Zero Hunger Challenge through Family Farming
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Transcript of Zero Hunger Challenge through Family Farming
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Shenggen Fan, August 2014
Enhancing profitabilityTransforming smallholder family farms
Shenggen FanDirector General | International Food Policy Research Institute
Asia Pacific Regional ConsultationChennai, India | August 9, 2014
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Shenggen Fan, August 2014
Key messages
Most smallholders farmers are family-based
Smallholders have a big role to play in achieving global food security and nutrition
Not all smallholders are the same and they face an emerging set of challenges and opportunities
Strategies should be tailored to different types of smallholders and country’s level of transformation
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Shenggen Fan, August 2014
Global hunger and undernutrition persist
Source: Data from FAO 2013, HarvestPlus 2011
Prevalence of undernourishment %
Smallholders make up 50% of world’s undernourished people, and live off 2 ha of cropland or less
Prevalence of micronutrient deficiencies
Source: Data from FAO 2013
+2 billion people are micronutrient deficient
Source: UN 2005
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Shenggen Fan, August 2014
Most smallholder farms are family-based
Of the world’s 570 million farms
• 88% are family farms
• 84% are smallholder farms
Smallholder farms provide
• Livelihoods for 2.5 billion people
• More than 80% of food consumed in Asia and Africa south of Sahara
Smallholder family farms are critical in achieving food security and nutrition
Source: FAO 2014Note: Most recent data on holdings used; Data for Algeria in 2001, Burkina Faso in 1993, Egypt in
2000, Iran in 2003; Ivory Coast in 2001; Morocco in 1996; Yemen in 2002
Share of farm size less than 2 ha (%)
Source: IFAD 2013; FAO 2014
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Shenggen Fan, August 2014
Is small still beautiful?
Old wisdom: small is beautiful → efficiency benefits
As agriculture and food systems transform, optimal farm size varies
Small is still beautiful: weak nonfarm growth and increasing rural population
Bigger is better: booming nonfarm sectors and increasing urban population
However, many countries artificially control farm size
Optimal farm size is dynamic concept that reflects different types of smallholders and economies
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Shenggen Fan, August 2014
Differences exist on Potential to commercialize
• Soft constraints — E.g. access to info and financial capital
• Hard constraints― E.g. high population density and low quality soil
Stage of economic transformation • Level of productivity in and outside of agriculture
• Economic diversification and growth
Not all smallholders are the same
Source: Fan et al. 2013
Agriculture-based Transforming Transformed
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Shenggen Fan, August 2014
Food price volatility
Rising agricultural-related risks to health
Climate change and higher frequency / intensity of extreme weather events
Land and water constraints
Limited access to finance and capital
Emerging challenges facing smallholders
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Shenggen Fan, August 2014
Improves long run agric. growth, reduces poverty
Short run/ volatile
Hurts net sellers and buyers of smallholders
Long run/ secular
Price increase
Food price increases and volatility
Access to inputs
Infrastructure
Markets and services
Capacity to convert high food prices
to high income
Capacity to convert high food prices
to high income
Price volatility can have harmful effects on the poor, but long run impacts of higher food prices can increase smallholder income and
stimulate poverty reduction
Food price increases can be positive or negative…
Source: Headey 2014, Christiaensen et al. 2011
Capacity
…but smallholders require support for long-run gains
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Shenggen Fan, August 2014
Rising agriculture-related risks to health
Picture Source: ILRI 2013
Human health increasingly
affected by intense food production
Affects smallholders’ ability to undertake more
productive and innovative activities
Food safety risks • Unregulated food production
• Increasing proximity of industrial and agricultural activities
• E.g. milk and rice contamination
Animal-borne diseases
Source: ILRI 2012
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Shenggen Fan, August 2014
Limited access to financial options for savings and loans
Incompatibility of microcredit with• Risks that affect whole communities
• Seasonality of smallholder production and income cycles
• Smallholders’ long-term needs for more productive capital investments
Uncertain impact of resource-seeking FDI on smallholders
Limited access to finance and capital
Source: Motes 2011
Agricultural investment needs, investment flows, and the remaining gap in developing countries (excl. infrastructure), 2008
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Shenggen Fan, August 2014
Smallholders should be supported to either
MOVE UP
• Smallholders with profit potential move from subsistence farming to profitable farming systems
• Already profitable smallholders scale-up commercial activities
OR
MOVE OUT• Smallholders with no profit potential move out of
agriculture for non-farm employment
Policies should differ across smallholders
Source: Fan et al. 2013
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Shenggen Fan, August 2014
Policies should also reflect country’s stage of transformation
Increased productivity among smallholder farmers
(e.g. smallholder-friendly investment and access to
finance)
Cross-sectoral social safety nets to protect during shocks and acquire skills to undertake more productive activities
Institutional reform to facilitate
consolidation of farms and
movement out of agriculture
High-value agriculture
Improved links to global and urban markets
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Shenggen Fan, August 2014
Economic
Promote market based price stabilization mechanisms that encourage smallholder profitability
Support institutional reforms that link smallholders to value chains
Ensure smallholder-friendly financing and investment
Develop programs and projects that target young farmers
Strengthen land rights for smallholders and promote optimal size of operations through land rental markets
Environmental and SocialAdvance smallholder-friendly climate-smart and sustainable agricultural technologies
Scale up productive and cross-sectoral social safety nets
Pathways to enhancing profitability of smallholder family farms
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Shenggen Fan, August 2014
Land, capital, and skill-building are crucial to develop next generation of farmers
Improve rural infrastructure to increase access to services, goods, jobs, and leisure
Young people + opportunity = “Youth dividend”
Developing youth in agriculture
Percentage of Rural Youth Workforce in India by Sector (Age 15-24)
Source: Motkuri 2013
Source: Brooks, Zorya, and Gautam 2012
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Shenggen Fan, August 2014
Linking smallholders to value chains
Author Type InnovationRegion / Country
Actual / potential beneficiaries and impact
Saenger et al. 2012
Dairy Contract farming
Vietnam Small farmers and processors•Higher productivity•Better milk quality with quality-dependent pricing•Lower per-unit transaction costs with independent quality control
Chenevix Trench et al. 2011
Perishable foods
Modified risk analysis framework
General Poor small farmers and consumers•Higher incomes from producing high-value foods•Lower health risk
Hawkes & Ruel 2011
Multiple incl. fortified foods
Nutrition-sensitive chains
Developing countries
Poor and marginal popula tions•Better nutrition •Improved access to nutritious foods (availability, affordability, and acceptability)
Bernard & Spiel man 2009
Grains Producer coop eratives
Ethiopia Smallholders•Positive spill overs from cooperative activities
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Shenggen Fan, August 2014
India: Linking smallholders to dairy grid
Linked small dairy producers to urban consumers• Chain of production, procurement, processing, and marketing
Created national milk grid of village cooperatives, district unions, and state marketing federations
13 mil. participants, 3.7 mil. women in 2008
Dairy production rose by 4.5% per yr,1970-2001
Source: Cunningham 2009
Increase bargaining power; provide demand information; and reduce transaction costs and risks
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Shenggen Fan, August 2014
Smallholder family farms are key to ending global hunger and undernutrition
Priority-setting in policymaking must include transformation of smallholder family farms
Strategies to enhance profitability should be tailored to different types of smallholders and country’s level of transformation
In conclusion