Leaving no one behind: financial inclusion for rural people

By Alice Marks 

Women in agriculture: A female farmer (left) and agrodealer (right).

As delegates return from last week’s Global Conference on Agricultural Research for Development (GCARD3) event in South Africa, the notion that we must “leave no one behind” will be at the forefront of the minds of all of those who attended. This commitment was not only the theme of GCARD3, but it is also a key message in the Sustainable Development Goals (SDGs) and Paris agreement. It hopes that everyone, all over the world, can be included on the development agenda, so that each individual can achieve the rights described by the SDGs.

For the agri-food research discussed at GCARD3, an important ingredient for this will be ensuring that farmers, many of whom are women, are able to participate in the processes from which they will benefit, such as research and innovation. For example, participatory research asks farmers what their needs are, and helps to make their ideas a reality – you can find case studies here. Another important ingredient will be using interventions that turn research into impact that is scalable, as well as ensuring there is efficient evaluation to help learn from good and bad experiences and improve interventions in the future.

Young people: risk and opportunity

Young people from the Aven cooperative who received support Technoserve

Young people in rural areas are a group that is at particular risk of being left out and left behind. Indeed, 60% of unemployed people in Africa are between the ages of 15 and 24. However, because agriculture and agricultural value chains are such important drivers of the economy in developing countries, the sector has the potential to provide many opportunities for employment, better more stable incomes, and potentially more sustainable livelihoods.

Five fresh facts from the Smallholder Diaries

Guest blog by Jamie Anderson, CGAP

Credit: CGAP

How are smallholder families managing their money? What challenges do they face? And what financial solutions can help?

Getting answers to these questions called for a year of data collection and thousands of conversations with farming families in three distinct markets. Researchers with CGAP’s Financial Diaries with Smallholder Households (‘Smallholder Diaries”) visited with 270 farming families in Mozambique, Tanzania, and Pakistan every two weeks from June 2014 to July 2015 to track how they were earning money, how they were spending it, and their agricultural activities. They also recorded all the ups and downs these families faced, from births and deaths to droughts and floods, offering a unique window onto their financial and agricultural lives.

So what did we learn? And how can these insights shape financial solutions for smallholder families? Five fresh facts emerge from the Smallholder Diaries.

1. Mobile money was nearly absent.

Expectations are high for digital financial solutions, but our research indicates that this technology may not be an easy solution for the financial challenges facing many smallholder families.

Four ways digital technology is transforming farming in Africa

Photo by phanlop88

Digital technology is likely to continue to be a major driver of development and industry in Africa. The capabilities of local entrepreneurs, start-ups and businesses to provide services such as technical assistance and finance are growing significantly due to greater access to mobile and internet technology. As such digital solutions are likely to make a huge contribution to addressing local concerns, connecting people in remote areas and to reaching greater numbers of people than more traditional development initiatives. Such technologies are already transforming the way in which smallholder farmers work and interact. Here we discuss five ways in which digital technology can play a part in transforming agriculture in Africa.

• Extension services

Accessing information on farming practices, crop diseases, pest control and land management can be made easier for rural farmers through mobile technology. At present there is a large gap between extension services provided and farmers being reached. In Kenya, for example, over 5 million smallholder farmers rely on just 5,500 agricultural extension workers so many are not getting the advice and information they need. Provision of phone-based agricultural information, advice and support to smallholder farmers can bridge this gap by utilising Africa’s exiting mobile network (currently the second biggest mobile market in the world). The form of the service can differ between organisations, some relying on coordinating agents within local communities to provide advice via their phone, some being purely an information service providing farmers with text messages containing advice relating to farming activities occurring at that time. Esoko, which provides a variety of agriculturally-related apps, has created several platforms for providing technical assistance, including personalised alerts with market, weather and agronomic information; knowledge-sharing to deliver extension advice to extension agents though audio, video, instruction manuals and information libraries; and bulk messaging to send data on best practice, campaigns and new products to all farmers.

The World Economic Forum on the Sustainable Development Goals

The Sustainable Development Goals, described as a social contract to transform the world by 2030, were the focus of a panel event at the World Economic Forum in Davos last week, which aimed to introduce the advocacy work being done around the SDGs as well as discuss what needs to be done to ensure the SDG agenda motivates action.

Secretary General of the United Nations, Ban Ki-Moon’s opening remarks introduced the goals as an ambitious blueprint to put the world on a more sustainable path, and as both a vision and a promise by world leaders. In order to deliver on the SDGs, and as quickly as possible, he affirmed that we need partnership and advocacy, introducing the SDG Advocacy Group (see below for a list of all members). Co-chair of the group, Mr. John Dramani Mahama, President of Ghana, was next to speak, further explaining the SDGs as a social contract to fix what is broken and to ensure all people have access to clean drinking water, sanitation, food, shelter, healthcare and education. In order for the world to see progress and peace we need to address the fact that many people do not have access to these goods and services as basic human rights, and we need to fix this fast. As global crises such as child hunger and malnutrition, the creation of refugees through conflict and the rise of terrorism show we do not have the luxury of time. President Mahama made clear that the SDGs cannot be a placebo that peddles false hope, we need to keep meeting, keep generating ideas and maintain momentum. “Our ability to effect change islimited only by our imagination.”

The second co-chair, Mrs. Erna Solberg, the Prime Minister of Norway, then spoke about the role of the SDGs as a call to action and a roadmap to the future we want. We cannot continue as normal without expecting social, economic and environmental bankruptcy. She also laid out the lessons we need to learn from the Millennium Development Goals:

• Progress is faster with effective partnerships (and sustainable investment models can scale up financing);
• The 17 goals are a coherent plan, not a menu and we need to get away from a silo mentality and start seeing the synergies between the goals.
• Establishing the goals is not enough, we need governments to show political will and resolve in dealing with difficult issues such as eradicating tax havens, halting illicit financial flows and combating corruption. We also need to monitor data to measure how effective new policies are at achieving the SDGs.
• Finally, it has proved difficult to make progress in areas of crisis and conflict so the international community must work together to improve situations in these locations immediately.

10 priorities for making African smallholder farming work under climate change

By Katrin Glatzel

With just over two months left till a new international climate change agreement is being finalised in Paris, the Montpellier Panel is launching a new report today, “The Farms of Change: African Smallholders Responding to an Uncertain Climate Future”, which addresses some of the key challenges to climate-proof Africa’s smallholder farmers.

As we all know, two of the greatest challenges of the 21^st century are the increasing demands for food, water and energy from a growing population and – climate change. Agriculture and smallholders are central to both, perhaps nowhere more so than in Africa. Africa is already battling against the impacts of climate change and smallholder farmers are amongst the most vulnerable with the least capacity to adapt. Rising temperatures signal more extreme weather events that will put lives and livelihoods at greater risk, increasing smallholders’ vulnerability to drought, famine and disease. And whilst progress has been made during the last two decades to reduce hunger and to improve farmers’ livelihoods, climate change jeopardises these gains.

High levels of poverty and underdevelopment combined with insufficient infrastructure exacerbate the already severe impacts of global warming on resources, development and human security. In order to adapt to and mitigate the effects of climate change, international organisations and governments must help smallholders to reduce and off-set greenhouse gas (GHG) emissions.

2014 Africa Progress Report

Released today, the 2014 Africa Progress Report, Grain, fish, money. Financing Africa’s green and blue revolutions, discusses agriculture, fisheries and finance, outlining reasons for optimism but also some of the priorities and barriers to Africa’s development.

The Africa Progress Panel (APP), chaired by Kofi Annan, former Secretary-General of the United Nations and Nobel laureate, consists of ten individuals across the public and private sectors who advocate for equitable and sustainable development for Africa. The annual Africa Progress Report, published every year in May, utilises the best research and analysis available on Africa to make viable, policy recommendations for African policy makers, international partners and civil society organisations.

Many African countries have seen significant economic development and transformation in the last few decades and incomes are set to double in the next 22 years. Senegal, for example, has gone from a debt crisis to selling sovereign debt on eurobond markets in ten years. But this economic growth is slow to trickle down to the many rural-dwelling Africans whose livelihoods are still precarious. In west Senegal, ongoing illegal, unreported and unregulated fishing by commercial fleets from other countries has left fish stocks dwindling, affecting tens of thousands of artisanal fishermen. As the report states this is just one example of the growing divide between the few who can benefit from Africa’s rising economic prosperity and the large number of people chronically poor and hungry.

On the one hand, the report states, the political and economic landscape of Africa is changing: exports and foreign investment are increasing while dependence on aid is declining. Democracy, transparency and accountability are entering into the language of policymakers more and more. But poverty and hunger are still enormous challenges and progress in making economic growth both wide-ranging and sustainable has, so far, fallen short. For Africa, as the report states, “the time has come to set a course towards more inclusive growth and fairer societies.”

In order to translate some of the economic growth to improving people’s wellbeing and livelihoods, Africa’s policymakers must focus on developing the continents farming and fishing industries, those economic sectors employing and supporting the majority of the Africa population. Smallholder farmers receive relatively little support from the government. As the report states, “Agriculture remains the Achilles’ heel of Africa’s development success story.” Subject to conflicting and sometimes damaging development initiatives, African farmers have some of the lowest levels of access to productive resources, markets and technologies in the world. As such agricultural productivity is very low. As has been seen in many developed and emerging economies an agricultural revolution is essential to overall growth and poverty eradication. Africa, as the report goes on to say, needs its own Green Revolution, one designed for the African continent. In particular increasing access to technologies such as drought-resistant varieties and tackling policy and market failures, which prevent farmers from increasing their productivity and incomes.

Food Price Rises: The Role of Speculation

Scientists from the New England Complex Systems Institute, in a paper published in September 2011, identified investor speculation and ethanol conversion as the two key causes of changes in food prices over the period 2004 to 2011. The latter linked to a gradual upward trend in prices, the former to food price spikes. Global food prices since 2007 have seen two surges whereby prices have increased by over 50% in less than a year. Authors of the paper warn that policy action to curb speculation in global food markets is urgent if we are to avoid another surge at the end of 2012. This is also important for the long-term given that the UN predicts food prices will rise by at least 40% in the next decade.

Speculation in the food market in the past has been limited to actors within the food industry itself. By setting a price, agreed between farmer and trader, prior to the harvest, risks were minimised as the farmer received a good price even in a bad year and the trader received a better than  average price in good years. In general, speculation had a stabilizing effect on food prices. With the liberalisation of markets in the late 1990s, however, non-food industry actors have become involved and speculation in the food commodities market by financial institutions has grown rapidly. In 2003 the market was worth £3 billion but by 2008 its worth had risen to over £55 billion.