Strategies And Policies 211 Sectoral Strategies

Policy reforms are often made individually, addressing a single issue at a time. However, because each issue has implications in other areas, reforms are sometimes more effective if they are designed and implemented jointly as part of an integral package, or strategy, for the sector. A strategy constitutes both a vision of what the sector should look like in the future and a 'road map' showing how to fulfill this vision. Its point of departure is the current situation of the sector and the issues that it faces. It should be firmly grounded in both history and an assessment of the sector's future potentials. The development of an agricultural strategy may be motivated by an economic crisis in the sector or by other problems that catalyze a decision to make fundamental changes. In some cases, it has been conceived as the principal supply side of a structural adjustment program, to stimulate production response to offset the otherwise deflationary effects of macroeconomic structural adjustment in the short term. Whatever the motive for developing a strategy, it usually needs the support of the principal actors in the sector, i.e. the farmers, if it is to be successful.

There can be as many strategic visions as there are observers of the sector's performance, so one of the defining characteristics of a strategy is by whom and for whom it is developed. A strategy should represent a commitment by the sector's authorities to carry out specified reforms, and hence participation of the government is a sine qua non in its elaboration. On the other hand, a strategy that is developed in part by the producers of the sector, and is responsive to their principal concerns, is more likely to be made truly operational than one which is developed solely by government officials or academic experts. Equally, a government's fiscal goals and other national development concerns need to be reflected accurately in a sectoral strategy to ensure its viability, and so the most successful strategies generally are those that are a collaborative effort among different institutions and groups in society.

A strategy needs to be realistic, but its vision of the future should be based on the sector's

Agricultural Development Policy Concepts and Experiences. R. D. Norton

© 2004 Food and Agriculture Organization of the United Nations

ISBNs: 0-470-85778-1 (HB) 0-470-85779-X (PB) FAO Edition: 92-5-104875-4

strengths and opportunities. It also needs to clearly identify the constraints to be overcome in order to realize the opportunities. A strategy that does not offer a vision of a better future, backed up by concrete policies for realizing such a vision, cannot motivate the rural population to participate in its implementation. At the same time, the more realistic it is, and the better its analytic underpinnings, then the greater are the chances of attaining its objectives.

In some agricultural strategies the vision for the future is quantified, in terms of cultivated area to be irrigated, area planted in principal crops, and so forth. Whether or not numerical projections are made, the vision should define the anticipated directions of change in the future, the new emphases that will characterize future growth. One of the best guides to the directions of change is the sector's comparative advantage, that is, the lines of production in which it can most effectively compete on world markets in the long run. However, it should be borne in mind that market conditions can change rapidly, and in the end producers are always in a better position than governments to choose the specific product mix.

Identification of a sector's comparative advantage is a basic step along the pathway to defining explicitly the national objectives for the sector. In one form or another, at the most general level they must include increasing productivity - the main prerequisite for increasing incomes - and reducing poverty. These are the classic economic goals of efficiency and equity. Other broad objectives may be included as well, such as reducing gender inequality. The productivity objective embraces both technological improvements (yield increases) and shifts in production patterns toward higher value crops or other products.

The next sequence of steps in the exercise of developing a strategy normally consists of the following: (i) identifying specific constraints to be overcome (problems to be solved) in each area, (ii) specifying operational sub-objectives in each area for overcoming the constraints and achieving the overall objectives, and, on the basis of the above (iii) drafting a set of policies to address the constraints and achieve the sub-objectives. It is vitally important that a technical justification for the policy recommendations be developed, otherwise a strategy may run the risk of being seen as only another set of opinions.

While it is important to visualize scenarios about how the structure of the sector may evolve, unless the policy framework and concrete policy instruments are also specified, and the farmers' role in making such decisions is taken into account, it may be difficult to implement a strategy. Policies and public sector investments constitute the means for implementing a vision. These are the primary links between national objectives, on the one hand, and the decentralized workings of a market economy, on the other hand.

All over the world, governments increasingly strive to use indirect instruments of policy, rather than direct controls. Accordingly, the type of vision expressed in strategies is shifting away from projections of specific future cropping patterns or production levels. Their place is being taken by the use of indirect policy instruments which improve the sector's markets, for purposes of promoting both equity and efficiency. Principal areas of policy instruments include agricultural incentives policies (operating primarily through trade policy and macroeconomic policies) and marketing systems, the land tenure framework, irrigation policies, the rural financial system and the system for development and transfer of farming technology. Concepts and experiences in each of these areas are described in Chapters 4-8 of this volume.

Increasingly, the issues raised and analyzed in a strategy have to do with institutions, laws, markets and resource endowments. The latter include not only land, irrigation supplies and field labor, but also farmers' managerial and administrative capacities. It is increasingly acknowledged that agriculture is but one part of the rural economy, and that a strategy should contain a program for rural development in a more complete sense, including the creation of economic opportunities for the rural landless. Chapter 9 is devoted to a discussion of these broader concerns.

In its operational form, an agricultural strategy is an integrated package of policies for the sector, complemented by an investment program. Some of its policies may be designed to take effect immediately or in the short term, but most of them typically represent deep reforms whose effects will be felt increasingly throughout the sector over a period of many years. The chief advantages of developing policy reforms in the context of a comprehensive strategy are that (a) the policies are derived from, and support, specified national objectives and a clear vision of the future, (b) they are designed to be mutually consistent across all facets of the sector and with macroeconomic policy, (c) no important areas of policy reform are overlooked, and (d) the effort of developing a strategy represents an opportunity to work out a consensus among principal interest groups in the sector.1

Additional characteristics of agricultural strategies, and the tasks involved in developing them, are reviewed in more detail in Chapter 9. That chapter also addresses issues of civic participation in strategy formulation.

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