Recent downturns in many so called ‘developed’ economies have more people than ever second-guessing the possibilities of exponential growth and reevaluating what risk means in an increasingly globalized world economy, but ask a smallholder farmer who’s gambled on the world export market and lost and they’ll tell you that the jig has been up for a long time, we’re just now feeling the pinch.

Remember back in 2007 when your grocery bill was increased by a few notches? I remember mostly because I was studying rural development at the time and the people around me were asking themselves at the checkout counter: “could this mean higher profits for poor smallholder farmers?”. Ok, maybe first they lamented that the days of inexpensive high-quality basmati rice were gone, but they found some comfort at least in the hope that food prices were finally making the long over due turnaround before rock-bottom. We now know though that these price increases didn’t translate to better deals for smallholders, and this fact speaks volumes to the uncompetitive and volatile markets that farmers are exposed to; a microcosm of the wider economic ills that the ‘developed’ world is reeling with at the moment.

Poor smallholders have been encouraged in a variety of ways and by a great many advocates that export markets are the modern way. Proponents for outward expansion into high-value crops claim that agricultural exports can produce faster growth than in domestic demand (World Bank, 2004), that export growth contributes to the growth of non-export agriculture by providing cash income that can be used to modernize farming practices (ibid) and that agricultural trade liberalization increases overall prosperity (Mccalla & Nash, 2007)

The precarious relationship between growth, poverty reduction and food security can be seen at a basic level by the fact that “of the world’s 34 most food insecure countries, 22 had average annual growth rates of 5 to 16 percent between 2004-2006” (von Braun, 2007). Economic growth does not cure hunger and poverty on its own.

It is important to keep in mind that trade policies, incentive programs and small scale development projects directly affect the 75% of the world’s poor who live in rural areas since the vast majority of them rely on agriculture for some part of their incomes (World Bank 2008). Whether it’s cheap imports displacing their local production systems or the removal of price support systems and marketing boards, these decisions and the forms of food marketing that are encouraged by them have direct influences on poor smallholder farmers, their families and their communities.  The global price fluctuations that make us uneasy when we glance at graphs posted on news websites can mean the difference between three healthy meals a day or malnutrition for many.

Growth, it seems, is not exponential nor is it limitless. Investors and public policy makers are now learning hard lessons about market volatility and how the bottom can fall out so easily. If they’re weary about putting their investments on the line, how can we still be asking smallholder farmers to put themselves out there?

Sources:

McCalla, A. F., & Nash, J. (2007). Agricultural Trade Reform and Developing Countries: Issues, Challenges, and Structure of the Volume. In A. F. McCalla & J. Nash (Eds.), Reforming Agricultural Trade for Developing Countries Volume 1: Key Issues for a Pro-Development Outcome of the Doha Round (pp. 1-17). Washington, D.C. The World Bank

World Bank. (2004). Global Economic Prospects: Realizing the Development Promise of the Doha Agenda. Washington, D.C.

World Bank. (2008). Agriculture and Poverty Reduction. Agriculture for Development Policy Brief.

von Braun, J.. (2007). The World Food Situation: New Driving Forces and Required Actions. Washington, D.C. International Food Policy Research Institute.