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Reconsidering structures in production dynamics:
methodological insights from World Agriculture Watch and preliminary elements on Indonesia
Authors:Hubert George, Jean‐François Bélières, Marie‐Aude Even , Pierre‐Marie Bosc, Alice Baudoin. WAW Executive Secretariat, Rome – Montpellier ; SupAgro Montpellier
JOURNEE FILIERE PALMIER A HUILEMontpellier, 9 juillet 2012
SPOP ANR2012‐2015
Outline
• The “Why?”: structural change in agriculture
• Overview Methodological Approach: 4 steps
• What to observe? – Holdings
– Territory
• Linking with SPOP project– Preliminary elements on typology
– Territorial perspective
Statistical data indicating that larger farms form an increasing share of the total area of agricultural holdings in France. Similar analyses are possible at sub national scales.
World Census of Agriculture
3WAW First Stakeholders Workshop ‐ FAO ‐
23 to 25 April 2012
A World Without Agriculture?
From: Timmer, 2009
AGRICULTURAL GDP Share
AGRICULTURAL EMPLOYMENT Share
Agrimonde, 2009. Note de synthèse
Working document 6
Agricultural Transformation
El Oued, ALGERIA
Traditional ‘Ghout’ system•Small, 0.5ha basins, dug to GWL•Low maintenance, •Adapted to desertification•Family production – subsistence•Preserves agro‐biodiversity
‘Modern’ practice•Irrigation•Large fields•Commercial oriented production
Implications?•Incomes
•Water availability•Customary rights & management
•etc
Why?
• “Production Structures” matters!
• Variable impact according to the type ofstructure and the way they operate
• No systematic international effort to monitorthe phenomenon– The structures and how they evolve– An integrated assessment of their performances
Overview of the Methodological Framework
FAO
April 2012
Why palm oil?
• High differentiation in holding types from large plantation with hired labor to smallholders with diversified assets
• Controversies on the impacts of large scale plantations – Environmental issues – Socio economic impacts on rural development
• Controversies on the type of relations between small holders and large scale plantations
• Connection between global challenges and local situations
WAW Diagnostic studies at national level
10
What to observe?
• Holdings and territories
• Why holdings? – Where decision making takes place: modify the combination of production factors
• Challenge: core set of indicators that could allow international comparison and wider set of indicators to fit with local needs
12
The sustainable rural livelihoods framework adapted
Indicators of Assets: Holding
Should allow international comparisons
HumanSex; Age; Household size; Level/type of education; Labour type (family; permanent employees; temporary)
SocialLand tenure (e.g. legal, informal, rented, ..); Legal status (Household vs. non household –e.g. corporation, cooperative, government); Financial remittances; Level of self consumption; Access to commons; Membership of rural producers associations
NaturalTotal area of holding and by land use types; Presence of forest and other wooded land
FinancialNumber of animals by livestock type; Types of temporary/ permanent cropsPresence of aquaculture; Other economic production activities (e.g. fishing, collection of forest products,..);Main purpose of production (home consumption or for sale); Access to credit
PhysicalPresence of irrigation; Debt ratio (for commercial enterprises); Agricultural equipment
13
Business scheme
Bank loans individually granted
Use of Middlemen and money lendersSome cooperatives often mixed with middlemen
Middlemen sell to the oil palm refinery
PIR‐trans
Cooperative of SmH
Bank loans to cooperative
Cooperatives sell to company’s mill
SmH can give the management of their plot to the company
KKPA
Buy the FFB from SmH with cash lent by
money lenders
Share owned by the farmer within the NES scheme
0‐100 • Entirely private plantation
20‐80
No debts in Bungo district
• A: SmH owns 20% of the palm oil revenue and 20% of the land they gave to the NES
• B: SmH owns 20% of the palm oil revenue and the company is entitled with 100% of the land and 80% of the revenue
30‐70• Farmers entitled with 30% of both revenues and land + consolation fee for the 70% land they gave up
40‐60 • Farmers entitled with 40% of both revenue and land at the price of more debts.
Credit provider for the SmHMicro‐credit systemsBank to individuals Bank in partnership with the
company and government
Management of the plasmaTo the SmH after plantation’smaturation (PIR‐trans scheme) through the SmH cooperative In the hands of the company the
whole time (KKPA scheme)
Population targetedLocals Trans‐migrants Locals then transmigrants Transmigrants then locals
Share to SmH0% 20% ‐no debt 30%‐debt 40%‐high debt
ownerprivate government
Financial assets
Land assets
Level of involvment of locals in the decision making process
Through cooperatives Through external organization Through local officials and village heads none
Source of FFB
SmH from their NES scheme Middlemen related to a SmHcooperative Independant middlemen Independent SmH
Labour on the Plasma
SmH on their own plot Hired labour through the cooperative
SmH who participates in the NES wherever labour is required
Only competent workers hiredby the company
Importance of the SmH cooperative
No cooperative (PIR or SmH have no implication with the plot they sold)
Price negociation, garantee for bank loans, revenue distribution betweenSmH
Human asset
Social asset
0
5
10
15natural
social
humanphysical
financial
SmH NES
SmH NES+indep
SmH independant
Preliminary typology of smallholders
• Why territories? – Holdings’ decisions affect land use patterns, impact natural resources and environment
– Need to define categories and assess their representativeness
• A need to frame a coherent and comparable system of indicators to assess performances going beyond sole productivity
What to observe?
Indicators of Assets: TerritoryHuman‐Population with access to drinking water; Percentage of rural children under five who are underweight ; Rural infant mortality rate
Social‐Food consumption per capita ; Population density and growth; age profile‐Proportion of the Agricultural population living above the poverty line‐Agricultural and non agricultural employment ; employment profileNatural‐Land cover and use ; Agrarian structure (size of plots, forest, etc.)‐Forest cover and deforestation rate; Protected areas ; Water availability and potential for irrigation; Rate of fragmentation (agriculture, forestry, pasture)
Physical‐Access to market centers (distance , time); Access to health centers‐Density of road network; Area equipped for irrigation ;
Financial‐Share of agricultural to total production (GDP territorial)‐Average interest rate by loan type; Price variability for main products‐Characterization: agricultural value chain and markets 20
Preliminary characterization of the territory
• Physical: Farmers included on a NES scheme should have better access to school, health care and water through companies 'investment in infrastructure
• Social: Transmigration (government regulation) and Spontaneous migration => increases population density, diversity. Work on the plasma
• Human: Depending on impact on livelyhoods. Better infrastructure supposedly next to NES scheme => better access to water and health care.
• Natural: Plots fragmented in NES scheme. Deforestation (independent clearing for cultivation, company’s clearing for timber or palm oil or illegal logging). Independent and agro forests: + diversity, sustainability and food security
• Financial: Agriculture main part of income, some areas shared with mining and timber companies. High indebtedness and interest rate not clearly determined for farmers. High variability of prices.
•National•International•local 0
4
8H
S
NP
F
Agricultural holdings
Outcomes
Drivers and pressures
Assets
Household or business strategies
Cumulative effects
Influence of outcomes
Type 1
Type 2
Type 3
Territory
Trends and context
Influence on strategies of agricultural holdings by•Institutions
•Organizations•Social relations
•population•policies•technology•markets•access to natural resources•natural disasters•…
•Economic•Social•Environmental
Activities based on•Natural resources•Other
22
Context and trends:
Increasing demand (biofuel, cooking oil, replacement for trans‐fat)
High yields and high prices
New international pressure for more sustainable production and forest protection: RSPO certification
Decentralization program
Structure and activities: Conversion of smallholders to Palm Oil:
• NES schemes and Trans‐migration program
• Clearing of new areas under Government regulation
• District and village heads allow or not the installation of the company through technical permit
• Foreign Investment increases in OPP
Strategies:• Smallholders: intensification in palm oil• Intermediaries : sell fruits at better prices and of a lesser quality to get a margin
• Manipulation on land ownership and forest status
• Organization in cooperatives• ¨RSPO” certification for firms for better « image » and new buyers
Outcomes and performance:
• Very few improvements on livelihoods
• Lot of farmers dispossessed from their land and with harder access to the forest resources
• Loss of biodiversity and increased greenhouse gas emissions
• RSPO’s certification difficult to implement and control
H
S
NP
F
H
S
NP
F
?
Types of holdings
Capital assets at Territorial level
Future projections•Models•Expert Opinion
Retrospective analyses•Agricultural census (time series)•WAW data collection•Expert opinion
‐ 20 years Present ‐ 2012 + 20 yearsTime
‐ 20 years Present ‐ 2012 + 20 years
Assessing trends: Territory
Comparison of capital assets at two selected points in time (labelled ‘before’ and ‘after’) during a continuous process of agricultural transformation
Changes in assets
24
Identify different Types of holdings based on distinguishing criteria •Labor; Size, etc.
Characterize each Type of holding based on 5 capitals•H‐human; S‐Social; N‐Natural; P‐Physical; F‐Financial
Take into consideration Types and Outcomes in policy formulation and planning•Status and trends
WAW Assessment
Livestock
Crops
Forests
Other
Generally increasing •Market integration; Size of holding
Need for robust typology allowing international comparisons
Generally increasing •Diversity•Self consumption
H
S
NP
F
Different livelihood strategies by each Type lead to different outcomes on•Food security•Environmental sustainability•…
CapitalAssets Outcomes
Sectors2
4
1
3
Livelihoodstrategies
Family labor only
Family + Hired laborHired labor only
Type 2
Type 4
Type 5
Type 1
Type 3
A variety of information requested by stakeholders to support decision making processes
•Changing importance of typologies•Disappearance and/or appearance of new typologies may occur
Undertake similar analyses as above for each Type of holding
Changing relative importance of different Types of holdings at Territorial level
0%
20%
40%
60%
80%
100%
1990 2012 2030
Type 5
Type 4
Type 3
Type 2
Type 1
Current Situation•Uneven progress towards rural development goals•Partly driven by poorly targeted policies and planning
25
Territory•Consider major farming systems within a policy‐relevant administrative unit•Flexible stakeholder selection of size of administrative unit, considering local issues and efforts for data collection and analysis
UpscalingUse selected ‘benchmark’ holdings (±statistically representative) to generalize results to the full area of territory
Summary information ‐on different types of holdings within the territory
Generalization: Holding to territory
+ agricultural holding
+
++
+
++
+
+
++
+
+
++
+
++
+
+Pastoral
Agro‐pastoral
Type 1
Type 2
Type 3
+
++ ++
+Territory
26
+
Next steps• Conceptual and methodological level
– Stabilize our set of indicators on structure / strategies performance assessment
– Harmonize the set of indicators at holding level but also at territorial level and how to link both levels (ie for environment and NR management)?
– How to conceptualize the “corporation” or enterprise pole of the continuum? Can the SRL framework be adapted to “corporation” or “non family” holdings?
• Operational dimension – Apply this framework when possible: SPOP in Indonesia– Short term: use of existing data sets to illustrate structural
change. What could be possible with palm oil systems? Where?– With IFAD and FAO: a global program, in which a call for
papers…to better document the global picture – Experimental prototypes of national observation centers (3 in
project: Viet‐Nam Colombia and Madagascar)
28
Thank you for your attention!
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