productivity of their labor; food security can hardly be achieved either by self provision or ... It is a relic from the past, a romanticised view of agriculture and rural life. They are ... They are backward & unable to cope with innovation and new.
Smallholders and Investments
CAAS, Beijing, May 16th HLPE Project Team, Pierre-Marie Bosc
Overview 1. 2. 3. 4. 5. 6.
Team, approach and process Why is this issue strategic for world food security? Definitions and conceptual framework Smallholder in world agriculture: Global figures & Regional diversities Main constraints to smallholder investment: A typology of constraints Main lines of recommendations
Discussion
THE TEAM Julio Berdegue Mamadou Goita Linxiu Zhang Kae Sekine Jan Douwe van der Ploeg
Why is it strategic for food security? It is a worldwide issue as smallholders represent the vast majority of
farmers It is not limited to developing countries but the majority of them live in developing counties The majority of them live in poverty which in turn is a threat to economic development [internal markets are limited] They have not been at the heart of agricultural policies They are agricultural producers but often they are in a permanent state of food insecurity (through self provision, access, quality through diversity) Smallholders generally have limited capital which result in low productivity of their labor; food security can hardly be achieved either by self provision or through income
False thinking on smallholders It is a relic from the past, a romanticised view of agriculture and rural life They are supposed to disappear leaving land for others to grow in size They are backward & unable to cope with innovation and new
challenges, better go with large scale or agri business type of farms to ensure food security They are not “true farmers” since they do not exclusively farm, they
engage often in a diversified set of activities
But….it is strategic for food security But empirical evidence also demonstrate that when favourable
“conditions” are met they “invest”, they change practices, they innovate, they rise production and productivity They behaviour is rationale but heavily constrained. Improving their situation is a way to reduce hunger and poverty, it is also a way to provide jobs and generate economic growth Through improving self provision, it is also a powerful means to improve nutrition Understanding their rationale and the constraints they face is key to define adequate policies and engage positive changes
…to better understand and support smallholder agriculture
Our approach: smallholders and Investments Definition A holding run by a household [family] that derives total or part of its income from agriculture and, relies on agriculture for at least part of the food consumed by the household [family]. The family members may develop activities other than farming, locally or through migration. The holding relies on family labor with uneven access to hired labor. Their livelihoods strategy relies on different assets or capitals: usually: human, natural, social, physical and financial: these assets are the result of past investments There is a strong inter dependency between the domestic and the productive side which is at the same time a constraint to maintain investment (an asset can be sold) or a source of resilience (the household income is “flexible”)
The sustainable rural livelihoods: the assets Context and trends
Structure
Activities and strategies
Performance / sustainability
capabilities and functionnings National and international trends and context. Local trends and context
Shocks
9
Social relations
Institutions
Organisations
Tangible & intangible (claims) assets Natural capital Physical capital Human capital Financial capital Social capital
Naturel ressources based activities Cultivation, cattering, livestock Others NR based non farm activities
Non naturel ressources based activities Wages, trade, services, manufacture, etc.
Livelihood Strategies Specialization, Diversification, Intensification, extensification, migration, rental, combined, etc.
Social and human sustainability
Economical sustainability Environmental sustainability
Increasing diverse assets requires policies in different sectors
Smallholders and Investments Investments will refer to the different assets at holding level, but
also to the capabilities attached to increase such assets through organizations and institutions [collective action]. Investments also refer to other levels of organizations that influence the assets structure and efficiency at holding level through: - Collective action to improve natural capital [landscape], producers’
-
organization to weigh in value chains and to strengthen human capital Investments in research and development – public and private Private investments by stakeholders [Global value chains, retail chains for domestic markets, agro industries...] Producers’ organizations to frame policies targeted at smallholders’ needs Public goods provision
World picture: 85% below 2ha 5-10 ha
2-5 ha
1-2 ha
< 1 ha Below 2 ha : 85% Below 5 ha : 94% Below 10 ha : 97%
Europe: around 60% below 5ha
Austria, Belgium, Bulgaria, Croatia, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania , Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Serbia, Slovak Republic, Spain, Sweden, United Kingdom. Source: FAO, WCA
7 000 000
Number of holdings
Ha/Holding
USA
6 000 000 Number of holdings
5 000 000
4 500 000
180
4 000 000
45
160
3 500 000
40
140
Mean size
4 000 000
200
120
Number of holdings
3 000 000 2 500 000
Ha/Holding
FRANCE
Number of holdings
35
Mean size
30 25
100 3 000 000
80 60
2 000 000 1 000 000 0 1930
7 000 000
Number of holdings
1940
6 000 000
1950
1960
1970
1980
1990
2 000 000
1 000 000
20
500 000
2000
20
1 500 000
40
0
Source : FAO 2010
15 10 5
0
0 1930
Source : FAO 2010
300
140 000 000
Number of holdings
250
120 000 000
Mean size
200
Ha/Holding
BRAZIL
5 000 000 4 000 000
1950
1960
1970
1980
INDIA
1990
2000
Ha/Holding 3,0
2,5
100 000 000
2,0
Number of holdings
150
1,5
Mean size 60 000 000
100
2 000 000
50
1 000 000 Source : 0 FAO 2010
1940
Number of holdings
80 000 000
3 000 000
50
1940
1950
1960
1970
1980
1990
2000
0,5
20 000 000
0 1930
1,0
40 000 000
0 Source : FAO 2010
0,0 1930
1940
1950
1960
1970
1980
1990
2000
Beyond diversity, main constraints to investments Poverty Risks: domestic level, production, markets
Institutional weakness Policy failures
Poverty affecting labor productivity Labor being the main source of investment, any threat to
labor is a constraint to potential investment Health is a major constraints on human capital but because it constraints the household budget Food access is a challenge for the most vulnerable households (self provision or income) Poverty also limits access to education and hence human capital development Poverty limits physical investment, collective action…
As a consequence, return on family labor is constrained by
low levels of productivity
Risks
Natural risks: natural hazards exposure (climatic risks and shocks
- CC, pests and diseases on animal and crops,…)
Economic risks linked:
- to market failures, missing markets (credit) - to price volatility and mostly domestic prices volatility Combination of diverse sources of risks
Institutional weakness Lack of social and political recognition at individual level
as a “farmer” or family farmer…This lacking status maintains smallholders in a kind of social “invisibility”
Specific social and intra-household inequalities
regarding gender and youth [access to resources & lack of autonomy]
Weaknesses of representative smallholders’
organizations even if progress has been accomplished during the last 25 years
Policy failures resulting in lack of access to assets Scarcity of available funds for smallholders to invest with long term
perspective in good conditions (low interest rates, insurance…), combining individual and collective investments
Lack of short term credit provision in rural areas and specific conditions for
agricultural investments for vulnerable households
Agro-business firms are more interested in medium to large size producers to
reduce transaction costs
Weakness of research and development targeted to smallholders (low cost
innovation, high intensive knowledge innovation for sustainable agriculture…)
Smallholder farming as a dead angle of ‘one size fits all” agricultural policies
A combination of constraints along three dimensions: Assets – Markets and Institutions
Main lines of recommendations 1. Developing a national strategy and mobilizing political will 2. Gaining access to natural assets 3. Providing a favorable investment climate
4. Improving productivity and resilience through research and extension. 5. Investing beyond the farm: rural non-farm economy and territorial development
Smallholder agriculture: the way forward!
