By George, J.

It is well recognized that agriculture and allied economic activities have reliably provided a social Isafety net. Have we, in that case, properly diagnosed the globally escalating poverty indicators? Why does every economic or financial crisis bring about manifold challenges to primary sector economic activities, despite rapid strides in development?

Responses to such questions vary depending upon which side of the triangle of discourse we tend to gravitate toward: the poor and vulnerable people in a given region, international development and financing institutions, or the sovereign nation state along with her development policies and instruments. The value-added from agricultural sector to national income, although declining, does not signal advances in moving dependent populations out of agriculture to other productive economic activities in the economy.

A dispassionate analysis does indicate that development designs and efforts have marginalized livelihood security options. The Asia and Pacific region is a case in point. For instance, UNESCAP in its annual "Economic and Social Survey of Asia and the Pacific 2011" present positive trends alongside downside risks. The region's projected growth stands at 7.3 per cent even though high food and fuel prices have returned, developing countries face a sluggish recovery, there is a deluge of volatile capital inflows, and some countries must cope with the after-effects of natural disasters. And yet the most forceful recommendation is to accelerate productivity gains across the production landscape. The point of investigation hence veers round to fundamental exploration of the laws of variable proportion under the rubric theory of production in micro-economics.

While cavil over numbers of poor people has been a dominant occupational hazard amongst development practitioners, realities on the ground abound in 'exclusion' and 'inclusion' errors. The inclusive growth framework continues nevertheless, burdened with these errors. Efficiency and equity considerations may have guided the global development design and implementation protocols. In the process, food and livelihood security concerns have been given little consideration to draw out critical pathways towards sustainable development (Weinberger et al., 2010; Wickramasinghe, 2010).

From the Asia and Pacific regional perspective I would point out that livelihood security options must precede sustainable development efforts. The two most disturbing issues, impoverishment of producers and unsustainability of livelihood, have recently received emphasis consequent to the food-fuel and climate change controversies.

Right to food for sustainable development
The expansive contours for such a sustainable development framework are supported by recent reports by the UN Special Rapporteur on the Right to Food.1 Broadly, competitive factor markets and better access to product markets could reasonably address the malaise. Hence it has become imperative to explicitly engage with the right to food approach incorporating fundamentals of human rights in general and livelihood security in particular.

For instance, the United Nations Committee on Economic, Social and Cultural Rights based their approach on the livelihood security premise, stating the "right to adequate food is realized when every man, woman and child, alone or in community with others, has physical and economic access at all times to adequate food or means for its procurement" (para. 6) (UNCESCR, 1999). The Special Rapporteur further elaborates thus:

"The right to food is the right to have regular, permanent and unrestricted access, either directly or by means of financial purchases, to quantitatively and qualitatively adequate and sufficient food corresponding to the cultural traditions of the people to which the consumer belongs, and which ensures a physical and mental, individual and collective, fulfilling and dignified life free of fear." (De Schutter, 2010a)

Additional emphasis on improving the livelihood security options of smallholder farmers and preserving ecosystems is designed to address the growing ground realities of agribusiness concentration and withdrawal of the State from its role in ensuring human rights including the right to food.

Three primary elements have particular significance in the Asia and Pacific context: land, seed, and agribusiness firms that set the tenor for sustainable development.

 

Land: A skewed production landscape
Land, under pressure for industrial and infrastructural development programmes, is the key starting block as it is the primary producing unit with a finite supply. The production landscape in the region is extremely skewed. According to a UN General Assembly report (UNHRC, 2008), smallholdings account for 85 per cent of the world's farms. In the Asia and Pacific region, the developing countries are dominated by marginal and smallholder producers who require special and differential consideration for food and livelihood security policies (Figure 1 and Table 1). In contrast, the region's developed countries have factory farms that are structurally and environmentally as diverse as the profit-maximizing opportunities permit (Figure 2). Loss of biodiversity as well as increase in vulnerabilities, severely impact the well-being of humans, plants and the animal kingdoms.

The data in Table 1 demonstrate that the economics of sustainable development in the Asia and Pacific region must rely on farming operations that in turn rely on marginal and smallholding farmers. Although the data set may appear dated, comparison with more recent data sets reinforces the preponderance of marginal and small farmers. For instance, the latest available data set for India from 2005-2006 shows the number of marginal farmers increasing to 83.7 million and the number of smallholders increasing to 23.9 million. If the trend from 1970-1971, or for that matter from 1990-1991, continues, estimated projections for these two size classes respectively increase to 92.7 million and 25.1 million during 2010-2011. Similar trends have been reported in Bangladesh, Indonesia, Philippines, Viet Nam and many other Asian countries.

Pakistan and Thailand are both exceptions; 57 per cent of Pakistan's farms and 46 per cent of Thailand's farms are on less than 2 hectares of land.

By implication, is it appropriate for these smallholders to invest in developing modern factory farms, as is often recommended by international development and financing institutions?2 And if they do not, does it mean these farmers have no future? Far from it -- the 8-step action plan recommended by the UN Special Rapporteur is a way out. These eight point work plan can be better illustrated after engaging with the seeds element and the agribusiness focus of the development financing institutions.

Seeds and agribusiness
Seeds and agribusiness policies share few common characteristics except that they rely on similar business models, those that favour monopoly. A collusive arrangement, under the garb of vertical integration or contractual systems of numerous hues in the value chain, is a common and global prescription.

 

Such exclusionary strategies that work to compete against other agribusinesses also exclude/throw up barriers for smallholders and ignore the realities of the production landscape.

The industrial farming model, we must boldly recognize, has resulted in three negative impacts. First, the poorly endowed marginal and small farmers are further marginalized and made more vulnerable when the State abdicates her responsibilities, wearing the mask of public-private partnership.

Secondly, the scientific research agenda is hijacked to meet the needs of the dominating private sector players. For instance, scientists go to great length to underscore the importance of seed replacement rates to increase productivity levels. That the moral and economic rights of the farming household, especially the women members, are infringed in doing so, is of no consequence to the business models.

Thirdly, under this type of global value-chain governance system, high consumer food prices do not necessarily lead to higher income for marginal farmers and smallholders. Most of these agribusiness firms have shown incredible business performance during the period of global economic downturn 2007/2008. The swelling profits of these conglomerates have increased many times over. Since these firms concentrate on the factor as well as product markets through various collusive strategies, oligarchic protocol becomes the defining protocol.3

Economies of scale is the oft-quoted theoretical underpinning to buttress the business model of agribusiness and seed companies as they consciously work within a framework driven by the bottom line. The other side of this coin is the transferring of their own diseconomies to marginal and smallholder farmers. It does not bode well for sustainability in the agriculture sector and allied activities.4 Given the incontrovertible scientific and ground-level evidence for alternatives that place smallholders and marginal farmers at the centre of the innovation and capital improvements, the roadmap for reinvestment in agriculture is available by asking the question 'how' and not quibbling over 'how much'.

How to reinvest in sustainable agriculture
"Agro-ecology and the Right to Food", a report presented in March 2011 (UNHRC, 2011), asserts the need to double food output in 10 years without infringing on the human rights of vulnerable segments of society.

The following eight-point plan of action recommended by the UN Special Rapporteur illustrates how the investment needs to be tweaked.

  1. Support countries' ability to feed their population.
  2. Establish food reserves.
  3. Regulate financial speculation.
  4. Ensure national social safety nets against declining export revenues and rising food import bills.
  5. Support farmers' organizations.
  6. Protect access to land, putting a moratorium on large-scale foreign land purchases.
  7. Promote the transition to sustainable agriculture.
  8. Defend the human right to food.

The most critical element in this eight point action plan is the first one: support countries' ability to feed their population. Once we recognize this ability, the livelihood security diagnosis and prescription becomes abundantly clear.

In the broader narrative, instances and case studies that describe how implementing international development and financing institutions' recommendations increase vulnerability in a developing country are also worth noting to avoid the pitfalls typical in a top-down approach controlled from afar.

Focusing on employment
Agriculture provides employment to the lion's share of the population as indicated by the portion of the population that depends on small-scale farming. A skewed production landscape must set the foundation for a new approach to production enhancement. Hunger itself is a function of a pronounced skew in distribution of food items, in which production may play a small influencing role. Select national level data (Figure 3) shows that challenges in agricultural sector growth, based on climate change forecasting, has a unique effect on livelihood security. Livelihood security policy therefore becomes integral since shifting employment to other sectors requires a threshold level of skill sets generally lacking in these rural populations.

The experience of Latin America can inform our discussion for strategic inputs as well. The Zero Hunger (Fome Zero) strategy is based on four pillars: increasing access to food, strengthening family-based agriculture, promoting income generation and empowerment and providing food assistance. It promotes the right to food as well as broader social inclusion and citizenship rights by overcoming economic, social, gender and race-based inequalities. Decentralized public procurement of food items for local distribution complement the public provision of health, education and other basic services. Zero Hunger takes into account local economies of scale and avoids the need for large amounts of capital investment that a centralized system would require. However, surgical implantation of these models in the Asia and Pacific region is to be approached cautiously for there are many latent and embedded conditions that may not align with the Asia and Pacific realities.

To conclude, we need updated figures for the summary data in Figure 3 on select Asian countries. Whereas the fragmentation of methods in industrial and manufacturing activities has proved feasible, the already fragmented production landscape in the agriculture sector can benefit from new, more sustainable pathways for growth. The continuing challenges in sustaining natural resources and building human capacity suggest that any fixation on technology to increase agricultural productivity, ensure food security and reduce poverty reduction are merely building castles on the quick sand. Too heavy reliance on unfounded hope and optimism on technology has to give way to local wisdom and knowledge for a gradual and yet sustainable development.

(The article is based on one of the preliminary findings of a research carried out at the Asian Development Bank Institute, Tokyo in late 2009. Grateful thanks to participants of a BBL seminar are acknowledged. However, analysis and views are purely personal.)

(References available upon request)

1 See mandate and reports by the Special Rapporteur at http://www.srfood.org.
2 Commentaries abound. Classic, misleading make-believe one is found in the joint discussion paper by the 'famous four': the Food and Agriculture Organization of the United Nations, the International Fund for Agricultural Development, the United Nations Conference on Trade and Development and the World Bank (2010), asking for the indulgence of 'responsible agricultural investment', ostensibly a euphemism for accelerating land-grabbing episodes across the developing countries. This document reinforces lose-lose propositions being faced by smallholder farmers. WEF (2011) expresses needed solidarity in such efforts to put pressure on the decision makers, yet the smallholders remain voiceless. The UN Special Rapporteur De Schutter termed it, "responsibly destroying the world's peasantry" (2010a).
3 Abuse of buying power is a reality. The Report of the Special Rapporteur on the right to food (UNHRC, 2009) elaborates on the dynamics. The collective abuse of dominance (Mehta, 2011) is the new crafty way to avoid sanctions for cartels and collusive behaviour. Smallholder farmers in the Asia and Pacific region are not at all equipped to handle this machination. See the list of sanctions and proceedings illustrated in De Schutter (2010b).
4 Vermeulen and Cotula (2010) discuss opportunities to leverage smallholders' stakes within various business models.