Reconsidering structures in production dynamics: methodological insights from World Agriculture Watch and preliminary elements on Indonesia
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1 JOURNEE FILIERE PALMIER A HUILE Montpellier, 9 juillet 2012 SPOP ANR 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
2 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
3 World Census of Agriculture 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. WAW First Stakeholders Workshop FAO 23 to 25 April
4 A World Without Agriculture? AGRICULTURAL GDP Share AGRICULTURAL EMPLOYMENT Share From: Timmer, 2009
5 Agrimonde, Note de synthèse
6 Agricultural Transformation 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 El Oued, ALGERIA Working document 6
7 Why? Production Structures matters! Variable impact according to the type of structure and the way they operate No systematic international effort to monitor the phenomenon The structures and how they evolve An integrated assessment of their performances
8 Overview of the Methodological Framework FAO April 2012
9 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
10 WAW Diagnostic studies at national level 10
11 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 12
13 Indicators of Assets: Holding Human Sex; Age; Household size; Level/type of education; Labour type (family; permanent employees; temporary) Social Land 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 Natural Total area of holding and by land use types; Presence of forest and other wooded land Financial Number of animals by livestock type; Types of temporary/ permanent crops Presence 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 Physical Presence of irrigation; Debt ratio (for commercial enterprises); Agricultural equipment Should allow international comparisons 13
14 Business scheme PIRtrans Bank loans individually granted KKPA Cooperative of SmH Buy the FFB from SmH with cash lent by money lenders Use of Middlemen and money lenders Some cooperatives often mixed with middlemen Bank loans to cooperative Cooperatives sell to company s mill Middlemen sell to the oil palm refinery SmH can give the management of their plot to the company
15 Share owned by the farmer within the NES scheme Entirely private plantation 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 Farmers entitled with 30% of both revenues and land + consolation fee for the 70% land they gave up Farmers entitled with 40% of both revenue and land at the price of more debts.
16 owner private government Share to SmH 0% 20% no debt 30% debt 40% high debt Population targeted Locals Trans migrants Locals then transmigrants Transmigrants then locals To the SmH after plantation s maturation (PIR transscheme) Management of the plasma through the SmH cooperative Land assets In the hands of the company the whole time (KKPA scheme) Bank to individuals Credit provider for the SmH Micro credit systems Financial assets Bank in partnership with the company and government
17 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 between SmH Labour on the Plasma SmH on their own plot SmH who participates in the NES wherever labour is required Human asset Hired labour through the cooperative Only competent workers hired by the company Source of FFB SmH from their NES scheme Middlemen related to a SmH cooperative Independant middlemen Independent SmH Level of involvment of locals in the decision making process Through cooperatives Through external organization Through local officials and village heads none Social asset
18 Preliminary typology of smallholders natural financial 5 social 0 SmH NES SmH NES+indep SmH independant physical human
19 What to observe? 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
20 Indicators of Assets: Territory Human 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 profile Natural 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
21 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.
22 Agricultural holdings Type 3 Type 2 Type 1 Drivers and pressures Trends and context National International local Influence on strategies of agricultural holdings by Institutions Organizations Social relations F Assets 8 H 4 0 S Household or business strategies Activities based on Natural resources Other Outcomes Economic Social Environmental population policies technology markets access to natural resources natural disasters P N Cumulative effects Influence of outcomes Territory 22
23 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 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 Strategies: Structure and activities: Conversion of smallholders to Palm Oil: NES schemes and Transmigration 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 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
24 Assessing trends: Territory 20 years Present years Types of holdings? F P H S Capital assets F S N at P N Territori al level 20 years Present years Time H Retrospective analyses Agricultural census (time series) WAW data collection Expert opinion Future projections Models Expert Opinion Changes in assets Comparison of capital assets at two selected points in time (labelled before and after ) during a continuous process of agricultural transformation 24
25 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 Sectors Crops Forests Livestock Other Current Situation Uneven progress towards rural development goals Partly driven by poorly targeted policies and planning Generally increasing Diversity Self consumption Family labor only Family + Hired labor Hired labor only Type 1 Type 2 Type 3 Type 4 Type 5 Generally increasing Market integration; Size of holding Need for robust typology allowing international comparisons Capital Assets F P H Livelihood strategies N S Outcomes Undertake similar analyses as above for each Type of holding Different livelihood strategies by each Type lead to different outcomes on Food security Environmental sustainability WAW Assessment A variety of information requested by stakeholders to support decision making processes Changing relative importance of different Types of holdings at Territorial level 100% 80% 60% 40% 20% 0% Type 5 Type 4 Type 3 Type 2 Type 1 Changing importance of typologies Disappearance and/or appearance of new typologies may occur 25
26 Generalization: Holding to territory Upscaling Use selected benchmark holdings (± statistically representative) to generalize results to the full area of territory 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 Territory + agricultural holding + + Type 1 Type Agro pastoral Type 3 Summary information on different types of holdings within the territory Pastoral 26
27 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! 28
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