Dynamic land markets Conclusion: meeting small-scale farmers in their markets 62

13 Faced with changing markets and opportunities in value chains, farmers have options to ‘step up’ to formal markets, ‘hang in’ to informal markets, or ‘step out’ into other sectors Dorward et al. 2009. Much analysis of ‘inclusive business’ does not distinguish between these different groups, and sees potential for trading with the majority of producers at the ‘base of the pyramid’. But inclusive business and value chain interventions work mainly with the farmers best equipped to step up. There is some justiication for such an approach. These value chain-ready producers, who may already be formally organised, represent the low-hanging fruit. They are also likely to be part of agriculture in the next decade or more, and are ready to invest in upgrading production to meet formal buyers’ needs. In so doing, they provide employment and other knock-on beneits to the wider rural economy. But in coming decades, a soft landing for the rural economy may depend on getting beyond the 2-10 per cent of producers reached by many of the new value chains. Wiggins Green 2012a argues for bringing an additional 25 per cent of farmers into agricultural development, though not the entire smallholder sector. He envisions a widespread agrarian transition similar to what seems to be starting in China: ‘the other [two thirds] of the rural population can then either increasingly earn their livelihoods from the non-farm economy, or move to towns and cities … [and] gradually lend, rent, or sell their land to their full-time farming neighbours’ Wiggins 2012. Wiggins’s 25 per cent represent another tier of small-scale farmers who could ‘step up’ to full-time farming — but value chains and inclusive business may not be effective approaches to reach this group. An alternative state-centred approach is to harness public procurement programmes so that governments purchase food directly from small farms. ‘Private enterprise cannot reach all the places that the state is able to,’ said Brazil’s agricultural minister in 2010, when Mercosur adopted Brazil’s public procurement scheme for agriculture Fraysinnet 2010. Sector-wide organisations and policies, like that seen in the Colombian coffee sector see Section 3.2.3, may also be able to reach a very broad base of producers. For the poorest small-scale ‘producers’ who are net food consumers, Jaeger 2010, for example, argues that there are needs ‘far more immediate and these are issues of development, of food security and poverty alleviation, rather than commerce… The activities of projects and schemes and government interventions that seek to include the very smallest scale farmers are costly and constraining the very schemes that can bring prosperity to a region.’ In the Knowledge Programme’s ifth Provocation Seminar, 3 Miguel Méndez, the Dutch agency SNV’s representative for Nicaragua, stated that the poorest of the poor cannot be reached by inclusive business and must be the object of social programmes. Rights-based approaches explicitly aim to serve the ‘other 90 per cent’. But as recipes for development, rights-based proposals may still be conceived by experts and implemented from the top down, much like value- chain initiatives — a pattern noted in the world of urban development by Diana Mitlin in the Provocation Seminars IIED 2011a. They may start from preconceived ideas of what farmers need and lack, rather than from a direct understanding of farmers’ own strategies and logic. Both sides of this debate, then, risk continuing a tradition of paternalistic interventions — government, donor and private programmes that aim to ‘develop’ small producers without addressing their speciic context and assets, or their capabilities and aspirations. On both sides, the agency perspective has the potential to identify where small-scale farmers really are and where they want to be, and can help external interventions adapt accordingly. smallholders — would quit farming if they had the chance. Satender Arya and Sanjeev Asthana carried out surveys in two Indian states and found that 77-81 per cent of farmers said they do not want their children to take up farming as an occupation. In Kenya, 64 per cent of a 900-household survey preferred wage labour cited in Proctor and Lucchesi 2012. The face of small farms may change if there are fewer farmers in the next generation and many are looking for opportunities elsewhere. Along with the off-farm jobs discussed below, dynamic land markets may facilitate shifts in who is farming, and on what land.

2.3.2 Dynamic land markets

Along with demographics, the distribution of land in the countryside is changing. Landholdings in a number of countries have splintered over recent decades Figure 2.6, and the trend of declining farm sizes continues in most places — though it has now reversed in China as migration and off- farm employment have grown, according to Huang et al.’s 2012 study of dynamics on China’s small-scale farms. Amid this shufling of landholdings, evidence from some countries and many local cases suggest that land markets are very dynamic and that renting and sharecropping are increasing. 3 www.iied.orgprovocation-series-pro-poor-business-development- smallholder-empowerment 14 Source: Proctor and Lucchesi 2012, based on Van der Geest 2010 elaboration from United Nations, World Population Prospects, the 2008 Revision. Estimations are based on population igures for the age group 15-24 and urbanisation rates. 250 200 150 100 50 1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050 Eastern Asia South-Central Asia South-Eastern Asia Sub-Saharan Africa Middle East and North Africa Latin America and the Caribbean Rural youth millions 190 230 136 35 26 62 Figure 2.6 Average farm size ha by year Source: Reproduced from Zhou et al. 2008 6 5 4 3 2 1 DR Congo Ethiopia China India Indonesia Nepal Pakistan Philippines A verage farm size ha 1970 19 90 1977 19 89–92 2001-02 19 80 19 90 19 99 19 71 19 91 19 95–9 6 19 73 19 93 19 92 200 2 19 71–73 19 89 200 19 71 19 91 15 Tenant farmers, as a marginalised and often overlooked segment of rural economies, can face particular disadvantages. In the Learning Network, Alberto Monterroso highlighted a pervasive pattern in Central America, in which large landowners ‘rent’ tiny tracts — often one-ifth of a hectare, suficient only for subsistence farming — in exchange for labour or a portion of the crop. In Guatemala, he writes, landowners who share the harvest but not the cost or risks of farming are able to sell very cheaply, depressing market prices — and, in turn, tenants’ income. In the wake of the 2007-2008 food crisis, the alarm has also been raised over ‘land grabs’. Foreign buy-ups of agricultural land in sub-Saharan Africa and other developing regions may put unprecedented pressure on land resources and land tenure systems. Those most vulnerable to losing their land are small- scale farmers who lack formal tenure Cotula and Vermeulen 2009. But besides big commercial land deals, which are relatively easy to trace, 4 there are local land rental markets not always accounted for in national statistics. These are creating new opportunities for many farmers to develop their agricultural activities. In rural China, Huang et al. 2012 describe farmers scaling up their operations by renting and consolidating land left unused by migrants, combining very small holdings to obtain a sustainable livelihood. Small producers in Indonesia are also increasingly renting and sharecropping to consolidate land and scale up production, as Ronnie Natawidjaja noted in the Learning Network.

2.3.3 Beyond the farm: off-farm jobs,