Underlying Causes of Poverty in Agriculture CARE Poverty

Underlying Causes of Poverty in Agriculture CARE Poverty Workshop 16 th June 2010 Dr George Welton

Low input The Problem = Farms Low output

4 Main Causes • Structural – irrigation, size of land-plots, credit, government policy and funding • Education – in production, markets, finance • Social – Collective and social action • Markets – imports, closed or hard to access export markets

Structure • Land-plots – Less than 1 hectare of cropped land – Split between 3 -4 different plots – Land as a source of security – 2 million hectares of undermanaged land • Irrigation – WB project repaired physical structures – Needs local management – Amelioration Associations

• Credit Structure – High cost – Banks unprepared to use land as guarantee – Fear of debt – for reasons of security • Government – Mo. Ag about 1% of government spending – Unclear policy on agricultural priorities – Centralisation of decision making – Little local government capacity

Education • 908 people trained in agricultural in VET Centers in 2009/2010 across the country – No national system for training small farmers – Little infrastructure for community-based education of farmers – Few community based associations • Little information on new markets and prices • Little information on business planning

Social Capital and Local Communities • Inability to work collectively – – Failing amelioration associations and low payment for irrigation Little collective management of farm machinery Higher input prices and lower use of inputs Lower sales prices • Few Community Based Organisations – Little knowledge transfer – No input into management of shared resources or protection against disease • Little interaction with central/local government – No input on management of shared resources like land – Little information or input on management for disease risk

Community Organisations can help… Farm Associations…. • Can utilise and manage assets… • Can buy cheaper inputs • Can collectively sell outputs • Can share knowledge o. On goods o. On markets and prices

Other Community Organisations Amelioration Associations Needed to… • Build trust in the system and local ownership • Collect fees from small farmers for irrigation • Maintain small infrastructure Agricultural Service Center Needed to: • Access to reliable inputs • Source of expertise and advice • Even small machinery

CLOSED West: Supply Issues Cheaper products Similar products Growing exports

Exports doing better slowly… Official Exports 2004 -2009

2009 Exports $15. 7 Citrus – mostly manderins $70 million nuts $32 million wine $54 million Spirits (mostly Cognac)

2009 Exports surprises Exports (Million USD) Cattle Azerbaijan Sheep 16. 5 Egypt 2. 1 0. 4 Lebanon 3. 8 Saudi Arabia 9. 3 Armenia 0. 8 Jordan Live animal exports 2007 - $42, 000 2009 - $34 million Total 1. 1 16. 9 17. 1

Food Imports and Exports (Million USD)

Imports…. still space to substitute

Meat Imports 2009 $37 million mostly from USA $12 million mostly from Brazil and Canada $10 million mostly from India

Vegetables Milk, dairy and honey $24 million. Most milk is powdered and VERY cheap $2. 6 million Onions and garlic $3. 8 million $3. 5 million $3. 7 million

Conclusions • Even infrastructure is social and needs community ‘buy-in’ if it is to be beneficial to poor communities • Widening participation and ensuring security is essential for strengthening markets • Import substitution in food appears to offer the greatest opportunity for pro-poor growth in the medium term

Thank you