IFAD’s Rural Development Report 2016

IFAD’s Rural Development Report 2016

The International Fund for Agricultural Development (IFAD) presented a new report, “The Rural Development Report 2016: Fostering Inclusive Rural Transformation”, in Nairobi late last month. The nearly 400-page report, which includes numerous tables and figures, looks at the whole of sub-Saharan Africa and concludes that the agricultural sector is expanding but that its foundations are weak, preventing any broad-based reduction in poverty and inequality. The report demonstrates that clear government policies and investments in smallholder agriculture can make a significant difference. It sees the agricultural sector in East and Southern Africa as being transformed by increased productivity as more land is being cultivated but finds agricultural growth has not always led to poverty reduction. Many small farmers in East and Southern Africa continue to live in poverty while struggling to own land and access credit. It concludes that agricultural growth is not reaching its poverty-reducing potential. The report claims that with sufficient supportive government action, growth in agriculture could be eleven times more effective in lifting people out of poverty than growth in other sectors of the economy, such as mining, utilities and services.

The report also points out that inclusive rural transformation does not happen automatically: it must be made to happen. To do this, four interconnected strategies are needed: overcoming the challenge of increased agricultural productivity; the promotion of manufacturing and the optimization of opportunities in agriculture; support for the rural non-farm economy; and finding an answer to the problem of unemployment or coping with the youth bulge. The IFAD report notes that despite rapid urbanization over much of the region, all projections indicate that young people reaching adulthood and seeking to establish families and livelihoods will remain predominantly rural in sub-Saharan Africa for at least two more decades. Creating jobs for youth both on and off the farm is crucial. In addition, to further combat poverty, the report suggests a special focus should be given to encourage young people into the agriculture sector and create a conducive environment for the private sector to invest in smallholder agriculture. Rural transformation, it insists, must go beyond getting food onto the table, it must help rural youth enter and actively participate in the economy.

The report notes just how far recent changes have presented challenges to rural communities. Urbanization, demographic shifts, the growing integration of food supply chains and food systems, and the rising domestic and foreign investment in the sector, all combine to generate new risks for those involved in smallholder agriculture. These also produce new opportunities for entrepreneurial activity and employment, in the food value chains, in processing and transport, in developing and servicing technology and infrastructure. The report also notes that the diffusion of digital devices and Internet access allows for more information and knowledge to be generated and shared with speed and accuracy, if not always equally. In addition, climate change is leading to concern about the sustainability of some current agricultural practices. It also underlines that smallholder farmers already face long-standing difficulties in accessing resources, technology, inputs, finance and knowledge as well as access to markets. Equally, pressures on rural resources are growing because of population growth, unsustainable agricultural practices, urbanization, mining, land-use changes and conversion, and deforestation.  It is already difficult to meet the rising demands for food and the threats to food security in many parts of the region.

This latest IFAD report, in fact, underlines the importance of exactly the policies that the government of Ethiopia has been implementing over much of the country as part of its determination to reduce poverty, to provide smallholders with the means for transforming rural areas, achieve the Sustainable Development Goals and, most recently, the policies announced to reduce youth unemployment.

The IFAD Report examines rural development through the prism of the transformation of rural areas and the wider economy, and underlines a number of ways forward. The first is that rural transformation does not happen in isolation, but as part of a broader process of structural transformation shaped by the inter-linkages between agriculture, the rural non-farm economy, manufacturing and services. It emphasizes that rural transformation is essential for structural transformation. Another fundamental point is that inclusive rural transformation does not happen automatically: it must be made to happen. It does, of course, have the effect of altering the structure of landholding, the technologies in use, the capabilities and capacity of local populations, and the distribution and dynamics of the labor force. Benefits are not confined to the rural areas; they are an integral part of the overall development process. Most important perhaps is the report’s assertion that inclusive rural transformation hinges on agriculture, which must retain its importance as the transformation progresses. It stresses that hundreds of millions of rural people will be key actors in developing sustainable development solutions. It therefore focuses on inclusive rural transformation as a central element of the global efforts to eliminate poverty and hunger, and build inclusive and sustainable societies for all.

The report also notes that improving prospects for tomorrow’s farmers entails more profitable management of existing farms, with enhanced access to technology, markets, finance, information and infrastructure. It suggests that because of the widespread lack of secure property rights over land, progress in land administration and documentation of tenure needs to be consolidated and expanded as a matter of urgency, and rental markets strengthened. The report notes that about half the countries in the world are engaged in some form of land tenure reform and as of 2010 around a billion farmers had already benefitted. The report stresses that all successful programs have involved “major investments in the infrastructure of land registration, including cadastral surveys, computerized records, training in legal rights and resolution of land disputes.”

Related areas to be addressed include closing the gender gap, obtaining access to assets, inputs and services, land, livestock, labor, education, extension and financial services. Equally, those who leave the agricultural sector need to acquire technological skills or vocational training skills to provide for employment prospects and abilities as well as the life skills for industrial or other working environments. All this needs to be accompanied by expanded access to finance and financial services. Growth in the rural economy also requires significant infrastructure development. Similarly, attracting private investment into agriculture and into the rural non-farm economy is critical. Improving the prospects for private investment in value chains that serve smallholders must be a priority.

The IFAD report provides detail of two impressively successful projects in Ethiopia: the Pastoral Community Development Project supported by IFAD, the government of Ethiopia, the World Bank and the International Development Association; and the Managing Environmental Resources to Enable Transition to More Sustainable Livelihoods program (MERET), supported by the UN World Food Program (WFP) in partnership with the Ministry of Agriculture and Rural Development. The first of these is a long-term intervention over 15 years to reach 4.7 million people. A key element has been to decentralize woreda (district) processes and empower pastoral communities, local administrations and regional governments to better manage local development. It involved a bottom-up community-driven development approach to promote, creating genuine participation of communities who engaged in a dialogue to ensure that the available resources were applied to their development priorities. They identified education, health, water supply and animal health care services as their investment priorities. The multi-phase design of the project allowed lessons to be applied in subsequent phases, “enhancing inclusiveness and accountability of planning processes.” This allowed for greater outreach and consolidated reform processes and institutional measures, offering tighter integration of pastoral communities into the national policy agenda. Policy dialogue in developing pastoral areas is now an established practice in Ethiopia, and the Pastoral Standing Committee in the House of people’s Representatives has become a strong proponent of pastoral institutions.

The Managing Environmental Resources to Enable Transition to More Sustainable Livelihoods program (MERET) aims to address root causes of vulnerability and chronic food insecurity by rehabilitating natural resources and enhancing land productivity. It is being implemented in 72 woredas of five regions and in one chartered city, Dire Dawa. It provides food assistance through food-for-work as a short-term means of enabling longer-term progress in agriculture. The main activities are physical and biological conservation, reforestation, small-scale irrigation, road construction and maintenance, income generation, livelihood diversification and soil fertility improvement. A core element is that the community defines and prioritizes problems and identifies solutions. The community implements activities through its own labor and management, with external support as needed or available. It therefore promotes a high level of community awareness and ownership of environmental rehabilitation. An impact evaluation completed in 2012 found that MERET participants were undertaking income-generating activities including livestock fattening, plant nurseries, bee-keeping and fish production. Farmers were using small-scale irrigation and shallow wells in increasing numbers. Savings rates for MERET households showed significant increases and those that saved money were also more likely to have made formal arrangements with a financial institution than others.

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