Friday, June 13, 2008

Report Review: World Development Report 2008- Agriculture for Development

The World Development Report 2008- Agriculture for Development is being prepared under the guidance of Francois Bourguignon in collaboration with the Sustainable Development Network. Team members for the WDR 2008 are: Derek Byerlee and Alain de Janvry, Irina I. Klytchnikova, Elisabeth Sadoulet, M. Paula Savanti, and Robert Townsend. The team was assisted by Harold Alderman, Beatriz Avalos-Sartorio, Julio Berdegue, Regina Birner, Lynn Brown, Luc Christiaensen, Klaus Deininger, Peter Hazell, Karen Macours, Michael Carter, Marie-Helene Collion, Michael Morris, and Dina Umali-Deininger, all of whom contributed to drafting parts of the Report, as well as Noora Aberman, Corinna Hawkes, Jorge Aguero, Shahrooz Badkoubei, Sarah Baird, Leandre Bassole, Tidiane Kinda, Melissa Klink, Claudio Montenegro, Eija Pehu, Catherine Ragasa, and Antti Seelaff. The WDR 2008 has 11 chapters namely: Chapter 1: Growth and poverty reduction in agriculture’s three worlds; Chapter 2: Agriculture’s performance, diversity, and uncertainties; Chapter 3: Rural households and their pathways out of poverty; Chapter 4: Realising gains from trade, price, and subsidy policy reforms; Chapter 5: Bringing agriculture to the market; Chapter 6: Supporting smallholder competitiveness through institutional innovations; Chapter 7: Innovating through science and technology; Chapter 8: Making agricultural systems more environmentally sustainable; Chapter 9: Moving beyond the farm; Chapter 10: Emerging national agendas for agriculture’s three worlds; and, Chapter 11: Strengthening governance, from local to global. The purpose behind coming out with the World Development Report 2008-Agriculture for Development is to place agriculture afresh at the centre of the development agenda, in a vastly different context of opportunities and challenges. The World Bank released a first draft of its latest World Development Report on 'Agriculture for Development' on 9 April, 2007. On 25 and 26 January, 2007, the World Bank thus held a civil society consultation on the WDR in Toronto, Canada. When the WDR's first draft was released, a subsequent e-Consultation process involving academics, national and sub-national government officials, small producer organisations, business sector and civil society groups was coordinated by Rimisp (Latin American Centre for Rural Development). The aim behind it was to identify any key issues missing from the report. The WDR's three-part structure addresses the following questions: 'why use agriculture for development', 'how to use agriculture for development' and 'how to formulate and implement tailored agriculture-for-development agendas?' The WDR Report 2008 thus calls upon action to bring out the smallholders from the poverty trap, in the Sub Sahara Africa, Latin America and Asia. There is call for addressing income disparities in transforming countries, which requires a comprehensive approach that pursues multiple pathways out of poverty shifting to high-value agriculture, decentralising non-farm economic activity to rural areas, and providing assistance to help move people out of agriculture. Instead of arguing for invisible hand (where market forces plays a decisive-role) as was dictated by Adam Smith, the WDR 2008 asks for the visible hand of the State for growth, poverty reduction and environmental services.

Message of WDR 2008
The Report emphasises upon market-based approach towards poverty reduction and agricultural growth. This however makes the recommendations contradictory since the same Report accepts market failures in the Southern nations. In this Report, agriculture comprises of crops, livestock, agroforestry and aquaculture. It does not include forestry and commercial capture fisheries since they require vastly different analyses. In agriculture-based countries, agriculture generates on average 29 percent of the gross domestic product (GDP) and employs 65 percent of the labour force. The Report accepts that domestic agricultural production is essential for food security. Agriculture is also accepted as a source of livelihood. The Report informs that the large decline in the number of rural poor (from 1,038 million in 1993 to 890 million in 2003) has been confined to East Asia and the Pacific. In South Asia and Sub-Saharan Africa, the number of rural poor has continued to rise and will likely exceed the number of urban poor until 2040. In this context, it is essential to see the debate around poverty measurement in India. The Report categorises countries into: agriculture-based countries, transforming countries and urbanised countries. It says that China and India moved over the evolutionary paths from the agriculture-based to transforming group over the last 20 years. WDR 2008 says that in the transforming economies, reallocation of labour out of agriculture is typically lagging. The Report do not touch upon the issue whether movement of labour from agriculture to non-agriculture is happening due to push factor or pull factor. The Report could have thrown more light upon the issue of disguised unemployment. Land reform can promote small holder entry into the market, reduce inequalities in land distribution, increase efficiency, and be organised in ways that recognize women's rights. Population pressure together with declining farm size and water scarcity are major challenges in many parts of Asia, the WDR 2008 says. The Reports says that land markets, particularly rental markets, can raise productivity, help households diversify their incomes, and facilitate exit from agriculture. However, whether such an exit of smallholders would result in the entry of corporate sector into agriculture, which is viable and profitable needs to be asked and understood. While land and water are critical assets in rural areas, education is often the most valuable asset for rural people to pursue opportunities in the new agriculture, obtain skilled jobs, start businesses in the rural non-farm economy, and migrate successfully, the WDR 2008 accepts. The broad policy recommendations provided by WDR 2008 are: a. Improve price incentives and increase the quality and quantity of public investment; b. Make market work better; c. Improve access to financial services and reduce exposure to uninsured risks; d. Enhance the performance of producer organisations; e. Promote innovation through science and technology; and, f. Make agriculture more sustainable and a provider of environmental services. The Report says that liberalization of imports of food staples can also be pro-poor because often the largest number of poor, including small holders are net food buyers. But many poor net sellers (sometimes the largest group of poor) will lose, and specific programmes tailored to country-specific circumstances will be needed to ease the transition to new market realities. The Report also throws light upon the Doha Round of trade negotiations and the trade related distortions due to subsidies provided by both the Southern and the Northern nations. However, putting the entire blame of trade related distortions on Southern nations, would be unwanted. The Report asks for investments in infrastructure, promoting commodity exchanges, market information systems based on rural radio and short messaging systems, warehouse receipts, and market-based risk management tools. But how can this be done without the active participation of the State, NGOs (non-government organisations), CSOs (civil society organisations) and farmers' collective and trade unions, needs to be pondered upon. Hence the WDR 2008 rightly argues for decentralisation and participatory governance. However, the Report donot say whether that will be political or apolitical in nature. The Report informs that producer organisations' effectiveness is frequently constrained by legal restrictions, low managerial capacity, elite capture, exclusion of the poor, and failure to be recognized as full partners by the state. While investment in R&D tripled in China and India over the last 20 years, it increased by barely a fifth in Sub-Saharan Africa. According to some critics, the Report over-emphasizes upon macroeconomic stabilisation policies to be pursued in Sub Saharan Africa. The Report accepts that investments in biotechnology, which is concentrated in the private sector and driven by commercial interests, have had limited impacts on small holder productivity in the developing world. In this respect, the issues (such as biodiversity, biopiracy, bioethics) related to GMOs (genetically modified organisms) too have been discussed. The Report informs that agricultural intensification has resulted in reduction in biodiversity, mismanagement of irrigation water, agro-chemical pollution, health costs, deaths from pesticide poisoning, soil erosion, spread of animal diseases like avian influenza, desertification etc. Although green-revolution has become a sort of cult term for agri-scientists, economists and policy-makers, but little thought is given on the adverse impact of green-revolution on environment and social structure in countries from South Asia and elsewhere. The WDR 2008 in this respect rightly points out the problems associated with agriculture. Developing country agriculture and deforestation are major sources of greenhouse gas emissions, the WDR 2008 says. There is also discussion on the pros and cons of biofuel production in countries like Brazil, the USA etc. The Report asks for decentralized environment which can address the following objectives: a.) increase access to markets and promote efficient value chains; b.) enhance smallholder competitiveness and facilitate market entry; c.) improve livelihoods in subsistence farming and low skill rural occupations; and, d.) increase employment in agriculture and the rural non-farm economy, and enhance skills. The Report asks for recognizing the often-dominant role of women as farmers, agro-processors, and traders in local markets. The Report asks for linking small holders to modern food markets. The state has a role in market development (in the backdrop of 'market failures')-providing core public goods, improving the investment climate for the private sector-and in better natural resources management by introducing incentives and regulations.
Although the WDR Report 2008 takes note of the problems faced by the poor, still it calls upon agricultural reforms in the Southern nations. The moot question is whether such reforms would include measures like removal of ceiling on land possessed, which can make the entry of corporates and MNCs easier, or poverty reduction measures like direct cash transfers to poor and landless, more allocation of budgets for food-for-work schemes etc. The Report misses out on traditional farming practices, importance of food banks for not only ensuring food security but which serves as gene banks, collection, preservation and genetic mapping of indigenous varieties of seeds, role of agriculture as a supplier of important herbal and medicinal products etc. Although the WDR focuses on the importance of decentralisation, but little is mentioned about the decay of old State institutions which had historical importance such as the rationing system (public distribution system), Indian Council of Agricultural Research (ICAR), state agricultural universities etc. Renewal and revival of such institutions can provide boost to the agricultural scenario in the Indian context. The WDR 2008 also misses out on the issue of farmers' suicides as had been happening in different Indian states. But altogether the WDR 2008 is welcome and much-awaited document which needs to be read by policy makers, economists and general readers for critical appraisal.

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