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Africa: Neglecting Agriculture, 2
AfricaFocus Bulletin
Oct 24, 2007 (071024)
(Reposted from sources cited below)
Editor's Note
"For the first time in 25 years, the World Bank's annual
Development Report (WDR 2008) is dedicated to agriculture. The
report is a welcome indicator of renewed interest in agriculture
worldwide that is urgently needed... [But] though the WDR 2008
makes a few guarded references to the mistakes made under
structural adjustment programs, there is no place that adequately
describes the responsibility of countries and firms who made
irresponsible loans, or of the Bank itself for its rigid and often
misguided programs " EcoFair Trade Dialogue
In its World Development Report for 2008, released on October 19
and entitled "Agriculture for Development," the World Bank stressed
the importance of a renewed emphasis on agriculture. The report
argues that "for the poorest people, GDP growth originating in
agriculture is about four time more effective in reducing poverty
than GDP growth originating outside the sector.
The report, which was covered extensively in the international
press, is available, along with much related material, on the World
Bank website at http://go.worldbank.org/ZJIAOSUFU0
In this and another Bulletin sent out today, AfricaFocus presents
excerpts from two related reports that have received much less
press attention. The first, the executive summary of which is
excerpted in another Bulletin, is a highly critical report of the
World Bank's record on agriculture from its own Independent
Evaluation Group. The second, a report from the EcoFair Trade
Dialogue on "What the World Bank Missed," is excerpted below.
The U.S. Farm Bill, which the Senate is due to discuss this week,
is likely to be renewed with little or no reforms demanded by
critics. For background on the bill and its implications for
international agriculture, see the resource page from the Wilson
Center at http://tinyurl.com/39x6vo
++++++++++++++++++++++end editor's note+++++++++++++++++++++++
The World Bank's WDR 2008: Agriculture for Development
Response from a Slow Trade Sound Farming Perspective
by Sophia Murphy and Tilman Santarius
The EcoFair Trade Dialogue
Discussion Papers No. 10 / October 2007 / English Version
http://www.ecofair-trade.org
The EcoFair Trade Dialogue is a project carried out by the
Heinrich B�ll Foundation and Misereor in cooperation with the
Wuppertal Institute.
[Excerpts only: for full text see http://www.ecofair-trade.org]
This document has been produced with the financial assistance of
the European Union. The contents of this document are the sole
responsibility of Misereor and Heinrich-B�ll- Stiftung and can
under no circumstances be regarded as reflecting the position of
the European Union.
Sophia Murphy, currently living in Australia, is Senior Advisor
to the US-based Institute for Agriculture and Trade Policy (IATP)
and an internationally recognized expert in food and trade
issues. ... Tilman Santarius, from Germany, is Senior Research
Fellow at the Wuppertal Institute for Climate, Environment and
Energy. ...
About the EcoFair Trade Dialogue:
The EcoFair Trade Dialogue is a project carried out by the
Heinrich Boell Foundation and Misereor in cooperation with the
Wuppertal Institute.... This discussion paper is one out of
several "implementation papers" that are based on the
perspectives and proposals contained in the full "Slow Trade
Sound Farming" report.
Introduction
For the first time in 25 years, the World Bank's annual
Development Report (WDR 2008) is dedicated to agriculture. The
report is a welcome indicator of renewed interest in agriculture
worldwide that is urgently needed. The generation-long silence on
agriculture is indicative of how agriculture went out of fashion
in development circles. Assistance to agriculture from bilateral
and multilateral sources decreased from US$ 6.2 billion to US$
2.3 billion between 1980 and 2002 (in 2002 prices), a neglect
that is all but incomprehensible given that three quarters of the
world's population living below the $2 per day poverty line live
in rural areas, most of them directly or indirectly dependent on
agriculture for their survival. The share of agriculture in the
International Financial Institutions' portfolio of loans fell
from roughly 20 percent of the total to nearer 9 percent over the
1990s.
... The choice of agriculture as the focus for the WDR 2008 is
welcome. The report offers a comprehensive, detailed discussion
of many of the facets of agricultural production and
distribution, giving space to questions of gender equity,
political voice, peasant organizing and unequal market power. The
strong focus on institutional issues is welcome, as is the
serious discussion of many of the environmental challenges
confronting agriculture. Science and technology, in particular,
are comprehensively discussed. For all that, we welcome the
report and trust the newly revived interest in agriculture's role
in development will prove lasting. The following critique is just
that: it is focused on where the authors differ with the authors
of the WDR 2008. From our perspective, there are still important
lacunae in the thinking and analysis that need further debate.
... N.B. The WDR 2008 report referred to in this review is the
July 2007 draft edition of the report. The report Slow Trade
Sound Farming. A Multilateral Framework for Sustainable Markets
in Agriculture (2007) can be downloaded at
http://www.ecofair-trade.org.
Overview
The WDR 2008 is comprehensive and detailed, filled with
illustrations from different developing country experiences that
make for a rich read. Yet there are some important and telling
gaps in the story set out, as well as some contradictions. These
are sometimes not explicit, but rather remain implicit in an
analysis that does not, so to speak, join all the dots. Somewhat
glaring, for instance, is the marked lack of historical
perspective in the report. The report does not ask how it is that
sub-Saharan Africa, for example, came to be as poor as it is
today. In the 1960s and early 1970s, commodity trade made the
region wealthier than many Asian countries. Then commodity prices
fell, and a wave of irresponsible borrowing and lending in the
1970s coupled with poor domestic policy choices left many
developing countries in financial crisis, including much of
sub-Saharan Africa. The policy prescriptions imposed by the World
Bank and IMF in response to this crisis and the further
liberalization of trade under the provision of the Uruguay Round
Agreements at the World Trade Organization (WTO) did little to
help, and in some cases aggravated the already serious situation.
Many African countries are still not recovered from the effects
of all these events.
Though the WDR 2008 makes a few guarded references to the
mistakes made under structural adjustment programs, there is no
place that adequately describes the responsibility of countries
and firms who made irresponsible loans, or of the Bank itself for
its rigid and often misguided programs, which aimed to restore
fiscal balance or to open markets to trade and investment but
which ignored empirical experience. The lack of historical
perspective is evident in the literature quoted, with very few
sources from before the mid 1990s.
Unless we understand history, it is difficult to get the next
generation of policies right. And without looking at history
anew, we can miss lessons that are there for the taking what we
are looking for in our historical experience changes as our
context evolves. ...
The WDR 2008 also fails to set out a bold vision for agriculture,
nor does it set out a vision for rural economies as a whole. The
WDR 2008 vision of agriculture implicitly incorporates mainstream
development thinking, which has tended to assume that
agriculture, once a country is becoming more developed, should
not occupy a significant place in a country's economy. Because
returns to agriculture are lower when compared to manufacturing
and services, economists tend to view agriculture as necessary,
but as of marginal interest. ...Yet this minimizing of
agriculture is both disingenuous and partial. ...although wealthy
economies in our day and age have relatively small agricultural
sectors compared to the economy as a whole, their agriculture is
nonetheless worth billions of dollars. Small does not mean
unimportant: indeed, many OECD countries spend tens of billions
of dollars in public money on food and agriculture. Nor is share
of GDP the only indicator of agriculture's importance to a
country's economy. ...Most [developing countreis] have a
significant share of employment in agriculture, even when
agriculture's share of GDP is relatively small. ..
... the importance of agriculture is much greater than its
economic value. Agriculture underpins the availability of common
goods in both the natural and the social sphere. Ecologically, it
is mainly through agriculture that humans shape the natural
commonwealth and the biodiversity surrounding us. Socially, first
and foremost agriculture is the basis for food security and
subsistence. In addition, agriculture is the mainstay of the
rural world, including its contributions other sectors of the
rural economy, as well as to social cohesion, community life, and
religion.
The EcoFair Trade Dialogue chose multi-functionality as one of
the principles that should underlie any policy prescription for
agricultural trade. ... Reading the WDR 2008, agriculture is
presented in instrumental terms rather than as an end in its own
right. ...It is portrayed as a way to raise GDP; to create jobs;
to manage natural resources, but not as a way of life. ... By
remaining silent on agriculture's wider contributions to ecology
and society, the WDR 2008 limits the vision for agriculture to
"its role as an engine for growth and poverty reduction" (p. 39).
The WDR 2008 is structured around three categories of countries:
agriculture-based, transforming, and urbanized. The first
category is most of sub-Saharan Africa, with countries that have
a large share of GDP in agriculture and where most of the people
living in poverty live in rural areas. Transforming countries
include most of Asia, the Middle East and North Africa, as well
as parts of Europe and Central Asia. In these countries, most
economic growth is in non-agricultural sectors, but poverty
remains overwhelmingly rural. Urbanized countries are mostly in
Latin America and some parts of Europe and Central Asia, where
poverty is mostly urban and agriculture may be dynamic but is a
small share of total GDP.
Given the report's focus on how to use agriculture to reduce
poverty, it makes sense to categorize countries according to
where poverty is concentrated and to consider the relative
importance of agriculture in the economy before making
recommendations for policy changes. On the other hand, the
framework suggests a somehow inevitable progression from more to
less agriculture in a country's economy. It assumes a progression
from more extensive, small-scale and labour-intensive forms of
agriculture, such as are still prevalent in the global South, to
intensive, large-scale and input-intensive forms of farming. This
assumption is highly questionable. Despite the detailed
discussion of the various environmental challenges facing
agriculture worldwide, the WDR 2008 does not clearly point out
the real limitations confronting the industrial agriculture
model. ...
The EcoFair Trade Dialogue debated the questions these new
departures often give rise to: can we feed the world with other
technologies than those that have so dramatically increased
yields over the past 50 years? How can we increase productivity
where we need to (especially in sub-Saharan Africa) without
relying on external inputs? Without definitively answering these
questions, the EcoFair Trade Dialogue did challenge the
assumption that more of the same is an option: developing
countries must not imitate developed countries to find the answer
to their agricultural needs. The WDR 2008 does not ultimately
confront these problems, leaving a tension in the report that
still needs to be answered: what conclusions for the future
should be drawn from the sad irony that the world basically
produces more than enough food to meet the needs of all its six
billion people, but hunger is still prevalent? ,,,
The EcoFair Trade Panel explored a different conception of three
rural worlds. Our notion was to capture three co-extensive,
indeed interdependent, kinds of agriculture: a heavily
capitalized industrial agriculture, found everywhere but more
typical of developed countries and developing countries with
plantation agriculture; an agriculture based on family-owned
enterprises, the most common model of agriculture, including in
the U.S., Europe and Japan; and, subsistence agriculture and
landless agricultural workers, in which even those who own land
may depend on selling their labour to survive.
Central to this conceptualization of three rural worlds is the
way the worlds interact with one another. For instance, heavily
capitalized industrial agriculture depends on a supply of
low-cost workers, many of whom have too little or too poor
quality land to support a household. Industrial agriculture,
besides its parasitic relationship to nature, has unfortunately a
well-deserved reputation for exploitative levels of pay and for
taking advantage of workers with very few choices who sell their
labour for nearly nothing. The WDR 2008 does acknowledge a
"dualism" in the agriculture of many developing countries.... It
does not, however, consider how these sectors relate to one
another, or how, for instance, the investments to meet the needs
of the modern sector (such as port terminals, and roads or locks
and dams to get produce to the terminals) come at the expense of
infrastructure to meet domestic demand or to build regional
markets. ...
The WDR 2008 describes the poorest countries as
"agriculture-based" nations, which under-plays the role of
large-scale and modern farm operations in these countries. The
large, modern farms often produce with high external social and
environmental costs, at the expense of their smallholder
counterparts. For example, commercial tomato growers that export
from S�n�gal have seriously depleted ground water levels in one
of the most prosperous agricultural regions of the country. At
the same time, describing richer countries as "urbanized" or
"industrialized" hides the presence of (poor) farmers in these
countries. In many "urbanized countries" of Latin America,
poverty is widespread; in the U.S., the worst poverty is found in
rural areas, not in the urban centres where much of the
population lives.
The three rural worlds framework used by the EcoFair Trade Panel
avoids the assumption that there is an inevitable progression
from agriculture-dependence to urbanization. The framework allows
the possibility that countries' economic well-being, developed
and developing, is inter-related. Without suggesting a simple
zero-sum distribution, it is clear, for instance, that processing
firms such as Sarah Lee and Nestl� take a much larger share of
the value of coffee than do the farmers who grow the coffee. In
the current market structure, consumers in developed countries
are able to buy relatively cheap coffee. With higher tariffs on
processed coffee in most rich countries, which reinforce the
market power advantage of the processing firms, Nestl� and like
firms make good profits from these sales. But coffee producers do
not earn enough to make a decent living or to invest in the
future of their families and communities. Meanwhile, exporting
countries are short-changed on their foreign exchange earnings.
This makes coffee growers, and coffee exporting countries poorer
than they should be, while increasing the returns to food
processing based in developed (urbanized) countries the actual
value of the commodity production is not realized by producers in
the agriculture-dependent country, because they are exploited by
firms based in urbanized countries. Understanding this
inter-relationship is central to any policy analysis of
agriculture. It is not absent in the WDR 2008, but its
implications for countries' agricultural development strategies
is strangely lacking.
Global agriculture is marked by deeply unequal distribution,
which reduces farmers' returns from the market in both developed
and developing countries and affects what developing countries
earn for their agricultural exports. The WDR 2008 gives important
space to the differentiated impact of different policies on
women. It also acknowledges differences among rural populations
and how they might be affected by various policy measures. The
WDR 2008 discusses the violence that unequal access to land gives
rise to and gives due importance to peasant organizing and the
need for political empowerment at the local level to allow rural
communities some political control. The report does not talk
about political power at the global level, however, nor about the
power of transnational corporations and their ability to extract
a disproportionate share of the benefit of agricultural
production and processing, as a result both of market distortions
and uncorrected market failures. ...
Conclusion
We are living in a period of great uncertainty related to
agriculture. We know that climate change is real and that
temperatures are rising more rapidly than most scientists at
first predicted. We know that many of the technologies developed
during the Green Revolution have run out of steam, while the
social and environmental problems they have created, including
the debt crisis of resource-poor farmers and their loss of land,
the over-use of water, soil salinity, polluted waterways, and
loss of biodiversity, have reduced the options for the next
generation of technologies. ...
There are a number of hopeful signs that a new paradigm will
emerge for agriculture. The signs are there in the WDR 2008,
although the report as a whole leans towards a better-thoughtthrough
version of more of the same. This will not do if we are
to meet the challenges we face. The WDR 2008 provides a lot of
illustrative examples but no vision for the next decades of
agriculture. . ..
a new paradigm for agriculture is needed. The strong assumption
underlying the WDR 2008 recommendations is that all countries are
at different points on a road that culminates in an economy such
as that of the U.S. or Western Europe. The heavily polluted,
economically distorted nature of that agriculture, which nests in
depressed rural economies which see little benefit from
agriculture because the profits are mostly captured off-farm and
in metropolitan centres rather than local market towns, is not
any kind of model to emulate.
Mainstream agriculture in developed countries is not a good
example to follow. First, the land's productive potential should
be assessed from the perspective of diversity not yield per
plant. ...
Second, we need to move beyond the fossil fuel age. Global demand
for oil will soon outpace global supply, resulting in
unprecedented price peaks. Oil will not be available as cheaply
as the oil that has fuelled economic growth for a century or so.
... the WDR 2008 at no point factors in the mounting expense of
fossil fuel inputs as a real brake on agricultural production as
we now know it. Already, oil imports are a significant drain on
foreign exchange reserves in many developing countries. The
widely anticipated significant increase in oil prices will make
it impossible for many developing countries to pursue the
agricultural development path mapped out by developed and
transitional economies. ... Planning ahead, especially for
low-income resource poor farmers, opportunities would best be
developed in local and regional markets, where transportation
needs are reduced and local crops, appropriate to the prevailing
water and soil conditions as well as local tastes, will find
buyers.
Linked to this need to curb dependence on fossil fuels is the
need to respond to climate change. ...The WDR 2008 focuses on the
issue in its chapter on the environment and in Focus F. Yet the
issue is so significant that it ought to have shaped other
chapters as well, particularly the question of science and
technology. Countries should be investing in preparedness for
uncertainty. ...
Ultimately, just as there are more satisfactory measures of
poverty than dollar per day income, there are also other ways out
of poverty than increasing that income. As UNDP has documented in
its Human Development Reports since 1990, money matters, but
human welfare is about much more. The poverty of someone who has
no money in a developed economy is very different to the poverty
of someone without money in an economy that is still
significantly reliant on subsistence production, barter and
exchange, and where there are resources held in common that
everyone can access. Agriculture and rural cultures more broadly
have paid a price, sometimes a heavy price, with the
commodification of not just their produce but also their
production systems. ...
Poverty lies not just in lack of income, but in the loss of
culture and loss of diversity. This tension, and the failure to
consider development from a wider perspective such as Amartya
Sen's notion of entitlements leaves the WDR 2008 without an
anchoring vision from which to advocate some of the really
radical changes needed to move agriculture beyond reliance on
fossil fuels and beyond servicing the markets of a few wealthy
countries and social groups, towards a sustainable, locallyowned
and locally accountable sector that neither excludes trade
nor makes trade the focus of infrastructure and technology
investments.
The WDR 2008, just as it is by and large silent on the past and
the question of how things came to be as they are, is also silent
about the role of the World Bank and other development funders
and investors in meeting the challenges and seizing the
opportunities described in the report. Given the prominent role
of the World Bank in promoting and financing structural
adjustment; in promoting a trade agenda that is now acknowledged
to have paid insufficient attention to developing countries'
supply constraints and the concentrated power of the firms that
operate in world markets; and, in financing projects that caused
significant environmental damage, it would be good to see the
World Bank setting out a new agenda for itself. ...
The reader is waiting for an annex to the WDR 2008, perhaps to be
entitled, "The role of the World Bank in Building Sustainable and
Fair Agricultural Systems for the Future".
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with a particular focus on U.S. and international policies.
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