Wednesday, 1 June 2011

The food conundrum: Can small farmers and big business work together to solve the world food crisis?

By John Humphrey

I turned on the radio yesterday morning and just caught the end of the interview between Nicola Horlick, a London investment banker, and Barbara Stocking, the Chief Executive of Oxfam GB, on BBC Radio 4’s Today Programme. They were discussing the latest Oxfam report on global food security. One big area of disagreement was the role of small farmers in global food production. Horlick was arguing strongly that the increasing global food needs meant that small farm production would not be sufficient to meet global demand and that this justified large-scale investments in agriculture in developing countries, and particularly in sub-Saharan Africa.

Coincidentally, Chris Brett, who works for one of the world's largest global food traders, Olam International, made a presentation yesterday at the globalisation team's Business and Development, ‘food for thought’ seminar series. Was he in favour of large-scale farming in Africa?

Well, up to a point. Olam owns farms and plantations, but it also works with 1.4 million small farmers worldwide. Inputs for its cotton ginning mills, cashew processing plants, etc., come from small farmers. Working directly with thousands (or tens of thousands) of small farmers is not efficient, but when these farmers are organised into farmer groups or cooperatives, companies like Olam can incorporate them into the supply chain. Furthermore, the farmer groups have much more capacity to invest in better inputs, equipment and processes than individual small farmers.

Olam is not the only large company committed to working with small farmers. Across Africa, there are many examples of links between groups of small farmers and large companies. Global companies such as Unilever are committed to working with small farmers.

The argument about the global food crisis and how to tackle it raises big issues:
  1. Do we have a global food crisis so urgent that small farmers need to be pushed to one side? Dirk Willenbockel from the globalisation team at IDS worked on the analysis of food price trends used by the Oxfam report and also contributed to the major study on global food and farming produced by the UK government's Foresight programme. The Foresight programme's final report concluded that smallholder farming has a role in global agricultural solutions: ‘Smallholder farming, which has been long neglected, is not a single solution, but an important component of both hunger and poverty reduction’.
  2. Will increasing production alone solve the problem of hunger? Nicola Horlick's argument focuses on global availability of food. The implication is that there will not be enough food to go around if we don't produce a lot more and do this through large-scale farming. But availability of food is not enough. People need access to food: the capacity to produce it or buy it.
Chris Brett from Olam International also raised the issue of food access in our seminar. Incorporating small farmers into agricultural value chains means that they not only generate the incomes needed to buy food, but also keep land and retain the capacity to produce food for their own consumption. With rising prices and global food shortages, this sounds like a good strategy for reducing risk. London financiers have taken a lot risks in the past few years that have had disastrous consequences for UK taxpayers. Are African farmers next in the firing line?

The good news is that, unlike Nicola Horlick, some of the big companies actually involved in agriculture have a much more nuanced view about how to respond to the global food crisis.

1 comment :

Dirk Willenbockel said...

John, your point about collaboration between smallholder groups and large corporation as a means to raise productivity and integrate small farmers into value chains adds an important fresh perspective to the ongoing discourse about the future of small-scale farming in Africa and elsewhere.

IDS recently hosted an online debate triggered by Paul Collier’s 2008 piece in Foreign Affairs (www.ids.ac.uk/go/news/do-small-scale-farms-in-africa-have-a-future), in which he argued that the traditional peasant:

“… mode of production is ill suited to modern agricultural production, in which scale is helpful. In modern agriculture, technology is fast-evolving, investment is lumpy, the private provision of transportation infrastructure is necessary to counter the lack of its public provision, consumer food fashions are fast-changing and best met by integrated marketing chains, and regulatory standards are rising toward the holy grail of the traceability of produce back to its source....”.

A nice and concise synthesis of that debate can be found on www.future-agricultures.org/pdf files/FAC-E-Debate-Report_Big_Farm-Small_Farm.pdf.

But coming back to Chris Brett’s seminar, I must admit that I didn’t find his concrete example of fostering smallholder rice production in Nigeria particularly encouraging. As he pointed out, the viability of the initiative depends on the maintained presence of high import tariffs, which keep consumer prices unnecessarily high and prevent imports from other low-income countries.

If you care to reach out to the nether regions of the blogosphere, you may try to get your points across to Tim Worstall, who yesterday posted a hyperventilating if misleading polemic against the Oxfam Report (http://timworstall.com/2011/06/01/oxfam-growing-a-better-future/#more-24416) in general and the suggestion to step up support for peasant agriculture in particular (scroll towards the bottom of the lengthy rant).