VREDESEILANDEN &

THE FARMER EFFECTChris Claes, Leuven 21/11/2013

Smallholder farmingand its contribution to saving the world

Overview

• The world situation with regard to agriculture and food systems

• Investing in smallholder farming: how to intervene in complex systems

• A contribution from a Belgian development NGO

By 2050, food production is projected to increase by about 70 percent globally and nearly 100 percent in developing countries. This incremental demand for food, together with demand from other competing uses, will place unprecedented pressure on many agricultural production systems across the world. These 'systems at risk' are facing growing competition for land and water resources and they are often constrained by unsustainable agricultural practices. They therefore require particular attention and specific remedial action. 

Why an increase in grains?

• Historically two reasons:

Population growth (increases with 219.000 per day)

Diets change by increasing living standards ‘grain’-fed intensive meat production (Westen: after WWII, now 3 billion consumers (China, already 2 times as much meat as USA)

• New:

Cars: grains for bio-ethanol because petroleum is expensive (USA in 2011: 400 million ton grain production 127 million ton bio-ethanol)

Consumption at world level: grow th of 21 million ton per year 1990-2005 45 million ton per jaar 2005-2011

USA: 800 kg grain/person/year of which 100 kg directly, the rest through conversion to meat

India: 200 kg grain/person/year, all directly

35 % of 2.3 billion tons of world grain production is for meat production

• 7 kg grain needed for 1 kg beef (increasingly in stables without grazing)

• 3,5 kg grain needed for 1 kg pork• > 2 kg grain needed for 1 kg poultry• 2 kg grain for 1 kg eggs• < 2 kg grain needed for1 kg carp (fish)

FOOD WASTE

• More or less 1/3rd of the food produced globally for human consumption gets lost: +/- 1.3 billion tons per year.

• This equals 6-10 % of greenhouse gasses generated by mankind.

Those who produce our food now are poor and go

hungry

Looking at numbers and statistics

• 3.1 billion people, more than 55 % of the developing world, lives in rural areas

• Between 2020 & 2025 rural population will peak and then start to decline

• Of rural inhabitants, an estimated 2.5 billion are involved in agriculture, 1.3 billion are smallholders, while others include farm laborers, migrant workers, herders, fishers, artisans and indigenous peoples who depend on agriculture and natural resources for their livelihoods.

• 1.4 billion people living on less than 1.25 US $ a day (world poverty benchmark), 70 % of the world’s extreme poor are rural (1 billion people) and live from agriculture

• 925 million (2010) suffer from chronic hunger, which means that their daily intake of calories is insufficient for them to live active and healthy lives (80 % of the hungry live in rural areas)

Smallholder farmers

Almost 90 % of all farms in the world are less than 2 ha. Big or small can not be defined by area only (depends on soil, crop, climate, vegetation…).

Who produces the food?

Poverty, hunger and other crises interlinked, a system crisis

• Poverty persists• Food crisis and hunger• Financial crisis• Ecological crisis• Climate Change

Newspaper ‘De Morgen’, 3/12/2011, Gaston Meskens, Prof. Nuclear Physics, University Gent: “Climate Conferences of the UN will not save the climate… the world needs a global protocol for energy, water, food and transport. Climate is a transversal issue that can be adressed meaningfully within each of these issues.

Food & the limits of the

planet

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Rising to 100% by 2050.

Source: WWF Living Planet Report 2006

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Sustainability, a playground of four elementsTransportTravels 80 % Housing

foot printagriculture/food (25%)

Transversally: climate, energy, natural resources, poverty, …

70 % of Earth Surface is Farm Land

What next?

• Agriculture= problem and solution ( 1,2 billion people; 1,3 trillion US$ in farm revenu; 18-30% GHG emissions)• Vredeseilanden working on solutions on the ground within a broader

framework and vision

Climate Change: Agriculture= problem and solution

1.2 billion people; 1.3 trillion US$ in farm revenue; 13%-30% GHG emissions

Water

• Petroleum may be replaced, water not• An adult drinks 4 liter water per day, 2,000

liter water is used to produce the food we eat daily

• 70% of water use in the world= irrigation• Surface irrigated agriculture grows less than

population (10% less irrigated surface per person than in 1960)

• Water shortages = food shortages

Biofuel Net Energy Ratio for Selected Crops

Crop Biofuel Type Net Energy Return*

Corn Ethanol 1.2 – 1.8Sugar Beet Ethanol 1.2 – 2.2Wheat Ethanol 1.2 – 4.2Sugarcane Ethanol 2.2 – 8.4

Rapeseed Biodiesel 1.2 – 3.6Soybean Biodiesel 1.4 – 3.4Oil Palm Biodiesel 8.6 – 9.6

FOOD FOR FUEL: land for energy

Ethanol & biodiesel : some numbers

• The amount of grain needed to fill up a tank of 25 gallon (= 95 liters) once = the amount of grain needed to feed one person for a year

• The amount of grain that in one year in the USA is converted to ethanol (2011) would be able to feed 400.000.000 persons (on average consumption levels)

• 14 billion gallons production = 6 % of yearly car fuel in the USA

• USA & Brazil (14 billion and 6 billion ton) = 87 % world production

• Biodiesel made of oilseeds, production more equally distributed over different countries

Food Systems: Globalization, markets,

trade agreements, subsidies and Agriculture

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Globalisation and shift in power• small-scale family farms, • Little risk for farmers• Governments created semi-public enterprises that ensured minimum

prices, administered inputs and outputs, extended technologies, extension services, capacity building…

• Situation has changed dramatically: states are absent

• Agro-corporation or Food-corporation = multinational, active in (bio)technology, chemical inputs production, processing, banking activities

• Alliances with others= clusters or oligopoly

• From input markets to retail

Structural adjustment programs, liberalisation of trade, globalisation, foreign investments…

Consumers: 160,000,000

clients: 89,000,000

stores: 170,000

supermarket formats: 600

buyers: 110

processors: 8,600

Semi-processors: 80,000

suppliers: 160,000

Farmers/producers: 3,200,000

The Bottleneck in EuropeGrievink (2003): OECD Conference to Explore Changes in the Food Economy, The Hague, 6-7 February 2003

85 % of food sales in Netherlands, Belgium, France, Germany, Great-Britain and Austria

Concentration of Food SalesLand CR3 CR4 TopEntreprisesAustria 57.4 66.2 Rewe, SPAR (Austria), Aldi, MetroBelgium 61.8 70.4 Carrefour, Colruyt , Delhaize Group, Metro, Aldi

Czech rep 24.8 29.7 Ahold, Schwartz, Metro, Rewe, Tesco Denmark 66.4 – 78 74.1 FDB, Dansk Supermarkt, Dagrofa, SuperBestFinland 83.6 87.6 Kesko, SOKFrance 48.1 60.0 Carrefour, Leclerc, ITM, Casino, AuchanGermany 44.3 56.1 - 66.7 Metro, Rewe, Edeka/AVA, Aldi

Hungary 48.2 51 CBA, Tesco, Co-op Hungary, Metro,

Ireland 54.4 70.3 Musgrave,Tesco,Dunnes Stores, Stonehouse,Italy 29.1 36.0 Coop Italia, Auchan, Carrefour, Conad

Netherlands 51.5 - 62.6 56.9 - 82.6 Ahold, Casino

Norway 62.6 – 83 76.3 - 99.5 Norgesgruppen, Coop Norden, Ahold, Reitan

Poland 14.9 17.7 Metro, Jerónimo Martins, Tesco, CarrefourPortugal 48.3 56.8 ModeloContinente, Jerónimo Martins, ITMRomania 17.5 18.7 - 27.0 Metro, Rewe, Carrefour, Delhaize

Slovakia 25.3 31.4 Tesco, Metro, Rewe, SchwartzSpain 53.8 62.5 El Corte Inglés, Carrefour, Marcadona, Sweden 80.9 – 95 83.8 Ahold, Axel Johnson, CoopNordenUK 42.3 – 60.4 49.3 – 70.6 Tesco, Asda-Wal-Mart, Sainsbury’s,

Morrisons

  2002 2012

carrefour 25,30 % 22,60 %

delhaize groep 21,80 % 22,50 %colruyt 16,00 % 27,70 %

louis delhaize 9,10 % 4,90 %aldi & lidl 10,00 % 15,80 %

makro & metro 8,60 % 4,10 %anderen 9,20 % 2,30 %

Bronnen1          Investigation of the determinants of farm-retail price spreads                Final report to DEFRA by London Economics, 2004                                http://archive.defra.gov.uk/evidence/economics/foodfarm/reports/pricespreads/wholerep.pdf2          ‘De concurrentie neemt sterk toe op de Belgische voedingsdistributiemarkt’            retaildetail communication platform, 27 juni 2012                             http://www.retaildetail.be/nl/case-van-de-week/item/14349-%E2%80%98de-competitie-neemt-sterk-toe-op-de-belgische-voedingsdistributiemarkt%E2%80%993          presentatie Bill Vorley over regoverning markets, Boerenbond, 19/04/2006

Evolution food retail (share of total sales) in Belgium between 2002-2012

Power in the chain

Consumer price remains equal or higher

Producer price decreases

Margin processor remains equal

Supermarket margin doubles

Source: Booz-Allen Hamilton, 2003

Argentina

Brazil

Mexico

Chile

Colombia

Costa Rica

UK

Portugal

Spain

Germany

FinlandDenmark

Switzerland

Belgium

Italy

Sweden

Austria

Greece

Norway

USA

30%

40%

50%

60%

70%

80%

90%

100%

5.0 10.0 15.0 20.0 25.0 30.0 35.0 40.0 45.0

GDP/Capita in USD (2001)

Lar

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Su

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mar

ket

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Mar

ket

GDP and supermarket concentration

Globalisation and market restructuring

• Supermarket power grows:

85 % of food sales in West Europe

Also 60 % in Latin America (20 years!)

30 % in Africa

Increase of supermarket sales: 40 % per year in China

High quality and food safety standards, also penetrating in traditional markets

International trade

• Trade Barriers reduced in industrial countries since 1995• Exception: agriculture and labour intensive products

(comparative advantage for developing countries)• OECD countries: 226 billion Euro support to agriculture; low

international commodity prices (milk, cotton, sugar, meat)• Import barriers (taxes): protect 28 % of agricultural production

of OECD countries• Less market opportunities for developing countries (added

value!)• Commodity suppliers…• Free trade agreements

New barriers: norms and standards: see supermarket

contentration

TECHNOLOGY AND AGRICULTURE

Technological Revolutions

• Industrial revolution:Intensification of land use

Leguminosae

Mechanisation

Fertilizers on basis of petroleum• Green revolution

Wonder seeds (HYV), hybrids, fertilizer and pesticides: unstable plants

Asia & LatinAmerica: increase in productivity high, Africa not

Green revolution did NOT improve access to food for poor people; wonder seeds are not pro-poor, doesn’t take into account the complexity of farming systems

India: poorest 30 % of population (285 million!) no increase in food and nutrient intake during the last 25 years

Environmental problems: erosion, soil intoxification, increase in pests and diseases…

Technological revolutions

• Genetic revolution: extreme form of wonder seeds:

Industry driven (stock driven?)

No access for small farmers• Economic growth instead of increase in productivity/production:

commercial agriculture, export agriculture, foreign exchange, trade balance…

• Simplification: 12 types of grain crops, 23 of vegetables, 35 fruits and nuts

• 70 types on 1.5 billion ha of crop land (100 years ago: 2000 types)

• Rain forest: more than 100 types of trees on 1 ha• Scientists:

“no more research on traditional varieties”• USA: > 80 % of varieties that can be bought (corn, soja) are gmo-

seeds:

“in a few years there will be only gmo-seeds left”

Agro-biodiversity

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Food Production & Population Growth

• Between 1975 & 2005, more than 175 % increase in food production, bigger increase than population increase, 16 % more food per person

• Hunger and food security have grown worse• 78 % of countries with undernourishment problems of

children, are net food exporters!

Food is NO production or technological problem: it’s a problem of ‘having access to food (income, land, knowledge…)

FOOD FOR 9 BILLION BY 2050

- feed the world- reduce rural poverty- reduce the pressure on the earth

You will have to invest in smallholder farming if you want to:

Smallholder farming as solution

‘You don’t have another choice than promote small-scale agriculture. Those small farmers don’t have another option, there are no jobs in industry or services for them. In the short term you can only strive for more means for small farmers, if not, you will create a massive emigraton from rural areas.‘

‘There’s more, small-scale agriculture has 3 big advantages. Firstly there’s more respect for the environment, just because there’s no money for pesticides and chemical fertilizers. That kind of agriculture is more in harmony with the environment and the climate. Secondly, it is a labour-intensive production, creating a lot of jobs. And thirdly, it can be a very productive agriculture, on the condition that those farmers have access to the know-how, resources and the institutional environment tat is needed.

Prof. Oliver De Schutter, VN-rapporteur for the right to food

From neglect to renewed interest for agriculture

• World Bank Development Report 2007: agriculture in the spotlight• Food Crisis 2007-2008• Studies show that a 1 per cent growth in GDP originating in agriculture

increases the expenditures of the poorest 30 per cent of the population at least 2.5 times as much as growth originating in the rest of the economy. Another study shows that agricultural growth is up to 3.2 times better at reducing US$1/day poverty than growth in non-agriculture.

• IFAD 2010: “the key policy priorities to halve rural poverty by 2030 are: developing more sustainable forms of agriculture; greatly enhancing education and skills; rural wage labour marktets tightening; and acces to land.

Composition of total expenditures (%)

Some promises

Agricultural aid as a percentage of total aid, 2002–2006

• Belgian Federal Governement Agreement: focus on agriculture, especially family farming and transformation of products. DGD: 10% 15 % to agriculture

• Declaration of Maputo: 10 % budget spending on Agriculture: +/- 20 % of African countries have reached this %

How to get there?

• Investing in smallholder family farming!• Building up evidence that family farming can indeed

contribute to the elimination of rural poverty, feeding a growing world population and reducing pressure on the earth

• Use the evidence to serve as a leverage for structural change

• Network and cooperate; involve all kind of actors, public, private, civil society, consumers…

Systems thinking

• Sustainability is closely linked to systems thinking

• Economic AND socio-cultural AND ecological sustainability (not OR)

• Changes in one parameter, will induce changes in most of the other parameters

Sustainability at which level: agriculture versus food chain?

• What is produced and how it is produced more and more defined by demand (see market restructuring, food safety concerns, sustainability claims)

• E.g. Consumers have a principal role in the definition of food production

• Many actors involved; farmers on their own will not be able to solve their situation…

• Complexity… Interactions between different stakeholders with different perspectives/needs/visions…

Titel• No straight forward planning• Cause-effect?• Emerging solutions• Multi-actor

• Klik hier om tekst toe te voegen

Need for a new regime, a new paradigm to over come business as usual

• Agro-ecology RegimeSystem thinking

Complexity leads

Building resilience

Capacity to adapt & innovate

Technology and interaction driven

• Biotechnology RegimeReductionist science

Cause – effect

Problemsolving (respond to problems)

Creates dependence on technology

Technology driven

“You cannot solve a problem using the same way of thinking as when the problem was created”

A. Einstein

A contribution of a Belgian Development

NGO

Viable livelihoods for smallholder farmers via income from sustainable agriculture

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Vredeseilanden- Senegal, Benin, Togo, Niger, Gambia, Burkina Faso, Mali - Uganda, Tanzania, Kenya, DR Congo- Nicaragua, Honduras, Ecuador, Peru- Indonesia, Vietnam- Belgium

170 partners150 personnel (40 in Belgium, rest in 7 regional offices)+/- 13 million euro turnover yearlyFunding: public (>65%) and private

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Scenarios Markets dominant Value shift marginal

Energy

expensive

Energy cheap

Valueshift in markets

Ecological and social concerns give direction

Scenario A

Scenario B

Scenario C

How to make a transition towards to a world where market logic that incorporates social and environmental concerns, is leading?

-governments: laws, incentives?

-private sector: CSR in the heart of the business model?

-consumers: consuming sustainable produce?

-performant farmer organisations that produce

quality, quantity, sustainably, lobby, negociate…?

In other words:

• With multiple chain actors, analyze, design and implement at experimental level, green chains, inclusive for family farming

• Build the evidence to advocate with these and other actors for structural changes so that smallholder family farming can take up its role to:

Feed the world

Reduce rural poverty

Reduce the pressure on the earth

Sustainable business models

Supply side model

Business driven

model

Donor driven model

Does not empower

Small producers to succeed over long term

Lacks market insight and raises

Empowerment and sustainability

problems

Lacks critical buyer relationships that ensure market demand

Sustainable model

Realisation of economic objective through multi-stakeholder dialogue processes

Market complexity

Different actorsfarmer organisation

private companypublic authoritiesresearch instituteNGO

Multi-stakeholder dialogue

Experiments

Innovation

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Realisation of political objective via ‘political’ alliances

Multi-stakeholder dialogues

Experiments

Innovation

Evidence

‘Political’ alliance

Advocacy (decisionmakers private- and public sector)

Competitive Rice Chains in West-Africa

• To compete with imported rice in function of food sovereignty1. Set up multistakeholder programs that try to design and

implement these chains: economic rice farmer organisations, local governments, business service providers, traders, consumer organisations…

2. Support national farmer platforms to advocate to national governments for a supporting environment , and West-African platforms to advocate at the regional level (e.g. for harmonized import taxes) based upon the evidence from the experiments to create competitive rice chains

Examples at:

www.veco-ngo.org