There is a very high level of excitement within the “development world” about the Sustainable Development Goals (SDGs). A great majority of development practitioners are looking at the future with renewed hope and vision. This is good and I find it reassuring to note the general realization that poverty can be dealt with within our lifetime. However, there is one thing I would like to be taken seriously in the formulation and launching of the SDGs; the need to seriously incorporate “learnings” from implementation of Millennium Development Goals in the design and implementations of the sustainable goals. Continue reading “on Sustainable Development Goals and hindsight”
I have just received an email from International Food Policy Research Institute (IFPRI) notifying me about the launch of Food Security Portal for Africa South of the Sahara. This particular part of the mail has captured my attention
“Policies that are formulated without evidence and analysis may not meet the region’s specific needs and could exacerbate the conditions that are fostering poverty and food insecurity.” Continue reading “When development efforts “disdevelop” other people”
Having been raised among some of the poorest smallholder farmers in the world and having acquired skills in assessing the contribution of smallholder agriculture to smallholder farm livelihoods through my training in agricultural economics, I seem to get the feeling smallholder agriculture does not significantly contribute to poverty reduction at household level.
Don’t get me wrong; I am not saying smallholder agriculture has no “power” to alleviate farmers’ poverty. On the contrary, I very much agree with World Bank’s World Development Report of 2008 when it is says that agriculture has about four times the power of any sector in poverty alleviation (The World Bank, 2007). What I’m saying is that currently, agriculture is not unleashing this power to improve the welfare of smallholder farmers in most of Africa. I know of uncles, grannies, neighbors and millions of smallholder farmers who have been involved in smallholder agriculture from as far back as 1960s and they are still categorized as poor or worse up to date. So, I have been asking myself for the past few weeks why most smallholder farmers aren’t breaking out of the cycles of poverty if agriculture indeed has the power the World Bank and others talk about.
The agricultural economist in me tells me there is a multitude of factors that perpetuate the status quo. Some of the factors include farmers’ production for subsistence purposes, high levels of technical inefficiency amongst smallholders [especially in Africa south of the Sahara], poor and thin market linkages, failure by smallholders to take advantage of economies of scale due to land and capital constraints et cetera. However, my interactions with smallholders (and I interact with smallholder farmers quite often) point out to one dominant factor; very low farm gate prices.
Every smallholder farmer I interact with seem to feel they are being exploited when it comes to commodity pricing. As you may know, the way agricultural markets function in most of the developing world is such that farmers do not have the right to price their own commodities. They produce and that’s it. Buyers decide how much they’ll buy the commodity at. Because there are many smallholder farmers, and because they mostly produce and market their produce individually, the farmers generally lack bargaining power to have a significant say in produce pricing. I know agricultural ministries in some countries (including Malawi) try to intervene by setting up farm gate prices annually but experience seems to suggest this is not having a significant impact as there tends to be little or no policing to ensure that smallholder produce is being bought at these prices. So, smallholder farmers are still forced to sell their produce at exploitative prices that can barely lift them out of poverty.
For example, I came across a canny case last week in Mchinji district (Central Malawi) where vendors were misinforming farmers that soy prices would drop this week in a plot to force the farmers sell their soy at US$0.40 a kilogram. Normally, soy prices reach a minimum of US$1/kg starting from September to February when supply is low [the vendors sell the soy during these months and make a “killing” out of the soy]. Since most smallholder farmers solely rely on agriculture for their livelihoods, the rational decision they make when misinformed like this is to sell when prices are “apparently still high”, losing potential income in the process.
The foregoing case illustrates that in as much as agriculture has the power to reduce poverty, it reduces “poverties” of players higher in agricultural value chains rather than “poverties” of smallholder farmers. And this is the case chiefly because smallholders are being exploited at the produce price front which is limiting the amount of income households earn from their agricultural activities; in turn limiting agriculture’s power to lift farmers out of poverty.
Now, if we are serious about using agriculture as a development tool, we have to make sure everyone gets an acceptable reward from their activities in agricultural value chains. It would not hurt anyone if smallholder farmers were handsomely rewarded from their industry. This is actually what should be done [rather than just being merely talked about in conferences and policy documents]. In pursuing agriculture for development agenda, let’s also consider ways through which smallholder farmers can get better prices for their produce.
As a way forward, I encourage any projects that aim at increasing smallholder farmers bargaining power in agricultural commodity marketing. This may be through setting up functional cooperatives et cetera. Announcing commodity prices through mass media can also help farmers make well-informed marketing decisions.
P/S: I suspect current farm gate prices play a significant role in discouraging the youth to participate in agriculture. For example with soy going at US$0.40 per kg, it would take great deal of convincing to have a young man to go into soy farming especially when they have an iPhone 6 plus on their “must have” list. He’ll surely search for “quicker and better” alternatives sources of income.
The World Bank. (2007). World development Report 2008: Agriculture for Development. Washington: The International Bank for Reconstruction and Development / The World Bank. doi:10.1596/978-0-8213-7233-3
It is a known fact that we can significantly alleviate poverty only if we truly understand what makes the poor poor. However, understanding the determinants of poverty at household level proves to be somewhat elusive as there is a multitude of factors that work both in isolation and in interaction to inflict a household into poverty. The big challenge for policy makers and analysts is to isolate the main variables (both macro and micro) that perpetuate poverty because poverty is, generally, context-specific. For example, two members of the same household may experience the impacts of poverty differently.
The heterogeneous impact of household poverty is evidenced by how governments and non-state actors [frantically] respond to the poverty question. It is not uncommon to see or hear of a government or an NGO distributing blankets or crop seeds or constructing a Community Based Child Care Centre (CBCC) et cetera in the name of poverty alleviation. This brings us to the question; given the multivariate causes of poverty and poverty’s heterogeneous impacts on households and individuals, what can development workers prioritize to significantly reduce the depth and width of poverty?
Given the millions of dollars that have been invested poverty research as well as experience with “development” over the years, one would expect an easy and quick answer to this question. However, experience shows that to a large extent, we have not learned much from research and experience in poverty alleviation. I say this by looking at what governments and NGO are doing in the name of development and poverty alleviation. For example, in March of 2014, i was involved in evaluation of a “development” project implemented by a reputable international NGO that was distributing chicken eggs to households with under-five children as a means of improving child nutrition. The project was somehow linked to increased household incomes. (this is just a case in point)
Now, i know good child nutrition is a precursor of maximizing human potential but should we be distributing eggs to poor households to achieve the goal? For how long are we going to do this? This example takes us to the gist of this post. what variables should we prioritize on to improve rural livelihoods? my observation is that a significant chunk of poverty can be explained by low income earning ability. Poor education, malnutrition, early marriages and a great majority issues we define as poverty are actually manifestations of meager incomes.
I am of the view that if we are to truly alleviate household poverty, we must prioritize programs that improve households income earning ability. we all know about the multiplier effect of money. If households have more sources of incomes, they can afford nutritious food (rather than depending on egg hand-outs), better education (and hence delay child marriages), better medical care, etc.
I am not trying to say every development project should focus on increasing household incomes but knowing which specific determinants of poverty to focus our attention and resources can save us years of frustration and lost potential. in this case, I believe helping household earn more and save more is the way to go.
I have just arrived home after spending a week ”in the field” participating in a survey for Feed the Future Incorporating Nutrition in Value Chains. Here is one of the lessons i have learnt from this exercise:
Smallholder farmers know that prices will be very high starting from October to February when many people have exhausted their harvest. They also know that they can make a lot of money if sell their produce during these months. However, because they are pressed with immediate cash needs now, they decide to forgo potential income during the lean season by selling their produce soon after harvest. The most important thing to note here is that they make this decision consciously. Continue reading “Smallholder farmers’ crop marketing decisions”