It is now 2050. Globally, we are 9 billion strong. Only 20% of us are directly involved in agriculture, and poor country economies have diversified. Yet we all have enough food. Technological innovation has played its part, but increased production has been largely driven by institutional reform. For example, industrialized countries have eliminated the subsidies that once undercut poor country agricultural production and exports. Land reform has spread in Latin America. Water reform has proceeded in Asia. Irrigation, which once constituted 70% of freshwater use, now consumes less than 50%. New agronomic practices are taking hold worldwide. The world is eating more healthily and locally. The sustainability of our agricultural systems is taken as non-negotiable by the world’s politicians.
The key? Institutional reform. And the key to institutional reform has been placing citizens and primary producers in more central oversight and ownership positions, with governments stepping back and taking more responsibility for managing at watershed and ecosystem levels.
The institutional structure of innovation
Governments are investing more in public sector agricultural research, while multi-stakeholder “trustee panels” provide broad oversight. Public agricultural research institutions rely for 15% of their budget on licensing their innovations to farmers, creating an additional accountability linkage. In poor countries, farmer-to-farmer innovation is partially subsidized by the government, as is improved agricultural information.
Private agricultural research is encouraged, but publicly-funded innovations are jealously preserved for the public domain. Local “agricultural boards”, with a mix of government, farmer, and civil society representation, have a large say in setting the research agenda. Income from agricultural patents accrues to the creators, but the state sometimes intervenes for the public good, as it once did for HIV/AIDS medicines.
Biological or chemical innovations in agriculture are now supervised by FDA-like mechanisms at national and global levels, which assess potential impact on human, animal, and environmental health. Patents produced from government-funded programs are held in public trust. Income from such patents is divided equally between inventors and state agricultural programs. Special efforts are taken to advise government and communities on the economic and social implications of agricultural innovations produced by public research. Major breakthroughs have occurred for crops that grow well under saline conditions and under the higher temperatures associated with climate change. New drought and heat tolerant varieties especially suited for the tropics and for some breadbasket areas of the North have been developed. GMOs are selectively used but heavily regulated, and are limited primarily to industrial crops.
Investment in innovative water-saving technology is flourishing, incentivized by better valuation- worldwide, water is now acknowledged as an economic good and has a price. Water use efficiency for agriculture is up 50% compared to 2012. The state has stepped up in its oversight roles, and guarantees base flows for ecosystem sustainability.
The institutional structure of production
Small-holder farmers now get significantly more attention. Governments support cooperative storage facilities – to manage stocks, flows, and prices. They have also improved transport links to major agricultural areas and provide loan guarantees for agricultural cooperatives. Both rich and poor countries have developed a clearer understanding of the role of the state in all this: where markets already function reasonably well, they should be left alone, within the confines of reasonable regulation. Where the markets themselves are not functioning properly, as in many poor countries, the State should play a role, not least to ensure that the very large number of poor people who are still dependent on agriculture benefit from their involvement. In consequence, rich countries have stopped subsidizing food production, leaving market forces to determine agricultural prices, while poor governments have extended their assistance to small-scale agriculture fourfold, primarily through co-investment rather than through full subsidy. Market systems, even in statist countries, are allowed to signal supply and demand. Most countries have disbanded their inept and corrupt ministries of cooperatives, replacing them with wholly farmer-owned “cooperative companies,” which have at least the same status and legal persona as any corporate entity.
All over Latin America, major land reform has peacefully taken place, with compensation to the former owners. The beneficiaries, mostly peasants, pay for the land over time at a discounted rate. Land reform has served the triple bottom line: higher productivity, more equitable income distribution, and greater ecological sustainability. Strengthened regulatory safeguards govern the buying and selling of agricultural land.
Heavily dependent on irrigation, Asia, home to nearly half our population, has accomplished major reform in water management, including revamping its water rights frameworks. Significant water rights have been invested in companies controlled by farmers. But multi-stakeholder water boards closely supervise transactions and form the first point of adjudication for disputes. Even large irrigation systems formerly run by government are now managed by farmer-owned cooperative companies or by public utilities. Irrigation engineers work for the companies, not the government, thus increasing the incentives to raise productivity, reduce water consumption, increase equity, and tackle waterlogging and salinity. Water cooperatives sell the water they save to other users, including growing urban areas. Proceeds from sales are reinvested in irrigation infrastructure and in research. For its part, governments now focus on issues above the individual irrigation system, especially ecological sustainability and inter-system water distribution.
In many countries, some agricultural extension services have also been privatized, providing the incentive for agronomists and extension agents to develop and disseminate products that the farmers want and are actually willing to pay for.
The debate is over about whether large-scale mechanized production is more efficient than small-scale peasant production. We acknowledge that both are necessary. In countries such as the USA, grain production stays under large mechanized farms. However, fruits and vegetables, which respond more to higher inputs of labor, is increasingly managed by smaller farms. Many developing countries have benefitted from selective mechanization, such as power tillers and small tractors, but except for areas with major labor shortages, wholesale mechanization has been found to be neither necessary nor advisable. And, in some places, such as terraced rice fields, the mechanization possibilities remain extremely limited.
The proliferation of advanced agronomic techniques continues. The plant root management techniques that started with the system of rice intensification in Asia have spread to new crops and continents. For many crops, combinations of newer and older agronomic wisdom appear to yield superior results. Restructuring the incentive and ownership frameworks for agricultural research and extension has been instrumental in producing new knowledge appropriate for the small holder. GMOs have gone through periods of alternating approach, avoidance, and ultimately cautionary adoption mostly limited to industrial crops.
We have mostly organic solutions on how to enrich the soil. Even soil-rich countries had, mistakenly, often considered soil as inexhaustible. When the nutrients disappeared, treatment overly relied on chemical fertilizers. Now, chemical fertilizer consumption is down 75% because of reduced costs to spread organic material (largely through new solar and hydrogen-powered transport vehicles), better recycling of organic urban waste, improved crop rotation, and more widespread use of nitrogen-fixing cover crops.
Fisheries and watersheds/forests are now under new management. In the case of the former, international bodies with advanced surveillance equipment now monitor fishing fleets in open water to make sure they comply with stricter international fishing quotas; while artisanal fisherfolk have stronger legal rights and technology to protect their coastal fishing rights. Regarding watersheds, the practice of downstream urban areas paying for upstream environmental protection services is now widespread. In selected areas, urban areas also pay agricultural producers to use less climate changing production techniques. New solar and hydrogen-based energy and better battery storage technologies greatly reduce the use of arable land for bio-fuels.
The institutional structure of consumption
Over 1 billion farmers are both sellers and buyers of food; and another billion rural people must buy all their food. With rising incomes, we have faced the severe challenge of high grain prices due to rising demand for grain-fattened meat animals. We still produce large quantities of grass-fed beef, lamb, and goats, but we have managed to reduce per capita consumption of grain-fed meat through public education, new “grain-meat” taxes, and social programs that emphasize the reduction or elimination of meat in the diet. Grain-fed meat consumption in emerging economies has grown relatively slowly due to good public education. Health professionals have helped reduce grain-fed meat consumption in the West, while poor countries have been able to better meet their protein needs through new crop-based amino acid combinations rather through grain-fed meat.
In conclusion, politicians around the world have learned that for agriculture to successfully produce food, stabilize the ecosystem, and generate employment, institutional reform is critical. This particular reform path is difficult because it requires nuanced policies—selective mechanization, appropriate application of artificial fertilizer, judicious GMO use, equitable land reform, improved valuation of water, fairer structure of knowledge creation, and more citizen control over regulation and enforcement. The underlying policies and institutions are the product of continual negotiation. And, new technology has been at the service of these institutions rather than the institution being driven by the technology. Special efforts are needed to ensure that poor farmers and women benefit from the new structure of ownership and authority. These changes have gotten us to a new place, one more meaningful because it centers around equity, sustainability, and distribution, and not so much on profit, extraction, and comparative advantage, as it did back in 2012.
This post was originally published on From Poverty to Power
Photo: Maria Fleischmann / World Bank. A farm worker cleans lettuce crops, in Chimaltenango, Guatemala.