From poverty to power - Oxfam-Québec
From poverty to power - Oxfam-Québec From poverty to power - Oxfam-Québec
3 POVERTY AND WEALTH LIVING OFF THE LANDper cent of rural African households do not grow enough to feedthemselves all year round, and so rely on the market to cover the shortfall.81 Rising food prices hurt poor consumers and may not even helppoor farmers, when the benefits accrue to processors and traders andare not transmitted down the value chain.As in the parallel argument for state intervention to nurture infantindustries, the role of the state is particularly important at the earlieststages of development, but it should fall away as agriculture takes offand fully functioning markets emerge in the countryside. An economicanalysis of the return on investment in India’s Green Revolutionfound that state spending on credit, electricity, and fertiliser yieldednet benefits in the early years, but fell away until by the 1990s all weregenerating a net loss. 82However, this exit can be politically difficult, as the longevity ofEurope’s Common Agricultural Policy and the US farm subsidiesdemonstrates.In India,one difficult legacy of the successful kick-startingof the Green Revolution is that the state still spends some $9bn a yearon subsidies, 83 mainly on fertiliser, electricity, and irrigation, whichlargely bypass the poorest people in the countryside, whether landlesslabourers or smallholders. Fertiliser subsidies in particular havebecome little more than a slush fund for the fertiliser industry, whichreceives payments directly from government on a cost-plus basis, thusremoving any incentive to improve efficiency. Such arrangements createvested interests that prevent the government from redirecting thatmoney towards public goods, such as rural roads or agriculturalresearch, where investment produces far higher social and economicreturns. 84THE FUTURE OF SMALL-SCALE FARMINGHigh commodity prices, growing demand for biofuels, a possible shiftto low-carbon agriculture, booming consumer demand in the citiesand in the North for year-round supply, and growing markets fororganic and Fairtrade products could all work in favour of small farmersin the coming years.Whether they can break into these new and growingmarkets will depend largely on their ability to organise and upgradetheir production.143
FROM POVERTY TO POWERDomestic and regional markets may offer more potential thanNorthern export markets, especially in light of the latter’s tariff barriersand intimidating array of health and quality standards (althoughsmallholders in Latin America appear to have had some success in ridingthe globalisation wave). 85 Africa’s domestic consumption of foodstaples, including cereals, roots and tubers, and traditional livestockproducts produced and consumed mainly by poor people, is estimatedat around $50bn a year, more than five times greater than the value ofits traditional commodity exports, and this is expected to double by2015. 86However, with urbanisation and the spread of supermarkets, localmarkets are becoming more like international ones. Small-scale agriculturewill have to learn how to meet more exacting quality standardsand face intense competition even to sell locally, or else will be left withthe lowest-value dregs of the market. The hiding places from globalisationare shrinking, and both state action and producer organisationare essential to equip small farmers to keep up with the pace oftechnical and commercial change, and to reform the business modelthat currently excludes them.The countryside in many developing countries is being rapidlytransformed. While change has brought a mixed bag of opportunitiesand threats for poor farmers, the threats are greater and the opportunitiesare slimmer than for large farmers and other powerfulplayers. Many of these changes are likely to drive up inequality in thecountryside, both between rich and poor, and between women andmen. Poor farmers are more vulnerable, more likely to be squeezedout of new, higher-value agriculture, and less likely to benefit fromnew technologies.How governments and rural people shape and adapt to change willto a large extent determine the course of global poverty and inequalityover the coming decades. Only a concerted effort by a combination ofeffective, accountable states and active, organised citizens to redistributepower in agricultural markets can arrest growing inequality andrekindle agriculture’s ability to trigger national economic take-off andpoverty reduction.In any case, many rural communities will in all likelihood face afuture of out-migration and an ageing population. In Peru’s Sacred144
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FROM POVERTY TO POWERDomestic and regional markets may offer more potential thanNorthern export markets, especially in light of the latter’s tariff barriersand intimidating array of health and quality standards (althoughsmallholders in Latin America appear <strong>to</strong> have had some success in ridingthe globalisation wave). 85 Africa’s domestic consumption of foodstaples, including cereals, roots and tubers, and traditional lives<strong>to</strong>ckproducts produced and consumed mainly by poor people, is estimatedat around $50bn a year, more than five times greater than the value ofits traditional commodity exports, and this is expected <strong>to</strong> double by2015. 86However, with urbanisation and the spread of supermarkets, localmarkets are becoming more like international ones. Small-scale agriculturewill have <strong>to</strong> learn how <strong>to</strong> meet more exacting quality standardsand face intense competition even <strong>to</strong> sell locally, or else will be left withthe lowest-value dregs of the market. The hiding places from globalisationare shrinking, and both state action and producer organisationare essential <strong>to</strong> equip small farmers <strong>to</strong> keep up with the pace oftechnical and commercial change, and <strong>to</strong> reform the business modelthat currently excludes them.The countryside in many developing countries is being rapidlytransformed. While change has brought a mixed bag of opportunitiesand threats for poor farmers, the threats are greater and the opportunitiesare slimmer than for large farmers and other <strong>power</strong>fulplayers. Many of these changes are likely <strong>to</strong> drive up inequality in thecountryside, both between rich and poor, and between women andmen. Poor farmers are more vulnerable, more likely <strong>to</strong> be squeezedout of new, higher-value agriculture, and less likely <strong>to</strong> benefit fromnew technologies.How governments and rural people shape and adapt <strong>to</strong> change will<strong>to</strong> a large extent determine the course of global <strong>poverty</strong> and inequalityover the coming decades. Only a concerted effort by a combination ofeffective, accountable states and active, organised citizens <strong>to</strong> redistribute<strong>power</strong> in agricultural markets can arrest growing inequality andrekindle agriculture’s ability <strong>to</strong> trigger national economic take-off and<strong>poverty</strong> reduction.In any case, many rural communities will in all likelihood face afuture of out-migration and an ageing population. In Peru’s Sacred144