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May 27, 2008

Traditional agriculture equals poverty

by Jeffery Sachs

Many poor, food-importing countries around the world have become desperate in recent months, as global prices of rice, wheat, and maize have doubled. Hundreds of millions of poor people, who already spend a large share of their daily budget on food, are being pushed to the edge. Food riots are mounting.

But many poor countries can grow more food themselves, because their farmers are producing far below what is technologically possible. In some cases, with appropriate government action, they could double or even triple food production in just a few years.

The idea is basic and well known. Traditional farming uses few inputs and gets poor yields. Poor peasants use their own seeds from the preceding season, lack fertiliser, depend on rain rather than irrigation, and have little if any mechanisation beyond a traditional hoe. Their farms are small, perhaps one hectare (2.5 acres) or less.

Under traditional agricultural conditions, the yields of grain - rice, wheat, maize, sorghum, or millet - are usually around one ton per hectare, for one planting season per year. For a farm family of five or six living on one hectare, this means extreme poverty, and for their country, it means reliance on expensive food imports, including food aid.

The solution is to increase grain yields to at least two tons - and in some places to three or more tons - per hectare. If water can be managed through irrigation, this could be combined with multi-cropping (multiple harvests per year) to produce a crop during the dry season. Higher and more frequent yields mean less poverty in farm families, and lower food prices for cities.

The key to increasing yields is to ensure that even the poorest farmers have access to improved seed varieties (usually "hybrid" seeds created by scientific selection of seed varieties), chemical fertilisers, organic matter to replenish soil nutrients and, where possible, small-scale irrigation methods, such as a pump to lift water from a well nearby. There is nothing magic about this combination of high-yield seeds, fertiliser, and small-scale irrigation. It is the key to the worldwide increase in food production since the 1960s.

The problem is that these improved inputs have bypassed the poorest farmers and the poorest countries. When peasants lack their own savings accounts and collateral, they are unable to borrow from banks to buy seeds, fertiliser, and irrigation. As a result, they grow food the traditional way, often earning little or nothing from their harvest, because it's not even enough to keep their families alive.

History has shown that government action is required to help the poorest farmers escape the low-yield poverty trap. If farmers can be helped to obtain simple technologies, income can rise, and they can accumulate bank balances and collateral. With a bit of temporary help, perhaps lasting around five years, farmers can build up enough wealth to obtain inputs on a market basis, either through direct purchases from savings or through bank loans.

Around the world, government-run agricultural banks in poor countries once not only financed inputs, but also provided agricultural advice and spread new seed technologies. Of course, there were abuses, such as the allocation of public credits to richer farmers rather than to needy ones, or the prolonged subsidisation of inputs even after farmers became creditworthy. And in many cases government agricultural banks went bankrupt. Still, the financing of inputs played a huge and positive role in helping the poorest farmers to escape poverty and dependency on food aid.

During the debt crisis of the 1980s and 1990s, the International Monetary Fund and World Bank forced dozens of poor food-importing countries to dismantle these state systems. Poor farmers were told to fend for themselves, to let "market forces" provide for inputs. This was a profound mistake: there were no such market forces.

Poor farmers lost access to fertilisers and improved seed varieties. They could not obtain bank financing. To its credit, the World Bank recognised this mistake in a scathing internal evaluation of its long-standing agricultural policies last year.

The time has come to re-establish public financing systems that enable small farmers in the poorest countries, notably those farming on two hectares or less, to gain access to needed inputs of high-yield seeds, fertiliser, and small-scale irrigation. Malawi has done this for the past three seasons, and has doubled its food production as a result. Other low-income countries should follow suit.

Importantly, the World Bank, under its new president, Robert Zoellick, has now stepped forward to help finance this new approach. If the bank provides grants to poor countries to help small peasant farmers gain access to improved inputs, then it will be possible for those countries to increase their food production in a short period of time.

Donor governments, including the oil-rich countries of the Middle East, should help finance the World Bank's new efforts. The world should set as a practical goal the doubling of grain yields in low-income Africa and similar regions (such as Haiti) during the next five years. That's achievable if the World Bank, donor governments, and poor countries direct their attention to the urgent needs of the world's poorest farmers.

The Guardian

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