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UNCORRECTED TRANSCRIPT OF ORAL EVIDENCE To be published as HC 602-i House of COMMONS MINUTES OF EVIDENCE TAKEN BEFORE INTERNATIONAL DEVELOPMENT COMMITTEE
Wednesday 12 May 2004 DR CHRISTIE PEACOCK, MR ANDREW JOWETT, DR LEA BORKENHAGEN and MR COLIN WILLIAMS
DR STEVE WIGGINS, MR MICHAEL HUBBARD, MR COLIN POULTON and DR PETER HAZELL Evidence heard in Public Questions 1 - 61
USE OF THE TRANSCRIPT
Oral Evidence Taken before the International Development Committee on Wednesday 12 May 2004 Members present Tony Baldry, in the Chair John Barrett Mr John Battle Mr Quentin Davies Mr Piara S Khabra Chris McCafferty Mr Andrew Robathan Tony Worthington ________________
Examination of Witnesses
Witnesses: Dr Lea Borkenhagen, Livelihoods Programme Development Manager, OXFAM, Mr Andrew Jowett, Director, Harvest Help, Dr Christie Peacock, Director, FARM-Africa, and Mr Colin Williams, OBE, Director, International Development Enterprises, examined. Chairman: Thank you very much for helping us with this inquiry. As the select committee has gone about its work, one of the things that caused concern was that we felt insufficient attention, particularly in Africa, was being given to agriculture. Sustainable livelihoods had all too often become subsistence livelihoods. It was one of the few issues on which we had not seen eye to eye with DFID. We are very glad that DFID have now produced their consultation paper on agriculture, I think largely as a consequence of our continuous representations[1]. We have quite a big agenda to cover this afternoon with two lots of witnesses. Please decide amongst yourselves who answers the questions. Do not feel that everyone has to answer every question. Q1 Tony Worthington: Can I thank you for your papers? It seems to me that there is something quite remarkable happening among the agriculture NGOs as a consequence of the consultation paper and other interests in agriculture. Something is fizzing around and I would be interested to know what has been happening. Mr Jowett: We were stirred into action over the Eliminating Hunger paper[2] two or three years ago which did not really mention agriculture in a strong enough way. That galvanized certainly myself and a dozen other NGOs into coming together and trying to feed into that consultation. We have tried to keep going since then. Q2 Tony Worthington: My notes say, "Why is agriculture important?" It seems extraordinary that someone should have thought that was a worthwhile question. It is remarkable, looking back over the last seven years of DFID, how rarely we have talked about agriculture and all aspects of agriculture. Why do you think it dropped off the agenda so much? Mr Williams: I do not know. You will have to ask DFID, but there is no reason for it to. It is still the case and was the case that 90% of people in sub-Saharan Africa are dependent on smallholder farming. Therefore, if you invest in that, you will invest in poverty reduction. That is the reality. You can analyse yourself in lots of directions and there are lots of issues and needs. I think HIV/AIDS is one issue that has diverted attention. The issue of hunger or food security as opposed to increased production may also have diverted our attention a bit. You can analyse that in a number of directions and that may be the reason, but you will have to ask DFID. The reality from the other end - I live in Africa - is that rural livelihood driven by small scale farming is still the way in which people are going to escape poverty and if we can invest in that we will achieve something. Dr Peacock: I think there has been a perception of past failure of agricultural projects. Particularly a lot of very high profile, World Bank financed projects have become quite notorious. I think a lot of projects have been tarred with the same brush. A lot of these rather large scale projects were very poorly designed, poorly conceived, often with rather over-ambitious, unrealistic expectations of them. A lot of the successes have been completely obscured and we would certainly argue from all our experience that there is a lot of small scale success around. I think this is worth looking at and analysing. I would also cite the absolute focus on the Millennium Development Goals as another possible reason why agriculture has dropped off people's agenda. There is not really an explicit agricultural food production type of goal, a higher level goal, and precedence is given to the very clearly defined health education millennium targets where there are perhaps much more tangible outcomes from a certain amount of investment. If you put 20 million into primary schools in Tanzania, you know pretty much how many schools you are going to get out at the other end; whereas agriculture has always been a more complex sector that perhaps is not so amenable to that sort of rather simple cause and effect relationship. Mr Jowett: Can I add a couple of points to underline why agriculture is so important? As well as Colin saying that the vast majority of sub-Saharan African people live in rural areas and rely on farming, we have to remember that within that the majority are women and they have additional responsibilities. We also know from good research that improving productivity in agriculture leads to a high impact on poverty relative to other areas of investment and that the distribution of created wealth is more even than with other routes. We should not forget the wider benefits of agriculture to do with the natural resource base and sustainability. Underneath all this is the bottom line which is food security. Improving agriculture and productivity is probably the best way to deal with food security, in the medium term certainly. Q3 Tony Worthington: I wonder if there is something in people's minds as well that development equals fewer and fewer people living off the land, the British model. Is it 2% living off the land? Development means going in that direction and you are looking for issues elsewhere to be about development. What I am reading now is that more and more people state that you have to have large numbers of people living on the land in Africa for there to be an increase in prosperity, which is a completely different perspective. Dr Borkenhagen: One of the things we are trying to say here is that both tacks are necessary to follow. That is, because it has been shown that investment in small scale agriculture is the thing that makes the largest difference in poverty reduction, not commercial agriculture which leads to greater disparities in wealth, we need to invest in that. At the same time, there is also the necessity to invest in broader urban developments and other types of infrastructural work that might connect rural production and urban production. We are not proposing a singular answer and that everything should be directed towards small scale agriculture. However, because it has been so left out of the main policy picture and because it has such an enormous impact, it therefore should be brought to the forefront of the table. We had some points about raising productivity as well. Q4 Tony Worthington: Can I come explicitly on to Africa and the contrast between what people say about Asian miracles and what has not happened in Africa, where you just look around and you can see so many conspicuously wrong things, like lack of property systems, where irrigation should have occurred, dependence on outside sources of fertilizer and so on. Above all, productivity has not increased. Why are there all those seeming failures? Dr Peacock: Both Lea and I have worked for a spell in south east Asia. There it is obvious to see the massive public sector investment in infrastructure to support the whole green revolution thing, whether it is in irrigation systems or fertilizer systems, credit systems or whatever. That is in stark contrast to the level of investment post-war in Africa. We have to get very serious about investing in rural Africa. I will take resources. It is not an easy thing to do but we all passionately believe that it is possible to improve things in rural Africa and improve African agriculture. Mr Williams: There are new opportunities which perhaps did not exist before. You can now fairly easily see the opportunities for using irrigation with smallholders. You can see farmers in peri-urban environments in Africa using cellphones which you would not have seen five years ago, which improves their information. There are new technical opportunities. There are new environments which, if we understand them and invest in them, will give farmers in Africa a much better chance. That is the reality. That is where 90% of the people are dependent. That is where progress has to be made and it can be made. We can see it all the time. Dr Borkenhagen: One of the issues that we have been talking about is raising productivity but we also would like to put forward that raising value at the farm gate as well as increasing prices are going to have complementary effects on increasing productivity. Q5 Chris McCafferty: I would like to ask if, while agriculture has maybe fallen off the agenda, livelihood programmes and livelihood approaches have come onto the agenda? Is this a major change in policy or are livelihood programmes agriculture under a different name? Dr Peacock: That is a very good question that has been baffling us, to be quite honest, in the way DFID presents it. We believe that the livelihoods approach is nothing more than a comprehensive view. If you like, it is good development practice. It is a comprehensive view of the way that people live. When that is applied in rural areas and people still get the bulk of their living from agriculture, agriculture should then automatically feature large in action that comes out of the analysis. Certainly in my personal experience, from talking to DFID and DFID staff, it appears that there is a paralysis of analysis and it is not leading into any practical action where you have to make choices and apply priorities to resource allocation as a result of your analysis. I think we have not really seen that outcome from the application of the livelihoods approach. Mr Jowett: In Africa, yes, you are right. We should be talking about agriculture when we talk about rural livelihoods, which does not take away from the need to be investing in the opportunities and efforts to diversify people's income and reduce the risk of farming. There is not a lot of option for most people. Q6 Chris McCafferty: Is the livelihoods approach just confusing? Mr Jowett: I think it was an excuse not to invest in agriculture because you are identifying other marginal opportunities that you could take forward. Great, but we are missing the core of the problem here. Dr Borkenhagen: What these two have responded to is the question of livelihoods in DFID whereas livelihoods, because it is a very wide term, can be interpreted in different organisations in different ways. I think it might be useful to separate those two issues. The comments that were made are very apt for what has gone on in DFID with the livelihoods work and the important place that agriculture should hold within that whereas there are other interpretations of livelihoods. For instance, Oxfam's has a remit that includes urban livelihoods, which indeed may be connected to agriculture, but is also to do with workers in factories producing textiles and this kind of thing. For us it is very much to do with the power that people have to live lives that are economically sustainable, whether it is through wage labour or agriculture production. Agriculture is a very key part of this. Q7 Mr Davies: I wanted to come back to something that Dr Borkenhagen said, which was that productivity was not everything, and you were not even quite certain about the virtues of increasing productivity. The important thing was to increase value at the farm gate. What is the difference between increasing productivity and increasing value at the farm gate? Dr Borkenhagen: I would like to correct that. I did not say that I believed productivity should be left behind. I think it is incredibly important to keep moving forward on increasing productivity for small scale producers and poor producers. However, at the same time, they could also benefit by increasing value or adding value at the farm gate. What this means is something like milling that would transform, say, rice or some other grain into something that could be sold as a different product, that is, flour. When you sell something as just a grain and then you sell it as flour, you can increase the price of that and that is the value increase. Q8 Mr Davies: Maybe there is a confusion of language because productivity is output per unit of factory production employed and if you are increasing value at the farm gate you are increasing the value of the output. Therefore, output per person, labour productivity or output per unit of land is capital productivity. It seems you are striking an antithesis that does not really exist. What you really mean is that you like the idea of productivity being increased and that is a good thing. Mr Jowett: Yes, be it high yields or a better price. Q9 Mr Davies: Yes, but that is an increase of productivity and that is an increase in value at the farm gate. It is the same thing, is it not? Dr Borkenhagen: We are looking for farmers to be doing better, whether it is by producing more and increasing value at the farm gate by increased productivity, or whether it is by the price going up of the good, or whether it is being able to transform that good through basic processing so that they get more money for the good. Q10 Mr Davies: All of that amounts to an increase in productivity. Dr Borkenhagen: That is right. Q11 Mr Davies: In the case in point, it is probably an increase in both labour productivity - that is to say, an increase in the output of the man or woman hour invested - and in land productivity, so we can shorten the debate by just saying that we like productivity. Is that right? Mr Williams: It is also an increase in the development of effective markets for agricultural produce at local level and the sub-regional level as well as at the international level. The market development side is one we have all been afraid of because it has been such a disaster in many areas. If you are going to increase production you have to increase things in the market and the market systems have to develop. That is where the higher values come in. Q12 Mr Robathan: I would like to turn away from productivity, whether at the farm gate or the production of grain per acre, and turn instead to the public policy, the government policies of ministries of agriculture in developing countries and how they have had an impact on this. I would like to set the scene by a rather lengthy quote because I think it is very relevant. This is from DFID's e-consultation and you may recognise it. "A traditional focus of ministries of agriculture has been upon food production self-sufficiency, often associated with a significant state involvement in agricultural production and marketing. Over recent years reappraisal of the role of government has encouraged a withdrawal of the state from commercial agriculture towards a role focused on making rural markets work and the provision of basic rural services that the private sector cannot provide. The process has not been straightforward. Reforms have often been partial and sometimes reversed, creating policy uncertainty and undermining the overall impetus for reform. There are few success stories." That is a pretty damning indictment of public policy in developing countries and brings into question the role of the state and how it has worked in agricultural policy. What were the problems of past policies and lending agencies in supporting agriculture? What went wrong? Dr Peacock: Historically, it is similar in a way to Britain. There were large, subsidised extension systems in many African countries that partly fell out of the colonial service. There were large cadres of people not necessarily very well resourced, and through these people a lot of the old agricultural projects were run, whether it was the World Bank or whoever funded it. Certainly in my professional life you could point to probably the late 1980s as a point when there was a lot of structural adjustment to programmes being imposed often on a lot of African economies. There was very strong pressure to retrench staff and reduce the role of the state. A lot of this was down to a belief that if the state withdrew, the private sector would somehow miraculously come into the vacuum. In our experience in East Africa this has simply not happened. Over the last ten to 15 years there has been a vacuum and a total lack of support to smallholder farmers, which I think is one of the biggest problems currently facing the development of smallholder agriculture. There have been very, very few serious efforts - I cannot personally think of one in Africa - where ministries of agriculture have really been seriously reformed and their role tackled in any serious, comprehensive way. Perhaps the Barnard Programme in Uganda, where people are trying to privatise agricultural extension is one example, where people are trying to tackle this at the moment, but generally ministries of agriculture remain pretty ineffective. Currently, certainly in all the countries that we work in, 80-90% of their budget is spent on staff salaries, releasing very little for operating costs to make these people effective. One of the roles that FARM-Africa plays is in implementing projects through these extension staff because they are there, they are capable and they just need a little bit of help to make them really effective. Rationalising the role of the ministry of agriculture has really been seriously tackled anywhere in Africa to my knowledge. Q13 Mr Robathan: What you are saying is that the ministries of agriculture are largely ineffective? Dr Peacock: For many purposes they are. Q14 Mr Robathan: You are also placing a large amount of responsibility on the shoulders of multinational organisations, structure adjustment programmes, etc., which may be a little unfair. Dr Peacock: The fiscal discipline, if you like, that was imposed had an impact in all sectors, not just in agriculture but also in health and education and everywhere. It was a shattering experience for many agricultural economies and led to school fees being introduced in Kenya, for example, which have now been withdrawn. It hammered agricultural ministries, like virtually all ministries in Africa. Mr Williams: We also need to make sure we look at what has gone right. I do not know why, particularly for Africa, we are always looking at what has gone wrong. Quite a lot has gone right. Maybe it started with the groundnut scheme when that went wrong in 1953. The extension system in Zambia at the moment is quite good. It is funded by SIDA; it is having good results. There are patches like that all over Africa and in other parts of the world. The issue is what are the expectations. On the production side, good technical support would be of value to farmers and is not available in the private sector. It needs to be available in the public sector. You have talked about finance. Keep finance out of government and keep it out of NGOs. They have all done it badly, but it is improving in the private sector particularly if people understand it locally. If we look at the market side, I have never seen a government in any part of the world being good at market development. I have never seen NGOs being good at market development. We are much stronger on the production side. We are looking for the government to provide technical support for farmers. It is across the board. It is not only ministries of agriculture that are ineffective. You will find the same with health and other areas. I am not sure it is much worse than in any other parts of the world. If you talk to an Indian farmer he may not see an extension worker from one year to the next but he does not complain about it. If we concentrate on those things that are important, I think we will find the farmer himself or herself has huge strengths and values that they are beginning to exercise and gain confidence in. If we can find those strengths then we can make progress. Q15 Mr Robathan: I am a farmer so perhaps I should declare an interest. The centralist agricultural policy in Europe has not been a great success. I think most people would probably agree. I am not saying the western world is fantastic, but the developing world is what we are looking at. There has been some success in the past but what do you think the key themes should be for developing policies in agriculture for government, for ministries of agriculture developing policies in the future, or do you think that governments are best to stay well out of managing agricultural policy? Dr Peacock: We would like to see governments playing a smaller but more effective role whereby they are facilitating, particularly at the local level, a range of people - private sector, farmer organisations, community based organisations, NGOs and the government - working together to come up with local level plans. One of the very positive things that I see happening in Africa at the moment is the decentralisation of a lot of government down to district or provincial level. There are opportunities within that for the ministry of agriculture to play that local facilitating role, getting people together, perhaps a little bit of co-ordination, a little bit of stimulation, exchange of information, to make effective agricultural plans, and it is those plans that I would see as a real opportunity for people like DFID to invest in ultimately. What is lacking very often, however, is a really coherent local level strategy that co-ordinates people and I think the ministry of agriculture could play an important role in that. We see the need for much stronger farmer organisations as well. I think there is a fantastic future for farmer organisations to play a role in providing support to their members, inputs for facilitating marketing, and I think the Uganda National Farmers' Association is quite an interesting model. The way that it is evolving recently is quite interesting. We also need to look at a mix of provision of input supplies and marketing - private sector, NGOs, farmer organisations, again facilitated by the ministry of agriculture, perhaps also bringing in things like infrastructure development, targeting roads so that they go to a place where there is increased production rather than going somewhere else. This kind of co-ordinating role for the benefit of improving agricultural production would be very useful. Mr Jowett: Also on the positive side, all of us here represent NGOs and we see lots of really great success stories in the programmes we support in Africa, often through our African partner organisations. African farmers have the capacity to significantly improve their production and their profitability at the same time as being custodians of the resource base they live in. It is not maximising production at all costs. Q16 Mr Robathan: But, Mr Jowett, you are not referring there to public policy. You are referring to the work of the farmers themselves rather than to government policy? Mr Jowett: That is right, but they do need some support in this. They need exposing to new ideas, they need to see how things work, they need to be given some encouragement to try new things out with a lot of horizontal learning from each other. Who is going to make that happen? At the moment it happens in these isolated projects which we are all involved in, but in order to scale that up to have wider impact we need different mechanisms, and again that is where government can play a key role. The skills are there, the resources are there, if we can bring them together beyond small projects. Dr Borkenhagen: I see we have all got lists. Can I add some to that? The first thing is that national governments can play a role in land rights securing. I am not saying land tenure necessarily or land reform but perhaps the national governments can support policies in law that protect established legitimate claims. Secondly, the national governments can play a very large role in supporting women agricultural producers and women who are involved in the next steps from the field. Quite often they are the ones who lose out in provision of information, even in the type of land titling that carries on. Attention to the women is going to have an impact on the children's health, education levels, etc. The third one is that national governments can play a role in preventing food dumping and food aid dumping if in some way they can say no, this is going to have an effect on the local agricultural markets and the prices farmers will get. The fourth thing is that they can also push to secure contracts with, for instance, supermarkets that are expanding their reach into agricultural production systems in different places all over the world, including Africa. They can seek to have greater security in these contracts such that the farmers' productivity is bought for that year and the next year and the following year, and also that there is input through those particular contracts in terms of locally appropriate technologies, information, even health care. The last point that I will add is that governments also have a role in providing appropriate technology to small scale agriculturalists and this means technology that is demand driven and that might particularly be focused on farmer-to-farmer exchanges - we have found that particularly effective in Nicaragua and Honduras and El Salvador in our project - rather than, say, commercially focused technologies that are not really appropriate for small scale farmers in all cases. Q17 Tony Worthington: Can I come in on the issue of supermarkets and generally the interaction between African agriculture and our world, where you can see in the supermarkets evidence of African products, whether they are flowers or beans and peas and so on? Is that leading to greater prosperity because the power of the supermarkets is so colossal and the whole enterprise seems to be external? Mr Williams: It is usually the better-off farmers who can deal with the supermarkets and the intermediaries who are very demanding intellectually and in terms of standards, etc. You will find that that is very good for improving the prosperity of people who are not that poor, but it is good, and if we can ease the burden of standards and so on that will help. You will not get a Ugandan pineapple in Tesco because it is too big and nice and juicy, so it is good but it is not helping the poorest farmers, and the standards side of it is possibly more bureaucracy than standards. Q18 Chris McCafferty: Can I take you back to that word "productivity"? What I have observed is that raising standards of productivity has been part of your answer to every question so far, even to Andrew's non-productivity question. Productivity did creep in there. What do you perceive as the main obstacles to agricultural productivity? Mr Williams: In one sentence? Q19 Chris McCafferty: I suspect it is more than that. Mr Williams: It is a problem of inputs in terms of the accessibility of inputs that make you more productive. You can go through the whole value chain. There are constraints on reaching the highest value and if you try and attack those constraints at each point in the value chain then you will make progress from the point of pre-production right through to market. There are constraints at each level and there are opportunities at each level. 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 sale commercial investment in agriculture. Those are just three examples. A second obstacle 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 market access, market security and market fairness are not there basically the productivity is not going to have any stimulation. 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 Netherland in terms of developing ways in which we have been able to get funds for them. This has not been an activity, as you were saying, that has been taken over by NGOs or by requesting assistance from the development agencies. Where Oxfam has played a role has been in guaranteeing that loan on behalf of the farmers or the co-operatives to the bank, so it has played a role in minimising the risk of that loan and that so far 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 the mechanisms to be provided you have to ensure that people have security of tenure. Then we have the most interesting 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. You did not take it from one year to the next and you would accept that it 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 where, as you heard, there has been a massive response to this. There have been state concerns within Ethiopia that if land was privatised there would be a massive landless class during 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[3] - which I have read, as always, with interest - that you do not agree with that: in paragraph 4 on "Land rights and economic and social stability" you say halfway down that page, "We are concerned that DFID's approach supports a 'willing-buyer, willing-seller' arrangements in land reform." 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: 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, and that may include things written down so that you can sell them, but it does not have to require land reform at an operational policy level but it has to require title to move temporarily across in some shared way which would perhaps ensure the possibility of women being able to entitle their land. 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 that are going to lose out; whether it is men or women that may be the case. 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, which are an obstacle to development 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 is less important than opening up the whole issue and getting the right policy response. Chairman: It seems to me there are whole areas like land reform, land reforms, 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: This is right: 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 is very different kinds of lives that can be led through agriculture and the point that was just made is that these last two categories are huge and the commercial sector right now is indeed expanding, as you were saying, in the supermarkets imposing particular standards or the food manufacturing companies imposing particular standards. What is happening is that they are 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? It is not the entire picture but it is one component of it and it links in from the labour in this area. 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 they have to pay in order to meet the standards of having toilet facilities on the farm and having other sanitary measures put in. The point is that what is happening with the standards is that the costs and the risks to meet those standards are being borne by the farmers and the farm workers, not by the supermarkets or the manufacturing agri-business companies who are in a far better position to do so. 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. 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, but they are avoiding potential damage by saying, "We have met such-and-such standards", mostly to do with health and safety, and some of them are to do with labour practices so that those companies then cannot be 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 Cancun 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, and 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 etc followed directly to those farmers is not that well understood and we want to have more direct linkages so that we can feed back to policy making and I think that, at least on the macroeconomic side, DFID is extremely well placed to do that and we who are more in the field are well placed to do that. 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.
Witnesses: Dr Peter Hazell, Director of the Development Strategy and Governance Division of the International Food Policy Research Institute, Washington, Dr Michael Hubbard, Birmingham University, Mr Colin Poulton, Imperial College, and Dr Steve Wiggins, Overseas Development Institute, examined. Chairman: Thank you very much for coming. I am sorry we are taking a little longer but, as you can see, it is a big agenda, and I am also sorry to colleagues for having to cut them short on one or two occasions. Q40 Mr Davies: I do not know whether our experts listened to the previous part of the discussion but, as they can perhaps see, what some of us are trying to do is introduce as much rigour and clarity as possible into this very important debate because we have a responsibility when it comes to write policy conclusions and we cannot discharge that responsibility unless we have made every possible effort to clear our own minds of any confusions or contradictions there might be. That was why I was trying to establish earlier on whether or not poverty reduction, wealth creation, even improving means of subsistence, is all about productivity increases or whether it is not; whether it is about something else. I think we have agreed now that it is about increasing productivity and that is a good thing. We need to establish whether there is a trade-off, whether there is a contradiction between improving productivity and wealth in one sector of the agricultural market and, let us say, the smallholder, the subsistence farmer, as against the commercial farmer, the supplier of the international supermarket chain or what-have-you, whether there is a positive trade-off or a negative trade-off, and that is my first question to you. Is investment by multinationals in agricultural products in developing countries problematic or is it unambiguously a good thing or, if it is ambiguously a good thing, what are the ambiguities? Mr Poulton: I would have thought that large scale investment in agriculture was a good thing. I would have thought that the biggest thing that is constraining it probably is getting access to the land if they want to do large scale production. Currently it is very difficult to find large parcels of land which are available for new large scale investment and so when that land is available I would have thought that unambiguously it was a good thing to have additional investment in that. If there is some sort of programme of forcing smallholders off their land to make room for new large scale investment I would say that that is where you start getting into it being a bad thing. Q41 Mr Davies: There is a lot of land in Africa which is apparently very under-employed and indeed some which is under-populated, so there may not necessarily be a problem there. One obvious way of reconciling the desirability of allowing small farmers to keep their property rights and indeed to have every incentive to maximise the return from that property, while also introducing new technology, driving the access to markets - we have just learned that access to markets is terribly important, and I am talking about access to global markets, and raising farm gate prices and productivity - would be to have multinationals, supermarket chains, what-have-you, directly or through intermediaries deal with, say, co-operatives of farmers, retain the property rights, they have a marketing co-operative, the marketing co-operative signs a contract with Carrefour or Aldi or Tesco or whoever it may be to provide a certain number of vegetables, so many tonnages with these specifications at this time of the year. That is just an example of what one could conceive. What about that sort of model? Is that a fanciful model, is it a practical model? If it is a desirable model how do you get to it being implemented? Dr Hazell: If I understand the bigger question, it has to do with whether commercial multinational type agriculture is harmful to the interests of the developing country. To a large extent the answer is probably no because these are creating new products, new markets, things that traditional farmers are not currently doing. I think the real answer is that if you just allow it to be a large farm, a commercial sector activity, then you are missing out on a really important opportunity to involve many small farmers in these new markets. There are things that organisations like DFID can do to make sure small farmers have that new opportunity too. The Committee suspended from 3.52 pm to 4.07 pm for a division in the House Q42 Chairman: Peter, would you please recap? You were the last one to speak. Dr Hazell: I was saying that commercial agricultural development, including multinationally funded investments, can be helpful for economic growth in African countries. They do not necessarily have to be harmful if they are creating new markets, new products and they are not pushing farmers out of those markets. What they are creating is a real opportunity and with the right kinds of investments and policies one can link small farmers into those new market chains and you can get not only growth but a lot of poverty reduction out of it too. Q43 Mr Davies: I am grateful for what Dr Hazell and Mr Poulton have both said in answer to that question. It would be very peculiar if we came to the conclusion this afternoon that investment was a bad thing and it is financial investment, introducing new technology, creating human capital by the training that goes along with the new investment, because we would have to revise the science of economics and quite a lot of other things in science, I dare say, so it is gratifying that we have not embarked on that particular enterprise. However, there are always distribution or welfare issues that arise in any structural change in economics; one knows that, so somebody loses, at least in the short term, and one wants to mitigate their problems and there may be good arguments for maintaining a healthy smallholder structure. I put forward one; somebody else might put forward another, hypothetical model of how the two things could be reconciled. Nobody has been tempted to respond to that. I wondered whether anybody on the panel might like to do so, a model whereby the Wal-Marts, the Tescos, might deal with co-operatives of smallholders. Is this an organisation which you think would be an marketing structure which would be economically viable and therefore feasible? Mr Poulton: I think there is a lot of potential in that model. I would point, for example, to work that CLUSA and CARE have been doing in Mozambique where in a fairly short period since the mid to late 1990s they have perhaps got 30,000 farm households organised into very small and local associations of maybe 30 households and then a slightly bigger level which maybe takes in six or seven of those organisations, and these contract with a range of agri-businesses, some of which are working for the export market - cotton companies, cashew processing companies, for example, others of which are serving domestic market needs, and the role of the farmer organisation is to contract and to reduce the costs to the company faced with contracting with all the individual producers separately. There are often links into credit providers and the return to the credit is assured through the marketing link that these farmer organisations have. I think the experience there is that it is beneficial that there has been an external organisation like CLUSA or CARE which has been assisting to get the farmer organisations together so that they are not totally dependent on one particular business, and they have the flexibility to contract with a range of businesses. CLUSA and CARE, overseeing the whole programme, will be constantly making associations aware of what opportunities there are so that they are not just bargained down to a really poor position by one business which is their only contracting partner. You need to maintain some independence whilst stressing the linkages with agri-businesses. Q44 John Battle: Chairman, I sometimes wonder if it is because I have a beard but I have noticed on all our visits from this committee that I have tended to end up with pastoral people, whether it was the Bedouin in Palestine, the Ethiopian pastoralists, the pastoralists in Ghana who move their cattle round from village to village, or most recently I was with pastoralists in western Afghanistan. I just wonder, looking at the lives of people who live a nomadic way of life, what the future is for them and what it should be for them. Some suggest to me that we should put them on reservations and turn them into tourist places for people like me to visit occasionally. Others suggest that they can be incorporated into the agricultural system of a country. Others say that is incompatible with providing primary health care and education. I would just like your view: what is the future for pastoralist peoples in developing countries? Any at all? Dr Wiggins: The future of pastoralists is a very good and difficult question to answer. Trying to find some way whereby you can provide services flexibly, whereby you can guarantee access to grazing which Christie Peacock was talking about earlier, grazing water rights, these are key elements which are in there for the future of pastoralists. If you ask then what is the policy implication of that, when you look at the fate of pastoralists, particularly in Africa, over the last 20 or 30 years, the inability to get a seat at the table of policy making, the inability for the pastoralist voice to be heard, has been a critical problem with pastoralists. They have usually been highly marginalised and in many cases, certainly 20 years ago, it was outside experts, range ecologists and so on, who designed exactly what the projects would be with little reference to the livelihoods of the pastoralists. It is a question of flexibility and probably a governance question, of providing some kind of voice so that pastoralists can say what livelihoods they want, what services they want. Q45 Tony Worthington: I ask the same question I asked earlier. Something went wrong or seemed to go wrong. There was a big move away from agriculture as a theme in development. We are told of funds, we are told of focus. If you were looking in the post mortem sense as the coroner on this, what went wrong? Why did this happen so that we can anticipate the future better? Dr Hazell: There were three reasons. The first was that there was a sense that we had beaten the world food problem back in the late 1980s/early 1990s, that in the rich countries like this one we had plenty of food to give away. The green revolution in Asia had transformed that continent from hunger to surpluses. Even India has 60 million tonnes of surplus food it does not know what to do with today. Farm prices were plummeting. The food problem had been solved. It was all about distribution so the urge to grow more food, even in Africa, was not there like it used to be. At the same time the agenda broadened. Environmental concerns became very important in the 1990s. Agriculture was bad suddenly because it was environmentally destructive. The environmentalists were very powerful in shifting the agenda. There was concern about human rights, about poverty, about women's rights. There was a lot of mission creep in the international agenda which meant that there was less money for agriculture but it was not just agriculture that disappeared. It was economic growth generally. I used to work at the World Bank and it was all about economic growth and donor agencies. I think third and probably least was the sense of failure. There had not really been that much failure. Foreign assistance in Asia had been dramatically successful in the sixties, seventies and eighties. We transformed Asia. Look at it today. All the historical and economic analysis of those investments over the last 30 or 40 years show that it gave incredibly high returns and had tremendous impact on reducing poverty in Asia. The sense of failure was more in Africa where we tried in many ways to bring the Asia solution to Africa and it did not work and we did have a lot of failure, particularly in the big irrigation investments, the farm credit and so on. But then some of that contraction may have been right. The World Bank pulled back from credit schemes and irrigation schemes that did not work and that was a huge chunk of their lending. Maybe that was not so bad but they gave up on things that did not work. The mistake was not finding new things that did work on the scale required and that really worked in Africa. That is the agenda still today, to find the right investments that will work in Africa. Q46 Tony Worthington: How important is what I picked up in this place, the CDC message that investment in agriculture had been tried in Africa and had failed? Whether that was true or not I am not arguing, but there was that powerful message and a withdrawal by CDC and, I assume, other development bodies from agriculture. Dr Hazell: There was a lot of failure. The World Bank has an external auditing department and for a long time they were showing that the failure rate for our projects in Africa was around 70 or 80% compared to about 40% elsewhere in the world. Again, it was in certain sectors like credit, like irrigation. There were winners. Agricultural research has consistently been a winner for the World Bank and everyone else and investments in rural roads have always paid a very high dividend. There are successes. We have recently completed a study in Africa looking at a number of success stories in agriculture, successes that were identified through a postal questionnaire. If you look at the hybrid maize revolution in eastern southern Africa, the cotton revolution, the cassava revolution, there are exciting things happening now with peri-urban dairy farming for smallholders in Kenya and Uganda and beginning to happen in Ethiopia. There have been real successes in conservation farming and horticultural exports too, of course. There are real successes out there. They just have not been of the scale that you need if you are really going to transform Africa. That is again the problem with the commercial farming, the multinationals. They help 30,000 farmers here and there but you have to help tens of millions of farmers. Q47 Tony Worthington: I think you used an expression there like, "if we are going to save Africa". That makes me think about ministers, it makes me think about government departments and it makes me think about UN organisations. I still have not got a clue what those bodies are supposed to be doing. I just feel they are not doing anything. Dr Hubbard: On the issue of policy and aid, adding to what others have said, going back to your prior question as well, a further more recent reason for moving away from agriculture was a relative failure of not only projects in Africa, as Peter Hazell has pointed out, but also to some extent attempts at sector programmes in aid later that were looking there at the 1990s, one of the reasons being that they found that the agricultural sector is much more diverse, is much more mixed in with private interests than, let us say, is health and education. To answer your second question, one would need to explore more issues about the role of the state in relation to aid as well. Q48 Tony Worthington: Does anyone want to do that? Dr Hubbard: I will continue a little if you like. My interpretation of this is that if one goes back to what we call the structural adjustment period in Africa one notes that the fiscal crisis in Africa in the eighties and the nineties tended to be much more severe than in other parts of the world. The impact on the state tended to be much heavier and the rundown in state services as a result much greater. I would argue, and I put something before you, an except from a publication called Developing Agricultural Trade, that there were two results which emerged in Africa particularly from that period. First of all, there was what one might call a mismatch between existing public services and new public services required by agricultural trade as a result of liberalisation. With liberalisation you do see market development, particularly in the easier areas, those surrounding imports and so forth, but it was much more difficult through that structural adjustment period in altering the role of the state. The state tends to be sticky. People are in there for jobs, particularly because of the crisis. Everybody is desperate to hang on to their jobs. Getting change in the state is extremely difficult and the sector programmes by the mid and late 1990s, which included reforming ministries of agriculture I think by and large - you could argue that the jury is still out but I think they have made very slow progress and there is a need for a change of direction on that. The other main impact from the structural adjustment in the early 1990s is that, particularly in Africa, governments with lower capacity both liberalised much more than, say, a state like India, starting at the structural adjustment in 1991, but also their public services declined much more. Thirdly, related to that and unexpectedly perhaps, the collaboration between the state and private sector and NGOs has been much weaker in Africa coming out of that process. If you take India or Sri Lanka facing the crises of the late 1980s, early 1990s, they liberalised much less, state services are much less run down but there is a greater effort to find new solutions to work locally. District planning holds up much more. Dr Wiggins: Can I make one small addition to that and it is on the nature of failure in African farming? If you look at the experience over the last 25 years in parts of southern Africa you can see some sensational successes of state-led agricultural development. One thinks, for example, of the efforts of Zambia in the 1970s and the 1980s, organising hybrid maize production which elicited huge additional amounts of hybrid maize from far-flung corners of Zambia, such as Eastern Province and Northern Province, and one thinks of the experience of Zimbabwe from 1980 to 1986 when the Grain Marketing Board organised smallholder production of maize using hybrid varieties, fertilizer, backed by credit and other inputs, and what was the increase? It was something like a six times increase in the amount of maize produced by smallholders in Zimbabwe over something like half a decade. These were spectacular successes but they were successes that were unsustainable because of the cost of the subsidies that went in there, the cost of the state operations. One sympathises a little with the ministries of agriculture who, having created what was a supply side miracle which they had got as stated policy, then found that financially it could not be sustained, and you sympathise with policy makers who then say, "Where did we go wrong? What do we do now?". The technology worked; the production was there, but it was financially unsustainable. You feel a little sympathy for an African policy maker looking at, say, their Indian colleague where India organised much of their grain production along similar lines of heavy state intervention, but in the Indian case, thanks to the size of the Indian economy and the degree of industrialisation, it has been possible to do that. The costs have been sustainable. Q49 Chairman: The inquiry the Committee is carrying out is into agriculture so that we can make a response to DFID's consultation paper. Is this really an African problem? Last year I was in Brazil. One looks at the work that has been done in Amazonia, now growing large quantities of soya for China and huge investment by China in Brazil growing soya. We have seen in Vietnam, some might think rather unhelpfully, huge amounts of coffee being produced from a completely standing start. First, is this an African problem? Secondly, we have been getting conflicting advice as to what is the future of farming in Africa. We have seen two very helpful discussion papers, both from people connected closely with the ODI, Simon Maxwell saying that the future of farming is larger farms, and Michael Lipton saying that the future of farming is that you have to have sustainable smallholdings. I think it was you, Peter, who was saying that actually there have to be millions of people in Africa who have got to earn their livelihoods off the land, but I suppose you could, if you went back 300 years in England, have seen the same sort of thing. The idea that only 2% of the workforce earned their income directly or indirectly from agriculture even 50 years seems very strange. I have two questions. Is this really an African phenomenon; should we need only to worry about Africa, and, secondly, what is the future? Are we really looking for sustainable livelihoods in the real meaning that people are not starving and earning a living from lots of smallholdings in Africa, or should we be looking at going back to Zimbabwe and Zambia for ways in which we can encourage more farming in Africa to be commercial so that it can compete in the rest of the world? Indeed, if it cannot compete in the rest of the world what is its future? Dr Hazell: Context is very important in understanding this small farm problem. In a country like this one farms should be big and commercial; small farms are either in niche, high value markets or they are hobby farmers. In a poor country where labour is cheap and capital is scarce and often land is scarce, small farming is economically not only viable; it is the most efficient form of farming. As countries grow and labour becomes more expensive farmers expect to earn a higher income to keep up with their urban counterparts, then farms do have to get bigger, but it is quite appropriate for Africa to have small family farms at this stage of its development, and also in much of Asia, and there are many more small farmers in Asia than in Africa, incidentally. Aspirations are much lower at that level of per capita income and a small farm can meet those aspirations. As countries develop people will leave the land. As the economy grows and diversifies there are more opportunities that pull them out and there are also more opportunities to grow higher value products as people's diets get better. You get emerging middle classes and so on, so there are a lot more opportunities, a lot more pathways out of agriculture as countries grow. In a poor country, however, most people have no choice but agriculture. The economy does not offer alternative livelihoods on any scale. Agriculture is economically efficient. Small farms can move ahead. I think Simon Maxwell is wrong. He does not understand that Africa can get quite a lot of development out of growing more food grains. It is a food deficit continent. If you look at the structure of market demand in Africa right now they have about ten billion dollars a year of traditional exports, the coffee, the tea and so on, they have about eight billion dollars of non-traditionals, these horticultural products, the new exciting products, the processed foods. They have about two billion dollars of intra-Africa trade in agriculture and then they have $50 billion worth of domestic Africa-wide demand in basic food staples, the crops and the livestock products. Fifty billion dollars is the £800 gorilla in the game. That market is going to double over the next 15 years. The other markets may not. In fact, traditional exports are declining. The non-traditional is extremely competitive. Once we all have a carnation in our buttonhole we are not sure where that market is going. The traditional food staples, the $50 billion dollar market today, is going to double. A lot of small African farmers can double or triple their income over the next ten years by increasing their productivity in food staples. Simon does not understand that and he is wrong. Q50 John Barrett: I asked in the earlier session about this change from agricultural policies to livelihood policies in trying to find out if this was just a change of name with a bit of re-branding of something that did not work, or is there a strategic change from agricultural policies to livelihood policies, bearing in mind that for the small farmer agriculture is their life and it is their livelihood? Is there something more going on there or is it just a case of re-branding? Is there something more substantial there? Dr Wiggins: A couple of us discussed this because it is an interesting question. I think we would rather say that the switch away from agriculture came from other reasons which have been rehearsed in this meeting and the one before, and the fact that that arose at the same time as the livelihoods framework is perhaps coincidental. The livelihoods framework is a very powerful one for focusing on the real lives of people at the bottom of the pyramid and I think it would be a severe judgment on livelihoods to accuse it of having misled us. Dr Hubbard: To follow on from what Peter was saying a moment ago about the opportunities in the future for small farmers in Africa, adopting a broad livelihoods view of that adds value because we must not forget that the majority of African countries are small to micro countries compared with the populous countries, for example, of Asia, that people are going to be making their living, even if they are managing to exploit opportunities for feeding the increased population in their countries, in diverse ways. African populations are going to be more and more on the move. Successful small economies tend to be open economies and it is probably no accident, although there may have been accidents involved, that the structural adjustment process in Africa has resulted in an opening of these economies substantially more than larger Asian economies. That is going to be a fact of life. We should not be throwing the livelihoods approach out at this point. Mr Poulton: My perception is, like Steven's, that the livelihoods approach that came to prominence at a time when there were ongoing debates about where agriculture should fit into devolvement strategies and donor assistance, and therefore, depending on the individual concerned, you could either use a livelihoods framework for saying, "Clearly agriculture is critical to these people's livelihoods", or you could use it to emphasise diversity. A lot of studies came up in the last five years which were showing, as if this was a fact that had been under-emphasised before, that actually livelihoods were quite diverse and the expression was often diversification away from agriculture, so, depending on where your position was in the debate on agriculture or not, you could take the livelihoods framework one way or the other. It does have a lot of good things about it. I guess if it was to be strengthened it would be in the way it is used rather than the framework itself. I sometimes think of it as a bit like a SWOT analysis because although it has dynamic elements in it, it is largely a snapshot of people's livelihoods and opportunities at a particular time, and within the SWOT it under-emphasises the "O" and it does not really have any strategic direction in terms of what were historic growth narratives, what would theory tell us in terms of ways forward for rural development in an economy like this, so you do not have a bigger picture within which you can interpret the opportunities for the individual households that you are looking at, and if you can combine those two I think you will do very well. Q51 Mr Battle: There has been a movement in recent times of government state withdrawal from agriculture and a view perhaps that it should be the private sector, the industry should be business and the market. What is your view of that? Should it be pushed harder? Should it be reversed? Where does it work and where does it not work? Mr Poulton: First of all, in terms of the experience with market liberalisation, I will try and make a summary which others can add to or challenge. I would say that you have to differentiate between crop types - and I will say something about cash crops and food crops - and areas of high potential accessible areas have been better than more marginal areas. There have been a lot of successes that have come through bringing private capital and management expertise into African cash crop sectors and there are very few where production or yields have declined for more than a very temporary transition period after liberalisation there. In countries like Uganda reductions in poverty in the 1990s have been closely linked to expansions in cash crops after the liberalisation of the cash crop sector, say coffee, for example. In food crops the picture has been much more mixed. You have informal market systems. You do not have very large quantities of private capital going in there. You have these fiercely competitive markets with lots of small players where private players do not have the same incentive to assist the producers in their production activities, whereas in the cash crop sectors they are buying companies. Coffee processors might also assist in investing in that farm's production. They will give them credit, they will give them technical advice, etc. That does not really happen in the food crop sector and so you have not had the same sort of supply response and you have not generally had the same sort of yield response in food production as you have had in cash crops. Dr Hazell: At the risk of generalising can I be a little bit more provocative and say that this has probably gone too far? Like many fashions in development assistance, they tend to get carried to an extreme. One of the victims of structural adjustment programmes was the public sector. Part of the sense of failure was that government agencies were highly inefficient and could not do the job, so development assistance should find other channels. We have looked at the NGO sector, we have looked at the private sector and so on, and support to government agencies, the need to rebuild them, re-staff them, train them, re-define their functions, sort of got lost and they have been left in the wilderness. The idea was that somehow the private sector was going to come in and take over this role and that has been one of the big myths in Africa in particular. The theory now is that the government should be back but it should be there just to create the enabling environment. It should ensure that contracts are in force, that we have quality standards, food safety and things like that. The private sector is supposed to take care of everything. There is not a single country in this world that has developed its agriculture on that model. Even this country still has a great deal of government intervention in services for agriculture, including credit. One of the consequences of this model in Africa now is that most small farmers do not have access to basic services, they do not have access to many markets, they do not have access to credit, they have enormous difficulty obtaining seeds and fertilisers and all the key things they need to increase their productivity and their livelihoods. The private sector is not filling that role. It is supporting commercial farming and it is supporting some of the best commercial areas but it is not going to go out there and help the vast majority of small African farmers who do not live anywhere near a road or a market. In Asia, as has been mentioned, the public sector played a key role during the early stages of the green revolution. The public sector did set up parallel marketing agencies. It put a floor price in the market, it provided credit, it provided seeds, it subsidised fertilizer. In the early stages that was not hugely expensive. The big subsidy costs came later. Those interventions played a key role during the first ten or 15 years in launching that agricultural revolution and in making sure small farmers were part of it. The mistake was not to phase them out and as more and more of the inputs got used the costs of the subsidy went up. India right now wastes about ten billion dollars a year on input subsidies which it does not need to. They have served their purpose. The lesson that we are all taking from Asia to Africa seems to be, "You should not do this. It would be a terrible mistake". We are throwing the baby out with the bathwater. The government intervention public services, not just the enabling environment, are very critical indeed in the early stage of agricultural development. We need to find innovative institutional solutions to do for Africa what was done in Asia but without getting trapped into those inefficient and increasingly costly public parastatals. That is the challenge. It is not to throw it all away and to say that Africa is going to develop through privatisation. That is not going to happen and if we stick with that agenda we are going to waste the next ten years too. Dr Hubbard: I would like to stress the need for innovative approaches, not trying to recreate, as Steve Wiggins said, the monolithic controlling ministry of agriculture as we saw those solutions were not sustainable. This also relates particularly to the role of aid agencies in relation to that process. If we can go back to their attempts with sector programmes in the mid to late nineties, conceiving of them as ministries of agriculture largely as units trying to reform them within themselves rather unsuccessfully, I would suggest that there are two things that an aid agency wishing to encourage a more exploratory creative approach to recreating those essential public services that Peter has stressed can do. First of all, it has to adopt a service-by-service approach to reforming public services to agriculture and rural development rather than bundling them up and saying, "Okay; we are going to reform this ministry of agriculture which comprises a number of services". Generally speaking they break down into three categories: assisting inputs, assisting outputs and setting standards, regulating, including foreign trade in that. A service-by-service approach, looking at how best those public services that are now needed can be delivered with an open mind on an evidence basis is going to be more fruitful than talking about reforming ministries of agriculture. The second point is that whenever there is talk of reforming ministries of agriculture think decentralisation. A big problem in the failure of monolithic ministries of agriculture in Africa has been over-centralisation in relation to the capacity of government to run a centralised system. Again, provocatively, I would argue that much of Africa is still a frontier society. Urban areas are springing up rapidly. The role of district plans integrating road development with urban development in the sense of markets, working with local organisations, is absolutely critical in this way. To sum that up, a service-by-service approach and thinking decentralisation is likely to be more fruitful than talking about reforming ministries of agriculture. Q52 Mr Khabra: Over recent years the role of the state has been less and less in agriculture and the private sector has moved in and there has been a trend in market liberalisation. In view of those new trends can you cite examples of where the private sector has successfully replaced parastatal marketing boards in remote areas? Is the distinction between food and non-food crops relevant? How do longer term trends and short term fluctuations in agricultural commodity prices influence the design of agricultural development strategies? Mr Poulton: As I said earlier, when we come to look at the impact of liberalisation there is a rather crude but probably valid distinction we can make between the performance of cash crop systems (not just traditional cash crop systems but perhaps my examples will come from there) and food crops produced for local or national consumption but certainly not for export, and I think that the record in cash crop sectors is generally better. It is not that they are without their problems but you can see examples of quite rapid expansion in production of cotton in a number of countries. There have been state-run examples of very successful cotton sectors but in liberalised cotton sectors in southern and eastern Africa more of them have seen quite large increases in production, and in some cases yields, than have not. You could probably generalise that to many of the export cash crop sectors that have been liberalised, so there is a distinction there. Dr Wiggins: Replacing parastatals in remote areas - I stand to be corrected but I cannot think of a good case in which that has taken place, but then you say, "Why would that not take place?". The problem here is that remote areas are often areas of low natural potential because you could turn that question round. You could say, "Let us look for some highly successful farming in this world that is in remote areas", and we end up with New Zealand where you could not be more remote from the world markets and yet New Zealand has a highly successful private sector agriculture. The difference is, of course, that New Zealand has some extremely good natural resources, albeit highly remote. One of the problems for most parts of Africa that are remote is that remoteness also correlates very often with rather poor natural resources which are probably never going to have a particularly productive agriculture. The other question I would like to shed some light on is the very pertinent question about the short term fluctuations in prices and the great worry there is about the long term decline in commodity prices. Here is a statistic that I only learnt a few months ago. Over the last 20 years in Bangladesh the real wholesale and retail prices and the prices received I think by farmers at farm gate for paddy rice have halved. Yet if you look at the agricultural performance in Bangladesh, the enthusiasm of farmers for intensifying their paddy fields has been in no way mitigated by that fall in the real prices. The fall in the real prices is extraordinarily good for the poor of Bangladesh, including any of the rural poor who are net food buyers. The way that has been achieved is of course by getting down the costs of production by applying technical innovations, so the protection ultimately in any kind of commercial farm sector, whether you are small or large scale, is that ability to innovate and get your costs of production down so that you are not booted out of the market when the market turns hostile. Q53 Mr Khabra: Would you agree with me that these new trends, big business moving into the market and the state giving up, are very damaging to the interests of the small and poor farmers? There is no protection for them at all because they cannot compete at all when a monopoly moves into the market and they do not benefit. Therefore, there is a need for some kind of protection from the state. Dr Wiggins: If you get a monopoly as economists we would all agree there is a danger of being exploited. The question is trying to create situations with private sectors where you have got competition and, Colin, you have been doing some work on that on the cotton sector in Africa that might be a pertinent answer. Mr Poulton: On the world trade trends, unquestionably as world prices are falling it makes the task of agricultural development to contribute to poverty reduction somewhat more difficult. You have to get higher productivity to get the same potential for accumulation or consumption multipliers out of your agriculture. Where it is clear that protectionist policies in the west are contributing to these low prices, and I think the cotton case is probably the single most obvious case here, efforts to scrap or reduce that northern protectionism are very important things to do. However, it is not the whole story. In some cash crops the general problem is world over-production and it has been countries like Brazil, Indonesia, Malaysia that have been increasing their production at the expense of Africa and it has been a question of Africa getting its productivity up. It has been falling behind the other countries and it has been losing its capacity to compete, so it is focusing on the supply side capability of African producers as well. When you come to food crops, particularly cereals, you have an even bigger trade-off because a higher price for producers is a bad thing for your domestic consumers and, as Steve has said, the majority of households in an African country, and particularly the majority of poor households, are net consumers of these grains. Therefore, if you are going to provide some sort of price support for your producers in a country you have to be pretty sure that you are at the same time enabling your producers to respond to that higher price so that you achieve your growth benefits and you can taper out your support fairly quickly. Otherwise you are just ending up with a tax on consumers without getting the benefits from the producers. Price support would have to come with what we have been talking about, with support services into producers so that you get the benefit. Q54 Mr Davies: Can we come back to the business about ministries of finance? The general consensus seems to be, and we have heard bits of it this afternoon, that the record of ministries of finance in Africa in the last generation or so varies between the disappointing and the ghastly. One of Margaret Thatcher's great phrases was, "Never bring me a problem unless you can bring me a solution". Dr Hubbard this afternoon, thank you very much, has come up with some solutions. As I understood it one was to split them up between the support for inputs, support for outputs and regulatory functions, and decentralise them. It is very useful to have that concrete suggestion. Let us suppose that we have confidently made the right analysis of the problem and we have got the right diagnosis that may be that or with other things added to it, and we will not go into that now. The question is what influence we as donors can have on that process because you are getting into pretty intimate political constitutional issues when you are trying to influence the structure of government in the countries that you are lending to, not specific policies but the structure of governments, and one realises that that is a difficult and delicate area to move into. Do we have suitable leverage to influence that kind of issue? Is there sufficient consensus between donors? Are they as willing to reach a consensus on that subject as they are on some other subjects where they are trying to influence donees? Is this an area where we might not only concede that there is the right political solution but be able to contribute helpfully to its implementation? Dr Hubbard: I welcome that question. What I tried to do was suggest directions in which donors seeking to help in this area might be trying to channel their thinking rather than imposing any blanket, one-size-fits-all solution. There are two things essentially. The experience of the sector programmes in agriculture has not been particularly successful and looking therefore to alternative aid instruments to using the possibilities that present themselves from budget support, for example, which DFID is moving strongly towards, and I think there are traditional project approaches which lend themselves to local projects. I stressed earlier the decentralisation element in that. Why would budget support perhaps provide a better forum for donors working with governments to reform agricultural services to ensure that those essential public agricultural services are there? Budget support generally speaking enables a higher level of dialogue and one problem with sector programmes in agriculture is that the reform of the sector lies essentially at the higher levels of government, the ministry of finance but particularly the office of the president. One is much more likely with budget support to be around a table with people at the highest levels of government rather than lower down. That is absolutely critical in that way. To sum up, allying that perhaps with a traditional project approach, which perhaps also enables an easier interface with NGOs, because NGOs tend to work locally on the ground with specific problems, may be worth exploring. Q55 Chairman: Let us go quickly round the table. Is there anything that you would like to say on this or any other matter you feel that we have not asked you questions about? Mr Poulton: "What do we do with the ministry of agriculture?" is a critical question. I am very much with Michael on the general trend towards decentralisation. I am very much with him in terms of thinking about how should services best be delivered that it should be done on a service-by-service basis, although I would tend to stress that one of the critical things when it comes to service delivery is that services are co-ordinated at the point of delivery because if I am a private investor and I want to invest in input supply but there is no extension advice and there is no decent output markets and there is no credit available to the producers my business is not going to go. You have to have some way of making sure that the range of services is available in an area, so co-ordination of service provision at both national and strategic level and at local level is a critical thing and it is likely to be local planning where the ministry of agriculture has a key role that will bring that about. An issue which we have talked round but is absolutely critical is just the whole business of the accountability of the people involved in public service delivery. I do not know how long this has been the dominant problem, but certainly if I ask to people in DFID offices now what they are engaged in is policy dialogue with governments where they are trying to keep the state out of what they consider should be private activity but they have no confidence that they can put money into the complementary public goods which would make private markets work better because they do not trust the state agencies that would be involved in that, and getting accountability of the state agencies, particularly the ministry of agriculture (though not only that) is critical. Sector support or budget support for doing that I am not entirely sure about. It strikes me that if you had donors lined up saying, "We are appreciating the importance of agriculture and DFID seems to be doing that at the moment" - and USAID seem to be doing that. The World Bank are doing that -and if donors are lined up saying, "We would love to support your agricultural sector but we are not just going to disperse money because we have got that pressure. We want to see your agricultural department strategy. We want to see that multiple stakeholders have been involved in the development of that, it has involved your NGOs and your civil society, it has involved farm organisations where they exist, it has critically involved private sector representatives, we have a credible strategy - -" Q56 Mr Davies: Even the structure of your government. That is the point I raised. That is the most difficult one, is it not? Mr Poulton: Yes - "--- and you are serious about working on how your ministry of agriculture is organised to support this thing, then we will put money into it and we will monitor it on performance", which I do not think has happened in the past. At the moment the fact that donors are interested in agriculture in perhaps a new way recently is an opportunity to try and put that leverage in. It is also a huge threat that if the donors I mentioned, all of whom say, "We want to invest more in agriculture", go ahead and just fire money in without those pre-conditions they will probably end up with exactly the same performance as we had in the past. Q57 Mr Davies: That is very clear; thank you very much. My next question is largely to Dr Hazell because one of the things that has come out this afternoon which I feel we need to pick up, and he brought it out very strongly in his presentation, is the enormous contrast between the success of the green revolution in Asia and its failure in Africa. We cannot do this job without focusing on that. The contrast was presumably not caused by differences in technological development and change, new strains of crops because by definition they were available anywhere, so was it conducive environmental factors? Was it sociological factors, perhaps including land tenure and property rights that we were talking about earlier on this afternoon? Was it government policies? Was it any of those or something else? Can you set up a hierarchy of causality for us to help us understand this very striking contrast? Dr Hazell: What was missing was the pre-conditions for successful agricultural growth. Africa does not have the infrastructure. Today if you look at road density in Africa it is a tiny fraction of what India had in the 1950s before its own green revolution. Most farms are just not connected to the market. Transport costs are horrendous. Fertilizer costs four or five times the world price for most Africans. Q58 Mr Davies: No so in India, you are saying? Dr Hazell: No. India had six times the road density in 1950 that most of Africa has today, but today they have much higher density in India. I was talking about 1950. It was one of the pre-conditions for the green revolution. You have distribution systems. The government in Asia invested in fertiliser distribution, seed multiplication, seed distribution. They invested in R&D. You had marketing institutions. All these things were missing in Africa. The green revolution technology - rice, wheat, irrigated conditions - was mostly transferable but there are plenty of technologies on the shelf for Africa. Most African farmers grow improved varieties of crops today. They are just not putting in the complementary inputs that give the high yields. The conditions are not there. I think what really made the difference in Asia though was political commitment. India made a conscious decision in the sixties to transform its agriculture to feed itself. The US used PL480 food aid as a political weapon and Indira Gandhi said , "Never again", and suddenly billions of dollars went into Indian agricultural development. You saw this across Asia, the real commitment. It has not been there in Africa. We can keep imposing conditionality. Huge amounts of money have gone into buying policy and institutional change in Africa over the last 25 years and it has not worked. The governments have not had the same goals or the same agenda. What is new and really exciting right now in Africa is NEPAD, the New Partnership for Africa's Development. This is where heads of state from very large countries like South Africa and Nigeria have come together and said, "Look: it is time Africa took its own initiative. We are tired of living with the mistakes of everybody else, particularly the donors. It is time we were in the driving seat", and they have proposed an economic development programme which has agriculture as its key. They are saying, "We need to improve our governance. We have got to improve our infrastructure, we have to have science and technology and we have to have markets that work". They are offering a contract with the rich countries: "We will do all these things for Africa ourselves. We will even increase our budget shares for agriculture to 10%". Chairman: We are pretty well up to speed on that. That is a question we can answer on the examination paper. Q59 Mr Davies: We could answer it much better having had that quite detailed list of lessons to draw. My last question is this. Do we face a terrible quandary because if we succeed in increasing productivity, which we all know we want to do, we will therefore be on the whole reducing commodity prices, we will be turning the terms of trade against commodity producers? We will be ensuring that the productivity gains are largely consumed by consumers rather than by producers. We will therefore be undermining the essential incentive with which we hope to start, so are we in a quandary here and, if we are in a quandary, how do we get out of it? Dr Wiggins: Yes, it is a quandary. If there was one thing to add to the discussions of today, and it is another light on the difference between Africa and Asia, it is the role of demand. When you look at a country like Malawi, for example, one thing that would make a difference in Malawi is if Malawi were to say, "We are five million people strong", and that would be five million reasonably well paid people working in the urban sector to provide a demand for the agricultural produce that can be produced there. You say, "Why wasn't the Zambian experience of Nambourg and what was a small green revolution sustainable?". The answer was that there was not sufficient demand to push up the prices enough to allow people in distant areas of Zambia to produce the maize that was needed. Q60 Mr Davies: So it is part of the answer to my second question too? Okay. Dr Hubbard: We must not forget the international dimension in that and that a lot of the market supply at the present time is coming out of subsidised arrangements. We must not forget the Doha round and the possibilities which arguably are crucial for future supply to these markets. These markets are being contested, the domestic markets in Africa. The large cities, particularly the coastal cities, are fed with basic grains to a very large extent by subsidised imports at the present time. The impact of removing EU or US subsidised exports would be, studies indicate, to raise prices and hence create domestic market opportunities. Chairman: Thank you. This is a discussion we could go on with for a very long time because it is a fascinating topic. I am conscious that colleagues may have other meetings and we have been disrupted by a vote. Thank you very much for coming. We will read and re-read the transcript of today's evidence because it has been really interesting. [1] Agriculture and poverty reduction: unlocking the potential, Department for International Development, December 2003. See http://www.dfid.gov.uk/Pubs/files/agri_poverty_reduction.pdf. This document is referred to throughout this oral evidence session. [2] Eliminating Hunger: Strategy for achieving the Millennium Development Goal on hunger, Department for International Development, May 2002 [3] Oxfam memorandum [4] Further information to follow |