Leveraging Smallholder Agriculture for Development

Leveraging Smallholder Agriculture for Development Shenggen Fan Director General, International Food Policy Research Institute Symposium on Global Agriculture and Food Security “Progress to Date and Strategies for Success,” Washington, DC, May 24, 2011 It is abundantly clear that more investment and innovation are needed to achieve global food security for its own sake. Close to 1 billion people continue to go hungry every day, and several billion suffer from deficiencies in essential vitamins and minerals. Recent progress in improving food security is threatened by global challenges that include population growth, high and volatile food prices, land and water constraints, and climate change. But investments in food security can also help achieve broader development goals such as nutrition and health, economic growth, gender equity, and effective response to climate change. To do so, improvements to smallholder agricultural productivity will be critical. Although some observers have long argued that agricultural investments should be directed toward large commercial farmers or smallholder farmers, the topic is still very much relevant today. The agricultural sector transformation process has not happened in many developing countries. Low industrialization, high levels of youth unemployment, and little buy-in from policymakers on the role of smallholder agriculture are some of the factors that suggest that this process remains difficult to jumpstart. Making a commitment to smallholder agriculture can help advance agricultural transformation, improve food security, and achieve broader development goals. The fact remains that smallholder farming systems dominate agriculture in the developing world. In Asia and Sub-Saharan Africa, small farms—of less than two hectares—account for more than 80 percent of all farms and a large proportion of the world’s agricultural output. Yet in many regions of the world, these smallholder farmers cannot increase their agricultural production fast enough to keep up with the rising demand for food and to provide themselves with adequate incomes and nutrition. Indeed, smallholder farmers account for the majority of the people living in absolute poverty and half of the world’s malnourished people. In addition to the global challenges they face, smallholder farmers confront many other constraints to their production, including limited resources, high marketing and transport costs, and insufficient access to technology, markets, credit, and infrastructure. Many of these challenges, however, also represent opportunities. Boosting investment and innovation in smallholder agriculture and helping smallholder farmers exploit these opportunities will not only promote food security, but also contribute to achieving broader development goals, including helping some smallholder farmers transition out of agriculture into other productive sectors. Here’s what it will take: ,[object Object],To help smallholder farmers become more productive, investments to improve farmers’ access to inputs (such as high-yielding seeds and fertilizer), and services (such as financial services and extension) should be scaled up. Innovative insurance schemes can help reduce the risk small farmers face from weather and price shocks. New agricultural technologies suitable for smallholders should also be strongly promoted through increased investment in agricultural research, and rural infrastructure should be strengthened to increase access to markets. Past successes, such as the Green Revolution in Asia, show that rapid increases in smallholder productivity can be achieved. More recent successes in Sub-Saharan Africa also demonstrate the potential for increasing smallholder productivity. In Kenya, policy reforms contributed to the growth of private investment in fertilizer and maize marketing. As a result, small-scale maize farmers increased their rates of fertilizer use significantly and achieved higher maize yields. The private sector, supported by a business-friendly environment including a sound legal and regulatory framework, can play an effective and sustainable role in improving smallholders’ productivity. ,[object Object],To move out of subsistence agriculture, farmers need to be able to participate profitably in markets. Linking smallholders to supply chains and markets will require both innovative institutional arrangements and investments in rural transportation and communication. Arrangements such as group lending, producers’ associations, and contract farming have been shown to facilitate smallholders’ access to food supply chains and markets in Asia and Latin America. These innovations strengthen vertical and horizontal coordination, which helps smallholders increase their bargaining power and access to markets, obtain technical assistance and information on market demand, and lower their transaction costs and price risks. ,[object Object],Smallholder agriculture has large potential for adapting to and mitigating climate change, and exploiting this potential will become increasingly important over time. Smallholder farmers can also increase their incomes while contributing to climate change adaptation and mitigation. A pro-poor climate change policy that creates value for smallholder farmers and integrates them into global carbon markets is essential. To achieve this, it is important to create incentives for smallholder farmers. Investments in adaptation could help farmers improve land management, adjust their planting dates, and introduce new crop varieties. Investments in mitigation could be used to help farmers improve their energy efficiency, raise crop yields, and manage their land in ways that increase carbon storage. For win-win-win solutions, strategies and investments must provide benefits for mitigation and adaptation, as well as productivity. ,[object Object],The significant benefits of linking agriculture to nutrition and health often go unrealized. With the right policies and investments, smallholders can play a key role in forging these links to improve both farmers’ incomes and consumers’ nutrition and health. Investments should go to develop more nutritious varieties of the staple food crops that poor people consume. Consumer knowledge and awareness campaigns, alongside price policies, can create demand for healthy, nutritious products. Safety regulations are needed to ensure that agricultural intensification does not harm people’s health through, for example, food- and water-borne diseases, occupational hazards, and environmental damage. More efficient postharvest handling can reduce deterioration in the nutritional quality of foods and increase poor consumers’ access to food by lowering retail prices. ,[object Object],Women make up a majority of small farmers in some countries, but they often face weak land rights, lower levels of education, and lack of access to credit, extension services, and technologies. Evidence from Nigeria and Uganda show that lower productivity persists in female-owned plots and female-headed households. This gender gap has significant implications for food security and broader development efforts. In fact, if women and men had equal access to productive resources, total agricultural output could increase by 2.5 to 4 percent, reducing the number of undernourished people in the world by 12 to 17 percent. Furthermore, women’s access to resources has been linked not only to food security, but also to child nutrition, education, and health—factors that influence future economic growth prospects. Food security efforts centered on smallholder farmers should therefore offer women equal access to marketing, extension, and input interventions. ,[object Object],Poor smallholder farmers are extremely vulnerable to shocks. Better-targeted and more productive social protection policies are needed to both cushion livelihood shocks and offer opportunities for them to escape poverty. Agricultural growth alone is not sufficient to reach the most vulnerable populations. New approaches, such as cross-sectoral social protection initiatives, should be explored to better reach the poor. Ethiopia’s Productive Safety Net Programme, for example, combines social protection and agricultural support interventions, thereby leading to greater impacts on food security than each intervention implemented separately. Innovative social protection programs in Brazil and Mexico also have a multisectoral focus, consolidating scattered initiatives and providing an integrated package of education, nutrition, and health services to the poor. ,[object Object],Testing and experimentation—in the form of, for example, pilot projects—have the potential to improve food security and other development outcomes by giving decisionmakers information about what works before policies are scaled up. Developing countries offer plenty of success stories related to improved smallholder agriculture. Community-based financial organizations in India and Niger have provided financial services to the “unbanked poor.” In Nigeria, new technologies—such as improved cassava varieties and advances in pest control—for smallholder producers have had high payoffs, including tripling production and increasing income and gender equity. The question remains how to generate these successes in other countries and on a broader scale. Much can be learned from China’s—and later Vietnam’s—gradual reform process that was based largely on trial and error and then scaled up. The development community should encourage the generation of innovation at the local level, accompanied by a framework for evaluating experiments and a political and legal space to transform the lessons learned into large-scale initiatives. Close collaboration between researchers and policymakers is also crucial to translate the results of experiments to policies. Conclusion The actions described here will help smallholder farmers contribute to increased food security by raising both their production and their incomes. At the same time, they will help small farmers advance broader development goals, including nutrition and health, economic growth, and gender equity. Concrete actions must be taken to make these goals a reality.

Leveraging Smallholder Agriculture for Development

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