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It's time for Farmer Power says UNIFAD Chief

Tuesday, 18 May 2010 09:47

Source: New Europe

Dr Kanayo Nwanze, President of the United Nation’s rural poverty agency, the International Fund for Agricultural Development, made his first visit to Brussels after becoming head of the organization. He spoke to Andy Carling  about how empowering small farmers could be Africa’s own solution to under development.

You have been advocating an African solution to it’s problems and that transforming agriculture was the key. What brought you to that conclusion?

The majority of African farmers are small holders, having less than one hectare. There are 80 million small holders producing over 80% of the food that is consumed by Africans. Additionally, agriculture provides 40% of Africa’s GDP and 60% of employment. In the rural sector it is practically the only source of income. It is a source of livelihoods for poor people in rural areas. If we say that agriculture is fundamental, then we must treat it with some dignity and make it profitable. Farming isn’t aid, it’s not a handout to producers, it must be seen as a business that you can invest in and make profits. We must change our mindset to see farming as a business and that farmers are small entrepreneurs. Our business is to make them profitable.

How can this happen with the serious challenges small farmers face?
There are two issues. 4%0 - 60% of production is lost, either by poor storage or poor infrastructure. We need to invest in storage, in roads that can link them to markets. They farm to sustain themselves, but we have evidence that says, with this investment, they can produce a surplus and sell that in markets. We must link production with local markets, provide financial services and we can link people to market information by using mobile phones. If governments will invest in infrastructure, in providing farmers access to local markets and rural development, they can create demand. The role of government is to provide the environment to transform subsistence farmers into productive entrepreneurs. When you can organize farmers into collectives, they will have a greater bargaining power with the private sector.

What role do you see for microfinance?
Yes. IFAD provided the first grant of $1 million to Yunus Grameen Bank to start their microfinance projects and that shows you how committed we are to microfinance. We provide around 20% of our total resources to microfinance. We’ve supported rural finance associations in Benin, which was so successful that the government started a Vice-Ministry for Rural Finance. We have similar success stories in many countries. In Kenya we went into collaboration with the Equity Bank with an official outlay of $50 million and that is now expanding to other banks, with a capital outlay of $200 million. We believe very strongly in providing finance to rural people, in agriculture and small businesses. We are also working with mobile phones to provide cash transfers. We’re also working on remittance finance, with the help of the European Commission. Commercial transfers can be very expensive so we are working on facilities with low costs for transferring money. We also work with communities to use remittances for investment.

Do you work with local governments and traditional structures?
We work with governments, providing loans and grants, but having said that, our projects use community driven development. This is a bottom up approach, from the grassroots. To work with communities you have to build up their capacities, so we work with women’s groups, farmers organizations’. we work with them and engage them in project formation and also in reviewing project outputs. We disperse funds on the basis of outputs. We’ve had very good experiences working with communities. We want them to have vibrant local markets. Once you have a quality local product you can begin to start developing regional and international markets. We’ve had an experience with organic cocoa in São Tomé and Príncipe. we managed to revive the local production and worked with a French company that was interested in investing in high quality cocoa and now farmers are making five times as much money as they were five years ago.

What are you looking for to increase the spread of this Farmer Power?
I was at the World economic forum in Dar es Salaam and I was very gratified to hear business and private sector participants refer to farming as a business. That was a major step forward. We must recognise that agriculture is fundamental to economic growth and that calls for commitment from policy makers and governments at the highest levels and this needs to be sustained. It cannot be like a tap that is turned on and off. we need to look at a tripartite relationship. government providing the policy framework, private sector bringing in investment and farmers being organised into strong organisations and cooperatives. This creates a dynamic relationship, local production  and quality increases and you have a value chain from production to market. What happens when everyone produces? Then people become secondary producers and you have agri-business. This is what has happened in history in countries over the world.

There is a snobbery against rural areas in Africa, does this attitude contribute to the neglect of the agricultural sector?
It does. It goes back to us having to invest in rural economies. In the 80’s people thought that they had to invest in industrialization, building industries around the  urban areas, but they forgot that industry is supplied by excess in agriculture, so many businesses folded, they are like graveyards because they did not also invest in agriculture, which supplied the industry. Today it is beginning to change. If we want to keep the rural youth, we must invest in the rural economy and create opportunity for them. Agriculture, in the MDG, is connected to everything else. I don’t understand why governments don’t put agriculture at the top of the agenda. We need this for peace and stability. There were 40 riots over food in 2007 and two governments collapsed. Do we want to wait for another food riot?