What the G8 forgot

What did the G8 forget about food security?  Jodie Thorpe shares some lessons from Oxfam’s work on tipping the balance in support of farmers.

The 2013 G8 Summit at Lough Erne is likely to be remembered for being the first to put some crucial new issues – tax avoidance and land grabs – on the agenda in a serious way.  But while successfully embracing the ‘new’, the G8 have largely forgotten the ‘old’: their previous commitments on food security.

 Of course, the $4.1 billion in commitments to tackle nutrition could herald a real breakthrough in the fight against hunger – if pledges are followed by cold, hard cash. However, it is in largely ignoring agriculture that the summit fell short.

Though David Cameron’s priorities of tax, trade and transparency could potentially make a huge difference to developing country agriculture, much of which depends on smallholders, the agenda was not framed in this way.

  Agriculture was covered – during the afternoon of the Hunger Summit on Saturday 8 June.  This focused on fostering investment in African agriculture through the ‘New Alliance for Food Security and Nutrition’ – though with the lack of specific outcomes and plethora of pre-prepared speeches, most media failed to even mention it. 

The New Alliance, a public-private initiative, was launched at last year’s G8 to ‘raise 50 million people out of poverty by 2022 whilst contributing to improved food and nutrition security’. It is based around a series of country-level investment promises by donors and companies, along with policy reform commitments by participating African governments.  While the reforms are all about boosting
investment, there is no attempt to consider how farmers themselves will be impacted.    

This question of how policies tip investments and markets towards or against smallholders, particularly women farmers, is crucial for Oxfam.  It drove the Make Trade Fair campaign, and has been the subject of Oxfam reports like Tipping the Balance and Power, Rights, and Inclusive
Markets
.  It was also the focus of a meeting I recently chaired where 55 Oxfam specialists from 20 countries debated these issues with the authors of Tipping the Balance: Bill Vorley and Lorenzo Cotula of IIED, and gender specialist, Man-Kwun Chan. 

Three key points that emerged illustrate the nexus between agriculture and tax, trade and transparency issues – and were almost entirely missing during the G8 debates.

1. Tax: remember that small-scale farmers are the main investors in agriculture 

Smallholders are the primary investors in agriculture in many developing countries. Investment incentives, however, often exclude small-scale farmers. Exemptions from customs duties on importing heavy agricultural machinery, for example, or low taxes on land allocated to large-scale investors, are biased against smallholders.

This bias could be reversed through tighter terms and conditions on large-scale land acquisition (here some tiny steps were taken by the G8), and tax incentives for investments that source from small-scale farmers. 

Nigeria, for example, has announced tax holidays for investors that set up processing plants in staple crop processing zones, which could benefit small-scale producers of these crops.

More and better infrastructure and institutions to support small-scale farming is also vital.  This is especially true for women farmers, for whom the lack of local infrastructure creates additional burdens, such as the need to walk many miles to collect water, severely restricting the time available to tend their crops.

Stopping the tax avoidance that robs developing countries of income to pay for infrastructure is vital.  Though the G8 has set the right wheels in motion, so far poor countries are left out.

2. Trade: for farmers to invest, they must get a fair share of the value created in agriculture

Low and volatile prices deter small-scale farmers from taking risks and investing in new techniques or varieties.  Initiatives like fairtrade or ‘inclusive business’ models can help, but only reach a small proportion of organised farmers that work within formal markets. Women particularly fail to benefit, as they tend to provide family labour rather than being smallholders in their own right. 

Governments, on other hand, can reach different ‘rural worlds’; both organised smallholders and those working with informal markets. Measures can include things like breaking up cartels, but can also include more interventionist approaches like marketing boards, commodity exchanges or protecting domestic markets in sensitive areas like food staples. 

While state intervention has a bad name, there is an increasing recognition of the limits of full liberalisation. This does not imply a return to the ‘bad old days’ of inefficient, poorly managed and sometimes corrupt marketing boards, but neither does it mean throwing the baby out with the bathwater. 

Good examples exist, such as the Kenya Tea Development Agency, which has seen producer share of tea prices rise to 75 per cent, versus just 25 per cent in neighbouring countries.

3. Transparency: farmers and communities need the means to scrutinise investments

Whether through government policy or private investment (and the world needs both), poverty and hunger will only be successfully tackled by good intentions that are also well implemented.  This requires appropriate resources, but it also requires scrutiny. 

Farmers, communities and civil society need clear information about investments in order to hold governments and investors to account for their actions and impacts. This is the principle behind the Extractive Industries Transparency Initiative, supported by the G8, but has been absent from the New Alliance.

In one of the few highlights of 31/2 hours of speeches on the afternoon of the Hunger Summit, David Nabarro, UN Special Representative for Food Security and Nutrition, made this point forcefully.  He called on the New Alliance to directly involve farmers’ organisations, women’s organisations and parliamentarians in the next review of progress in 2014, noting it would be uncomfortable – open, searching and frank – but vital.

Overall, the Lough Erne Summit will be remembered for highlighting the importance of issues like tax and transparency, and for putting some new and challenging issues like land on the agenda.  The opportunity now is to make progress on real solutions that also support, rather than undermine, developing country agriculture and food security.

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Author: Jodie Thorpe
Archive blog. Originally posted on Oxfam Policy & Practice.