social group” is not satisfactory. It is not clear in the presentation how this term helps to explain the constraints and solutions to investments in small-scale agriculture. This needs to be clarified.

A key recommendation of the report is the formation of a National Smallholder Vision and Strategic Framework. While this is a good proposal, it is important to go back to the report’s discussion about the power of small-scale producers’ voices in shaping such a framework. As a starting point, it would be important to ask countries to share their experiences with any such processes that are already underway or reports published. The US government initiated such a process through the United States Department of Agriculture Commission on Small Farms which submitted its report in 1998, , but its recommendations have not been implemented. The Voluntary Guidelines on the Right to Food ask for nationally led inclusive processes to create national right to food strategies; the vision and strategic framework for small-scale producers should be a part of that implemented process.

For more information about these comments, please contact:

Shefali Sharma, Senior Policy Analyst

Institute for Agriculture and Trade Policy

[email protected]

www.iatp.org

Contact at Grassroots International:

Saulo Araújo, Program Coordinator for Latin America

Grassroots International

Saulo Araujo

[email protected]

www.GrassrootsOnline.org

Contact at International Development Exchange (IDEX):

Katherine Zavala, Program Manager, Grassroots Alliances

International Development Exchange (IDEX)

[email protected]

www.idex.org

Appendix 1: Agroecology in Action — Case Studies by Grassroots International

Investing in Haiti’s Rural Communities

Organization: Peasant Movement of Papaye (MPP)

Haitian peasant movements and organizations provide practical demonstrations of sustainable agricultural methods and practices and act as an example of the way out of poverty. One of these groups, the Peasant Movement of Papaye (MPP) has been working in Haiti’s Central Plateau for nearly 40 years. A partner of Grassroots International, the MPP is today one of Haiti’s largest and most successful peasant movements with over 60,000 members, which includes 20,000 women and 10,000 youth.

 

Read more: http://www.grassrootsonline.org/news/blog/investing-haiti%E2%80%99s-rural-community

 

Nut Harvesters Are Changing the Local Economy

Organization: Association of Agrarian Reform Settlement Areas of the State of Maranhão, Brazil (ASSEMA)

Maranhão is one of the poorest Brazilian states. Despite its wealth of natural resources, 62.3 percent of the population lives below the poverty index defined by the World Health Organization, with the poorest families living in rural areas. Landlessness is one of the root causes for the widespread poverty in Maranhão. Without land, many peasant families struggle to eke out a living through seasonal jobs on plantations or large farms and through the harvesting of wild fruits such as the nuts of the native Babaçu palm tree. Barely able to feed themselves, these families are subjected to backbreaking work conditions and are often forced to migrate to cities and other regions. For the hard work of collecting the Babaçu and then breaking the shells to expose the nuts, peasants, mostly women, are paid a pittance by intermediaries who resell the nuts for a larger profit to pharmaceutical or cosmetic companies. Collectively, however, the nut harvesters are winning rights and royalties that benefit the whole community.

Read more: http://www.grassrootsonline.org/news/blog/nut-harvesters-are-changing-local-economy

 

Seeds Help Communities Raise Hope, Independence

Organization: Popular Peasant Movement (MCP)

This shift from locally controlled agriculture to large-scale industrial agricultural operations is affecting the capacity of rural communities to produce their own food, especially because it creates unfair competition between small-scale farmers and large agricultural corporations. With the expansion of agro-fuels plantations, and no control over their seeds, small-scale farmers end up having no option other than selling their land to large farmers and international investors. This shift in Brazilian agriculture is a result of and also exacerbates the growing influence of transnational corporations over the local food system. In Brazil, three companies – Cargill, Archer Daniels Midland, and Bunge – control 66 percent of the exported grains. Within this daunting context, the Popular Peasant Movement (MCP) and their Creole Seeds Program (supported by Grassroots International) are demonstrating viable alternatives to industrial agriculture.

Read more: http://www.grassrootsonline.org/news/blog/seeds-help-communities-raise-hope-independence

For more information about these case studies, contact:

Saulo Araújo

[email protected]

Appendix 2: Other Resources and References on Agroecology

De Schutter, Olivier. “Agroecology and the Right to Food.” Report presented at the 16th Session of the United Nations Human Rights Council [A/HRC/16/49], March 8, 2011. Accessed January 23, 2013. http://www.srfood.org/images/stories/pdf/officialreports/20110308_a-hrc-16-49_agroecology_en.pdf. Also available in French, Spanish, Chinese and Russian.

Frehaut, Berenger and Seema Rupani. “Agro-Ecological Farming.” Surplus People Project. Accessed January 23, 2013. http://www.spp.org.za/agro-ecological-farming/.

Hansen-Kuhn, Karen, Yang Saing Koma, Tony Santos, and Ika Krshnayanti. “Agroecology and Advocacy: Innovations in Asia.” Institute for Agriculture and Trade Policy and Asian Farmers Association, October 14, 2011. Accessed January 23, 2013. http://www.iatp.org/documents/agroecology-and-advocacy-innovations-in-asia.

Pretty, J. et al. “Resource-conserving agriculture increases yields in developing countries.”

Environmental Science and Technology 40 (2006):1114−1119.

Pretty, J. et al. “Reducing food poverty by increasing agricultural sustainability in developing countries.” Agriculture, Ecosystems and Environment 95 (2003):217–234.

Surplus People Project. “Research Reports.” Surplus People Project. Accessed January 23, 2013. http://www.spp.org.za/research-reports/.

UNEP-UNCTAD Capacity Building Task Force on Trade, Environment and Development (CBTF).

Organic Agriculture and Food Security in Africa. New York/Geneva: United Nations, 2008.

Uphoff, Norman. “The System of Rice Intensification: An Alternate Civil Society Innovation.”

TECHNIKFOLGENABSCHÄTZUNG – Theorie und Praxis 20 (2011): 45-52. Accessed January 23, 2013. http://www.itas.fzk.de/tatup/112/upho11a.htm.

Uphoff, Norman. “Institutional change and policy reforms.” In Agroecological innovations: Increasing food production with participatory development, edited by Norman Uphoff, 255. London: Earthscan Publications, 2001.

Via Campesina, La. “Sustainable Peasant and Family Farm Agriculture Can Feed the World.” La Via Campesina, September 2010. Accessed January 23, 2013. http://viacampesina.org/downloads/pdf/en/paper6-EN-FINAL.pdf.

Wynberg, Rachel, Jaci van Niekerk, Rose Williams and Lawrence Mkhaliphi. “Policy Brief: Securing Farmers’ Rights and Seed Sovereignty in South Africa.” Biowatch South Africa, June 2012. Accessed January 23, 2013. http://www.biowatch.org.za/docs/policy/seed.pdf.

Some References on Women in Agriculture:

FAO. State of Food and Agriculture 2010-2011. Women in agriculture: Closing the gender gap for development. Rome: Food and Agricultural Organization of the United Nations, 2011. Accessed January 23, 2013. http://www.fao.org/docrep/013/i2050e/i2050e00.htm.

FAO, IFAD and the ILO. Gender dimensions of agricultural and rural employment: Differentiated pathways out of poverty. Status, trends and gaps. Rome: Food and Agricultural Organization of the United Nations, the International Fund for Agricultural Development and the International Labour Office, 2010. Accessed January 23, 2013. http://www.fao.org/docrep/013/i1638e/i1638e.pdf.

Spieldoch, Alexandra. “Reference Document: Women Farmers, Change and Development Agents.” Document presented at the Family Farming World Conference, October 5-7, 2011. Accessed January 23, 2013. http://es.scribd.com/fullscreen/73353429?access_key=key-17pgzqunmhi2iuq9t5m6.

Varghese, Shiney. “Women at the Center of Climate Friendly Approaches to Agriculture and Water Use.” Institute for Agriculture and Trade Policy, February 2011. Accessed January 23, 2013. http://www.iatp.org/files/451_2_107914.pdf.

Report on a National Process:

USDA National Commission on Small Farms. A Time to Act. Washington, D.C.: United States Department of Agriculture National Commission on Small Farms, 1998. Accessed January 23, 2013. http://www.csrees.usda.gov/nea/ag_systems/pdfs/time_to_act_1998.pdf .