Why do developing countries depend on agriculture

For instance, if the lead firm provides fertilizer and credit, it wants to be sure that the final product, indeed, is sold to them. The agenda to increase agricultural productivity and make the rural poor more resilient to the adverse shocks likely to prevail is as urgent as ever. Fortunately, governments have new private sector actors and tools at their disposal if they embrace the necessary reforms.

This article was originally published on the World Bank 's website. The views expressed in this article are those of the author alone and not the World Economic Forum.

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Have you read? Is agriculture the way for refugees to rebuild their lives? License and Republishing. The question is whether public money in emerging economies is being used to address these challenges and the needs of small farmers. Or is it being used to prop up large-scale industrial agriculture? Many emerging economies have dual forms of agriculture — both industrialised and small-scale. Yet investment in agricultural innovations typically centre only on priorities for industrialised farming.

Genetic engineering is an example. It has become one of the main areas of focus in agricultural research over the past three decades. Highly specialised — it involves the modification of an organism by manipulating its genes — it needs high levels of investment.

Smallholder agriculture is increasingly important in emerging economies. There is a need for alternative agricultural solutions. Emerging economies can be leaders in this field. Agroecology presents a tested and forward-looking approach. But it needs to be institutionalised in the allocation of research funding and in science and technology policy. Agricultural research and development is already playing an important role. Over the past decade there have been increased investments by emerging economies in agricultural research.

For example Chinese government investment in agricultural research doubled from to , exceeding any country except the US. In this environment, only the big farms producing traditional crops were able to survive the competitive prices.

The export drive in new crops led to some impressive increases in production and exports in some countries. Early adopters of new non-traditional crops and technology promoted by foreign agencies in this case through USAID would be provided high levels of support - credit, a full-time extensionist, certified disease-free seed, and a purchase contract with an export company.

The first year of conversion would be an outstanding success. However, in the second year, seeds and marketing contracts were no longer provided. Yet more local farmers would plant the new crop, based on the experience of their colleagues the year before. The prices would drop in the US in response to new competition from other countries with lower production costs.

Farmers often also suffered heavy disease losses due to the poor quality seeds used. Furthermore, some would not be able to find a buyer for their meager production. Subsequently, the market would show a bias against the small producers. Packers and exporters tended to offer contracts to a few large producers whom they felt had better quality control, then to pay the costs of contracting with dozens of small farmers.

Many peasants are not legal owners of the land they farm. They are often renters, sharecroppers, or simply squatters. When a new and potentially high-return alternative is introduced into a locality, the opportunity costs associated with traditional peasant land use rises.

Landlords earn more by renting their land to those who grow high-value crops. Thus, land values rise while sharecropping opportunities become scarce. If rising land values are accompanied by declining profitability of traditional activities, even landowning peasants may be displaced as it becomes no longer possible to live off traditional production.

The situation is aggravated if the start-up capital needed for export production is beyond their means. Peasants may have no alternative but to sell their lands and join the ranks of the landless labourers or migrate to the cities. The start up costs for NTAEs were much higher than for traditional crops.

In one country, the initial cost barrier for small poor farmers in snow pea production was nearly 15 times the cost of planting basic grains. The poorest farmers would therefore require credit. However, this would be difficult for them to attain as there were strict criteria attached eg the need for the property title as collateral, official letter stating that one does not have outstanding debts etc , and interests rates charged to them were invariably higher.

It was found that the market place presented not only price fluctuation risks. Farm size was a significant determinant of price. Every additional hectare that a farmer planted to melons, for example, translated into payment that was per cent higher for the overall produce. The researchers conclude that nontraditionals offer the worst possible marketing scenario for the small farmer.

They are perishable crops that are not usually consumed locally. Should the contract with the importer not materialize, the crops would not fetch a good price locally.

In contrast, a farmer who produces a crop for the local market is more likely to have more control over the market. He or she may be at the mercy of middlemen, yet these intermediaries are local people, so that face-to-face complaint and conflict resolution would at least be possible. Non-traditional crops often require considerable technological sophistication relative to traditional crops, as they are new to the region, or require special care at harvest because of perishability or the need to meet demanding cosmetic standards.

The risk of crop failure due to insect pests, disease or inadequate agronomic practices is much higher than in traditional crops.

Access to technology, however, is biased against the small-scale producers. Large farms can afford to hire the foreign expertise and buy the equipment needed, whereas small farmers usually rely on extension services which may or may not be provided.

Quality control is also a new problem for small farmers not accustomed to the exigencies of foreign markets. It favours those producers who are able to hire foreign consultants.

Peasants may have grown a certain product all their lives. However, the family and local markets had very different standards for appearance, insect presence and damage. In extreme cases, export to foreign markets may be closed to small farmers who do not have the technical knowledge or money to meet the appearance and quality standards required.

Many studies have found that new high yielding varieties such as those of the Green Revolution responded to costly inputs. In the absence of such inputs, their yields were actually inferior to traditional varieties.

Those farmers who adopted these varieties and who could afford more inputs benefited disproportionately. Those who could not suffered, often eventually losing their land. Yield increases from high yielding Green Revolution technologies have been decelerating, and in some cases stagnating and even contracting. The highest yields have been obtained by using ever larger inputs of fertilizer and irrigation water, which in many places have passed the point of diminishing returns.

Greater use of these inputs is becoming less productive. In comparison to traditional varieties, outputs are small. Traditional rice farming in Asia produced 10 times more energy in food than was expended to grow it. According to Cambridge University Geographer, Bayliss-Smith, the gains drop to zero in a fully industrialized system such as that of the US.

In India, adoption of the new Green Revolution seeds led to a six-fold increase in fertilizer use per acre. Farmers used an average of By , usage had gone up to While food grain production increased 84 per cent from 82 million tones in to million tones in , consumption of chemical fertilizers rose from thousand tones in to 16, thousand tones in , a 15, per cent increase.

Similarly, in the Philippines, rice production increased in the late s, and early s as a result of the Green Revolution, but has since been on the decline. Why is this happening? Experts are concluding that clearly, chemical fertilizers are destroying the quality of the soil. Yields are falling because chemical fertilizers are not a sustainable source of soil fertility.

These remain hidden costs behind the yields obtained in conventional farming. One of the myths about industrial agriculture is that it is a land-saving system. In fact, monocultures and the separation of crops from livestock necessitate much higher amounts of land than traditional polycultures, and systems integrating crops and livestock.

Since monocultures eliminate diversity and the multiple uses of land, and instead provide a single output, additional acres are required to produce the output which would otherwise have been produced on the same piece of land.

Thus another acre has to be used for fodder production. The two acres, without chemical inputs and new seeds, could have produced kg grain plus kg of fodder on 2 acres. Likewise, crop production strategies which ignore livestock as an important source of soil fertility leads to the intensification of agriculture through the use of non-sustainable chemical inputs for fertilizers.

In addition, industrial livestock farming in fact consumes three times more acres of land than ecologically rearing livestock. Analysts have calculated that Europe in fact uses seven times the area of Europe in Third World countries for cattle feed production. For fodder alone including that used to produce food products for export the Netherlands appropriates , to , square kilometers of arable land.

This is times the area of agricultural land in that entire country. Shiva concludes that one acre of a farm that only uses inputs derived from the farm itself with integrated livestock and crop production can support a family and two farm animals.

If both crop production and livestock are made to rely on intensive inputs, the same family and two animals require additional shadow acres of land to produce the inputs and absorb the pollution. The other resource which is overused by industrial agricultural methods is water. As mentioned earlier, high-response seeds grow well only when water is plentiful. The water tables, however, are falling in key food-producing countries. Regions suffering from aquifer depletion include central and northern China, northwest and southern India, parts of Pakistan, much of western United States, North Africa, the Middle East and Arabian Peninsula.

The poor cannot afford to deepen their wells or buy stronger pumps. As the shallower wells dry up, some of the small-scale, poorer farmers end up renting their land to the larger well owners and become labourers on these larger farms.

Agronomic systems of agricultural production, for example, intercropping to maximize use of soil moisture, as well as better matching crops to climate conditions can reduce the pressure on water supply, 22 and increase the opportunities for small farmers to maintain their livelihoods.

The point made here is that extra resources used by the industrial systems, such as Green Revolution techniques, could have gone to feed people. These systems are resource wasteful and rely on intensive external inputs, including water and land. The emerging Gene Revolution which is similarly input-intensive promises to be as resource wasteful. These systems take away the entitlements from those most in need, and add to food insecurity and poverty in developing countries.

Another significant issue that must be addressed as a result of industrialized food production systems is the increasing dependence on pesticides. Monocultures erode diversity. It is diversity that increases resistance to pests.

In a holistic system, a problem in a part of the system can be absorbed or counter-balanced by the entire system. This is why the polycultural system is widely recognized as more stable.

This is not the case with monocultures. Without the advantages of a balanced eco-system, pest infestations are common, so that the entire crop can be easily destroyed. Chemical pesticides are in fact creating more pests than controlling pests. By contributing to the emergence of resistance in pests and by destroying natural enemies and predators, pesticides increase pest problems.

Globally, species of insects and mites, species of plant pathogens, 48 species of weeds have become resistant to one or more pesticide products. In California, of 25 insect pests, 72 per cent are resistant to one or more pesticides and 96 per cent are pesticide created or aggravated.

Comparison of crops organically grown and those under chemical intensive methods showed that pests were commonly absent in vegetables such as organically grown snow peas, while chemical intensive plots showed relatively high levels of these pests.

When comparing damage due to plant disease of both groups, it was found that damage was considerably lower in organically grown broccoli and snow peas than in fields where they were grown chemically with herbicides, pesticides and fertilizers. Indeed, for snow peas, the damage was times greater for chemically treated plots. Similarly, in terms of soil quality and soil erosion the most powerful indicators of ecological well-being , it was found that these were much better for traditional crops corn and beans than the nontraditionals.

For example, the research found far fewer earthworms their quantity is an indicator of soil quality in broccoli fields than in corn, and no earthworms in snow pea fields those with the heaviest uses of pesticides. Here again, the problems of heavy pesticide use have not affected all players alike.

When the ecological problems have reached crisis-generating levels, such as the collapsing of the entire sector due to pesticide residues and pesticide-resistant pests, transnational operators and exporters are quick to close down their operations overnight and move to another locality or region to set up their export operations free of the ecological problems they have created.

In contrast, the thousands of farming families left behind have to deal with an ecological crisis on their hands. The strengthening and growing resistance of pests is hardly surprising given that 4. Most exports originate from industrial countries. The other facet of the pesticide problem are the costs to human health.

Estimates of pesticide poisonings in the third world are as high as 25 million people yearly. The most harmful chemicals end up in developing countries. Many industrialized countries continue to export chemicals that are deemed too deadly for domestic use. Between and , US chemical companies increased exports of domestically prohibited pesticides by 18 per cent. The rate of exports of pesticides that have never been registered jumped 40 per cent during this time. Beyond causing cancer, new evidence suggests that pesticides may have many other dangerous effects.

Much of the problem with the use of pesticides has to do with meeting the cosmetic standards of consumers in the export markets, particularly the industrialized countries.

Lappe, Collins and Rosset estimate that in the US, from per cent of the pesticides applied to oranges and per cent of that applied to tomatoes are used only to improve appearance.