Power, rights, and inclusive markets: Public policies that support small-scale agriculture

(by Marieke Poissonnier and Hielke Van Doorslaer, Oxfam)

Agriculture is back on the agenda for both governments and donors. A new era of high and volatile food prices, a growing and more affluent global population, and climate change have refocused minds on the need to invest in agriculture. As a consequence agricultural foreign direct investment (FDI) in developing countries rose from $600m annually in the 1990s to $3bn in 2005–07. Unfortunately, most of the investments are often biased towards large-scale agricultural projects. However, good policy can drive more and better investment to small-scale producers.

Oxfam's message to policymakers is simple: government has a central role if agricultural investment is to combat poverty and hunger. Policy makers, in governments and donor agencies around the world, must embrace their role in shaping agricultural markets and investments. The following principles should guide them:

1. Stand by your small-scale producers

There are 500 million small-scale farms across the world supporting two billion people. And 80 per cent of hungry people live in rural areas, mostly working as small-scale food producers. As a result, growth in this sector has twice the effect on the poorest people as other sectors.

If policies are to reach the poorest people, they must be targeted at supporting small-scale producers and creating non-farm jobs. Women small producers require particular investments and support to overcome entrenched exclusion and discrimination.

2. Put power at the heart of your policies

People are poor because they lack power, both in markets and in politics. Small-scale producers are vulnerable to market abuses such as cartels and monopolies, and too often are dominated by larger market players who capture the profits, whilst transferring the risks downwards.

Policy makers should both protect small-scale producers from market abuses (e.g. by using competition laws) and support mechanisms that give them power in markets (such as producer organisations) and politics (such as platforms for producers to engage in policy decisions).

3. Protect basic rights

Left unprotected by governments, communities and small-scale producers can find themselves robbed of their basic rights. Land grabs, abuses of workers, stolen water: these can all happen where government is missing. States have a duty to protect human rights and to regulate the private sector. Policy-makers should strengthen labour laws and introduce protections - such as a requirement for free, prior and informed consent - and transparent contracts in land deals.

4. Make markets inclusive

Small-scale producers, and their communities, can use markets to lift themselves out of poverty. For this to happen, markets must allow small-scale producers to participate and thrive.

Often, it requires support from government to help traditional markets evolve, e.g. through regularised grades and standards to raise quality, protection from cheap imports and facilitating investment in market infrastructure, such as urban wholesale markets.

Or it can require governments to shape formal markets so they give access to small-scale producers, by training small-scale producers to meet sustainability or safety standards.

There is no silver bullet in tackling poverty and hunger but we know that supporting small-scale agriculture and creating decent rural jobs is a big piece of the puzzle. We hope to see policy makers embrace this and shape markets and investments so they deliver a fairer and more inclusive food system.

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