What is inclusive agricultural growth?

PLAAS | 17 November 2014

What is inclusive agricultural growth?: Agricultural investment, productivity and land rights in the context of large-scale investments

by Ruth Hall

The third day of the Conference on Land Policy in Africa, which took place on 11-14 November 2014 in Addis Ababa, built on the discussions on securing land rights to debating what constitutes inclusive agricultural growth and how this can be realised.
We have a collective responsibility to use and promote the AU Guiding Principles

The African Union’s Guiding Principles on Large-Scale Land-Based Investment, officially launched at this conference, represent an important step forward in Africa’s policy framework on land policy, and are the culmination of all the policy processes over the past decade. There had been widespread demand for regional guidelines, and operationalizing them is not an exclusive responsibility of the LPI. The African Union and national governments need to raise awareness of the Guiding Principles, as well as civil society and development partners. The Guiding Principles must be read together with the Comprehensive African Agricultural Development Programme (CAADP) Results Framework, which should be used as a tool to promote better policy and practice, as it addresses the same elements: legislative and policy frameworks, women’s land rights, promotion of family farming, inclusion and promotion of young people, and so on. CAADP recognizes that small farmers already feed most of the continent. Rising food imports – often the reason why LSLBI are considered – reflect the systemic neglect of agriculture over a long period. While the Maputo Declaration and the CAADP process are helping to reverse this, there is still a long way to go.
Guidelines form the basis for best practice but we need indicators and monitoring

Where local people support LSLBI through participatory processes, more meaningful benefit-sharing systems are needed, and best practices of responsible investment need to be documented. Decentralising land governance is not adequate; what is needed is the devolution of power. But given differentiation within communities, when it comes to gaining community consent, whose opinions and interests really matter? To safeguard the long-term interests of communities, and to ensure that the investment is viable and durable in this context, we need agreed indicators for what constitutes free, prior and informed consent. Compensation in LSLBI is a controversial issue, as compensating for the loss of livelihood resources now and into the future (for a whole generation or in perpetuity) is a massive undertaking and is regularly under-estimated, leading to a net decline in wealth and wellbeing for affected people. A promise of jobs cannot be considered as part of compensation. The Guiding Principles need to be read in their entirety to inform a proper understanding of compensation, and some tools are emerging that can assist with more realistic formulations for compensation commensurate with what is lost, which will leave people either no worse off, or better off. More detailed and operational guidelines are becoming available, and should be used and tested, alongside robust indicators, so that over time best practices become the accepted standard.
Creating a revolution in African agriculture requires a system-wide approach

It is not about technical fixes such as seed and soil, and it cannot focus exclusively on primary production. There is not agreement on whether inclusive agricultural growth requires a ‘green revolution’ and increased access to improved seed, pesticides and fertilizer, or whether promoting agro-ecological alternatives would be more sustainable environmentally and economically. Technology transfer is important if family farming is to be combined with industry. As became clear on day one, in relating to tools for securing land rights, we cannot rely on technology to resolve political problems. The same applies to enabling agricultural growth.
Create viable opportunities for young people to build livelihoods in farming and throughout the agro-food system

If young people in rural areas cannot see a future for themselves in farming, this reflects not a deficit in their understanding of the importance of agriculture, but is the product of structural conditions that make farming an unviable or unattractive proposition for them. Agriculture must not be a last choice, a default. Policy and institutional biases need to be addressed. Policy can and must create an environment in which young people can access land and inputs, produce, participate in entrepreneurial opportunities throughout the value chain, make profits and sustain their families. If young people are excluded from agricultural growth, then it is not inclusive. If young women are excluded from agricultural growth, then it is not inclusive. Agriculture must be made more attractive a proposition by the removal of obstacles to gaining access to land, and by the provision of infrastructure and services. Agricultural curricula must be developed, in and beyond production into the value chain and business, so that young people can establish themselves in diverse niches in production and entrepreneurship throughout the value chain.
Food security doesn't require Africa to give its land away!

There is now overwhelming evidence that large land deals have not delivered their promised benefits, especially jobs, so we need alternatives. The good news is that we have the experience and evidence that it is possible to achieve growth in agriculture without transacting land rights to those with capital. Combining land, labour and capital in new ways is what is needed to keep farmers farming, but doing so more profitably. We need investment in farmers. The metric for inclusive agricultural growth should be how many livelihoods farming – and the wider food system and agricultural value chains – can support, and the quality of these livelihoods. A development pathway that means farmers must exit the sector, to be replaced by large-scale agriculture, is exclusionary. ‪‬
Financing requires innovative leveraging of private finance by the public sector

We have generally lacked appropriate financial tools to support inclusive agricultural growth. Most formal financial institutions are not interested in small-scale agriculture. Obstacles to accessing credit must be addressed if farmers are to be able to invest and improve their yields and productivity, and also if farmers and other rural people are to expand into niches outside of primary production so as to add value and stimulate the rural non-farm economy. There is recognition of a need for public investment in order to leverage private funds. The state can and must promote access to finance, reducing risk for farmers and for financial institutions, which can enable financiers to offer reduced interest rates to farmers and other actors in the agricultural sector. Barriers of scale in access to finance need to be resolved, and realistically we cannot expect the private sector to make finance accessible to small operators in the absence of financing partnerships. Not only production finance, but finance throughout the system needs to be made available on more equitable and accessible terms. More generally, it is a fallacy that private sector will take over roles of the state, by investing in crucial infrastructure like transport, and services to family farmers. Evidence shows that such investments have been limited, leaving deficits. Through public financing, the state needs to come back into agriculture, but in new, more innovative and more effective ways.
Which are the better and worse models of commercialisation?

LSLBI are not the only threat to inclusive agricultural growth. Endogenous processes of concentration in land ownership and the farm economy are in some countries having as big, if not a more significant, impact. As farming becomes more commercialized, accumulation by some and dispossession and exclusion of others is becoming evident. We need to compare the impacts of LSLBI and compare these to impacts of outgrower schemes and medium-scale commercial farming. What we know is that benefits and risks are differentially distributed. For instance, outgrower schemes based on block farming might create loss of land access and intergenerational transfer of land, while young people not being absorbed into wage labour. Policy makers need to know and think through the implications of the model of commercialization that is promoted, for land access, food security, gender equity, youth inclusion, employment creation, and economic linkages into the local economy. Longitudinal studies are needed to really understand the trajectories of agrarian change over time.
Can Africa achieve agricultural growth that is inclusive? Yes, and it must!

Inclusive agricultural growth means avoiding big corporate takeovers of farming and value chains, and the food system as a whole, from production to retail. Rather, inclusion requires that agricultural growth helps existing farmers, traders, and others in the value chain to mitigate risk, to become more profitable and to scale up what they are doing. Inclusion cannot be only at the level of primary production. Inclusion means that family farmers must be able to access markets, by aggregating their outputs, and selling into value chains that are able to efficiently get produce to the growing numbers of urban consumers. Inclusive growth means there must be equity in ownership and income, which means that incomes from agriculture need to be reinvested to stimulate further growth in farming, in the rural non-farm economy and, through rural-urban linkages, into the urban food economy, to feed Africa’s growing and urbanizing population. Inclusive agricultural growth means that the needs of rural population must be achieved by meeting the needs of the urban population.

The final day of the conference will address experiences and emerging best practices in development and implementing land policies, and will see stakeholder groups meeting separately to identify what le insights they have gleaned from the conference and their priorities and commitments for implementing the African land agenda in the coming decade.
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