ISSUE 38: JULY–AUGUST 2005

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ANALYSIS: The New Agriculture Pt. II

Boom and bust, shocks and setbacks

By Andy Hall

	Dr. Andy Hall is a researcher at UNU Institute for New Technologies where he specialises in  innovation processes and policies in agriculture. This is the concluding part of his analysis of the New Agriculture. To read the first installment click here.

Despite the impressive performance of the New Agricultural sectors, they are not without problems. At least three things can go wrong. 

The first is the volatility and competitiveness of international markets. World market prices change for many reasons. It may be that a major producing country has had good rains. Of course good prices encourage other countries to enter or increase production of a particular product and this can lower the world price. But it is also possible for one or more countries to lower production costs. This can result in uncertainty. Dr Rasheed Sulaiman, a technology policy specialist from the Indian Council of Agricultural Research worries about this cycle of boom and bust. “Will vanilla become the next coco?” he asks, alluding to the collapse of the coco industry in his native Kerala.

The second major problem is that international markets and market regulations change. As Dr Ben Dadzie, a Ghanian horticultural expert explains, “The European supermarkets decide what type of pineapples Ghanaian farmers produce. Right now they want a Costa Rican variety and if we don’t find a way to switch quickly to this type we will be pushed out of the market.” New regulations also hurt. In 1997 the European Union imposed a ban on shrimp imports from Bangladesh because of worries about hygiene standards. The industry, with support of the European Union and other introduced HACCPA protocols – Harzard Critical Control Point.

The third problem is pest attacks. This is very typical of New Agriculture when crops or animals are newly introduced and it takes a number of seasons for the pathogen load to build up. Once this happens, it spreads very rapidly through the intensive production system that farmers have usually adopted. With cut flowers it was fusairum, a fungal disease. With shrimps it was a skin discolouring virus. With mangoes it was anthracnose, a fungal disease that produces black spots on ripe fruit.

Produce stall in Ghana features fruits of the new agriculture.

Innovation preparedness

Initial findings from ongoing research at UNU-INTECH suggest that there is an initial period of rapid growth usually relying on the technology and information held by farmers and firms – research often makes negligible contributions in these early stages. Then at a certain point knowledge becomes limiting. A pest problem occurs or new standards emerge and have to be dealt with. It is at this point that farmers and firms find that their own knowledge and the networks that they rely on for information are inadequate. Often, what is needed to cope with these shocks is new networks or partnerships to access and share information.

Rose Kiggundu, a Ugandan technology policy specialist notes: “The only way Ugandan fish export firms survived the introduction of sanitary and phyto-sanitary regulations by the European Union was to start to talk to each other and work together to find a solution.”

In a similar way in relation to vanilla Dr Rasheed Sulaiman observed: “We have an agricultural university. We have a research centre on species. We have a spices promotion board. We have large international companies with extensive knowledge of the sector. And we have knowledgeable farmers. The communication between all of these is extremely limited. The main task to support vanilla is the integration of these different sources of knowledge.”

In Bangladesh, in contrast to the Ugandan fish processing sector, shrimp processing companies do not exchange technical information, although they do work collectively for political lobbying.

Processing palm nuts for the production of palm oil in Ghana.

It seems that this integration and the ability to form networks is key not just because of existing problems and shock, but because these shocks continue to happen. Take the example of shrimps in Bangladesh. First there was the European ban on hygiene grounds. Then there was an outbreak of a virus that discolours the shrimps. Then there was an attempt to ban imports in the USA following the Tsunami disaster. As Dr Zahir Ahmed, a Bangladeshi anthropologist, points out: “The sector is exposed to a continuously changing production, market, policy and regulatory environment.” However, much of the support to the sector has been fire-fighting technical assistance to solve problems, rather than create capacities to deal with future shocks.”

Based on our analysis, the key to resolving these problems is to carry out four interrelated actions:

• Make sure that there is a critical mass of technical skills in R&D organisations so that they can effectively trouble-shoot and problem-solve. Or alternatively act as a point of contact for accessing trouble shooting technical expertise internationally and adapt this to local conditions. 
• Build loose networks between farmers, industry, research, industry and policy. The idea here is that when problems or new opportunities occur people have knowledge of who can help. New alliances and knowledge networks can then be built quickly. Networks also act as an early working system for approaching shock and emerging opportunities. 
• To avoid vanilla becoming the next coco, or the Tsunami ban becoming the European import ban, sectors need to learn lessons from the busts as well as the booms. This sort of "sector learning" could be used as a way of building up skills on how to deal with the inevitable volatility that is so characteristic of New Agriculture. Really this is a question of learning how to innovate and it is likely that it will have characteristics that are very specific to different countries and different commodities. The trick is to build up incrementally ways of doing things that work locally and suit local agendas. 
• Policy needs to recognise that supporting the capacity to innovate includes supporting agricultural and allied research. But it also goes much beyond it. What is needed is policies that are locally relevant, encourage both the creation and productive use of knowledge and do so in ways that reduce poverty and protect the environment. No simple task.

The future of agriculture

But is New Agriculture just a stepping stone on the road to industrialisation as it was in North America and Europe? As an American Department of Agriculture official recently noted at conference on the future of world agriculture, “There are more people detained in prison in USA than working on the land.”

This progression is far from certain for most of the poorest developing countries. Nor may it be desirable. The process of rapid industrialisation that took place in 19th Century Europe and North America was a unique event resulting from a certain historical sequences of events, physical endowments and particular modes of political, social and economic activity that allowed knowledge and technology to be put to use in ways that revolutionised society.

It goes without saying that these same conditions do not exist today in the poorest developing countries. Nor should there be attempts to emulate them. These countries have their own uniqueness. As the experience of New Agriculture shows, this uniqueness is both the context and the creative well-spring that can bring about social and economic change.\

Development planners should recognise this and look for ways in which these creative capabilities can be further developed and nurtured. New Agriculture is certainly on the road to another stage of the development process although it is impossible to specify what that stage might be. What is starting to become clear, however, is that if the poorest countries are helped to create the capacity to innovate around self-selected growth poles like new agriculture they may yet get the chance to invent a future that best suits their national context.

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 hall@intech.unu.edu

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