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Mainstream, Vol XLV, No 45

World Development Report on Agriculture:

MANY QUESTION MARKS ON WOLRD BANK’S THINKING

Wednesday 31 October 2007, by Bharat Dogra

It is in the midst of serious and growing concerns about farmers’ suicides and threats to food-security that an important document like the latest (2008) World Development Report (WDR) on Agriculture (prepared by the World Bank) needs to be examined carefully. The World Bank’s influence on policy-making is widely acknowledged and the WDR provides a strong indicator of the overall direction and thrust of these policy-influences.

A claim that is repeatedly made in this report is that for hundreds of millions of rural poor employment in the ‘new agriculture’ of high value products can open pathways out of poverty. But quite often it is when the small farmers shift to the more expensive and untried crops and technologies that they become indebted due to their low ability to absorb risks. From the point of view of sustainability, the traditional, time-honoured cropping patterns are known to be in keeping with the soil, water and climate, and recommendations for any drastic change have to first answer what the new crops will mean for water and soil.

Another key recommendation repeated time and again is to help people move out of agriculture. But it is not clear where exactly these people will go and whether they’ll get ready access to better livelihood. It is even less clear which sections of the farmers the WDR wants to move, and to what extent these farmers have been consulted whether they want to leave farming or not. This kind of recommendations entirely ignore the reality that farming is much more than a source of income for many people, it is also a way of life and has strong socio-cultural connotations. Rather than speaking of moving people out of agriculture, a more humane approach would consider creating a more broadbased rural and small-town economy so that small farmers have more diverse opportunities without necessarily having to break their strong links with rural life and land, which have social and cultural dimensions in additions to economic ones. Besides, there is the danger in the WDR approach (based on necessarily moving out farmers) that it is specifically the smaller and more vulnerable peasants who will be the target, while actually they are the ones who deserve maximum help. The WDR recommendation of necessarily moving out farmers from agriculture (or as it says, helping them to do so) can be used to provide intellectual respectability to policies which displace a lot of people, while in countries like India there is growing realisation to protect peasants from policies which cause displacement. Industries including multinational companies increasingly opt for more capital-intensive, mechanised operations providing fewer jobs while urban policies are getting more hostile towards the newcomers from villages.

What is more, even the WDR says quite clearly that more than 80 per cent of the decline in rural poverty is attributable to better conditions in rural areas than to out-migration of the poor.

The WDR speaks repeatedly of strengthening property rights. However, the context of this recommendation needs to be more carefully established. True, the land rights of the small peasant should be properly recorded. But strengthening of property rights cannot be extended to the biggest landlords. In their case, actually, property rights have to be challenged so that land reforms can make available a part of their land to the landless and near landless peasants.

THE WDR says that land markets, particularly rental markets, can raise productivity, help households diversify their incomes and facilitate exit from agriculture. This report says that well-functioning land markets are needed to transfer land to the most productive users and to facilitate participation in the rural non-farm sector and migration out of agriculture. This recommendation about transferring land to the most productive user is highly objectionable as it can be used as a justification for displacement and eviction of many small peasants who function in difficult conditions and so may not be able to match the productivity of big landowners who are much more favourably placed in terms of access to irrigation and inputs.

In its analysis of agricultural policies to reduce poverty and hunger, the WDR emphasises policies linked to business and ‘high-value’ agriculture and technologies of the Green-Revolution kind while giving only meagre attention to land reforms and steps to increase the production of staple foods in self-reliant ways which improve nutrition.

The WDR makes the questionable claim that poverty is increasingly reduced through the employment of unskilled labour. Such gains, even when real, are more likely to be temporary. In addition working conditions for farm workers even in areas of rapid growth and large-scale exports are known to be pathetic. It makes much better sense to argue that durable reduction in poverty is likely to be obtained by land reforms which provide landless workers ownership rights of some land.

The WDR does well to draw attention to low levels of public spending on agriculture, as also to the fact that it has often been biased toward subsidising private goods like fertilisers. It also notes that the share of the official development assistance (ODA) declined sharply over the past two decades from 18.1 per cent in 1979 to 3.5 per cent in 2004. It also declined in absolute terms, from about $ 8.3 billion in 1984 to $ 3.4 billion in 2004. The World Bank lending to agriculture fell from about $ 3.5 billion in 1995 to less than $ 1 billion in 2001, accounting for two-thirds of the total decline in ODA support to agriculture.

In its analysis of agriculture’s performance and future prospects, the WDR overestimates the productivity gains, particularly keeping in view the fact that surpluses would be much reduced if all people is fed adequately. The decline in the quality of food is ignored, as also the extent to which the technologies used to increase productivity have degraded soil and polluted as well as depleted water sources. Agriculture’s ‘global success’ is celebrated in the report but not well-established. While the Green Revolution’s gains are overestimated, the likely adverse impacts on food security of promoting bio-fuels are underestimated.

The WDR’s optimistic view of agricultural performance is strange given the estimates— included in the report—that net cereal imports by the developing countries of Asia, Africa and Latin America are projected to increase to 265 million tonnes in 2030 from 85 million tonnes in 2000. Many countries have declining domestic production per capita of food staples. Low foreign exchange availability often limits their capacity to import.

Despite stating these facts, the WDR is not inclined to support policies which promote self-reliance of the food-system of developing countries. Instead it overestimates the benefits of trade liberalisation and undermines the need for developing countries to become self-reliant in meeting the needs of the most important food products. Very real issues of great concern to farmers of developing countries have been raised at the Uruguay and Doha Rounds, but the WDR is dismissive of this opposition. According to the WDR, tariff reduction is crucial for global welfare and poverty reduction, ignoring the many instances of severe adverse impacts of tariff reduction for farmers and workers in developing countries. The WRD accords great importance to the success of the Doha Round, ignoring the many concerns of developing countries regarding how an anti-development Doha Round agreement can be disastrous for farmers, workers and other vulnerable groups. Several important concerns related to food security and other equally important issues are dismissed quickly by the WDR.

The agenda for ‘transforming countries’, like India, China and Vietnam listed in the WDR, emphasises high-value activities and diversifica-tion, but such a view underestimates the importance of giving adequate attention to staple foods. Staple foods should actually continue to get the foremost attention, keeping in view the fact that a large number of people in countries like India are still underfed.

The agenda mentioned in the WDR says— promote livestock activities among the landless and smallholders as a substitute for land. This assumes there is no hope of providing land to them. Actually land reforms to provide farmland to the landless (apart from homestead land) should be a top priority, but this is not even mentioned in the agenda of the WDR.

Clearly there is a need to be quite cautious about the WDR’s policy prescriptions. It is possible to interpret many of its prescriptions and observations in ways that will consolidate corporate power in rural areas while eroding or disrupting autonomy and self-reliance of the communities of small peasants. Some of these policies can increase the risks and indebtedness of small peasants. Food security and the availability of staple foods can be adversely affected. The objective of food self-reliance for developing countries can be jeopardised, and the space available to the government for helping and protecting small farmers can be constricted substantially.

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