Agricultural Commercialisation, Institutions and Markets - Background Resources
Agricultural policy in Africa in the last 50 years can be broadly but
usefully divided into two phases, emphasising first state-led and then
market-led development. Neither has lived up to the promises made on its
behalf, but policy debates have tended to set these two approaches off
against each other. The weaknesses of this polarised debate are increasingly
recognised, with the need for the state and market, and other players,
to play separate but complementary roles. Dorward et al. (2005) argue
that this complementarity is very important, but the distinction between
state and market roles in development cannot be clear cut. They propose
an integrated suite of eclectic measures involving different stakeholders
within a robust policy paradigm of 'developmental coordination' (see Dorward,
Kydd and Poulton, IDS Bulletin 2005).
Further resources on Market Coordination
Supermarkets and Standards
The changing structure of the global agri-food system – and the role of supermarkets and standards in particular - is increasingly having an impact on small scale farming in the developing world. Supermarkets – and their intermediary buyers – need just-in-time production meeting exacting standards of quality, presentation and food safety. International standards – set by private sector players like supermarkets or government and international agencies alike – are increasingly a focus of concern for developing country governments and producers. Much effort is being invested in attempting to upgrade standards, with capacity building and training efforts in SPS compliance being rolled out in many African countries.
Recent workshops held at IDS have explored these dynamics and their policy implications. A number of questions have been raised including: how important are major international supermarkets in practice in the retail and wholesale markets that most poorer small scale farmers in Africa engage with? Has the supermarket bandwagon, documented for Latin America and parts of Asia, been extrapolated too far? The answer is not clear, and requires more empirical research. But it remains an open question as to whether the ‘tidal wave’ scenario so eloquently propounded by Tom Reardon of MSU and others is as inevitable as they imply.
Both private and public standards, with often taxing requirements for risk and hazard assessment, reporting and traceability, are most definitely a feature of the current policy landscape. That developing countries are ill equipped to respond, and in particular to negotiate in standard setting bodies is well recognised . This is affecting an increasing array of commodities and their export to a growing range of countries and economic regions. One response - supported by many international aid initiatives - is to boost developing countries' capacities to respond to these by upgrading facilitites, training staff and improving inspection and tracing processes. While meeting standards is clearly important for gaining access to high value export markets, particularly in Europe and N America, questions must be raised about the polticially motivated and trade protectionist origins and justifications for many standards.
Science is often used as a justification for why standards are as they are, and why they are rational, neutral and objective. But closer scrutiny shows that there are different ways of seeing the risk problem and responding to it, all equally scientifically justifiable. A wider debate about risk assessment policy - in line with Codex principles - is seen as an important step forward, and one that developing countries need to engage with urgently, lest standards are set which are either inappropriate or unachievable. Thus in the case of livestock exports from Africa, a 'commodity based approach' is likely to fit circumstances better than the usual argument for 'disease freedom'.
But for the case of Africa, is all this focus on standards and supermarkets the priority? Are there other markets, perhaps more local or regional, perhaps looking towards the growing demand of Asia, which are more appropriate? Is a focus on meeting retail standards the answer, or is it better to aim for perhaps lower value but more accessible wholesale markets? And is the formal marketing system, with all the constraints and pitfalls of standards requirements really where the action is, or are informal, often unregulated markets more lucrative for poorer marginal farmers and livestock keepers? These remain key empirical questions, with no doubt regional and country specific answers. It is this wider debate which sees the broader picture which the IDS workshops confirmed is clearly needed.
If changes in the purchasing patterns and the standards requirements of the agri-food sector are changing as they surely are, as a consequence of globalisation, even if in not quite as dramatic a way, particularly in Africa, as some might suggest, then what future is there for small-scale farming? Again a diversity of views were heard at the IDS workshops. For some the scale economies of large scale commercial farming operations were increasingly apparent, especially in the high value horticulture sectors. Increasingly vertically integrated, consolidated operations were taking over, even if they had some element of outgrower production for some specialist crops. The consequence of a shift away from small scale farming for poverty reduction and livelihood opportunities was therefore hotly debated. Some argue that the labour opportuntieis on large farms – and increasingly the social support conditions provided – improve the lot of previously struggling marginal farmers, and particularly women. Others argue that this may be the case in some instances, but the pattern is not all positive, with employment insecurity, low wages and poor conditions typifying many large scale corporate run farming operations.
The changing nature of institutions and markets is a central feature
of the Future Agricultures consortium work. Empirical resutls on some
of these questions will emerge from the country work in east and sourthern
Africa over the coming years, hopefully contributing to some of the answers
to these questions.
Further resources on Supermarkets and Standards
Further Reading
Market Coordination - Further Resources
'Sequencing of Investments for Agricultural Growth, Poverty Reduction and Food Security'
Andrew Dorward, June 2006.
'Beyond Liberalisation: "Developmental
coordination" Policies for African Smallholder Agriculture',
A. Dorward, J. Kydd and C. Poulton, IDS Bulletin, Vol 36, No 2,
2005
Imperial
College London, Agrarian Development Unit Website
'Institutions
and Economic Policies for Pro-Poor Agricultural Growth', Andrew Dorward
et al. November 2004, IFPRI and Imperial College London.
'The
Future of Small Farms: New Directions for Services, Institutions and Intermediation',
Colin Poulton, Andrew Dorward, and Jonathan Kydd, paper presented at The
Future of Small Farms: A Research Workshop, June 26-29, 2005, Withersdane
Conference Centre, Wye, UK
Supermarkets and Standards
- Further Resources
Supermarkets
and Standards - Report of UK House of Commons All Party Parliamentary
Group on Overseas Development meeting on 23rd November where David Gregory,
Head of Food Technology, Marks and Spencer plc. and and Dr William Vorley,
International Institute for Environment and Development (IIED) presented.
IDS
Globalisation Team - Value Chains Studies - Agriculture and Horticulture
Regoverning Markets
project - analysing growing concentration in the processing and retail
sectors of national and regional agri-food systems and its impacts and implications
for rural livelihoods and communities in 18 countries in five regions.
IDS
Vulnerability and Poverty Reduction Team - Ethical Trade and Fair Trade
work
International
Portal on Food Safety, Animal and Plant Health
USAID
- Agriculture
Supermarkets
and Development IDS/ IIED Workshop Report - 12-13 October 2005
'Links
among Supermarkets, Wholesalers, and Small Farmers in Developing Countries:
Conceptualization and Emerging Evidence', Thomas Reardon et al., The
Future of Small Farms Research Workshop, Wye, June 26-29, 2005
Development
Policy Review, September 2002, Supermarkets Special Issue
'Food
Safety and Agricultural Health Standards: Challenges and Opportunities for
Developing Country Exports', Summary of the Report Number 31302, (2005),
Poverty Reduction and Economic Management Trade Unit, and Agriculture and
Rural Development Department, World Bank
Livelihoods
Connect - Agriculture and Natural Resources - Supermarkets and Informal
Standards - Hot Topic
Linking
Farmers with Markets
“Science
in Trade Disputes Related to Potential Risks: Comparative Case Studies”,
Erik Millstone, Patrick Van Zwanenberg, Claire Marris, Les Levidow and,
Helge Torgersen, ESTO, EUR 21301 EN , 2004
'An
Appropriate Level of Risk: Balancing the Need for Safe Livestock Products
with Fair Market Access for the Poor', Brian Perry, Alejandro Nin Pratt,
Keith Sones and Christopher Stevens, 2005, ILRI, PPLPI Working Paper No
23
'Communities, Commodities and Crazy Ideas:
Changing Livestock Policies in Africa', Andy Catley, Tim Leyland, Berhanu
Admassu, Gavin Thomson, Mtula Otieno and Yacob Aklilu, IDS Bulletin,
36(2): 96-102.
International
trade in livestock and livestock products: the need for a commodity-based
approach, GR Thomson, EN Tambi, SK Hargreaves, TJ Leyland, AP Catley,
GG van 't Klooster, and ML Penrith, The Veterinary Record,. 2004,
155: 429-433
'Exploring
Market Opportunities for African Smallholders', Xinshen Diao and Peter
Hazell, IFPRI, 2004
'Food
Inc. Corporate Concentration from farm to consumer', Bill Vorley, UK
Food Group, 2003
'Export
Horticulture and Poverty in Kenya', Neil McCulloch and Masako Ota, 2002,
IDS Working Paper 174
'Ethical
Trade in African Horticulture: Gender, Rights and Participation', Sally
Smith, Diane Auret, Stephanie Barrientos, Catherine Dolan, Karin Kleinbooi,
Chosani Njobvu, Maggie Opondo and Anne Tallontire, 2004, IDS Working
Paper 223
