Research Needs and Outcomes in Agro-enterprise Development Peter J. Batt

The world’s population is rapidly approaching 7 billion – population growing at 1.2% pa – global agricultural production growing at 1.7% pa – and yet 925 million people are malnourished – why is that?

Malnourishment arises from armed conflict natural disasters scarce resources weak governance breakdown of local institutions unsustainable livelihood systems increased price of food

Food prices are increasing increase in demand – increase in population – increase in per capita consumption reduced supply – climatic disasters – low levels of stocks – competition for resources land/water biofuels

For those living in poverty food prices increased by a greater margin than the overall rate of inflation the impact is potentially catastrophic – poor spend 50-70% of their income on food as prices rise, households are forced to – limit their food consumption – shift to even poorer diets – to spend less on other goods and services

For those living in poverty the increasing price of food has negative consequences for nutrition and health over 75% of the world’s poor reside in rural areas – 62% derive livelihood from agriculture

Gains in agricultural productivity are slowing complacency chronic underinvestment in key areas such as – new variety development – early generation seed multiplication – market infrastructure – market information systems – deterioration in public sector services

At the farm level, smallholder farmers have limited access to high quality seed, fertilizers and pesticides lack credit limited access to markets limited access to market information concentration and aggregation in the food output sector

To address the global food crisis higher prices ARE NECESSARY to stimulate investments in improved productivity and increased output an integrated approach is required to improve the participation of smallholder farmers – greater linkages to upstream and downstream sectors – policy support to provide an enabling environment

To enhance smallholder production additional investments in agricultural productivity of at least USD 7 billion per year are required to achieve the Millennium Development Goals – new crop varieties – seeds and fertilizers – biotechnology – vaccines and veterinary equipment – superior animal feeds

To enhance smallholder production (contd) adopt more sustainable production practices – organic fertilizers – use mineral fertilizers as a supplement – integrated pest management – improved water efficiency

To enhance smallholder production (contd) technical assistance must be provided to ensure that inputs are used to their best advantage – collaborate with input suppliers, traders and even consumer groups

To enhance smallholder production (contd) extension programs play a key role in information sharing by – transferring technology – facilitating interaction – building capacity among farmers – empowering farmers

To enhance smallholder production (contd) smallholder farmers must have access to markets adequate investments in – rural roads – transport – storage – market infrastructure – market information

To enhance smallholder production (contd) market information is necessary – helps farmers to make profitable decisions on what to produce and when and where to market – reduces transport costs – enhances price transparency – reduces marketing margins and price volatility – increases farm gate prices

To enhance smallholder production (contd) rural credit is critical to – enable farmers to increase their productivity – invest in value-adding activities cash constraints prevent smallholder farmers from intensifying their production systems families with more resources are – better able to cope with risk and uncertainty – experiment with new technologies

To enhance smallholder production (contd) public sector investments are required in – agricultural research and development – institutions – infrastructure – reduce post-harvest losses 30-40% of the food produced is wasted reducing food losses will cost less than boosting farm production production increases can be achieved more rapidly no additional utilisation of natural resources

The policy challenge is to promote productivity growth particularly for smallholder producers in a way that improves the resilience of the market to external shocks that reduces waste increases the supply of food to local markets at affordable prices