Discussion Points For Chapter

• An agricultural development strategy is a consistency framework for bringing together policy initiatives in an overarching logical structure that adopts a medium- or long-term view of the sector's prospects. A defining characteristic of a strategy is that it presents an integral approach to development issues and does not deal with them in isolation from each other.

• Although a strategy needs firm technical foundations, in order to be effective it also needs widespread support, especially from producers, government and international development agencies.

When a strategy proposes several different kinds of policy reforms, benefitting different groups in society, it may be easier to overcome narrowly-based opposition to some of the reforms, than if the reforms were proposed individually. One of the roles of a strategy is to eliminate special privileges and create a level economic playing field.

One of the roles of a strategy is to elevate the level of the national dialog on policies. It is an educational process for all participants, including technical advisors. Work on a strategy can provide a 'learning-by-doing' process for participants, in learning how to define the policy issues themselves in fruitful ways and how to pursue solutions in perhaps unaccustomed directions.

In recent years, many efforts have been made to enhance the participatory character of development programs and policies, but citizen participation in formulating national or sectoral development strategies has not been so common.

In addition to respecting basic principles of democracy, encouraging participation in the development of a strategy can be valuable for the following reasons:

(a) It improves the chances of attaining a national consensus on policy reforms.

(b) It strengthens the channels of national dialog, thus empowering citizens to participate more effectively in the resolution of future policy issues. It represents capacity building for civil society and the private sector in regard to national development policy issues.

(c) It helps develop more solid policies. Experience has shown that representatives of the private sector and NGOs not only can play a role of supporting consensus policies, but that they are also capable of making fundamental contributions for improving the quality of the reforms, even to the point of assisting in the drafting of proposed legislation.

(d) It helps improve the accountability and transparency of the policy making process.

(e) It helps empower the country in international dialogs, so that truly national priorities can serve as guides for programs of international assistance, instead of allowing national policies to be defined implicitly by the sum of conditionalities attached to international loans and grants.

• It is important to ensure that those who participate in such a process are sufficiently representative of a broad spectrum of that society. This includes women, the poor and other traditionally disadvantaged groups. Participants do not necessarily have to be formal representatives of associations or other recognized entities, but should be recognized in their communities and groups as thoughtful persons on policy issues.

• The risk of not reaching a consensus on strategic questions among members of civil society is real. However, if there are important disagreements in society on basic policy issues, the work on a strategy is a good forum for trying to heal them.

• A principal objective of a participatory process of strategy formulation is to create a sense of ownership of the product on the part of the participants. In good measure, achieving this objective depends on how the process is carried out. Another objective is to generate a sense of ownership by the country. This objective is particularly relevant in countries where many policies have effectively been imposed by international development agencies through the conditionality tied to financial assistance.

• The ownership question, for the country and for civil society, suggests limits on the extent to which international financial organizations and governments can directly sponsor participatory processes of strategy development. Ideally, both should contribute expertise to the process, and assist with the implementation of the strategy's recommendations, but civil society may be reluctant to commit itself to working under the aegis of one of those entities.

• How the participants are selected for the process also can be relevant to the issue of own ership. This is an issue that deserves full discussion with the participants themselves before their membership is fully decided.

• If a strategy is drafted by technical advisors and then presented to civil society for consultations, it is unlikely to create a sense of ownership among those who are consulted. The key to ownership is for persons from the country concerned, and civil society in particular, to take the lead in the process of drafting the strategy document.

• Technical quality control is an important issue in strategies, especially those in which civil society plays a leading role. It can be best promoted by capacity building, and that, in turn, requires a sustained working relationship between participants and technical advisors, in a 'learning-by-doing' process. On the other hand, often there is a considerable amount of latent technical talent in a developing country that has not previously been tapped into for work on policy issues.

• Civil society's capacity for analyzing policy issues should be institutionalized so that it may be sustained over the longer run. This is a topic that warrants the attention and support of international development institutions. In the final analysis, one of the most valuable roles for official development assistance is building national capacity for policy analysis and formulation.

• The organization of a strategy effort centers around task forces, or working groups, that carry out the analysis and write drafts of chapters. Managing the effort requires a coordinating committee, and sometimes there are two levels of co-ordination, one for day-to-day logistics and the other, in a larger group, for review of substantive issues and consistency requirements among the components of the strategy.

• Task forces can draw into the process talent from civil society that otherwise may not have been brought to bear on policy considerations.

• The principal challenges that are inherent in launching a participatory effort at developing an agricultural strategy are the following:

(a) To motivate a sufficient number of leading farmers and ranchers to commit themselves to the process and dedicate the time required to bring it to a successful conclusion. Since both agricultural entrepreneurs and peasant farmers have many claims on their time, it is not easy to satisfy this requirement.

(b) To reach beyond the group of persons who reside in the capital city and attain a degree of geographical representativeness in the participation. The logistics of this challenge can be difficult in large countries and countries with poor communications and transport networks.

(c) To overcome schisms that may be present in the participating group for reasons of political partisanship or socio-economic differences, in order to be able to put together a consensus position that has the implicit support of all or most major groupings in rural society.

(d) To create an environment in which civil society representatives jointly go forward to lobby for sound economic policies that will benefit the entire sector, instead of promoting narrow personal or sectarian interests.

(e) To avoid creating a parallel process of dialog that may weaken existing channels of communication and social processes rather than strengthen them.

(f) To avoid premature publicity about the participatory work in its drafting stage. Although some publicity about the process can be useful, to help keep the public informed, premature publicity about the content of the strategy runs the risk of becoming a 'lightning rod' for sharp, sometimes partisan, criticisms of the tentative policy formulations, even in the national press. The danger is that such criticism early in the effort could fracture the emerging consensus among participants and even derail the entire effort.

(g) To gain acceptance for the principal policy recommendations from the government of the day, or the next government if elections are due relatively soon.

• While a creative and feasible vision about the future is an essential element of a strategy, the means of making the vision come true eventually need to be stated in sufficient detail and rigor as to constitute an implementable program.

• A useful step in the transition from a vision statement to a program of policy proposals is to identify principal obstacles to the fulfillment of the vision. Another worthwhile step is for the task forces to develop descriptions of the existing policy framework, and that may not be a trivial task for those who have spent most of their professional careers working within the same policy framework. Working continuously within a given context makes it hard to step outside it and see alternatives.

• In a strategy, the logical links between diagnoses and solutions need to be made clear. One way to structure a strategy document is to ensure that for each sector, sub-sector or topic it includes the following elements:

(a) Basic characteristics of the sector, sub-sector or topic under review.

(b) Review of past and present policies for the area or topic.

(c) Major issues and constraints to be dealt with.

(d) Specific (subsidiary) objectives for the area or topic.

(e) Policy recommendations and supporting technical justifications. (The policies are developed logically as ways to overcome the constraints and satisfy the objectives.)

(f) Appendices: recommended legislative reforms and recommended investment program (not applicable for all areas).

• Human capital is the most strategic factor for agricultural development, especially as new technologies emerge, markets demand higher quality and safer products, and as consumer requirements for quality and delivery timing change. Learning how to continuously access information and assimilate is acquiring increasing importance in agriculture throughout the world. Equally, institutions and policies that facilitate such access are increasingly critical, but often Ministries of Agriculture are slow to recognize the importance of quality issues.

• Institutional development is one of the keys to agricultural growth. Solid institutions open the doors to new knowledge for farmers and allow them to enter into reliable arrangements for future delivery of inputs and products and deferred payments. When all transactions and payments have to be made on a spot basis, there is little scope for development. In most developing economies, institutions serving the rural sector need to be improved in terms of accountability and efficiency.

• The policy recommendations of a strategy should be consistent, both within the sector and across sectors. Implementation of one policy may require changes in another, complementary policy. Agriculture is especially dependent on the macroeconomic framework, which largely determines producer incentives. If there has not been enough exploration of macroeco-nomic policy options, an agricultural strategy may have to suggest some alternatives at the macro level.

• The most basic policy goal for an agricultural strategy is to improve incomes of rural households. Increasing production and productivity are important as means to achieve that goal, and policies that shift relative prices in favor of agriculture also contribute toward fulfillment of that goal.

• In all countries, the aim of an agricultural strategy is to generate sustainable growth that is widely shared, but producing a successful strategy requires creativity in finding concrete and detailed solutions to specific problems that are viable in their context.

• Historical experience and conceptual models of long-term agricultural development have emphasized the need to minimize government interventions in product markets and instead give priority to improving the functioning of factor markets, particularly in the areas of education training (human capital) and for the factor markets related to land, water, credit and technology - the latter being another dimension of human capital.

• The 'historical model' of Vernon Ruttan and Yujiro Hayami is one of the richest of that genre in policy implications. Their model emphasizes the fundamental role of technical innovation in agricultural development, and it also states that the nature of innovation is heavily influenced by relative factor prices and also by real prices of agricultural outputs.

• Agricultural production is only one part of a chain of related activities, stretching from input supply and technology development through production to post-harvest management, marketing and processing. Therefore, agriculture cannot prosper without forging solid linkages to markets, both domestic and international, and markets in turn are ever more demanding in terms of product quality and conditions of delivery. The primordial role of markets is as true for smallholder production as for larger farms.

• In the broadest sense, the most important factors for generating agricultural growth are adequate market and pricing conditions and sufficient productive capital. In the latter category human capital, as noted, is the most essential for improving development prospects.

• The key substantive orientations of agricultural development strategies may be summarized as follows:

(a) Market Development and Pricing Policies

— Market development policies, including a country's international trade negotiations for agriculture (bilateral as well as multilateral), policies to ensure compliance with phytosanitary norms and food safety standards, product grading (especially for grains), export promotion measures, market information and testing efforts, finance for marketing and storage, training of extension agents in product quality issues and organic production, and related efforts.

— Pricing policy, mostly at the macroeco-nomic level, to avoid declines in real agricultural prices, and to reverse at least partially large declines that may have occurred. Pricing policy also should aim for relatively uniform rates of effective protection among products within the sector, and between sectors.

— An open trade regime without, however, transmitting obvious distortions in the international arena to the domestic economy.

(b) Human Capital Policies

— Improving rural education, changing, if needed, the way in which such schools are managed.

- Extension and training programs in rural areas should incorporate elements of community and producer organization, especially as regards women. The ability to work together co-operatively is a key to success in many development efforts, especially those that involve penetrating new markets. This is the factor of rural social capital.

— The capacity for agricultural research and extension needs to be strengthened very considerably in most developing countries, with emphasis on the quality of staff and on participatory approaches.

— Human capital also is manifest in institutions and, as commented upon, strengthening institutions is vital to agricultural progress. In the most general form, it requires inculcating respect for the rule of law, and for property rights in all forms. Sound governance is a key to all aspects of agricultural development. In more specific form, institutional strengthening requires that they be made more accountable and efficient, and usually in developing agriculture that requires a greater degree of decentralization of institutions than now exists.

(c) Physical Capital Policies for Agricultural


— Clarifying and buttressing property rights, including lease and rental rights, and improving access to land without disrupting the security of property rights.

— Investments in rural physical infrastructure, especially those related to irrigation, transportation, electrification and communications.

• The ways in which agricultural policies are conceived, designed and implemented are major determinants of their results. The lessons of experience point to five key approaches that help ensure the effectiveness of policy reforms:

— Reducing distortions in product and factor markets.

— Reinforcing the legal strength of contractual relationships.

— According special emphasis to women, small farmers and the rural poor in the targeting of policies and programs.

— 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.

— Emphasis on creating viable institutions.

• To advance the implementation process, a strategy should be accompanied by recommendations for legislative reform where appropriate.

• The integrated rural development approach followed in many countries has generally been a failure. The reasons include an adverse policy environment, lack of sufficient government commitment, lack of appropriate technology, neglect of institutional development, lack of beneficiary participation, and weak interagency co-ordination.

• Because of these concerns, among international agencies the emphasis in rural development has shifted to decentralized and participatory approaches, including 'demand-driven' investment programs in rural areas. Increasingly, communities are asked to take the lead in defining or selecting the programs they will participate in, and the role of local governments is being put in higher relief.

• Successful rural development also requires institutional decentralization, supportive policies in other sectors, and good governance.

• The effectiveness of rural investments can be increased by implementation of complementary programs of fiscal transfers to poor rural households. Such transfers are consistent with WTO rules on agricultural policy and represent a way to deliver incentives to smallholders and to producers of export products, whom it is otherwise difficult to target in programs of incentives.

• Direct transfers also are neutral with respect to cropping patterns, unlike most other forms of fiscal support for agriculture. If combined with an area-based land tax, the net effect would be progressive with respect to farm size.

• The administration of direct support measures requires considerable decentralization of the operations of ministries of agriculture.

• It can be argued that a substantial share of public investments in rural areas should be channeled into a few essential kinds of infrastructure, instead of being dispersed over many fields, and that those investments will enable rural families to make other kinds of choices that will raise their standard of living. International experience would appear to confirm that there are four priority areas: education, transport, electricity and communications. If agroe-conomic conditions are favorable to irrigation, then it should be added to the list as a fifth priority, in view of the large potential that it holds for increased agricultural productivity.

• To the extent possible, approximate estimates of investment requirements in priority areas should be incorporated into an agricultural development strategy.

• Five principal classes of constraints hold back the efforts of rural families to improve their lot, as follows:

— Human capital: low education levels and insufficient training in topics relevant to their work.

— Social capital: low levels of community organization, producers' organization, etc., reflected in a inability to undertake productive efforts in co-operative or associative ways.

— Physical infrastructure: inadequate roads, communications facilities, energy supplies and irrigation water.

— Institutional infrastructure: weak agricultural research and extension, underdeveloped rural finance systems, inadequate rules and institutions for defining property rights and resolving conflicts over those rights, weak contract enforcement, and so forth.

— Private physical capital: insufficient land and on-farm irrigation infrastructure; inadequate investment levels in livestock, tree crops and other productive capital. This is the constraint of insufficient farm-level physical capital for the poor.

From these constraints, five classes of rural development policies and programs may be designed, and priorities among them may be defined separately for each community. Each community's degree of progress along each of the five 'axes' can be assessed to determine the next priority for its programs of rural development.

• In the area of social capital, there is little doubt that the priority should be placed on removing gender disparities, on both equity and efficiency grounds. This issue can be addressed at the community level, through programs of education and awareness building and through economic empowerment of women, and through sector policies in the ways indicated in the foregoing chapters. It also can be addressed through national policies and legislation regarding inheritance rights, eligibility for land under agrarian reform, domestic violence, women's health and related topics.

• A strategy's value is limited if it is not at least partially implemented. Therefore, in the strategy development process it is worthwhile to take into account the ways in which policy reforms are implemented. There are five channels through which policies are put into effect:

— New legislation (the legislative policy channel).

— Administrative decisions and decrees of the executive branch that alter the rules govern ing the economic environment for agriculture and change institutional structures (the administrative policy channel).

— Allocations of public investment, or capital account funding, some of which may come from external partners in development (the investment channel).

— Allocations of the current account budget of the government (the program channel).

— Voluntary participation in implementation by the private sector and civil society (the non-governmental channel).

A strategy should be followed by an implementation plan, and an implementation secretariat can be established to oversee the steps taken to put it into effect. Those who participated in developing the strategy will have acquired the expertise needed to monitor its implementation and develop solutions to problems encountered along the way.

The most effective kind of conditionality international assistance is that which requires a country to implement its own plans, particularly those developed in a participatory manner. Even with the best of intentions, hurdles always are encountered along the road to implementation, and therefore it can be useful for international agencies to specify the implementation of a nationally developed strategy, or key parts of it, as conditions for disbursement of external assistance.


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