Agriculture and Rural Development
The impact of natural resource wealth on macroeconomic outcomes is well researched, with the debate centered on whether resources are bad for development (i.e., the phenomenon of the resource curse). However, relatively little attention has been given to examining the effect on communities where those resources are located.
But interest in the local impact of resource abundance is growing, underpinning a nascent literature. The focus of this research is on exploring whether extractive activities improve or harm welfare in adjoining regions, and how the benefits or costs are transmitted to the local population. The answers to these questions can inform policy, leading to better outcomes, and may also help us understand the sources of regional and social tensions associated with extractive industries.
Among them, 38 percent are projected to work in household enterprises, amounting to around 65 million people. Studies show that jobs generated in the sectors where the poor work and places where the poor live, i.e. in the rural areas, are more effective at lifting them out of poverty.
But is this justified? If only small numbers of rural inhabitants are entrepreneurs, if they predominantly engage in low productive activities, or if they do not make significant contributions to household income, we need to be more skeptical with regard to the role of entrepreneurship. Or at least, we must more critically reconsider whether current supporting policies are appropriate or supportive enough.
Every year, we lose 24 billion tons of fertile soil to erosion and 12 million hectares of land to desertification and drought. This threatens the lives and livelihoods of 1.5 billion people now.
In the future,. Land degradation could also reduce global food production by up to 12% and push world food prices up by 30%. In Egypt, Ghana, Central African Republic, Pakistan, Tajikistan and Paraguay, land degradation could cause an annual GDP loss of up to 7%.
Pressure on land resources is expected to increase as populations grow, socio-economic development happens and the climate changes. A growing population will demand more food, which means that unsuitable or especially biodiverse land will be claimed for farming and be more vulnerable to degradation. Increased fertilizer and pesticide use related to agriculture will increase nutrient loading in soils, causing eutrophication and declines in fertility over time.—especially in drylands, which occupy 40% of global land area, and are inhabited by some 2 billion people. Urban areas, which are located in the world’s highly fertile areas, could grow to account for more than 5% of global land by mid-century.
Unless we manage our land better, every person will rely on just .11 hectares of land for their food; down from .45 hectares in 1960.
One of the most common assumptions underlying current policy and development interventions in Sub-Saharan Africa is that the use of all modern agricultural inputs – like chemical fertilizer, improved seed varieties, irrigation, agro-chemicals, and machinery – remains dismally low. But when you examine the evidence underlying this basic claim, it’s easy to feel misled. Most of the well-perpetuated numbers we hear about are from highly aggregated macro-data sources while others are derived from small or purposively chosen samples. Even further, many of the studies that continue to be cited are a decade or two old and may no longer be accurate in an environment influenced by pledges made via the Abuja Declaration on fertilizer.
So what’s a policy analyst to do when the evidence base is likely problematic? Just wish and hope that more appropriate data existed? For a set of eight countries in Sub-Saharan Africa, the wait is over. The Living Standards Measurement Study Integrated Surveys on Agriculture now provide nationally representative and highly disaggregated data from farmers’ agricultural plots to help rebase our understanding of African agriculture and rural spaces.
It has been 50 days since the devastating earthquake struck Nepal on April 25. With another powerful aftershock on May 12, a combined 9,000 lives were lost, making this the worst disaster in Nepal’s history in terms of human casualties. One in three Nepali has been affected by the earthquakes. One in ten has been rendered homeless. Half a million households have lost their livelihoods, mostly poor, subsistence farmers. Everyone has been affected in one way or the other – women, men, children, the elderly, the differently-abled. A large part of the country is in ruins.
Nepal is grateful to her friends in the international community for the rapid humanitarian response in the immediate aftermath of the disaster. We owe you our deep respect for your generosity and heroism.
Early estimates from our Post Disaster Needs Assessment (PDNA) price the damages and economic losses at US$ 7 billion, roughly one-third of our economy. The economic growth rate this fiscal year ending mid-July is expected to be the lowest in eight years, at 3.04 percent. Revenue collections will be off-target by at least 8 percent and result in a lower base going into the next FY. The immediate priority is to restore the productive means of livelihood for millions of people in agriculture, services and industry.
Reducing risk is the only way for community joint-ventures to get serious with commercial banks. Without commercial finance, this niche tourism sector might never deliver on its potential. Photo: World Wildlife Fund
Over the last 20 years, joint-ventures between local communities and the private sector have grown up as a feature of the sustainable tourism development agenda. Typically, the community provides the land, the heritage or the wildlife asset base while the private sector brings the capital, management know-how and business networks. When they work well, these partnerships contribute substantially to local economic and social development, as well as providing professional, unique and authentic tourism experiences for visitors.
Lena Florry is an Area Manager for Wilderness Safaris, the private-sector partner in a community joint venture (CJV) lodge in Namibia. ”What we have here at Damaraland really changes our lives,” she says. “Previously, in our village, I was herding goats. Now we have good jobs and a much better life.” Crucially, Lena is also a member of the local community and takes personal pleasure in sharing the model’s success story with the camp’s US$500-a-night paying guests.
Typical benefits include income for communities through lease or contract agreements, employment and supply-chain opportunities, skills and knowledge transfer from the private sector, and usually a kind of joint “tourism asset protection” like wildlife preservation or heritage protection. In Namibia, for example, community conservation generated about US$7 million in returns for local communities in 2013, and the elephant population doubled in 20 years.
While much emphasis has been placed on the development impacts of this model, the actual health of the businesses has often been overlooked. As long as the ventures continue to deliver a development dividend – such as contributions to a community fund, or increased biodiversity – all is believed well. For the venture’s supporters, it may then come as a surprise when applications for commercial finance are rejected.
“We would like to finance the sector,” says Christo Viljoen at First National Bank (FNB) Namibia. “But our biggest challenge is to determine the financial viability of the community joint-ventures. We find the risks involved are not properly addressed in the business plans.”
Banks report that risks typically have to do with corporate governance, low-quality financial data, collateral, the level of experience of the sponsor, and a host of structural problems in the CJV business – not least, the balance between the development dividend versus the profitability of the business. All these factors help to undermine a firm’s viability. A business that cannot demonstrate financial viability – and, thus, show how it will pay back a loan – cannot be financed.
This presents a very real problem. Without the means to make necessary investments in the business (such as refurbishment or expansion), the quality of the tourism product deteriorates, occupancies and rates decline, and funds for the community and for wildlife protection drop.
In an effort to help the various stakeholders increase the financial viability of CJVs, reduce risk and increase loans, the World Bank Group and the World Wildlife Fund released “nine tips” at the recent tourism trade show ITB Berlin 2015. Dr. Hannah Messerli of the World Bank’s Trade and Competitiveness Global Practice said, “We believe that destinations that address these issues are more likely to provide comfort to the banks in lending.”