Investing in smallholders

Consider the following facts:

By 2050, there will be 9 billion people on the planet, and the demand for food will have risen by 70 percent.

Demand for water worldwide will increase by 30 percent by 2030.

Consumers in rich countries waste up to one-fourth of the food they buy.

In more than half of the rich countries, more than half of the population is overweight.

In the last 25 years, the share of agriculture in international aid fell from over 20 percent to less than 4 percent.

Three agribusiness firms are estimated to control nearly 90 percent of grain trading worldwide.

These are among the startling facts that Dame Barbara Stocking, chief executive officer of Oxfam Great Britain, and her colleagues shared with Inquirer editors and columnists in a visit to the Inquirer offices last week. Oxfam International was born in 1942 in response to a food crisis spawned by World War II. Now, almost 70 years later, the organization warns of an impending food crisis threatening all humanity that could be much bigger than any past famines the world has seen (that is where the “fam” part of their name comes from).

The last few years have in fact given us a foretaste of how bad things could be, as prices of food staples hit new heights at the same time that petroleum prices hit the roof. The United Nations Food and Agriculture Organization has warned that a new era of rising food prices is upon us—and with it, an expected rise in world hunger.

The problem cannot be properly analyzed by simply looking at aggregate numbers, and making reckless prescriptions based on mega-approaches to the food supply problem looking to unsustainable industrial farming as the answer. Oxfam points out that despite huge increases in agricultural productivity over recent decades, global hunger has been on the rise. There is a fundamental structural problem that plagues world agriculture, leading to appalling inequities, Oxfam notes. Rich countries produce more food than they need, and consequently throw much of it away, even as nearly one billion people elsewhere go hungry every day.

In Oxfam’s analysis, the core of the problem lies in a structure where a powerful minority of vested interests captures the bulk of the benefits of the food system. These include enormous agribusiness companies hidden from public view that wield oligopoly power, govern value chains and rule markets while being accountable to no one. They also point to “bloated biofuel lobbies, hooked on subsidies that divert food from mouths to cars; and shipping companies that overcharge for freighting food including emergency food aid.”

These observations prompted Oxfam to embark on their global “Grow” campaign, supported by extensive research and case studies made across seven decades through Oxfam’s operations in various countries worldwide. When I asked what would be the single most important intervention which trigger solutions to other problems to fall into place, Stocking was quick and unflinching in her reply: invest in smallholder farms. Hunger and poverty are concentrated in rural areas. In Oxfam’s view, unlocking the potential of smallholder agriculture, the backbone of the food system, represents the single biggest opportunity to raise food production, boost food security, and reduce vulnerability to threats like climate change. And yet, small food producers are routinely deprived access to the resources they need to thrive, including water, technology and credit, with the last usually being the most limiting factor.

The fact is, each American farmer is now estimated to feed 155 other individuals, reflecting the very high level of productivity in American farms. I vaguely remember reading before that a Filipino farmer feeds only one other person besides himself (indeed, it is a common lament that Filipino farmers can’t even feed themselves). The point is that productivity is so much lower in countries like ours that are blessed with even more farm-friendly environments, with soils and climates conducive to year-round productive agriculture. This suggests that the potential for greatly increased productivity in smallholder farms especially in the developing world is vast. At the same time, experience has shown that a farm sector built on smallholder agriculture lends itself more to environmental sustainability and broad-based benefits in the countryside —provided that small farms would get the support they need to thrive.

But what about the argument that large-scale industrial farming is the only way to achieve higher productivities from economies of scale? Aren’t American farms so much more productive precisely because farms are large and efficient?

There is a proper place for large-scale commercial farming in the scheme of things, to be sure, but to suggest that they should replace smallholder agriculture especially in developing countries is to promote the perpetuation of continued inequities in the rural economy. What is needed, Oxfam maintains, is for governments to undertake public investments that will permit smallholder farms to attain much greater productivity, rather than perpetuate their systematic deprivation through misguided policies biased for large business interests. Lately, in fact, it is governments that have been triggering, rather than averting, food price crises. Our own government’s role in triggering a rice price spike in 2008 was a prime example.

In the quest for broad-based food security, Oxfam’s credo, then, could very well be “Small is beautiful.” In this age of rising hunger amid plenty, it is time we revisited this mantra and built a dynamic and prosperous rural sector in the process.

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E-mail: cielito.habito@gmail.com