Approaches to Agricultural Development Policies

The ways in which agricultural policies are conceived, designed and implemented are major determinants of their results. For example, centralized, command-economy approaches in relation to the growth factors mentioned above, from agricultural extension systems to land redistribution, have not proven effective. The lessons of experience point to five key approaches that help ensure the effectiveness of policy reforms:

• Reducing distortions in product and factor markets. This can mean appropriate regulation, as, for example, in the cases of privatization of agricultural marketing and processing facilities or the creation of water rights markets, and it

60. 'Government investments in education, rural electrification, agricultural extension, transportation, the communication infrastructure and other areas where externalities occur are required because the commercial market is not capable of delivering critical services' (T. L. Vollrath, 1994, p. 475).

61. Roger D. Norton, 'Critical Issues Facing Agriculture on the Eve of the 21st Century', in IICA, Towards the Formation of an Inter-American Strategy for Agriculture, San José, Costa Rica, 2000, p. 312.

62. The World Bank, March 2001, p. 16 [translated by the author].

also can mean removing unproductive regulations and controls.63

• Reinforcing the legal strength of contractual relationships.64 This requires not only appropriate legal codes but also strengthened judicial organs, including in some cases the establishment of special rural tribunals. In the final analysis, fostering relationships of mutual confidence is crucial for penetration of new markets and obtaining production finance.

• According special emphasis to women, small farmers and the rural poor in the targeting of policies and programs. Such an emphasis is warranted not only from a viewpoint of equity but also to unleash the potential in the proven productive efficiency of small-holders.65 As the material presented in the previous chapters illustrates, a special focus on gender in agricultural development is justified in almost all policy areas.

• Decentralization and participation: an approach of devolution of public services, with privatization where appropriate, and encouraging farmer and community participation in the design and implementation of programs and policies. Greater local participation has proven to be very effective in many areas, including water management, market-assisted land reform, agricultural research, agricultural extension and rural finance.

• Emphasis on creating viable institutions. This is a corollary of the emphasis on decentralization and participation, but it also implies attention to long-run financial viability and developing operating modalities that are sustainable. This last consideration is particularly relevant to rural financial institutions. Institution-building in the sense of nurturing entities that serve the rural sector is a vital part of an agricultural development strategy, especially in regard to water management entities, rural financial institutions and functioning land registries, but the goal in all areas always should be the development of institutions that are self-sustaining and viable in the long run.

To enhance the concreteness of policy prescriptions in a strategy, they can be accompanied by recommendations for legislative reform where appropriate. Without specificity in the proposals, there is the danger that the reforms ultimately approved may differ in significant ways from what the strategy proposes. Equally, lack of specificity creates a loss of momentum in the reform process and thus a greater risk that the proposals may wither away instead of being approved and implemented.

It is evident that an agricultural strategy cannot be limited to issues that fall within a narrow conception of agricultural policy. As Robert Thompson has said:

Macroeconomic policy, trade policy, factor market policy, and public investment policy (especially as it relates to education, research, and infrastructure) can all have a greater impact on agricultural development than narrow sectoral policy.66

Conceiving and carrying out policy reform is a demanding task in all circumstances but, in the words of Vernon Ruttan, 'it is imperative that the

63. 'All too often, government policies are themselves distortionary. The pricing of public goods, such as water, provides an example. Water may be provided at little or no cost to farmers and then be wasted. . . .' (T. L. Vollrath, 'The role of agriculture and its prerequisites in economic development', Food Policy, 19(5), October 1994, p. 476).

64. 'A viable system of property rights and an effective legal system and judiciary to secure these rights must be established' (ibid.).

65. This is a theme stressed by many authors, perhaps beginning with the work of Mellor and Johnston mentioned above. Binswanger (1998, p. 298) has encapsulated the argument as follows: 'A strategy that promotes an open economy, employment intensiveness, and a small farmer orientation is both economically efficient and most likely to reduce poverty, both rural and urban'.

66. R. L. Thompson, 'Public policy for sustainable agriculture and rural equity', Food Policy, 23(1), February 1998, p. 2.

poor countries design and implement more effective agricultural development strategies than in the past'.67

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