Tackling rural poverty and the
role of agriculture in meeting poverty reduction targets
22. The National Audit Office identified in its recent
report Tackling rural poverty in developing countries that
75% of the world's poor live in rural areas and this percentage
is even higher in the countries DFID targets for assistance.[56]
Our report on DFID's Programme in Vietnam highlighted that people
living in rural areas are the ones most likely to be living on
less than $1 a day.[57]
In evidence to the Public Accounts Committee on the NAO report
on rural poverty, DFID's Permanent Secretary said:
"We are seeing many developing countries shifting
resource allocation toward rural areas, which is why poverty in
rural areas has fallen rapidly in the past 10 years in a number
of countries. The Department has been a part of that story, because
it has been arguing for the right policies to help rural areas,
and because it has increasingly tried to shift resource allocation
and service delivery capacity to rural areas."[58]
Rural economies in developing countries remain very
heavily dependent on small-scale agriculture. DFID recently told
us:
"DFID is very concerned about the plight of
the poorest farmers in developing countries and the Government
is committed to helping developing country farmers access international
markets. However, many of the poorest farmers are unable to grow
or buy enough food for their families and without this basic food
security, research suggests that they are reluctant to invest
in commercial agriculture."[59]
23. In 2005 DFID produced a policy paper on Growth
and Poverty Reduction: the role of agriculture which said:
"Agriculture is a key part of DFID's efforts
to reduce global poverty and achieve the Millennium Development
Goals. It extends into many other areas of development policy
and complements our work on issues such as fisheries, forestry,
food security, social protection, governance and trade. […]
Improving development assistance to agriculture will require concerted
and coordinated efforts from development agencies such as DFID,
developing country governments, regional initiatives, civil society
(such as churches and charities) and the private sector."[60]
However, no additional funding was allocated to support
this policy, although DFID undertook to work with recipient governments
and development agencies to "help to build the capacity and
accountability of governments to direct public spending to where
it will have the greatest impact on agricultural growth and poverty
reduction." In 2003, a number of members of the African Union
pledged to increase expenditure on agriculture to 10% of national
budgets within 5 years (the Maputo Declaration).[61]
But written evidence we have received indicates that there has
been little significant change in the percentage African countries
spend on agriculture.[62]
The Permanent Secretary believes that "10% is probably not
enough" but told us that DFID's main aim is to persuade countries
to allocate funding to the poorest people, whether they are in
urban or rural areas.[63]
24. The impact of DFID funding on rural poverty is
difficult to assess when so much assistance is given via general
budget support. The NAO has pointed out that rural populations
are less likely to benefit from general government expenditure
including that provided through development assistance.[64]
Nor does DFID target agriculture in the same way as, for example,
education and health in its negotiations with recipients on the
sectors which should be prioritised for aid received via budget
support; and agriculture does not feature as a priority in Country
Assistance Plans. DFID's support to agriculture as a percentage
of total aid to Africa declined from 4.72% in 2003-04 to 1.37%
in 2005-06.[65]
25. When we challenged the Permanent Secretary about
this apparent contradiction between DFID's stated commitments
in relation to agriculture and the decline in funding provided,
he told us that "the problem is that for some vested interest
groups success will be measured only by a volume of spending which
it then certifies is the right level.". His view was that
DFID's strength does not lie in funding, which is the primary
responsibility of multilateral bodies, but in policy work and
reform and "country offices trying to shift domestic resources
in favour of the poor and trade policy work in international agricultural
markets."[66] The
Permanent Secretary was clear that addressing rural poverty should
not only involve DFID's rural livelihoods advisers, but that economists,
governance advisers, private sector enterprise advisers and health
specialists all had a role to play.[67]
26. DFID officials pointed to the example of Uganda,
where rural poverty has fallen from 60% in 1992 to 34% in 2005.
They believe that this is at least partly due to improvements
in agriculture including the promotion of coffee as a key export
crop.[68] But the Director
General, Country Programmes also pointed out that "Africa
is the fastest urbanising region in the world and so the whole
dynamics of rural poverty are changing over time. We need to be
aware of that in our own plans."[69]
The Comprehensive Spending Review 2007 announced that the Government
would "more than double spending to Africa through bilateral
and multilateral channels between 2004 and 2010, from £1.3
billion to at least £2.6 billion."[70]
It is vital that this additional funding is used to help the poorest
people in the poorest countries.
27. We are pleased to note that the World Bank has
recently announced that agriculture will again be prioritised
for funding. The President is reported as saying "A greater
focus on agriculture will help boost overall economic growth and
can offer multiple pathways out of poverty."[71]
We hope that DFID will follow this example.
28. We
support DFID's underlying aim of focusing resources on the poorest
people. We accept that urbanisation is a factor which DFID needs
to consider in allocating resources but 75% of those living in
poverty are in rural areas and this figure is higher in the poorest
countries. We are concerned that funding agricultural development
has "gone out of fashion" and that DFID has moved its
focus to other sectors. We believe that improving the economic
return on agriculture remains intrinsic to reducing rural poverty
levels, which in turn is necessary to meet the Millennium Development
Goal of tackling overall poverty levels. DFID needs to recognise
this in its funding allocations, in the priorities it sets in
its Country Assistance Programmes and in the agreements in reaches
with recipients of budget support for priorities in allocating
those funds.
29. The UK Forum on Agricultural Research for Development
(UKFARD) points out that agriculture is given scant attention
in DFID's consideration of climate change nor is sufficient account
taken of the contribution agricultural improvement could make
to progress towards the MDGs.[72]
In our report on Sanitation and Water, published in April
2007, we noted our concern that DFID's water strategy does not
sufficiently address agriculture, and equally that DFID's agriculture
strategy makes little mention of water. We recommended that DFID's
focus on achieving the sanitation and water Millennium Development
Goal should not ignore the importance of water for agriculture,
an essential component of achieving MDG1, which seeks to halve
the number of people suffering from hunger.[73]
30. UKFARD also drew attention to a decline in DFID's
support for the UK science base for agricultural development.
In response to recommendations made by our predecessors in their
report on the 2003 DFID Departmental Report (and to a 2004 report
by the Science and Technology Committee on The use of science
in UK international development policy[74])
DFID launched a Strategy for Research on Sustainable Agriculture
in 2006. The Annual Report 2007 says that DFID is "strengthening
the link between technological innovation and international development"
but no practical examples are given.[75]
UKFARD believes that such research has not yet been mainstreamed
as an integral part of development which would ensure new technologies
and other research outcomes are used to assist the poor.
31. DFID's draft Research Strategy for 2008-13 indicates
that one of its four priority areas will be sustainable agriculture,
especially in Africa.[76]
The Director General, Policy and International explained to us
that over the last 30 to 40 years the UK has financed "thousands
of technologies and new bits of knowledge related to agriculture,
whether it is new seed varieties, new systems of crop protection
or a variety of other technologies". But he told us that
"the world as a whole has been much better at creating new
technology than promoting its uptake" and that DFID's emphasis
in its research strategy was now much more strongly weighted towards
uptake.[77] The Permanent
Secretary gave the example of cotton boll worm pest which costs
India £1 billion a year in lost output. DFID's country office
had worked with the Indian government and researchers to encourage
100,000 farmers to implement research findings, leading to the
halving of the use of pesticides, an 11% increase in production
and a 75% increase in profits.[78]
We are
encouraged to see from DFID's consultation on its Research Strategy
2008-13 that one of its four priority areas will be sustainable
agriculture, especially in Africa. We hope this signals a reprioritising
of agricultural research which has the demonstrated potential
to bring tangible benefits to poor farmers in developing countries.
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