“We tend to think that money on the table is enough but there needs to be an enabling environment including infrastructural issues like irrigation, soil quality, electricity, roads, access to credit, training and human-capital development in agriculture – the focus cannot be on just giving money,” said Elina Amadhila of the Department of Management Sciences at the University of Namibia. “Countries that link social protection with agricultural finance interventions also usually achieve greater agricultural output.”
Amadhila, a STIAS Iso Lomso fellow, was presenting a seminar on her project which looks at the successes and failures of social protection as part of government interventions in the agricultural sector by comparing initiatives in Brazil, Indonesia and Namibia. This work is an extension of her PhD and will attempt to understand why strategies for promoting social protection for agricultural growth have worked better in some countries than others. The methodology includes analysing secondary data, document analysis and semi-structured interviews.
“Strategies promoting social protection for agricultural growth have been remarkably successful in some countries (mainly Asian and Latin American countries) but not in others (mainly African countries),” she said. “The work emphasises on trying to understand why.”
“Most of the literature on social protection in agriculture comes from outside Africa,” she continued. “The purpose of this research is to draw lessons from Brazil and Indonesia as countries that have achieved high agricultural output growth through agricultural finance interventions coordinated with a social-protection function and compare these with initiatives in Namibia to see what can be learnt.”
“Farming is a hugely strategic sector and should be high on the political agenda in every country,” she added. “It’s ironic that those who produce food are often the most susceptible to poverty, hunger and lack of income. Often the problem is low productivity due to environmental factors like drought. In drought-prone Namibia there is either no rain or flooding. Although the Namibian government has introduced some interventions – like irrigation schemes – these have not necessarily worked well.”
She explained that social protection is a set of interventions to reduce social and economic risk and vulnerability to eliminate poverty and deprivation. The underlying economic theory is that social protection can assist with income redistribution and bridging the inequality gap which ultimately contributes to poverty alleviation.
“With a Gini co-efficient of 0.57, Namibia has amongst the highest inequality in the world,” she said.
She focused on the social-protection conceptual framework which encompasses – protective including benefits like state pensions; preventative including savings clubs and social institutions; promotive which is about strategies to enhance inputs; and, transformative which involves labour laws and employment.
“Social protection can shrink and break the cycle of poverty, reduce hunger and build household resilience.”
“When social protection and agriculture work together they can lower structural constraints like access to markets, technologies and employment, increase food security, profit and access to credit. Allowing farmers to borrow by alleviating credit constraints actually encourages riskier choices usually resulting in higher productivity.”
“Providing liquidity and certainty also allows farmers to reinvest in labour and human capital.”
However, she also described issues which need to be addressed including – the type of cash transfers, the timing and scale of interventions, conditionality and trade-offs (often resulting in unintended consequences), the stability and reliability of programmes, effective targeting, and the overall political economy of local, national and international relations.
Success stories
She highlighted strategies that have worked in Brazil and Indonesia.
Brazil has promoted smallholder agriculture in particular by adopting structured demand to promote access to markets. In such programmes – large, predictable markets (like schools under national school-feeding programmes and hospitals) are linked to smallholder farmers giving them a guaranteed return.
“Brazil also constructed resources like water infrastructure and facilitated the provision of loans against notes delivered by farmers – this committed farmers to a specific amount of produce or equivalent payment by a specific date. This, along with access to credit without collateral and the introduction of federal crop insurance from 2004, led to an increase in production which, in turn, encouraged investment, technology improvement and the seeking out of new buyers.”
Indonesia focused on strategies like government purchases of agricultural products, fertiliser subsidies, insurance provision, more democratic resource allocation, and a move from subsidies to market-determined credit allocation.
“There was also increased investment in irrigation, expert planting and cropping intensification schemes, climate-change adaptation and increased food diversity, along with changes to the legal and regulatory framework,” said Amadhila.
In Namibia there have been three main interventions – those through Agribank – which has offered credit, drought-relief schemes, and post-settlement supplementation funds for historically disadvantaged farmers; programmes via the Ministry of Agriculture, Water and Forestry for dryland crop development and conservation agriculture; and, AGRIBUSDEV Namibia which is involved in green schemes.
“But despite the operations of Agribank which has been in existence since independence in 1990, agricultural productivity has not been encouraging.”
“Although loans increased from $1.8 billion in 2012/13 to $2 billion in 2013/14, resources still often don’t reach farmers,” said Amadhila. “There is no equilibrium in resource allocation – due to system dysfunction or individuals in power using resources meant to benefit the nation.”
“Other negatives have included extensive drought and water shortages, low output prices and price risk, and a lack of expertise in the financial sector where there is a need for training in making loans to farmers and loan recovery.”
“There is weak institutional capital in Namibia – and it is not agriculture focused.”
“Current interventions in Namibia are more agriculture than social-protection focused,” she said. “The transformative functions are missing. A truly sustainable reduction in poverty requires deeper investment in rural areas, serious labour and human-capital reform, and secure financing schemes.”
In discussion, she acknowledged the need to understand the gender aspects of agriculture – “in Namibia farming remains male dominated” – as well as the urgent need to encourage young people to enter the sector.
“There is zero interest in farming by the youth,” she said. “We have to look at how to incentivise young people to go into agriculture. It must be made more attractive.”
She was also asked about the link between this and current global calls for universal basic income in light of the COVID-19 pandemic.
“In Namibia universal basic income is only available to those not working in certain parts of the country and would only be given to subsistence farmers with no income or considered to be living in poverty. There have been talks around implementing a broader, nationwide rollout of the basic income grant as part of the national 2016-2025 plan, although it has yet to be implemented. It’s still a work in progress. It’s very important to see social protection from a global perspective but also from the view of individual states. You need to understand what’s happening around the globe so you can make informed decision on the ground in individual states.”
Michelle Galloway: Part-time media officer at STIAS
Photograph: Noloyiso Mtembu