30 September 2010

Theories of development and the World Bank's land report

Two long, fascinating pieces caught my eye today.

The first is by Owen Barder on three theories of development (a propos the MDG summit): a 'big heave' story, a 'improve accountability' story and one that focuses on inequality. The central insight of the last theory is that enormous poverty remains in fast-growing countries like India - and may even remain, if the China example is a guide, when it is a middle-income country. I was astonished recently to discover that malnutrition rates in much of India, especially the eastern states, are as bad as the worst parts of Africa: the Green Revolution and general lack of armed conflict notwithstanding. Does this contradict Amartya Sen's point that democracies do not allow famine? No - these are not famines. They appear to be chronic, underlying malnutrition, in years of good harvests and bad.

The second is a write-up of the World Bank's new report on "Rising Global Interest in Farmland". It tries to be an even-handed review of land grabs. Their press release is neutral, cautious even, simply noting that the surge in large land deals, especially in developing countries, reported in 2008 has continued unabated. The Financial Times interprets the same as "World Bank backs farmland investment". In reality, many of the early deals have been disappointing to all concerned: governments, investors and local residents. The Bank reckons a code of conduct with seven principles (transparency, fair compensation, etc) will do the trick. I like the principles, but I doubt they will be enough: enforcement will be key and when the land is remote and its natural owners weak, it will be difficult for governments to resist the pressure to flog it to the highest bidder.

Two things surprised me in the Bank report. One, the yield gap in African agriculture is just as great in densely populated countries like Rwanda and Malawi as in thinly populated ones like Sudan or Mozambique. How can this be? Either there is little or no value assigned to non-agricultural land (as forest, fallow or pasture), so farmers prefer to clear land over intensifying; or intensification is technically too difficult. The latter seems unlikely, since densely inhabited regions of Asia (Java, southern China) have farmed intensively for centuries. So if high-intensity agricultural techniques (as simple as legume rotations and human or animal manure) have existed for so long, why have they been so slow to spread in Africa?

Two, while it is well known that 70% of the increase in agricultural production since 1961 has come from yield increases, it came as a surprise to me that two-thirds of the land expansion (concentrated in Latin America, South-East Asia and Africa) came from smallholder farmers moving into new areas. The huge soya farms of Brazil or palm oil plantations in Indonesia are quantitatively less important than millions of smallholder rice growers in Myanmar or Thailand clearing forest or maize growers in Zambia converting pasture. Do the land grabs mark a shift in this trend away from smallholders to large commercial estates? Or could those estates become the hubs of a mixed farming model in which smallholders follow their lead? If large farms help seed smaller ones, the land expansion might become an attractive development path.

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