Examination of Witnesses (Questions 20
- 39)
WEDNESDAY 12 MAY 2004
DR LEA
BORKENHAGEN, MR
ANDREW JOWETT,
DR CHRISTIE
PEACOCK AND
MR COLIN
WILLIAMS OBE
Q20 Chris McCafferty: What are the
constraints?
Mr Jowett: In Harvest Help's experience
external inputs are important. You can raise productivity with
just the right person assisting the farmer to try new things and
improve the way they farm their small piece of land. For me it
is this huge empty sea out there of hundreds of thousands of farmers
with zero support, and with skilled workers (and it is a skilled
job) you can achieve an awful lot. If I were to do one thing it
would be to re-invent the training programme for field staff who
work for whoever—the government, outgrow schemes, NGOs,
whatever. We have got a real shortage of skilled people who can
work with farmers to help them do better with what they have got.
It is a major constraint.
Dr Borkenhagen: One of the obstacles
is that land is increasingly fragmented and that people have increasingly
precarious access to it and therefore are unable to maintain consistent
or increased productivity.
Q21 Chris McCafferty: Why is that?
Why is the land increasingly fragmented?
Dr Borkenhagen: There are a number
of different reasons. Some of them include massive changes in
health. Some are environmental changes that really are quite exogenous
and do not have any local drivers. Some of them are also to do
with the privatisation that comes from large scale commercial
investment in agriculture. Those are just three examples. To return
to your main question, a second obstacle to agricultural productivity
aside from fragmentation of land is food aid and food dumping
which reduce the local market prices and therefore basically make
moot any market activity that farmers would want to engage in.
A third broader issue is that, whether you are talking about very
local markets or large scale international ones, if poor people
are not facilitated in attaining market access, market security
and market fairness they would not be motivated to or have the
ability to increase productivity.
Q22 Mr Davies: I have a question
for Dr Peacock who has not answered this question yet. I think
FARM-Africa, while of course not excluding other important issues,
has generally in answering this question put the emphasis on market
access, a phrase that Dr Borkenhagen used a second ago. I wonder
if you would like to tell us a bit more from FARM-Africa's perspective
what you see as the major obstacles to market access and what
you think the policy conclusions from that ought to be both for
domestic governments and for foreign donors?
Dr Peacock: To be honest, we have
not done that much because we often work with very marginalised
people who are trying to produce enough for home consumption.
We are just starting to learn about it, for example, in our project
in Kenya, the Meru goat project, where now we have managed to
more than quadruple milk yields. There is now masses of milk at
home, there is milk for local sale, and we are just starting to
get into processing of milk and improved marketing. There is no
doubt that the key to this is infrastructure. All of you I know
have travelled in Africa and you know how lousy many of the roads
are. Infrastructure has got to be improved. It is a physical thing
for perishable goods in particular. Information as well has to
be improved and the explosion of mobile telephones in many African
countries, as I am sure you have all seen, is changing a lot of
that very quickly. It is an area that we are just learning about
ourselves because we are having sufficient success such that we
are generating enough surplus.
Mr Williams: If you are looking
for particular solutions, a real improvement in short haul transport,
moving goods from the farmer to the roadside, the first stage
to market, would have a huge impact on incomes of small farmers
as one technical solution. If we are looking for technical solutions
we should be looking in those areas where there are real constraints.
Q23 Mr Davies: Can I stop you there?
You might think that that was an ideal opportunity for massive
entrepreneurship because the capital threshold required to buy
a truck and go round a few villages, collect the produce and take
it to the nearest town is not impossibly high, one would think,
even in the conditions of Africa, and the immediate improvement
in the market price and therefore productivity would be quite
substantial. Why is this not happening?
Mr Williams: It is a question
of the viability of motorised transport. I think there is a technical
opportunity there that will make progress. I do not know what
the solution is; otherwise it would have been found. Secondly,
90% of small farmers farm for one season in a year, whereas they
could be farming the whole year. Water is not that bad in Africa.
A lot more farmers could be irrigating and farming the whole year
round. These are technical opportunities to assist and intervene
on. I think that is a good one and we should be looking at it.
Q24 Chris McCafferty: Dr Peacock,
you mentioned earlier the need for effective agricultural plans
and that you saw opportunities for DFID there. What are the implications
for DFID's overall strategy in terms of raising productivity?
Dr Peacock: I think there are
huge opportunities for DFID to re-engage in agriculture and other
donors, and I know the World Bank is also re-thinking their lending
in this area. I would like to see a much more balanced aid programme.
I and my colleagues are deeply concerned about the trend towards
more and more resources going into direct budget support, leaving
DFID itself with much less room to manoeuvre within particular
sectors. That was why we welcomed the Country Assistance Plan
that was recently developed in Kenya which seemed to have a much
more balanced approach to development, supporting the government
but also supporting other sectors, civil society and so on. In
countries where there are weak democracies, growing democracies,
that would be the sensible approach. There is the big question:
is there a sector investment programme for agriculture? Is this
what DFID should do as they do for health and education and others?
There may be some resistance within DFID to this but I think it
needs to be explored and each country is different, of course,
but there are a lot of opportunities for DFID to explore new funding
mechanisms. I very strongly believe that we all have to recognise
that to have good quality aid costs money. It cannot be done on
the cheap and it is better to do good development rather than
lots and lots of bad development. I fear that with DFID's recent
increase in their budget over the last few years, which is fantastic,
there is a terrible tendency for shovelling money out the front
door as fast as they can in big dollops because they have got
so much of it. I would much prefer to see higher quality aid,
well-managed, focused aid, and I think that could have a significant
impact on agriculture productivity if it were targeted at the
grass roots. To do this requires perhaps the exploration of new
funding mechanisms and district level agricultural plans as one
possible route.
Q25 Chairman: The reality is that
DFID are now moving much more towards budgetary support. What
you are seeing is writing out cheques for central treasuries of
other governments for health and education, HIV/AIDS programmes
and that kind of thing, and so it is going to be more difficult
to get money for agriculture. A few weeks ago you would have found
me cast adrift on the Atlantic Ocean in a boat going to Bonthe,
which is an island off Sierra Leone, because the outboard motor
had broken down, so all we could do was sing hymns. Eventually
we managed, after many attempts, to get the outboard motor going
and it was a slightly worrying moment. Bonthe struck me as being
an example of the problems that we all have in that this is a
very fertile island that used to produce rice and palm oil, and
where Wellsbourne helped them develop coconut trees which were
shorter so that you did not have to climb so far to pick the coconuts,
and piassava, which is a sort of rattan which was used to make
the bristles in brushes for which they used to have quite a good
market. However, during the years of conflict all of that collapsed
so now in Sierra Leone they are importing rice. The price of rice
in Freetown is now higher than it has ever been. They are not
doing anything with palm oil. The piassava market has collapsed.
I am not sure what has happened to the coconuts. What stopped
anything happening was two things. One was a complete lack of
leadership. Who was going to get a grip on this? Who was going
to get the co-operatives going again? The other was a lack of
finance. Little short of bringing in an African agricultural credit
bank of some kind, I do not see the Government of Sierra Leone
funding agricultural credit, I do not see DFID funding agricultural
credit, so, other than NGOs coming in with money which is often
not the right disciplines because it tends to be soft money or
not the right market rates of interest so you do not have all
the market disciplines; how do NGOs like FARM-Africa see this
working out? Do you see the need for an African agricultural credit
bank or somewhere where farmers could go and get credit to get
themselves going? Otherwise I just do not see how you get the
motor going to buy the seed to start the whole thing off.
Dr Peacock: No. I am a very strong
believer in the often vital role of credit and micro-finance.
I would say that virtually every single success story of ours
in Africa has pretty much involved some form of credit, whether
it is in an informal way, such as goats given to a women's group,
for example, and kids born and lent on to new families, so it
is a very local level thing based often on traditional savings
and credit systems (of which there are many in Africa) or in a
more formal use of cash systems of revolving funds to support
new enterprises. Certainly in the livestock field, which is my
area of speciality, that is often the first step for a lot of
people out of poverty, to acquire the ownership of livestock:
small livestock and big livestock and more livestock eventually
perhaps. That is a big economic driver in many parts of Africa
which I think is very important to recognise. Historically there
have been terrible failures of government credit programmes and
as a result in many cases a very bad credit culture has developed
because people have got away with not paying in many instances,
with the exception of women, who are the most incredible repayers
of credit generally and have the most remarkable repayment rates
in my experience. They take credit extremely seriously but are
often prevented from obtaining any form of credit because of the
barriers and the collateral requirements and all these kinds of
things. It is a really big constraint for a lot of women. I see
credit as being very important. It probably needs to be along
the lines of more non-profit type bank style things, and KREP
in Kenya seems to be doing quite well from what I hear, and these
kinds of models, even a role perhaps for a farmer organisation
to provide credit eventually to its members as a service. I think
credit is absolutely vital.
Dr Borkenhagen: Oxfam over the
past couple of years has been working with some more progressive
banks, Etimos in Italy and Rabobank in The Netherlands to facilitate
providing loans to establish co-operatives. This has not been
an activity, as you were saying, that has been taken over by NGOs
or has been done by requesting assistance from the development
agencies. Rather, Oxfam has played a role in guaranteeing the
loan on behalf of the farmers and the co-operative to the bank,
so it has minimised the risk of that loan and has been effective.
Mr Williams: Increasingly productivity
sector organisations in the market are participating in and encouraging
that and that will increase.
Q26 Mr Davies: I just want to amplify
the important issue of land tenure which is allied to what you
have been saying. There is a perception if you take the long view
you will not get farmers to invest anyway unless they are certain
that they will continue to get the benefit of the investment.
If you want investment to be provided you have to ensure that
people have security of tenure. Then we have the most interesting
de Soto hypothesis which says that unless people can be clear
about their property rights less capital will be available because
it will not be possible to provide secured lending. If one thinks
about it, it is a challenging hypothesis. What do you think the
importance is in the business of improving agricultural productivity
of securing effective land tenure rights and what policy conclusions
do you think we should be drawing from that?
Dr Peacock: Certainly this is
fundamental. When I first arrived in Ethiopia in the late eighties
land was redistributed every year. Farmers did not know from one
year to the next what land they would get which was an absurd
situation. It depends on what sort of investment you are talking
about, the length of time and so on, as to how secure your land
has to be. Certainly in terms of long term soil improvement, soil
conservation measures, you want very long term rights of use over
the land. I would also look more broadly at the rights of pastoralists,
for example, for grazing which have been eroded over many years
in Africa and establishing those rights is equally important to
food production and to livestock production. It is absolutely
vital that we work within the land reform programme in South Africa,
which is quite a radical change in redistributing the huge chunk
of land and our role is to try and help people get some production
out of the land they acquire. At the moment there is clearly a
trend of land going out of production as part of this land reform
process, which is undesirable but there have been strong political
pressures driving this forward. Clearly, securing rights of access
to land is critical to long term agricultural development.
Q27 Mr Davies: You have to be very
specific if we are going to draw the right policy conclusions.
When you say you want rights to land what we are talking about
surely is that if the rights are to have any real impact, any
economic significance, they have to be property rights. It has
to be possible to transfer them; otherwise they are not any good
as collateral for loans. What you are saying is that this is an
obstacle to development in these countries. People do not have
property rights in that sense.
Dr Peacock: There are very particular
issues for places like Ethiopia. There have been state concerns
within Ethiopia that if land was privatised there would be a massive
landless class created after the next drought. That is the Ethiopian
situation, and perhaps in Malawi there is the same difficulty
in this area, but I think there are ways round that.
Q28 Mr Davies: We have had some clear
testimony from FARM-Africa and could I ask Dr Borkenhagen, because
I sense from the Oxfam paper—which I have read, as always
with interest—that you do not agree with that: in the paragraph
on "Land rights and economic and social stability" you
say, "We are concerned that DFID's approach supports a `willing-buyer,
willing-seller' arrangement in land reform."[3]
Surely a "willing-buyer, willing-seller approach" is
what Dr Peacock and I have been talking about. You do not share
that analysis?
Dr Borkenhagen: A `willing buyer,
willing seller' approach assumes equal power in a market exchange.
We reject this because there are so many inequalities in land
distribution and land rights. In our discussions earlier, before
we came today, we did talk about land rights and rights of tenure
issues. As I said earlier on, what is important and what we agreed
among ourselves before, and what I think Dr Peacock was very much
in agreement with, is that what we support is that people should
have legitimate rights to access, use, own and control land. This
may be enabled by written down titles so that the title owner
can sell them, but it does not have to require the writing down
of land ownership, and indeed does not have to imply land reform
at an operational policy level—not necessarily formal land
tenure. To ensure people invest in their production, it is necessary
for them to have secure rights. This is important for DFID to
consider for women because they unusually have less power in land
rights.
Q29 Mr Davies: When I say "property
rights", my question is based on the suggestion that both
men and women would be able to hold those rights. It would be
scandalous and against Human Rights Act principles if it were
otherwise. I think that is a red herring.
Dr Borkenhagen: I was not making
that point; I was making a different point. For there to be legal
binding titles to land in order for people to sell them, there
are certain classes of less powerful people that are going to
lose out. Whether those classes are men or women will be context
specific.
Mr Davies: That is a different point.
I want to establish whether the principle would be desirable,
whether we should have property rights as we understand them in
this country. It is a different issue what the pragmatic problems
might be of achieving such a regime. You may have to look at the
registration of rights. There is a bit about that in de Soto's
book, as you probably know. The impression I get from your written
submission was that you did not share the view that we have just
heard from FARM-Africa which I have tried to summarise. It is
important that we should know that. Maintaining solidarity between
NGOs is less important than opening up the whole issue to public
debate and getting the right policy response.
Chairman: It seems to me there are whole
areas like land reform, land rights, land tenure, where they clearly
do have a shorthand for something substantial behind them. Perhaps
Andrew would be kind enough to do an idiot's guide for MPs on
the politics of land rights, land tenure and land reform, because
there is obviously a whole politics of shorthand here and I think
what we have been seeing is a bit of what Quentin said, you trying
to reconcile these bits of shorthand into policy. If we could
understand what the shorthand was about it would be more helpful
for us. Does that make sense?
Q30 Mr Davies: But, Chairman, I do
want to make one point if I might, and that is that there are
genuine differences of view. They should not be disguised or hidden
and we want to know what the differences are.
Mr Jowett: I am not going to try
and answer that!
Chairman: You have made that point. Andrew,
you can now say something.
Q31 Mr Davies: One side of A4 only.
Mr Jowett: We will put something
together for you.
Q32 Mr Davies: You can make it a
consensus document.
Mr Jowett: No, we will not do
that. We will put forward the arguments. We will send that in
in writing[4].
Can I just make one point, because this discussion started after
a discussion on access to credit and whether or not you needed
land title for access to credit. You do not. There are dozens
of locally managed credit programmes having a significant input
that do not depend on land title serving as collateral. Usually
there is a savings programme in place, or other assets maybe,
or guarantors may be used or insurances, so it is a bit of a red
herring, this argument over access to credit in terms of needing
land title.
Q33 Chris McCafferty: Can I turn
to something completely different? The funding of NGOs has changed,
as you are very well aware, quite dramatically over the last ten
years. In times gone by there was access to general aid funding
and now you are in a situation where for the most part you are
being paid to provide a contracted service and those contracted
services are generally speaking based on policies of donor governments
or aid agencies. Does that cause a conflict of interest and how
should NGOs interact with national governments and what is the
appropriate role of an NGO in your view?
Mr Williams: Are you talking about
national governments like Malawi?
Q34 Chris McCafferty: I am talking
about donor governments because generally speaking the contracted
service is through donor governments or aid agencies, although
of course it can be through national governments, but I am interested
in donor governments and aid agencies where you may have a contracted
service, being a contracted service provider.
Mr Williams: We receive money
from DFID, from USAID, from the EU, and we have had to develop
a whole new set of skills in each case to deal with that. The
goalposts change quite frequently, which means another set of
skills and that is reality. From our perspective all the time
we are trying to pursue our own long term strategy through those
changes. They are not always negative but I think it helps us
also to be a bit more professionally accountable than we may have
been in the past on the one hand. On the other hand sometimes
there is a bit too much detail required that may not be relevant.
Q35 Chris McCafferty: You said that
sometimes you are able to deliver your own strategy. Is there
not a conflict of interest?
Mr Williams: Of course; yes, there
is.
Q36 Chris McCafferty: What is the
nature of the conflict? Can you give me an example of one?
Mr Williams: I can give you one
example of wanting to concentrate on a certain technical area,
such as market development, where the donor was far more interested
in concentrating on hardware inputs on the production side and,
more than that, where our interest was the position of the small
farmer and getting the best deal and the lowest costs for the
small farmer but the donor was particularly interested in developing
local manufacture which we did not think was the priority interest
of the small farmer.
Dr Peacock: It is always very
difficult to generalise about NGOs because they are so different,
every single one of them, and the roles that they play and the
roles that they want to play are very different. There are some
that just earn their living, if you like, by doing contracts,
providing services to people, and that is a legitimate thing.
I think there is a danger in many African countries, partly driven
by donors, of a blurring of NGOs with consulting companies, if
you like, and private sector contracting service suppliers. A
lot of NGOs, certainly FARM-Africa, see their role as being independent,
trying to innovate and do new things and be independent of government
but working with government, being able to pursue their own strategic
objectives through accepting funding from a range of different
donors and trying to spread their risks that way. It is extremely
difficult therefore to generalise about NGOs in this way but I
think we see an important role for NGOs as being part of this
mix of suppliers of services to farmers, indeed suppliers of services
to government. We have just got a contract to provide training
to the Ethiopian Government in pastoral development, for example,
which was a big breakthrough for us. We viewed that as a very
big breakthrough, but it was very much in keeping with our own
strategic objectives and supporting what we thought was a very
good programme of work.
Chairman: There is also going to be another
important role for you, it seems to me, which is that if governments
increasingly move into budgetary support NGOs increasingly are
going to be the only people out in the field and we are going
to be increasingly reliant upon you to tell us whether the budgetary
support is working, because one is not necessarily going to know
that in Addis or Nairobi.
Mr Battle: Some NGOs are now getting
the contract to monitor the budget support which puts them in
quite difficult positions sometimes, I would suspect.
Q37 Mr Khabra: DFID has issued a
policy paper and the International Development Select Committee
has decided to hold an inquiry into the effectiveness of the agriculture
policy of the Department. DFID's policy paper highlights its commitment
to trade reform, because that is important as far as agriculture
is concerned, and identifies work to raise product standards as
influencing the ability of farmers to participate in international
markets. I know for a fact that agriculture is important for people
in developing countries as well as in poor countries because the
large population depends on their livelihood from agriculture.
I can give the example of India where there are small farmers
who depend on agriculture. So far in developing countries they
have been pursuing agriculture policies which are to the disadvantage
of developing and poor country farmers, so do you think raising
product standards is a sensible thing to do and could the regional
trade agreements deliver results in the short term?
Mr Jowett: Can I just make a general
point in responding to that and maybe pass the question on because
we are not that involved in the big global trade agreements and
their effects? The vast majority of farmers that we work with
in southern Africa are on the margins of all this globalisation.
They are interested in improving food production on their farm
for their own consumption. Broadly speaking that is still what
the game is about. I fear sometimes that debates move too far
towards globalisation and big trade issues and we are missing
what is the major point, which is how we are going to support
those millions of farming families to reduce their vulnerability—whatever
jargon you want to use—or increase their food security by
producing more from the same piece of land on a sustainable basis.
I accept your point is important but I do not want us to get too
deflected from the core issue here.
Dr Borkenhagen: There are three
broad areas of farming. You have the large scale commercial farming,
you have the medium sized land holders, and then you have people
who are really mixing and matching, doing a bit of subsistence
agriculture at some point during the year, perhaps working as
a waged labourer in the town for some part of the year and perhaps
also working on a farm as a labourer for another time. What you
have are very different kinds of lives that can be led through
agriculture. The point that was just made is that these last two
categories are huge. The commercial sector right now is indeed
expanding and, as you were saying, supermarkets—also retailers
and manufacturers of products—are imposing particular standards
on food production. What is happening is that the commercial sector
is drawing from this quite often landless third group which is
looking for wage labour and they come in and work in these factory
fields. The question is, first of all, what is the impact of standards
in that realm? Part of the impact is that right now the people
who bear the cost for raising those standards are the farmers
themselves. Quite often they are relatively wealthier farmers
to start with but, for instance, Tesco impose standards on the
farmers from whom they buy of about $120 per farm that the farmers
themselves have to pay in order to meet the standards, such as
having toilet facilities on the farm and having other sanitary
measures put in. The point is: the costs and the risks of transforming
their production systems to meet those standards are being borne
by the farmers and the farm workers, not by the supermarkets or
the manufacturing agri-business companies. Agri-business companies
are in a far better position to do so, however. What we at Oxfam,
and also with the Ethical Trading Initiative which DFID also funds,
are trying to do is to get that risk to be borne by the larger
companies who can afford to bear it more than the farmers can,
whether it is the slightly wealthier farmers who own these farms
that feed into these agricultural global supply chains or whether
it is the workers themselves, quite often women, who are having
to meet those standards themselves, for instance, in relation
to not having children on the farm at the time of harvesting.
Q38 Mr Khabra: Is it really essential
to raise standards? There must be some reason for wanting to raise
standards, in order to disqualify poor farmers' products so that
they cannot be sold in the market at all. What are those reasons?
Is it just to protect their own interests or for health reasons
or what?
Dr Borkenhagen: Primarily it is
risk aversion strategies by the agricultural production or retailing
companies. They do not want to be caught out. If they are saying
they are selling something that is organic, if in fact it is found
to have a particular amount of pesticide on it then consumers
can take them to court or whatever are the proceedings that can
follow after that the retailers are avoiding potential risk to
reputation by saying, "We have met such-and-such standards".
The standards are mostly to do with health and safety, and some
of them are to do with labour practices. By meeting the standards
in some areas of their supply chain, they minimise the possibility
of being brought to book by consumers or consumer groups or investment
groups.
Mr Jowett: If I understood your
original question correctly, I do not think the answer for African
farmers in general is the big export of cauliflowers or sweet
peas. That is not what we are trying to argue for.
Mr Williams: And we stay clear
of Tesco and the toilets as well.
Q39 Chairman: Obviously with different
commodities there are going to be different issues, for the cotton
farmers of Burkina Faso or Bali or Benin or for the cocoa farmers
of Ghana or Sierra Leone. We take the point. What one does not
want to have is a situation whereby everyone is doing high politics
in Cancün and forgetting that for the vast majority of farmers
in Africa what they are really trying to do is get a living and
sell their produce to local markets and regional markets.
Mr Williams: I think the huge
progress is to get in at the bottom end of the market for the
vast majority of farmers. If we can be part of a process that
makes that shift, that is where the big impact on poverty is going
to be.
Dr Borkenhagen: I also think that
DFID is very well placed to understand exactly what you just said,
that is, the relationship between these international trade regimes
and the small scale farmers that we are discussing today. The
impact of the trade regimes followed directly to those farmers
is not that well understood. We want to have more direct linkages
so that we can feed back to policy making. I think that, at least
on the macroeconomic side, DFID is extremely well placed to do
the macroeconomic analysis and we who are more in the field are
well placed to do the analysis of the conditions of the rural
poor.
Mr Williams: We sometimes forget
that DFID in one form or another and through several guises, through
ODA and ODM and NRIN and TPI, has been working with small farmers
for 60 or 70 years and the knowledge that they have built up is
immense and we are slightly concerned that they are throwing it
all away. They have a huge amount to offer, particularly in supporting
research, the technical stuff, in local areas, much more than
most other donors.
Chairman: That is a huge message that
we can finish on. Thank you very much for your papers, thank you
very much for coming and giving your evidence, and thank you very
much for the further paper that you are going to give us.
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