House of Commons - International Development

Select Committee on International Development Memoranda

Memorandum submitted by Oxfam

Introduction

Oxfam welcomes the opportunity to submit views to the International Development Select Committee (IDSC) inquiry addressing the effectiveness of the Department for International Development's (DFID) agricultural policies. We aim to work closely with DFID in our development and advocacy activities, both in the UK and with DFID representatives overseas. We would like to encourage the IDSC to consult also with producer groups, consumer groups, peasant groups, women's groups, indigenous people's groups, national recipient governments and private sector interests to expand research into the impact of DFID's agricultural work across the world

Our beliefs and views are based on our own programme learning in 60 countries around the world. We have worked in famine relief and development since 1942. This document is based on consultation with Oxfam GB's Middle East, Eastern Europe and Commonwealth of Independent States region; Southern Africa region; Horn East and Central Africa region; East Asia region; and our Central America, Mexico and the Caribbean region.

Oxfam believes that small-scale farming is a viable means to sustainable economic development. We aim to understand how small-scale agriculture best contributes to growth that is equitable, provides greater stability for demographic change, and is good for the environment. Against this, commercial agriculture - by far the greatest power in agricultural production today - is expanding, and governments and multilateral agreements are supporting it. Commercial agriculture can under certain circumstances support healthy and economically strong livelihoods for the poor. However it is destructive to people's livelihoods and to the environment.[1] The current agricultural system can be deadly in many ways: poisoning our waters, making the lives of peasants and migrant workers unbearable, and ruining the health of ecosystems around the world. Oxfam uses evidence from landscapes and people the world over to show the positive steps that can be taken if small-scale agriculture is supported and commercial agriculture enabled to support all people.

Oxfam works in dialogue and collaboration with DFID, especially in providing evidence from poor farmers and producers themselves. We enter this review of DFID's agriculture policies in the spirit of jointly improving the lives of poor farmers around the world. We would like to acknowledge that Oxfam faces very similar criticisms and challenges as those listed below.

DFID has re-orientated its approach to poverty reduction and sustainable development in the agriculture sector. We applaud DFID's re-orientation because we feel it will reduce poverty in a more effective, equitable and long-term manner than past efforts.

The remaining part of this section comments on some of the broad re-orientation of DFID's work in agriculture. It then list the five key areas we believe are central to enabling agriculture to be a motor for poverty reduction and sustainable economic growth. DFID is already working in some of these are areas. Others, we encourage DFID to engage in. In both cases, we attempt to provide some examples from Oxfam's programme on how poor farmers are affected by the issues we raise. The last part of the document describes these recommendations in greater detail with examples from the regions.

The Issue. There has been rapid change in the world's agricultural sector in the past ten years. The number of smallholding farmers has drastically decreased. The size of commercial farms has increased. Trade of agricultural products is held in the hand of fewer large companies (retailers, manufacturers, processors). The number of landless has increased. People who were once farmers on their own land now are either labourers on that land, or they work in other sectors. And, of the 842 million people who are hungry today, three quarters live in rural areas. This transformation is unlikely to be stopped. Because Oxfam believe small-scale farming can be more sustainable than commercial farming we are trying to slow down the transformation away from smallholding farming to industrial and large-scale commercial agriculture. Studies show that substantial economic development is unlikely to occur if there is no prosperous rural sector. A strong rural sector produces food for the inhabitants but also creates consumers for good produced in urban manufacturing zones, such as shoes or processed food. Therefore, we strongly support poverty reduction strategies that support smallholder farming in rural areas. To do so, we must have integrated programmes that ensure, among other issues: value is added in rural areas and smallholders can have secure and fair access to assets, markets, information and appropriate technology.

Oxfam supports DFID's move towards facilitating development rather than aid. We strongly encourage DFID's recent direction that aims to achieve pro-poor growth through working on: market security and fairness at local to international levels, access to markets and assets, disproportionate vulnerability and risk borne by poor producers, policy development in rich and poor countries that focuses on equity, international trade rules, and concentrations of power in the private sector and its increased control over nations' policies and behaviours. These are the key issues that we see in agricultural development. The environment, changes in demography and gender disparities also strongly influence poverty and agriculture, and we encourage DFID to ensure that they are crosscutting issues in all of their work.

We are pleased to see DFID's commitment to fighting for a "fair and equitable international trading system for agricultural products", for example through CAP reform and pro-poor WTO negotiations. We realise that this might not an exact match to the policies of other UK Government Departments. Oxfam believes DFID have a key role to play in ensuring coherence in UK Government trade policies that are pro-development and have a positive impact on developing countries. We believe that it is essential that EU markets are open to development countries and that trade distorting subsidies are substantially reduced. At the same time developing countries must be able to provide a measure of protection for their vulnerable farm sectors in the interests of food security and in sustaining rural livelihoods.

Thinking innovatively to overcome poverty. We are very pleased that DFID is moving towards a new approach to rural development and agriculture. We would like to encourage DFID to continue to move away from past development approaches and explore new ways of working. A great wealth of experience exists in many organizations around the world working on agriculture and rural development, many of which are supported by DFID. This experience can help DFID find new ways to increase benefits poor people can expect to receive from agriculture, if DFID seeks out engagement with these organizations. In many cases, DFID will find that their need for more research in particular areas will have actually already been met by partners. In other cases, the organisations will redirect DFID to other priorities. For example, DFID's desire for research on getting markets,[2] technologies and institutions[3] 'right' is an example of an area where recent shifts in policy and practice need to be taken into account. Furthermore research on the impact of commercial farming systems on farmers has been studied thoroughly since the early 1980s.[4]

We encourage DFID to continue with its reorientation in approach. It is evident from DFID's documents, Better Livelihoods for Poor People: The Role of Agriculture (2000) and Agriculture and poverty reduction: Unlocking the potential (2003) that there is a shift in emphasis of work. We would like to encourage DFID to become clearer in that shift, and to encourage DFID to look for more alternative options for the rural poor to overcome poverty.

The old model that DFID have pursued also, rather contradictorily, presents industrialisation as the driver for growth and then emphasises labour transfer from rural areas to industrial zones. In this model, rural poor are only given options for poverty reduction by leaving the land and entering the industrialised world. Oxfam supports DFID's new approach in which rural and urban development are balanced and this in turn helps to provide people with more ways to overcome poverty.

A further change in DFID approach is in terms of markets. We fully support the new approach. The 'old' DFID argues also that 'getting prices right' enables poverty reduction and that markets, institutions and technology simply need to be improved to allow poor people to overcome poverty. The 'new' DFID argues for facilitating growth through agricultural markets by working to balance power in missing or segmented markets. Oxfam's programme experience leads us to view this as a more sensible approach.

We would like to see greater monitoring and evaluation of DFID activities so as to improve their effectiveness and impact. In some cases Oxfam's programme have found it difficult to assess DFID's effectiveness on the ground even after several years, in part because implementation has been slow. Likewise, it is difficult to assess DFID's impact on poverty reduction through agriculture because there are few clear indicators of what this means. For example, how many people will have an income, access to education, enjoy gender equity, improve health, and so on, as a result of the contributions that agriculture can make to improving rural livelihoods?

Key Recommendations

1. Influence private sector engagement in agriculture so as to require their engagement to be pro-poor. This includes supporting national governments to demand pro-poor terms of engagement, considering measures to limit transnational corporate concentration, facilitating a pro-poor consumer activity, providing information and infrastructure to poor farmers, and enabling poor producers to enter into value chains. Aim through these activities to add value at or near the point of production.

Corporate concentration and producer nation governments

· DFID could argue for stricter competition laws in the UK and worldwide to reduce concentration of corporate power.

· Facilitate the creation of an international body aimed specifically at regulating corporate activity from one continent to another.

· Work with national governments in poor- and middle-income producer countries to protect their poorer producers and agricultural workers.

Increase Prices at the Farmgate

· DFID can encourage supermarkets to trade fairly and thereby increase prices at the farmgate.

· DFID should continue its work with the Ethical Trading Initiative, but also extend its understanding and support of the Fair Trade movement.

· DFID can support requirements for supermarket companies to increase transparency at each stage of their supply chain.

· DFID should do more analysis on agribusiness supply chains and the impact on poor farmers in developing countries.

Contract Farming Agreements and Standards

· We support DFID's examination of non-tariff based exclusion practices such as standards in regard to labour, environmental, health and safety and production practices.

· We would like to see DFID help producer country governments and producer groups to negotiate farming contracts that support increased in local prices paid to farmers and farm workers; increased investment in skills development of farmers and farming-related workers; and decreased extractive behaviour by the companies. Contracts would require: consistent purchasing by supermarkets or their suppliers and an investment in infrastructure, technologies or capacity of workers.[5]

· DFID may be able to encourage supermarkets to bear the risks borne presently by small farmers of making the transition in processes and farming practices in order to meet new standards. DFID could press supermarket companies to bear the costs of meeting such new standards.

Infrastructure & Information: Power in Markets

· We support DFID's present focus on supporting small farming production that will enable farmers to have power in marketing relations with supermarkets or other agribusiness companies

· DFID would greatly benefit small farmers if it supported more comprehensive extension work with wide coverage and infrastructural support appropriate to poor farmer production, both of which should be aimed at increasing productivity and adding value locally. These could include improving productivity, access to and security in markets, and processing techniques.

· We strongly encourage DFID's support of partner organisations that enable farmers to group together and to form associations as this has great positive impact on farmer incomes. When DFID empowers cooperatives or other associations, these organisations could better influence relevant public policies in their home countries, and therefore DFID's support of associations can have a double impact.

Corporations, Trade and Dumping

· We encourage DFID to conduct more macro-economic analyses to help direct corporate activity in a pro-poor way.

· We also encourage DFID to engage in policy dialogue at the level of the CAP or international trade policies in order to limit the ability of large agribusiness corporations to profit at the expense of poor farmers.

· We encourage DFID to work with partners to analyse local grain market distortions due to different forms of dumping, including food aid, to a region.

· DFID could do work on defining appropriate regulations on food aid, which are now under negotiation at the WTO. This could include determining what rules could be agreed at WTO that could prevent Food Aid from being disguised as dumping.

2. Facilitate technological advancement that puts poor producers first, as this generally has greater positive impact than commercial production on local food and economic security, environmental stability, migration patterns, and health and disease. When combined with security of assets, appropriate technologies can encourage farmers to invest more in agricultural production as well as a local processing.

Technological advances in small-scale farming

· DFID could work to promote technological advances in small-scale farming that have significant positive impact on local food and economic security, environmental stability, migration patterns, health and disease, and willingness for producers to invest in production and sales of agricultural goods locally.

Locally appropriate technical solutions

· DFID could focus on locally appropriate technologies needed to improve the lives of the poor.

· DFID could increase support to National Agricultural Research Organizations (NAROs) because they are very well placed to respond to key challenges like achieving food security, enhancing production, protecting natural resources and biodiversity.

· More downstream research to address subsistence producer's needs in terms of technology, nutritional intake and sustainable use of natural resources needs to be carried out by national research institutions that DFID funds.

· Some Oxfam regional staff felt that DFID should change its apparent view that strategic issues, such as agricultural research and development, are better supported at the international level.

· Likewise, some regions felt DFID expresses an over-reliance on the role that formal agricultural science and technology can play in overcoming rural poverty.

Useful training in new technologies

· DFID might consider using its funds and policy influence not only to support producer nations to press companies to bear the costs of achieving standards, but at the same time DFID could support farmers to meet some of the more reasonable standards.

Inappropriate Technologies

· We urge DFID to consider the impact of genetically modified crops, because of the concentration of corporate power they enable, and how GM crop regulations affect poor farmers' property rights and their power to enter markets.

3. Promote small-scale agriculture as part of integrated poverty reduction strategies. Small-scale agricultural production also leads to increased environmental and social stability than commercial agricultural systems, which are associated with greater disparities between rich and poor. This integrated approach should work to adjust to environmental and demographic changes over time, and to militate against their negative impacts on poor people's livelihoods.

Complexity of Rural Development

· Women are critical in agricultural production, and DFID could improve their work with women farmers. An explicit gender analysis and gender policy to ensure that women are supported and empowered to effectively and equally benefit from market opportunities related to agriculture is urgently needed in DFID's work. Much more specific work with women is essential if poverty is to be addressed in rural areas.

· We encourage DFID to maintain a view that small-scale agriculture as well as commercial agriculture will continue to be important in rural areas over the coming years.

· We would like to encourage DFID to maintain a view that economic and social relations are complex in rural areas. Small farmers do a range of activities to meet their income and other needs, and DFID's work on agriculture should reflect an understanding of this complexity.

Integration of rural development projects

· We encourage DFID to continue to redirect its focus and work on understanding and supporting ways for poor producers' goods to be integrated into the local economy. This could include DFID facilitating the creation of manufacturing of locally produced farm goods into products for sale in regional or national markets.

· We encourage DFID not to overemphasise working to increase production in rural areas, but rather to work also on increasing prices and value of agricultural goods.

· A strategy to more explicitly link agriculture to more competitive sectors like the tourist industry needs to be devised in order to facilitate better national synergy among productive sectors in small economies.

DFID needs to work in long-term views to account for climate and demographic change

· DFID should focus their field level support to programmes that foster resilience of poor producers against climate change (droughts, floods, irregular seasons) and demographic transformations (health, disease, migration).

· DFID could very usefully consider supporting innovative multi-actor, multi-sector approaches to projects addressing climate change and agriculture that can benefit poor communities through the payment of environmental services.

· DFID should directly address the impact of HIV/AIDS on livelihoods and/or agriculture.

· DFID would do well to address how migration - due to reasons of climatic change, disease or conflict - affects people's ability to adopt sustainable livelihoods practices, especially in regard to rapidly changing demands on assets like land.

4. Promote pro-poor land policies that support poor farmers' and workers' access to, use of and/or ownership of land. Land access should be promoted as a means to facilitate increased agricultural production, increased food security and the allocation of value to agricultural produce at or near the point of production. DFID should concentrate their efforts on working on women's land rights.

Land rights and economic and social stability.[6]

· Pro-poor land policies must be supported at all levels, from community to national, because the access and use of land by poor farmers and workers is one of the foremost indicators of economic and social security.[7]

· DFID should support women farmers through aiming to secure them land rights, as their economic stability from land production increases their families' stability in terms of health, education and work.

· We very much encourage DFID to use gender-based analyses in all of its work, especially on land, as women are the first to lose this asset when land rights are weakened across a whole community.

· We encourage DFID both to adopt some of the World Bank's more forward thinking analyses of land issues, but also to help the World Bank in implementing the ideas.

· Development activities that DFID pursues need to expand the remit of work on land access and tenure change

· We are concerned that DFID's approach supports a 'willing-buyer, willing-seller' arrangements in land reform.[8] We do not think this is the best alternative for pro-poor agriculture development, as it does not account for vast disparities in power in a sales agreement.

· The Food and Agriculture Organisation has had little impact on enabling poor people secure rights to land, and we suggest DFID is in a good position to analyse why and to have some influence over a positive change.

· There has been insufficient application of ideas of collective or communal rights in mitigating the impact of the commercialisation of agriculture and the concomitant privatisation of land on farmers. Can DFID support poor farmers movements on this topic?

Land distribution and environmental health.

· We encourage DFID to analyse the environmental impact of large-scale farming and to then link results from this to proposals for land policies. The aim would be to use land policies as a means to minimize animal disease outbreaks, for example.

Land rights and control over resources

· We encourage DFID to support policy and law that protects established legitimate rights (instead of reinventing them through new centralised procedures) and that devolves responsibility for regulation to local level.

May 2004