Growing out of poverty or grow poverty?

The poorest farmers in the world are unlikely to farm themselves out of poverty. They simply lack resources to invest in agriculture, and paradoxically they often even lack the labor needed as they are busy earning money with other trades than farming. To try to ease their predicament by introduction of GMOs or chemical fertilizers is a counterproductive strategy. 

A recent doctoral thesis, From Betterment to Bt Maize: Agricultural Development and the Introduction of Genetically Modified Maize to South African Smallholders by Klara Jacobson, Uppsala reinforce this understanding through a study of the Massive Food Production Programme (MFPP), an agricultural development program aiming to reduce poverty by raising agricultural production in Eastern Cape Province, South Africa. Introduction of Bt maize (a GM crop) was a main component in this program. The Bt maize variety introduced was not adapted to smallholders' farming environments. It was input-demanding and sensitive to environmental dynamics, and it was promoted for planting in monoculture.

The results also reveal that the program was not properly designed to support the improvement of smallholders' livelihoods through agriculture. The program disregarded the long-term marginalisation of smallholders, and the associated need for substantial advisory, infrastructure and credit support to increase agricultural productivity.

The program also, like so many similar programs, failed to recognize the heterogeneity of poverty, resulting in a bias towards the better-off smallholders. Many may believe that poor farmers would have ample access to labor, from themselves and their families, but the study show that the poorer were more labor constrained than those better off. For example they had to do manual hand-hoeing of their fields instead of using oxen and they had to offer their labor to others for money or food. The wealthier, in contrast could use the labor of the poorer to increase their productivity. 

I have written a number of posts on this, and associated topics earlier, e.g.
The road to food security: What works and what doesn’t?
The hunger, the people and the land
If you don't have cash you don't get to eat
Rich people are not starving – can markets help?
Millennium Villages: the Great Experiment

Ultimately, this analysis can be drawn much further. There are similar issues to consider if we want to understand why commercialization of small holder farming may not work out as well as many believe.
Most farmers will simply not survive in this process. If they did, there would be enormous over-production of agriculture commodities. After the introduction of cross-Atlantic steamships, European farms had difficulties to cope with competition from North America. The response was to introduce protectionist measures. Still the pressure of competition was a lot lower for them than it is for poor farmers in developing countries today. To believe that they could compete with their manual labor, their muscles, with tractors driven by fossil fuel is simply not at all realistic, and the result of this is seen everywhere.

In addition, because of the productivity gains in developed countries, agricultural prices dropped with some 60 percent in the period 1960 to 2000 (Dorward et al 2002). As the productivity, and energy use, of the poorest farmers remained much the same, it is obvious that they lose out. At current prices, it would require one life of labor for a manual farmer to acquire a pair of oxen and small animal drawn equipment, and ten generations of labor to buy a small tractor (Mazoyer and Roudart 2006). The productivity gap has widened over the last decades, both relatively and in absolute numbers (see table below). 

Agricultural labour productivity, dollar per man-year

	1990-1992	2001-2003	Agriculture as share of GDP
Low income countries	315	363	20%
Middle income countries	530	708	9%
High income countries	14,997	24,438	2%
France	22,234	39,220	2%
United Kingdom	22,506	25,876	1%
USA	20,797	36,216	1%
Brazil	1,507	2,790	5%
India	332	381	4%
China	254	368	12%
Malawi	72	130	36%

Source: World Bank 2007

You can read more on this here: Agriculture: How cheap energy (and capitalism) increased the gaps between rich and poor

Organic agriculture spreads in East Africa

“When I use chicken manure that I produce from my poultry farming I am able to get 5 tons of Irish potatoes on one hectare while I use to get not more than 2 tons per hectare using chemical fertilizers. And my products are the most favored on the market and consumed before others. The price doesn’t matter, people like high quality products,” said Jean Marie Vianney Ngiruwonsanga, an organic farmer of Rulindo District,
Muhondo Sector in Rwanda.

“What struck me about the whole idea of organic farming is that with my little farm space, I could grow enough food to feed my family and supply to the market. And that is without the use of synthetic fertilizers, pesticides and herbicides that are expensive these days,” says Sally Niaisiae, an elderly mother of six in the outskirts of Nairobi, Kenya

Jennifer Kigunda's one acre land is divided into several portions, growing maize, various vegetables, and different potatoes varieties. Previously she would only grow maize and beans –the two most popular food crops with subsistence farmers in Kenya mainly grown using conventional farming methods.

“I would harvest on average six 90-kg bags of maize from the farm and on average three bags of beans,” she said. With her small family, she prefers to sell most of the harvest, fetching around 400 U.S. dollars per season, meaning she would make on average double that amount per year from the sale of surplus harvest.

But since the change to organic farming, Kigunda’s family income has increased tremendously as the sale of organic food from her farm brings in on averaged, 200 dollars per a three month season meaning that in a year, she now makes at least 3,600 dollars a year from her one acre farm, a 450 percent increase.

“We have a ready market for organic foods and we get a premium price for it at the market. What else would a farmer look for?” she asked.

Typical diverse production of African smallholder

 Organic farming proves again and again that it is capable of producing healthy and safe food in sufficient quantities, not only for the rich.  I have written about it in many blog posts here, e.g. 
Growing with love and care, Organic agriculture grows in Africa
People, Planet and Prosperity-organic agriculture as a development concept
But I also emphasis that, in the end, economic factors are determining who will eat and who will be hungry. Read: Markets don't distribute food to those without money
Read more stories from Kenya organic farming on Coast week. 

Is commercialized farming the cure for smallholders' ills?

In the period 1996 to 2011 I worked a lot with various efforts to link smallholder farmers to markets, mainly organic, in developed countries. The biggest engagement was in EPOPA:


"By 2008, 80,000 farmers contracted by EPOPA have sold organic products to exporters for approximately US$ 15 million per year. All farmers received higher prices due to the organic premium, which ranges from 10-25% over the conventional price. Taking into account the size of households, 600,000 people have benefited from the programme."
This is how the Export Promotion of Organic Products from Africa is presented as one of a limited number of case studies of "Evidence of Impact" on the joint donor web site. 

The cost of the programme for the Swedish taxpayers is one cup of coffee per taxpayer. You can read a whole book about this successful project here.

Overall EPOPA was a success. Today, linking farmers to markets is an overarching policy for almost all development agencies as well as governments. It also fits very well with a development model that assumes that more markets and more capitalism is the best path to development. Considering that small-scale farming is a main component of the livelihood of something like a third of the worlds population, and most of the worlds very poor it is only natural that there is a huge interest in how to improve livelihood of them. While I do think it works quite well, it has, unfortunately, been oversold.

A recent report from Hivos, Small Producer Agency in the Globalized Market, looks deeper into if and how smallholders can benefit from globalized markets. In short the answer is that a few of them will - and they will soon not be smallholders as the recipe for success is to grow, mechanize and buy up your neighbours farms. This should be no surprise, this is how the farm sector developed in other parts of the world. The report estimates that linking farmers into modern value chains (be they organic, fair trade or normal) may benefit only about 2-10 percent of the farms - and it will be those with the greatest assets.

The reality is that commercialization of farming is good for the economy and for a few so called progressive farms, but that most of the farms will not benefit from it. Some will become farm labourers at the farms of the more successful, or in huge agri-business plantations, other will only get a better life if there is some place for them to go. 

The report does a good job in demonstrating how diverse the group of small farmers is and therefore also their coping strategies:

"multifaceted livelihoods that use diversity of economic activities to hedge risks and make the most of scarce land, cash and other resources. Farmers may rent various plots and grow multiple crops; move in and out of different informal (and sometimes formal) markets; and combine farm income with off-farm jobs and remittances from migrant family members. With more rural people, especially youth, moving back and forth from farm to city, there are fluid frontiers between urban and rural markets, boosting the vibrancy of local economies."

The report recognise that the informal economy may actually be very important for most farmers and that the army of middlemen, often considered parasites, can play a positive role in markets for small-holders by offering easy market access and intensive competition for supply, rather than tying farmers into integrated value-chains. Those trade links are also the ones that supply the hordes of urban poor. In many parts of the world the informal economy is on the rise according to OECD reports.

The authors, Bill Vorley, Ethel del Pozo-Vergnes and Anna Barnett, concludes that

"we should not continue to expect multiple wins — on poverty reduction, food security, security of supply, ecosystem services and rural development — from the single-minded approach of including farmers and their organisations in value chains and ‘empowering’ them in markets as beneficiaries of external initiatives. to get the future right for the majority of small-scale producers who cannot readily participate in modern value chains, or for the many youth with aspirations out of farming, we must recognise other layers of the picture."

See a video from the launch of  Small Producer Agency in the Globalized Market


Other posts of relevance:
The road to food security: What works and what doesn’t?
Don't buy organic instead of changing the world - do it as part of changing the world
Traditions, Western Union, Churches and Taro
Will there be farmers?

Traditions, Western Union, Churches and Taro

I spent a few weeks in Samoa, a paradise Pacific island country. My task was to be part of a technical team assisting the government in the development of a program for increasing the competitiveness of the agriculture sector. My role was to look into opportunities for commercial organic production.

It has been a treat to visit Samoa, experience its people, see the nature, enjoy the food and the sea. In eighteen days no-one was rude or aggressive. Samoans are proud of their culture and their country, rightly so I think. I can strongly recommend Samoa for a visit.

You can look at a lot of pictures at: http://picasaweb.google.se/GunneEpost/BilderFranSamoa?authkey=Gv1sRgCMH0tIPk9YLFeA#

When it comes to development, Samoa, like Bhutan that I also visited earlier this year (see my posting), is a complex case. Some things strike you in Samoa. One are the traditional villages with their special building style, the open fales , houses without walls. The village and the extended family (still) have strong positions in Samoa, land is mostly still communal (some 90 percent) and leaders of the extended families, the mathai, assign land to the members of the family. Soils are mostly rich, but some of the soils have more rocks than soil and some parts of Samoa, especially on the island Savaii, are lava fields, the younger of them hundred years old. In these soils Samoans have been growing coconuts, breadfruit, taro and bananas as well as a number of fruits. Traditionally, pigs played a big role. Later cattle, cocoa and coffee were introduced. A lot of the products are not sold in the market but are distributed within then families and villages, the meat in particular is mostly consumed at big parties. So farming is still not so integrated in the market economy.

(cocoa growing out of the lava rock)

Missionaries brought Christianity to Samoa. I have not seen any statistics, but it appears to me that there must be in the range of thousand churches in Samoa, every village has a number of churches of competing congregations. The churches and Christianity seem to have integrated quite well with Samoan culture and is today a part of the culture and not an alien element. They have added another layer of people living on the surplus from farming, pastors. To be a pastor is a remunerative occupation and following a theological college is undoubtedly a pathway for personal income. So the farmer doesn’t only have to share his earnings with the extended family and the village but also with the congregation.

Overseas remittances play a very big role for the Samoan economy. Samoans are working in New Zealand, Australia and the USA and send money home – the signs for Western Union are as frequent as are the churches. Nobody seems to be hungry in Samoa. There is limited wealth and the wealth is distributed within the extended family.

There are a number of obstacles for a commercialization of farming. In essence this means bringing more farmers into a mainly cash-based and market based economy, both on the input and output side. It means that farmers shall sell products in a market situation, but it also means that farmers use more inputs, both hard and soft inputs, ranging from credits, fertilizers. irrigation to advisory service, business planning. In this way they can increase productivity and their incomes. But the price is increased risk. But not only that. When traditional farming systems are brought into the market economy, the change is not only technical or economic and the effects are not only for the household, but the whole village social context is disrupted, reducing the role of the village, and the extended family, as economic institutions. This was certainly the case for when farming was brought into the market economy in Europe and the same pattern is seen everywhere.

We tend to believe that social security is some modern innovation, but the truth is that all traditional societies have had social security and poor or sick people have been taken care of – within the limits of the ability of the society. That is why the introduction of the (capitalist) market economy in farming systems often result in devastating effects on the less resourced, such as famines like the one in Ireland in 1800s and those in many developing countries the last hundred years.

If people are desperately poor, say like many farmers in Sub-Saharan Africa, breaking down traditional institutions in order to unleash the innovation and investment based on private property and entrepreneurship seems perhaps reasonable. But we should still keep in mind that there will be winners and losers, and if there are no new social security systems developed replacing those of traditional societies the results can be devastating. In societies that are less poor, it is harder to see that commercialization of farming is such a sign of progress, even if the GDP is likely to increase.

When visiting some dozen farms in Samoa, I realize that many of the farm families seem to be happy with their life. Even on direct question of what they would like for their business, they come up with nothing related to increased production, higher income etc. Combine this with the effect of the remittances: lot of money coming in with little efforts from the locals and a certain shortage of labor. Add the effect of the village structure, land ownership, and churches: low incentives to invest in higher production as it will be shared by so many and low incentive to invest in the soil as it is not private. Yes, then there are simply not very big reasons for farmers to increase productivity. In particular there is little reason for why they would like to specialize and increase risk in their production, something that is often a basis for modernization of farming.

While Samoa as a whole, and the Government of Samoa, might want more commercial agriculture it is still not very clear that it is the best option for the individual farmer, which then would also be the main cause for repeated failure of “modernization efforts”, not only in Samoa but in big parts of the developing world.

Some claim that small holders never voluntarily change into the market economy but must be coerced into it through many different pathways. Sometimes by brutal means such as the British enclosures; trading monopolies or outright colonization. But more often through more subtle means: credit programs that makes them dependent; compulsory schooling that means they need to pay school fees, uniforms, books as well as they loose labor force and the children get other values; land titling, i.e. the transformation of land from communities to individuals etc. “Commercializing agriculture means ending subsistence agriculture. How can subsistence agriculture be ended? The simple answer is by huge amounts of compulsion administered by central governments. Only compulsion will induce most peasants to increase per capita production for sale on anonymous markets” says Ronald Seavoy in Subsistence and Economic Development (2000).

It is hard to accept that people should be forced to leave their traditional ways of living…..And ultimately, there is really no proof that a Swedish, German or American farmer is any happier than their Samoan colleagues. As most factors for well-being are not about money but about social and private relations, one may suspect that it is rather the other way round.