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Sunday, June 9, 2013

Investing in Smallholder Farmers Key to Economic Growth

A report commissioned by the International Fund for Agricultural Development (IFAD) and the United Nations Environment Program (UNEP) and released on June 4, 2013 argues that investing in smallholder farmers provides the best opportunity to produce sufficient food while lifting billions out of poverty.

The Report, “Smallholder farmers, food security and the environment”, opens with a candid appraisal of Green Revolution of the 1960s and 1970s. The report notes that the gains of the Green Revolution have been associated with environmental externalities, which have undermined the natural resource base and threaten to reverse the gains in agricultural productivity. The report concludes that with targeted support, smallholder farmers can transform the rural landscape and unleash a new and sustainable agricultural revolution.

Decades of underinvestment in research, extension, rural infrastructure, financial services, weather and climate information, and health services have marginalized and left smallholder farmers in developing countries behind. A year ago in this column, I shared the story of feisty grandmother. In the middle of the main cropping season, Ann’s maize crop was pale yellow and spindly, barely chest height and choking in a thicket of weeds. Beneath my feet, the Earth’s fragile skin was pale, evidence of decades of nutrient mining and hemorrhaging of vital soil minerals. Ann’s 14 grandchildren are malnourished and chronically hungry.

For Ann and 1.4 billion farmers like her who depend on the land for their livelihood;, nutrition, health, employment, income, wealth creation opportunities as well as a safety net, decline in agricultural productivity creates a vicious poverty trap, leading to a self-perpetrating loop of resource degradation and poverty. In my view, Africa’s liberation from the yoke of chronic hunger, malnutrition and poverty is inextricable bound with the productivity and profitability of hundreds of millions of smallholder farmers. Jeffery Sachs, renowned of economist and leader in sustainable development, has argued that productivity of smallholder farmers is a critical pathway out of poverty through nutritional security stable income and wealth accumulation.

The report delivers three key messages, which have significant economic and development policy implications on the future of smallholder farmers, food security and environmental sustainability. The first message makes the point that smallholder farmers manage about 500 million small farms and produce 80% of the food consumed in the developing world but they are largely neglected. In many parts of the developing world, especially in sub Saharan Africa, public policies do not support smallholder farmers through instruments like input credit, secure property rights, extension services, infrastructure and markets.

The second message recognizes that the productivity of smallholder farms depends on vital services; water, fertile soils, pollination, pest control, which are provided by well functioning ecosystems. Poverty, land degradation and a lack of tools for responding to the impacts of climate change often lead farmers to adopt bad land use and land management practices, which undermine the ecosystem service upon which agriculture depends. This message underscores the ecological foundation of food security.

The third message makes the point that while the need to produce more food is imperative, current agricultural practices are undermining the ecological foundation of agriculture and therefore threatens the global food system. Sustainable agricultural intensification in smallholder farming systems could be the answer to enhanced food security, poverty reduction and environmental sustainability.

According to Achim Steiner, UNEP Executive Director, we have a choice to continue to either marginalize smallholder farmers or recognize them as catalysts for a transformation of global food supply and stewardship of the ecological services that undergird agriculture. As the economic sector that employs the highest proportion of the rural population, agriculture must be at the heart of global economic growth, poverty reduction and environmental sustainability.

More importantly, the report cites key studies, which show a positive relationship between agriculture and poverty reduction. For instance, one study has shown that for every 10% increase in farm yields, there was a 7% reduction in poverty in Africa. In contrast, growth in manufacturing and services has not shown comparable impact on poverty. Similarly, previous studies have found that a 1% increase in agricultural per GDP reduced the poverty gap five times more than 1% increase in GDP per capita in the manufacturing and service sectors, especially among the poorest.

Agriculture now accounts for just 25% of Kenya’s GDP, down from 40% in the first decade after independence. Do you sometimes wonder why despite significant GDP growth the proportion of Kenyans living below the poverty line remains stubbornly high? 

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