Farm investment helps slow migration - GLOBAL - More investment by governments in agriculture and the right farm policies would help keep rural populations on the land and reduce migration, according to the United Nations Food and Agriculture Organization.

Major FAO study on roles of agriculture

This is among the conclusions of a major FAO research programme aimed at analyzing the various roles played by agriculture in the societies and economies of developing countries. The findings were made known as Europe and North America come under increased pressure from illegal migrant flows.

The FAO study addresses the problem of rural-to-urban migration, but, says Randy Stringer, the senior economist in charge, “It’s clear that the forces at play are the same as the ones in international migration”.

Funded by the Government of Japan, the Roles of Agriculture (RoA) programme was launched in 2000 and targeted on 11 countries representing a broad range of economic and environmental conditions in three continents.

One of RoA’s main conclusion is that governments and policy makers are largely unaware that “Properly managed, agriculture can not only produce food but also have a positive impact in such areas as poverty alleviation, food security, population distribution, and the environment.”

Urban Migration

In the past 50 years, according to RoA, some 800 million people have moved from the countryside to the cities. Large numbers have also migrated across borders from south to north and from east to west. The rural exodus looks like gaining further momentum as rapid economic growth in India, China and parts of Latin America draws growing numbers of country dwellers into urban centres.

Rural dwellers currently represent over half – 60 percent – of the population of developing countries. That share is expected to drop to 44 percent by 2030 as millions more head for the cities, according to a RoA report. The continuing exodus is clearly bound to have profound social, economic and environmental repercussions.

But appropriate agricultural policies can do much to regulate the rate of rural out-migration and ease the pressure on urban centres, the report says. This translates into reduced pollution, congestion, crime and disease caused by over-crowded living conditions.

Chile, for example, managed to cut back the numbers of migrants to the cities by stimulating employment in the countryside through export-oriented fruit growing and processing, RoA noted. Similarly, an economic boom in Ghana led by the cocoa sector resulted in the return of two million Ghanaians who had migrated to Nigeria.

One reason why people move to the cities is in search of higher wages. But Ethiopia found that investment in fertilizer, new technology and livestock could narrow differences between rural and urban wage levels – and reduce migratory flows. Rural migration generally focuses on the country’s capital and a few large cities. RoA suggests that the trend can be countered through the creation of medium-sized towns based on the growth of agriculture-sector services and manufacturing.

More generally speaking, it said, governments needed to invest in education, access to technology and physical and social infrastructure in rural areas so country dwellers could enjoy the same level of amenities as are available in towns.

More investment

Although, as Stringer noted, “The returns to public investments in agriculture are very high”, governments and communities are not investing enough resources in the sector. One reason was that, as countries developed economically, agriculture’s share of the Gross Domestic Product (GDP) and employment fell. Food purchases became a minor portion of household budgets. But another reason was that governments and policy makers failed to appreciate agriculture’s indirect, non-food, importance in the development process, Stringer noted. “Regulating migratory flows is just one of the ways in which agriculture can contribute,” he said. “Agriculture’s indirect contributions are not well understood, seldom analyzed in the context of development and rarely reflected in national and rural development policy formulation,” he added.

Poverty reduction

RoA’s researchers found that agricultural growth often helped reduce poverty more than any other economic sector. It had dramatic effects on poverty and hunger that were felt not only in rural areas but in urban ones too. It acted as a multiplier. Every percentage point in agricultural growth was equivalent to a 1.5 percent decrease in poverty at national level, though the benefits were not necessarily distributed evenly between town and country. In Indonesia, for example, agricultural growth was found to be responsible for a 50 percent reduction in rural poverty and a 36 percent drop in urban poverty.

(One of the ways this occurs is that as farm production increases prices drop and lower food prices translate into more disposable income for urban dwellers). But farm production had to move from the subsistence level to some scale of commercialization before any impact was felt on food insecurity and poverty. In addition, which farming sectors produced the growth was of fundamental importance.

China, for example, has become self-sufficient in grains in order to achieve national food security. But China’s consequent sharp rise in cereals production has had negative effects in terms of overexploitation of natural resources and degradation of the environment, and has failed to significantly increase rural incomes. Any gain has been offset by a rise in marginal costs and lower prices due to higher production. “For China to achieve integrated rural and urban development it is necessary to move from agriculture to off-farm opportunities which result in increased labour productivity,” RoA concluded.

Elephants or onions?

Just how agriculture impacts on economies in areas that have nothing to do with food, feed or fibre is shown by the “Elephants or onions” riddle facing the Kenyan government. Kenya’s Amboseli National Park, a spectacular, 392 km2 wildlife preserve at the foot of Mt Kilimanjaro, features elephants and other land animals and is also one of the world’s leading bird sanctuaries. In 2004 it attracted some 200,000 tourists and earned about US$ 3.5 million. The Amboseli area is inhabited by Maasai pastoralists whose traditional herding activities are compatible with the wildlife. On the contrary, they provide the park with such “services” as environmental management and bear the costs of living cheek-by jowl with wild animals in terms of personal safety, grazing competition and damage to crops.

But they receive no payment for their indirect contribution to the tourism industry and have consequently turned to farming to increase their incomes. Some of the land is now adjoining the park’s southern and eastern borders is therefore now fenced in to protect the Maasai’s tomatoes and onions from intruding elephants. But the fences limit the animals’ access to water, food, breeding grounds and seasonal migration routes. The quandary is whether to protect the Maasai’s onions or the tourists’ elephants. The solution offered by RoA is to pay the Maasai in recognition of the services they provide to the park. Such PES (Payment for Environmental Services) would mean they no longer had to grow tomatoes to make ends meet. They could easily be funded by a one-dollar increase in the park entrance fee.

Services

While the Maasai’s services to Kenya’s tourism industry remain unrecognized (and unpaid) there are many other ways in which agriculture assists the economic and social development of nations. It can play a crucial role as a social buffer in times of economic crisis. In many cases, the farm sector has proved more resilient than others in economic downturns, providing an economic and social safety net for urban workers, who migrate back to the countryside, and for the poor in general.

It is also an essential element in preserving the environment, impacting at global level on biodiversity, climate change and wildlife habitats and at regional and national level on such areas as soil conservation and the rural landscape. As incomes grow, people are in a better position to pay for quality environment and are prepared to spend more to obtain it. But environmental damage, once done, is difficult and expensive to repair, RoA noted.

The issue should thus be addressed as early as possible in the development process – possibly through direct incentives to small farmers to invest in the protection of natural resources, RoA said. The RoA programme is currently half way through its second phase, which is aimed at producing policy guidelines taking account of agriculture’s non-market contributions at local, national and international levels. One important issue here is designing effective incentives for use when justified.

The programme’s first, four-year phase sought to identify and measure the value of agriculture aside from the production of food and other marketable commodities. The 11 countries studied were China, India and Indonesia in Asia; Ethiopia, Ghana, Mali, Morocco and South Africa in Africa; and Chile, the Dominican Republic and Mexico in Latin America. The programme is implemented by the Agriculture and Development Economics Division (ESA) of FAO’s Economic and Social Department (ES).

Source: Food and Agriculture Organization of the United Nations (FAO) - 6th June 2006