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THE FAO REVIEW: Rural financial markets
ISSN 0009-0379

Climatologists fear prolonged drought in Sahelian zone

Throughout human history, rainfall in sub-Saharan Africa has been variable from year to year and from place to place. There were recurrent droughts during the first 60 years of this century, but the rain has usually returned within one to four years. For this reason, agricultural planners have become confident, even in years of low rainfall, that "normal" rains would return within a few years.

Since 1960, however, rainfall in the Sahel has been declining. More precisely, the year-to -year variations in rainfall in any particular place have been superimposed on a continuing long-term decline. The same is true of overall rainfall in the western Sahel as reflected in the statistical indices constructed by climatologists. Through out this region rainfall has become sparser and more variable. To cite one dramatic example, rainfall in Dakar has declined from 500-800 mm in the 1950s (that typical of the mid western United States) to 130-200 mm in the 1970s (that typical of the American arid southwest). The effect of this long-term decline is exacerbated by a shorter-term drought that extends over a huge crescent-shaped area that stretches across the Sahel and doubles back down through southern and southeastern Africa, an area twice the size of the United States.

The historical precedents for this kind of prolonged Sahelian drought have made climatologists seriously concerned that the current drought will persist for another decade or so. The last period comparable to this one took place in the 1820s and 1830s. According to the rather meagre records available, rainfall declined for a period of 20 to 30 years and the level of Lake Chad fell to about where it is today. The geological record shows several similar drops in the level of the lake in the past 600 years. (The Sahel has also seen much wetter periods. The area near Timbuktu, which now has 100 mm of rainfall a year, exported wheat to other regions of West Africa in the late nineteenth century, taking advantage of then higher rainfall and river flow.)

Climatologists still do not know the extent to which the drought and its persistence are due to human activities. Any climatic phenomenon that extends over an entire continent and which has occurred intermittently in the past cannot be due to human activities alone, but must be related to the global atmospheric circulation that controls the climate of the entire earth.

Other areas of the tropics are affected by periodic droughts, but these last for one or, at most, two seasons. Many of these are known to be caused by the El Nino/Southern Oscillation (ENSO) phenomenon. A global change in the oceans and atmosphere that causes drought in India, Australia, South America, and the Pacific Islands. (See Ceres, Nov.-Dec. 1985).

The year-to-year variability caused by the ENSO phenomenon can be seen in African climatic records. Of the last 28 ENSO years, 22 have been unusually dry in southeast Africa. Since ENSO-related changes take place a few months before the rainy season, further research may make it possible to use them to give a few months' notice of some particularly bad drought years in southeast Africa, south of Zimbabwe. However, their usefulness for this purpose in the Sahel is doubtful.

In the Sahel, by contrast, some dry years are correlated with a warming of the surface of the Atlantic just north of the equator. This change may be related to the movements of the Intertropical Convergence Zone (ITCZ), the great band of equatorial clouds whose north-south migrations bring rain to the humid tropics and the Sahel.

But unlike the situation in other parts of the world, Africa has had many dry years that are not correlated with ENSO or other sea surface phenomena. And the trend line of its rainfall regime in the Sahel has gotten steadily worse for 20 years. It is the persistence of the Sahelian drought that sets it apart from droughts in other parts of the world.

While the cause of this persistence is not known, the obvious suspect is the large-scale changes in the land surface in Africa. Some of these changes are probably due to human activities, such as deforestation. But the most important changes are probably caused by the drought itself. In other words, there is probably a natural feedback mechanism that causes the drought to feed on itself.

Both human and natural changes involve major changes in surface hydrology, reflectance (albedo), and dust - all of which are major influences on climate. In particular, surface runoff increases, and percolation and soil moistture decrease, decreasing in turn the amount of water available for evapotransportation back into the atmosphere. In addition, crops and grasses evapotranspire less than trees because they have shallower roots. These changes can have a serious effect on local precipitation, since in many areas rainfall is derived from water evapotranspired locally. Another possible contribution comes from the coaling effect caused by the increase in reflectivity and dust. This draws dry air down from the upper atmosphere, reinforcing the effect of decreased soil moisture.

From the scientific point of view, the problem is, first, that no one knows the relative contribution of human and natural causes to the persistence of the drought. (To be sure, erosion and deforestation caused by humans seriously affect the availability of soil and water for agriculture, but this is another matter.) There is no empirical evidence that even large-scale changes in land surface (covering an area of, say, more than 500 km²) can affect climate. But they are not yet capable of modelling climate reliably at the continental level, or of modelling the details of surface hydrology or the relations between plant cover, soil, and atmosphere. Hence, scientists are unwilling to rely on their ability to predict the climatic effects of even large-scale changes in land surface in the absence of empirical data. These research techniques are now rapidly improving.

Rainfall data in Africa, both current and historical, is meagre. Local research capacity is almost non-existent. The network of operational meteorological stations is poor and deteriorating. Upper air measurements of wind and temperature, which are essential for research, are few and dwindling over the Sahel. Even routine rainfall observations are often not communicated to international networks or are subject to long delay. Historical records are difficult of access; one researcher reported that she had to visit the station in person and copy the records by hand in order to obtain satisfactory historical records. Satellite data help, but are still mostly qualitative and extend back at most ten years. Well-trained African meteorologists do exist, but they are employed mostly in routine forecasting and administrative duties.

Two conclusions can be drawn. First of all, rainfall atlases based on the historical records of the last three or four decades are clearly not applicable to the next decade or two. Specifically, agricultural and other projects now being planned for the Sahel should not use farm models based on the assumption that "normal rains will return". The causes of the drought are not understood, and there is no assurance that the rain will return soon. On the contrary, it is prudent to assume that the pattern of the last decade may persist for another decade or more.

Charles Weiss

Mosquito control aided by tiny fish with big appetite

Since 1970, mosquito abatement programmes in the state of California have reduced their use of insecticides by more than 75 per cent. Part of the credit for this is due to a hardy minnow from the rivers and lakes of the southeastern United States, the gambusia, whose prodigious appetite for mosquito larvae has earned it the more common title of "mosquitofish". Although the full-grown female is only as long as a human finger and the male is even smaller, each can eat dozens of mosquito larvae and pupae a day. The fish occupy some amazing habitats: tunnels, abandoned swimming pools, bonds, rainbarrels, stagnant rice fields, and waterways that dry out only slowly in the spring. Mosquitofish have been introduced statewide into sewage-treatment ponds, roadside ditches, and watering troughs on ranches. The city of Fresno has them in drains under the streets. Disneyland has them inits aquatic exhibits and its many storm drains.

Yet the discovery of the species' effectiveness in controlling mosquitoes is not new. The tiny grey or grey-and-black fish were first used for mosquito control in the United States in the early 1900s. Stocks were sent to Hawaii in 1905, where they were credited with reducing the populations of the encephalitis mosquito. Mosquitofish also helped conquer the yellow Fever epidemic that threatened to halt all work on the Panama Canal. They were dumped into flooded excavation pits, into plants that trap water in their leaves, and even into gutters around houses.

In the 1940s, however, the spectacular early success of DDT and other synthetic compounds made the tiny minnow seem obsolete. Its use declined. This natural form of mosquito control is only now coming back.

The fish require no special egg-laying site: they bear live young. Under favourable summer conditions a single female can produce 200 young every 21 days. Small size allows them to penetrate most sites where mosquito larvae and pupae are found. They thrive when combined with other control techniques, such as bacterial pesticides, and even chemical insecticides used to spray mosquitoes do not hurt them. They tolerate wide ranges of temperature and salinity, as well as moderate sewage pollution. "Mosquitofish can take terribly poor water," notes Graham Gall, an aquaculture specialist at the University of California. "The oxygen level can be down to practically nothing. They're a surface fish, they work on the interface with air, and are okay."

Most of California's 53 mosquito abatement programmes use some mosquitofish. Some have full-time fish biologists on staff. Mosquito control personnel have fish trucks and other special equipment for handling fish. (Mosquitofish have been dropped out of helicopters in plastic bags; the beg explodes, releasing the fish into little pools that are hard to find except from the air.) The study of the metabolism, feeding, and aquaculture of mosquitofish are leading programmes in statewide mosquito control research.

For mosquito control in rice fields, the fish reduce the number of pesticide treatments by 90 per cent and reduce both inspection time and costs per acre by around 65 per cent. Only insufficient supplies of the fish are hampering the increased use of this integrated control. Many mosquitofish die during the cool California winter, and there are not enough available in the spring when mosquito populations are small and most vulnerable. No one yet knows how to culture the fish, although researchers are attempting to mass rear it. To recover the fish, rice growers now drain their fields before drying them out in the autumn. The fish wash down through canals, where mosquito control personnel recover them. They are overwintered in warm water ponds at power plants or sewage treatment facilities.

Elsewhere in the United States mosquitofish have proved singularly successful as well, and they could have worldwide possibilities. They are not, however, without their potential problems. Mosquitofish are so effective that they can consume most of the plankton in an area, and scientists worry that this might harm other fish species. There are no quantitative data to confirm any adverse effects in field practice - indeed, the mosquitofish are preyed upon by larger fish and in some waterways they seem to have improved the numbers of food- and sport-fish species - but it is still possible that problems may arise in the future, especially in areas where the fish do not die off over the winter. Most biologists are opposed to introducing the mosquitofish to new habitats.

Instead, countries worldwide should investigate their own indigenous fish and identify those that consume mosquito larvae. (This is done by observing the faeces under the microscope; the species that eat mosquito larvae are identified by the undigested outskeletons, which are easily seen.)

The World Health Organization has already begun this process for some areas. Mosquito-eating fish that have been identified include guppies, blackfish, the desert pupfish, goldfish, and even "annual fish" whose eggs resist desiccation when a pond dries out.

Therefore, the most important message of California's success is that fish in general can be valuable in mosquito control. In the future, this natural form of pest management is likely to be used the world over, employing dozens of local species and involving many fish biologists in suppressing mosquitoes and preventing diseases.

Noel Vietmeyer

New cropping system reveals promise for low-input farming

For centuries, African farmers have relied on shifting cultivation and bush fallow systems to regenerate soil fertility. Although these provide only a subsistence living, they are ecologically stable and therefore suited to the tropical environment. They are, however, wasteful, especially where urbanization and the introduction of large-scale mechanised farming make the practice of idling land for several years unrealistic.

Many programmes for improving tropical agriculture have tried to remove components of the bush fallow system, but the replacements, usually based on temperate-climate farming methods, have often had a destabilizing effect on tropical environments. Thus the search for a stable and suitable alternative to shifting cultivation has engaged the attention of researchers for many years. Now, after a series of studies and experiments at the International Institute of Tropical Agriculture (IITA), Ibadan, Nigeria, scientists have come up with a method called "alley cropping" which holds promise for making tropical soils more productive

Alley cropping is a low-input soil management technology that can sustain crop production where farmers cannot afford expensive inputs and where increasing pressure on land does not favour traditional shifting cultivation. While introducing important and more reliable improvements, it retains the basic features of bush fallow and can easily be adopted by resource-poor farmers. As a biological low-input production system, alley cropping represents a useful production technique in developing countries where shortage of foreign exchange prohibits the importation or use of larger quantities of inputs such as fertilizers and herbicides.

Alley cropping consists essentially of planting food crops between rows of leguminous trees or shrubs whose leaves are periodically slashed to supply nutrients to the soil. A major advantage of alley cropping over the traditional shifting cultivation and bush fallow is that the cropping and fallow phases can take place concurrently on the same land, thus allowing the farmer to crop for an extended period without returning the land to bush fallow.

Alley cropping is another arm of the no-tillage or zero-tillage package being emphasised by IITA scientists as part of a worldwide campaign to find an alternative to the conventional system of land preparation in the tropics. Scientists discourage use of heavy equipment for land clearing and preparation because tropical soils are prone to rapid degradation as a result of high humidity and temperature. With alley cropping, conventional ploughing and harrowing are not required. As long as there is adequate mulch from prunings, tillage makes little difference in crop yields. Besides, like bush fallow, alley cropping helps to suppress obnoxious weeds, a big advantage especially in small-scale farming, in which weeding constitutes more than 30 per cent of the labour in crop production.

Perhaps the greatest gain in alley cropping is the supply of nutrients to food crops by the leguminous trees and shrubs. According to three IITA scientists, Drs B.T. Kang, a soil scientist; G.F. Wilson, an agronomist, and T. L. Lawson, an agroclimatologist, coauthors of a publication called "Alley Cropping", trees and shrubs in alley farming provide green manure or mulch for companion food crops. Eight years of continuous experimenting in Nigeria have shown that a wellmanaged row of leucaena used in the alley system produced between 15 and 20 tons of fresh prunings (5 to 6.5 tons dry matter) per hectare with five prunings per year. These prunings, excluding stakes, yielded over 160 kg N. 15 kg P. 150 kg K, 40 kg Ca, and 15 kg Mg per hectare per year. A similar study carried out in Hawaii showed that nitrogen fixation was as high as 500 to 600 kg N per hectare per year. The study also showed nitrogen yield of 127 kg per hectare from four-month-old leucaena plants grown in the Cauca Valley of Colombia. This is a reaffirmation of the high nitrogen fixation ability of leucaena. The recycling of nutrients to the surface soil is a major benefit of alley cropping. Where nitrogen fixing leguminous trees or shrubs are used, some of the nitrogen fixed is eventually released to the companion crops through decomposition of prunings of leaves and twigs. Reports show that yields of open pollinated maize, when alley cropped with leucaena continuously for six years without additional chemical fertilizer on a sandy entisol near Ibadan, was never less than two tons per hectare.

The same system of alley cropping on an alfisol alternating maize intercropped with cowpea produced even more encouraging results. There, with leucaena prunings serving as mulch and without additional use of fertilizer, the maize yield was not less than four tons per hectare. Very promising results were obtained from alley cropping of cassava with gliricidia and also from alley cropping of rice and yams with leucaena. To further expand and select suitable tree and shrub species for alley cropping, field testing is being conducted around Ibadan and the high-density rainfall area of Port Harcourt.

A peasant farmer who has practised alley cropping for two years at Ijaiye village near Ibadan said he received the "gospel" with mixed feelings when it was introduced to him. After one year of trying the package, he added, he began to see the benefits, especially in the area of mulching and weed control. Many farmers in the area are now buying the idea through him.

In the savannah region of Benue State, noted for yam production, a major problem is the supply of stakes needed for this crop. Vegetation there is mainly grass and scattered stunted shrubs. To reduce the farmers' problems, IITA scientists introduced alley cropping in some locations about five years ago. Farmers planted fast-growing Leucaena leucocephala using the stems for yam stakes and the leaves as fodder for their ruminants during the dry season.

Taya Babaleye

Frogs' usefulness cited in campaign to ban their export from India

A conflict between ecological and economic interests has arisen over the humble Indian frog. For many months now, ecologists of the Federal Republic of Germany have been telling their countrymen that leaving bullfrogs in their native fields augurs well for the ecology of the Asian countries exporting frogs' legs. The West German National Environmental Foundation, based in Frankfurt, is trying to persuade food shops and restaurants to drop frogs' legs from their menus. German ecologists have also been carrying their campaign across the Atlantic, to the United States, which imported 3 212 tons of frogs' legs in 1983, about six times the average annual imports into the Federal Republic of Germany.

It takes at least 20 to 25 frogs to produce a kilo of frogs' legs, which fetches up to $85 on the US market. For India, which exports more than 3 000 tons of frogs' legs annually to the United States and Western Europe, this implies the killing of 9 000 tons of frogs a year. Indians traditionally worshipped frogs as harbingers of prosperity and plentiful rain, and killing them used to be considered a crime. But in the face of widespread poverty and unemployment, such traditions are rapidly fading. Frog trapping has emerged as a lucrative occupation. Favoured hunting grounds for Indian frogs are the areas surrounding Calcutta, Hyderabad, and Cochin, where unemployment is high and jobless youth need little encouragement to catch frogs which yield high returns.

Western Europe and the United States are the largest outlets for Indian frogs' legs, though, of late, Canada, Saudi Arabia, the United Arab Emirates, and Japan are growing markets.

But while the economy may benefit from the export of frogs' legs, the deficit side of these transactions will include insect damage to agricultural crops, more money being spent on pesticides, pollution of the environment by non-specific pesticides, and, more important, spread of malaria. This is the view of Dr G. M. Oza, a member of the commission of ecology of the International Union for Conservation of Nature and Natural Resources (IUCN). By feeding on a host of insects that continuously threaten agricultural crops, frogs play a prominent role in maintaining the ecological cycle and the food supply pattern. An adult frog devours its own weight in insects every day. It has been estimated that over a period of 90 days, 9 000 tons of frogs would swallow about 810 000 tons of food, including insects. Thus the killing of so many frogs will con tribute to an increase in the insect population, which in turn will lead to a steady decline in crops.

Field studies conducted by the Indian Council of Agricultural Research (ICAR) have established that crop losses in India are more pronounced during the period between May and 7 August - the peak breeding season of frogs. As a consequence of these findings, the Government of India has banned frog trapping during these months. To restrict the slaughter of wild frogs, captive breeding is being encouraged.

But it is not only the extent of the slaughter that is disturbing to the conservationists, it is the method of killing. And this is what gives their cause its emotional appeal. The trappers' normal practice is to kill frogs on capture and sever their hind legs and despatch them to the processing plant. At times, however, legs are removed in more violent fashion - the frog is chopped in two across the torso while still alive. Sometimes they are also skinned and the hides used to make small leather goods.

Further ammunition for the save-the-frog argument comes from Australian researcher Michael Tyler, an eminent authority on frogs and frog behaviour. He has discovered that certain abnormalities in frogs can be traced to specific water pollutants, often as far back as tadpole stage. But what Tyler adds to the conservationists' cause is this: frogs can serve as a highly sensitive early warning system.

Land clearance, mining wastes, pesticides, and weed control measures have been found to exert an adverse effect on the healthy growth of frog species. According to Tyler, natural abnormalities in the frog usually vary between 0.5 and 12 per cent. Any percentage beyond this is a certain indication of aquatic contamination. "One day it may be possible to suggest the nature of pollutants in an area just from the examination of abnormal frogs," Tyler says. "But what we lack is sufficient data to exploit this unique environmental monitoring system."

Radhakrishna Rao

Loss of markets feared for Sudan's gum arabic output

For 2 000 years harvesting of gum arabic has been an essential part of subsistence agriculture in the Sudan. In good years the country's Acacia Senegal trees have provided 80 per cent of the world's requirements for gum arabic, which is used in textiles, plastics, and paint and serves as an emulsifying and adhesive agent in confectionery and drugs. It has provided cash income for farmers in lean years, and, more important, grown in rotation with other crops, it has helped to bind the soil and provide cover against the encroaching desert.

But, as in the case of other crops, years of drought in the region have taken their toll on the Acacia Senegal plantations. Gum output has fallen substantially, particularly in Kordofan province in the west of the country, which accounts for half of total national output. By the beginning of the present decade Kordofan's production of gum arabic had declined by one third from the long-time annual average of about 24 000 tons. Once the Sudan's second most valuable export commodity (after cotton), gum arabic has now slipped to fourth place. Even so, in 1983 it still earned $58 million, or more than 10 per cent of the Sudan's export revenues.

In addition to the immediate damage to the region's economy, however, the Sudan's gum arabic industry is faced with a more disturbing longer-term threat: the possibility that important export markets, weaned from gum arabic in periods of short supply, may turn to readily available synthetic substitutes. Since global demand for gum arabic is small (only about 50 000 tons a year}, the Sudan's share of the world market was assured until recently. However, synthetic substitutes made from starch and petrochemicals are making steady inroads into markets for natural gum arabic. To counter the possibility that the Sudan's customers might change more quickly to synthetics if supplies became restricted, the government-run Gum Arabic Company {GAC) drew upon its strategic reserve of 20 000 tons to help offset the immediate effects of the drought.

The Government has also recognized the environmental importance of Acacia Senegal and has initiated conservation measures. Within the 65 000 km² area in Kordofan known as the gum belt, a major programme for restocking gum arabic plantations is under way. The Sudanese Government has been working since 1981 in collaboration with FAO, UNDP, and UNEP, the United Nations Sudano-Sahelian Office (UNSO) on a project aimed at Planting 27 000 feddans of new gum trees. The Dutch Government has contributed $1.5 million to the scheme, which has more recently been extended another four years and expanded to include assistance from the World Food Programme. The present aim is to extend the gum belt further with two plantations, one of 11 350 hectares and the other of 34 660 hectares.

The Government's interest has been complemented by increased involvement in actual production by GAC, in theory a joint venture between state and private producers.

The cultivation of and trade in gum arabic was traditionally conducted by private merchants until 1969, when the Sudanese Government set up the GAC to market the commodity. GAC's role was first confined to Port Sudan, where it bought, cleaned, and exported gum transported to the quayside by producers. However, over the years the GAC became more involved in production, evolving research and extension programmes and supplying farmers with seeds and credit. As drought worsened in 1984, the company provided farmers with water tanks and money for digging wells. Now GAC wants to improve screening, sorting, and packaging facilities at Port Sudan in order to raise standards of Sudanese gum arabic on the world market. According to the International Trade Centre, higher standards could lead to price increases of 10 to 15 per cent in ordinary grades and 15 to 30 per cent in top grades. The ITC also noted gum arabic users' need for standardized and consistent raw material supplies as their production processes become increasingly automated.

Andrew Lycett

New species, techniques help to rehabilitate African fishponds

Five kilometres of dirt road, then a path between two maizefields rising steeply before it suddenly divides - even if one knows of their existence, the two fishponds operated by a womens' group at Mwilitsa in the Lake Victoria region of Kenya would not be easy to find. Yet, in that region alone, there are at present about 4 200 such ponds. They are operated by individual farmers or by groups like the one at Mwilitsa - Teresa, Myriam, Anna, Leonida, and 35 others - to raise fish for the family table or to sell to neighbours or in the market. Since average meat consumption in this impoverished region is only about 10 kilos per person per year, the potential of these small ponds, each about 10 by 20 metres in area and a little more than half a metre deep, for improving family diets is considerable. With good management, a pond can produce from 20 to 50 kilos of fish a year.

"That may seem like a ridiculously small amount compared with the 75 000 tons of fish brought out of Lake Victoria each year," admits Frans Vallet, leader of the FAO/ UNDP project for the development of fish farming in the Lake Victoria region. "Of that total, however, only 20 000 tons are sold on the markets of the region and the supply is much below the demand. Moreover, threadfish constitutes 60 per cent of the catch and the local population doesn't eat it because they prefer tilapia." The Belgian Fund for Survival, in addition to the Kenyan Government, is contributing to the project.

In 1983 the Lake Basin Development Authority (LBDA), with the support of FAO's Technical Cooperation Programme, trained 20 extension workers and seven coordinators, who are presently working with farmers and groups in the region. Their first task, undertaken with the financial support of the World Bank, was a stocktaking of existing ponds, which made them realize that almost all of these were either badly managed or simply abandoned. "The pond should be dug on a spot where the soil is an impervious clay, the gradient very slight, and where water will be available year round," said Vallet. "When an extension worker goes to see a farmer for the first time he shows him the works that are needed to restore a pond. Generally, he also suggests that the pond should be completely emptied. The farmer can then resume his production with first quality young fish (100 fry are worth 15 shillings), that we raise in the project fish hatchery at Kibos, near Kisumu."

A regular culling of the fish or a complete emptying of the pond is essential. "Often," says Vallet, "farmers believe that fish continue to grow indefinitely. In fact, it takes about six months and sometimes a little more if it is at a higher altitude or the water is cold, until they reach their maximum length and weight. A pond-reared fish will never weigh more than 500 grams. However, tilapia reproduce very rapidly and overpopulation prevents fish from growing normally."

Each morning and evening at Mwilitsa, teams of two women come to feed their fish with food scraps, ogali leaves, manioc, and cow manure, which, deposited at the bottom of the pond, fertilizes the soil and assures the production of fungus and grass on which the fish feed. "It takes more time for the fish to gain weight with this type of feeding," Vallet explains. "The conversion rate is 10 to 1, while with commercial rations it takes only three kilos to produce a kilo of fish. Use of prepared feeds also permits more densely stocked ponds, since density of population is partly limited by the amount of feed that can be placed there. On the other hand, the cost of commercial feeds is often a negative factor for the farmer. It all depends, finally, on his main objectives."

Since the beginning of the project in July 1984, some 500 ponds have been restored to an operating state and another 500 have been constructed. However, this is still too slow in the view of some 2 100 farmers who have asked help from extension workers to take their turn in this new productive activity. Between October 1984 and June 1985 the new hatchery at Kibos was able to supply more than 43 000 selected tilapia and tilapia Nilotica to the fish farmers. Six other hatcheries are to be built before the end of the project in order to meet the needs of the extension service. Another programme of technical assistance to schools is being provided by a United Nations volunteer who arrived in early 1985 and is working in the Kisii region in collaboration with extension workers and Department of Fishery personnel.

With the expectation of achieving an annual regional output of 200 tons of fish from 4 000 ponds, this project bears the imprint of similar programmes that have been successfully established in several African countries. "Fish farming was introduced to the continent at the beginning of the 1940s," says Michel Vincke of FAO's Department of Fisheries, "but in most cases they were abandoned at the time of independence. Our main objective was to rehabilitate this activity and to introduce new fish species."

An FAO regional project covering Gabon, the Congo, and the Central African Republic has, since the end of the 1960s, provided training for groups of officials and intermediate technicians who have in turn worked to reestablish fish farming in the rural milieu. When the project was begun the Bangui region of the Central African Republic could claim only 11 ponds. Today there are not fewer than 11 000 across the country belonging either to smallholders or to organized groups. Similar developments are under way in Zambia, the Ivory Coast, the Congo, and Kenya. "The basic technique remains the same," says Vincke. "That is to contact the peasants directly, to develop the concept of production without the assistance of the government, including the production of the young fish, which farmers can do perfectly well themselves."

Dani Blain

Local language use helping to spread new farming techniques

One obvious but often overlooked reason for the difficulties encountered in upgrading agricultural practices in the developing world is the fact that an overwhelming majority of peasant farmers do not understand any of the European languages in which much of the international exchange in agricultural research is conducted. To a lesser degree, the same handicap faces many extension workers charged with disseminating improved technology. And even where some familiarity with European languages exists, there is often resistance to its use, based on post-colonial perceptions of independence and sovereignty. In the mid-1970s, when the UN Economic and Social Commission for Asia and the Pacific (ESCAP) surveyed more than 400 government agencies, research centres, academic institutions and non governmental groups in the region concerning languages to be used in education and extension programmes, the great majority indicated a preference for local languages. The proportion of respondents favouring local languages exceeding 75 per cent in seven of 13 countries and fell below 50 per cent in only two. A more recent survey by the International Rice Research Institute (IRRI) showed that educational material published only in English failed to reach millions of farmers, extension specialists, scientists, and educators in the developing world.

An early initiative to help bridge this gap was undertaken by FAO in the early 1970s when it began publishing its Better Farming Series in non-European languages. Although still modestly budgetted at about $150 000 per year, the programme has succeeded in publishing and distributing practical farming and rural homemaking guides in Arabic, Hindi, Indonesian, Lao, Swahili, and Thai.

A new effort in this field has been launched by IRRI with its manual, "A Farmer's Primer on Growing Rice", recently made available in 22 languages worldwide. Editions in at least 14 other languages are in press.

The effectiveness of this manual and other publications in local languages as against English is now being studied in Leyte, Philippines, through a cooperative research project of Araneta University, the Philippines Bureau of Plant Industry, the FAO Integrated Pest Control Programme, and IRRI. "A Farmer's Primer on Growing Rice" was conceived and compiled by Dr Benito S. Vergara, an IRRI plant physiologist. When teaching IRRI courses on rice science to students and trainees from Third World countries, Vergara sensed the need for a simple, readable book for extension agents or progressive farmers that would explain clearly the "how" and "why" of good rice-growing practices. Although leaflets available then listed steps for successful rice cultivation, Vergara believed that farmers and rice production specialists should understand better the reasons why such practices as seed incubation or proper depth transplanting were recommended. The Science Education Centre of the University of the Philippines at Diliman used an early draft to teach principles of agricultural science to elementary students. IRRI trainees who studied early drafts of the primer in Vergara's courses returned home and realised its usefulness. But it was not then available in their local languages. Even before IRRI published the primer in English in 1979, requests were made for permission to translate it into Thai and Bahasa Indonesia. The author knew then that his primer was reaching the people for whom it was intended, those involved in rice growing.

Since IRRI does not have the staff, expertise, or equipment to translate and publish its educational materials extensively in non-English languages, it cooperates with other agricultural agencies and private publishers in developing countries in joint efforts to publish their materials in local languages. According to IRRI statistics, by late 1983, more than 600 000 copies of non-English editions of IRRI books had been or were being printed in 32 languages.

Another effort to hurdle the language barrier is being made by the Developing Countries Farm Radio Network. Based in Toronto, Canada, it supplies about 500 affiliates in Africa, Latin America, the Caribbean, Asia, and the Pacific with tapes and scripts that provide the raw material for farm radio broadcasts in more than 100 languages. The broadcasts reach an estimated 100 million listeners. Project Director George S. Atkins, a former farm radio commentator for the Canadian Broadcasting Corporation who also produced that service's renowned "National Farm Radio Forum", sends out a quarterly package of radio tapes covering a wide range of practical subjects.

The first such package was distributed in English in 1979 to 34 charter members in 26 developing countries. The first participants were all farm broadcasters. Now the network also includes agricultural extension workers, health workers, writers, missionaries, teachers, librarians, and others. Currently the tapes and scripts, which are distributed in English, French, and Spanish, have been translated into 113 languages and dialects.

Information polls sent out with each package request evaluations from participants. The evaluations and suggestions are used as a guide in determining the form and content of information prepared for future packages. Participants are also encouraged to contribute material for use in future broadcasts. Atkins lists the following criteria for his selection of material to be used: 1) it must be aimed at increasing food supplies and improving the quality of life of the small farmer and his or her family; 2) it must be simple and practical; 3) its idea must be communicable by radio or word of mouth; 4) it must have been developed, tested, and proved in the developing world; 5) it must be useable or adaptable for use in other developing countries; 6) it must cost little or no money, requiring only resources ordinarily available to the farmer; 7) it must require little or no help from extension workers.

With a staff of six, the network operates on a budget of about $1.5 million per year underwritten by three sponsors: the Canadian farm equipment firm, Massey Ferguson, the University of Guelph, which provides office space and administrative and technical support, and the Canadian International Development Agency (CIDA).

"One of the secrets of the network's success," says Atkins, "is our threeway approach to communicating with the local broadcaster, teacher, or missionary, whose knowledge of English, French, or Spanish may be somewhat limited. In the regular feedback we receive, they tell us that by following the script, by listening to a recording of the script, and by referring to illustrations with the script, they are able to fully understand the information and then pass it along to the rural people they serve in the local language and cultural mode."

Nick Kesi with Ceres staff

Integrated approach adopted by Rwanda for fishery project

For countries like Rwanda, suffering serious consequences from prolonged drought and poor harvests, it is as important to overcome present difficulties as it is to create a solid basis for food production. The opportunities for increasing agricultural production are restricted by the lack of arable land, a consequence of the country's mountainous nature and extremely high population density. This has reached an average of 180 persons per square kilometre, and reaches 390 per square kilometre on the arable land considered alone. This situation appears all the more serious when one considers the rapid growth of population - 3.7 per cent annually. The present level of agricultural production-when harvests are normal - barely covers the minimum food requirements of the population. The average dietary energy availability is around 2 300 calories per day, and animal protein is severely lacking.

Only the intensification of agricultural production and the development of all natural resources can save the country from the dangers of future famine, which could assume proportions comparable to the suffering experienced by some of the Sahelian countries. Among Rwanda's natural resources that have not yet been developed satisfactorily are the fisheries of numerous lakes and rivers. So far, these waters have been exploited in the traditional manner, and techniques that would increase their biological resources have not been introduced.

One exception is the fishery development on Lake Kivu on the border between Rwanda and Zaire. Since the beginning of 1983 some systematic studies have been pursued thanks to an FAO/UNDP project financed jointly with the Netherlands, and fish are being caught with methods completely different from the traditional ones. The project not only embraces the problems of capture technology but also includes biological studies, the processing and marketing of fish, and an evaluation of the economic impact of the development. The project director, Wilhelm Scheffers, is convinced of the value of this integrated approach, considering that fish production is intended to contribute to better nutrition for Rwanda's people.

Lake Kivu, the largest body of water in Rwanda, with a surface, including that part belonging to Zaire, estimated at 2 500 km2, belongs to the region's system of great lakes, including Lakes Tanganyika, Idi Amin-Edward, and Mobutu-Albert. However, it was isolated from the other lakes by the volcanic eruptions of the Virunga massif, which dominates the region. The present link with Lake Tanganyika, some 600 metres lower than Lake Kivu, is the gorge of the Ruzizi River, which is geologically fairly young - about 10 000 years old. Surrounded by mountain peaks at an altitude of 1 450 metres, the 100-km-long Lake Kivu is the highest body of water in the region. Its isolation and its location in a volcanic environment creates a special situation for the development of its biological resources. The lake reaches depths of 485 metres, but from 70 metres below the surface down there is a dead zone deprived of oxygen.

The initial research on Lake Kivu's waters was undertaken before the second world war. Subsequent studies have demonstrated the biological poverty of the lake. Only 21 species of fish have been identified, and their numbers are low, as is their economic utility. However, scientists who studied the lake as early as 1954 confirmed the richness of its plankton resources and the absence of plankton-eating pelagic species. They thus envisaged the artificial stocking of the lake with fish from Lake Tanganyika, which was successfully undertaken in 1959-60. For this purpose the species chosen were Stolothrissa tanganica-Ndagala and the Limnothrissa miodon-Lumpu. Both species resemble sardines in nature and size. Later surveys made in the 1970s established that the fish had adapted but that only the Lumpu were reproducing. This is probably explainable by the great hardiness of this species and especially by the fact that it tends to inhabit shallower water than does the Ndagala species and can take advantage of the upper strata of water which are rich in oxygen.

The establishment of these fish in quantities sufficient for exploitation has attracted the interest of the Rwanda Government in fishing and later resulted, in 1979, in the launching of the FAO/UNDP project which continues today.

The fishery began by employing local methods which soon proved to be inadequate. In 1981, the potential capture of the Lumpu species was estimated at 14 900 tons for the entire lake. Under ideal conditions the catch could reach as high as 35 000 tons. By comparison, productivity of local fish has been estimated at 600 to 800 tons for all of the lake.

Twenty-two pirogues have been buil-catamarans equipped with nets and lamps to attract the fish. The catch is growing systematically. At the beginning, in 1979, only one ton of Lumpu was fished; in 1983, 91 tons were fished and in 1984, 190 tons. In addition to the project's catch, there is that of some private beats on the lake as well as those of the fishery cooperative.

In parallel with this project, a small fishing port has been erected at Gisenyi - a beautiful lakeside village that was the launching point for excursions to the summit of the volcanoes. On this site have now been built a small sales pavilion, a fish-processing plant, a solar drying unit, and a fishery equipment depot.

On returning each night from the fish, each six-man crew brings in an average of about 50 kg of fish. The boats' arrival is awaited by customers who buy fresh fish for either retail or wholesale purposes. What is not sold is dried or processed and the dried waste products are made into fish meal. A small part is frozen. As a result the consumption of fresh fish in the region has increased; dried fish are exported to the interior of Rwanda. Many people have found work and have learned a new trade.

Marcin Makowiecki

FAO in Action

CONFERENCE ENDORSES FAO WORK PROGRAMME

FAO's programme of work and budget for the 1986-67 biennium was approved by the Organization's Governing Conference during its 23rd session last November. The new budget of $437 million (based on an exchange rate of 1 760 Italian lire to the US dollar) represents a real increase of only 1.1 per cent over the previous budget. However, while the overall net programme increase was held to $5 million, savings achieved in administrative and support areas permitted a net programme increase of US$9.4 million for technical and economic programmes, especially in the field. The Conference endorsed six key programme objectives to which Director-General Edouard Saouma had assigned priority for 1986-87: promotion of food production, increasing food security, consolidation of information systems, emphasizing training, enhancement of economic and technical cooperation among developing countries, and ensuring impact at the field level. The overall priority given to addressing African problems was also endorsed. A Conference resolution urged that policies and programmes of both African countries and external sources of assistance should give priority to the rehabilitation and development of food production.

FOOD AID DONATED BY INDONESIAN FARMERS

A donation of more than 100 000 tons of paddy rice - the first ever emergency food aid contribution through FAO directly from producers - has been made by Indonesian farmers for "less fortunate brethren in other countries of the world who are ravished by natural disasters and food shortages". Thirty-two Indonesian farmers representing all parts of the country, as well as Indonesia's Agriculture Minister Achmad Affandi and other senior officials, were present for the special ceremony during the FAO Conference at which a symbolic bag of rice was presented to Director-General Edouard Saouma The presentation came a day after Indonesia's President Suharto had addressed the Conference and related his country's successes in increasing food production, recalling that "from a nation which only some years ago was the biggest rice-importing country in the world, with a total import of two million tons a year, we now have become self-sufficient." Both President Suharto and France's President Frans Mitterrand, who also addressed the Conference, called for increased North-South cooperation to help developing countries solve problems of hunger and malnutrition. President Mitterrand outlined three approaches to a world economic recovery: reform of the international monetary system; the fullest participation by developing countries in multilateral trade negotiations; and "a global approach to the problems of indebtedness and of development, with the possibility of new public and private financial agreements".

FAO'S MEMBERSHIP INCREASES TO 158

In other major actions the FAO Conference:

- endorsed a World Food Security Compact calling on all governments, non-governmental organizations, and individuals to commit themselves to ensure the aims of world food security;

- approved an International Code of Conduct on the Distribution and Use of Pesticides;

- admitted the Solomon Islands and the Cook Islands to FAO membership, bringing total membership to 158 nations;

- reported that nearly 80 countries have thus far endorsed the International Board for Plant Genetic Resources (see Ceres, July-August 1983, page 3);

- reviewed a major FAO study on "Agricultural Price Policies" (see Ceres, September-October 1985, page 15) which shows that "a quiet revolution" is taking place as more developing countries adopt strong price incentives designed to stimulate greater food output;

- approved FAO's programme for a world census of agriculture in 1990.

URGENT MEASURES PROPOSED FOR SAHEL

FAO has proposed a four-pronged crash programme for the Sahelian zone designed to help consolidate within that region the Organization's agricultural rehabilitation scheme for Africa that was launched last year. The proposal was made to the heads of state of the Permanent Interstate Committee for Drought Control in the Sahel (CILSS) by FAO Director-General Edouard Saouma as he completed a tour of six countries in the Sahelian zone. The four areas in which FAO would provide additional technical assistance were chosen to reflect priorities identified by CILSS governments comprising:

- the production, storage, and distribution of improved local seeds;

- increased production of vaccines and reinforced animal health services to help in rinder-pest control, and assistance to drought-affected livestock;

- emergency action to stop the proliferation of pests, especially locusts, which this year are posing a threat in Mali and Mauritania;

- the strengthening of FAO's Early Warning System in the Sahel

"Priority should be given to simple actions with modest but attainable objectives compatible with local realities," Mr Sauoma said.

INDIA'S RURAL WOMEN SEE STATUS DECLINE

Employment opportunities for women on family farms in India are declining and there is growing pressure for women to resort to wage labour, often under exploitive conditions. This is one of the findings of a recently published study commissioned by FAO's Statistics Division and carried out by the Institute of Social Studies Trust in New Delhi. "A disturbing trend in women's participation in agriculture during the last decade," the study declares, "is their progressive shift from the cultivator to the labourer status." On the basis of 1971 census data, more than half the country's female labour force is engaged as agricultural labourers, as against one-third in the 1951 census. While male cultivators and agricultural labourers number about 77.6 million and 34.7 million respectively, according to the most recent census, there are only about 15 million women cultivators and 21 million agricultural labourers.

FORESTRY SCHEME INVOLVES PEASANTS

For a number of years Benin has been paying particular attention to the development of forest resources. Within the framework of a major rural development programme, a five-year $1 million FAO/UNDP project is designed to address a range of objectives related to improved protection of the ecosystem. Fast-growing tree species are being introduced to ensure the availability of fuelwood and other forest product supplies for the rural population. Peasants are being encouraged to become involved on the reforestation activities and in a campaign to control forest fires. This latter effort has attracted significant participation of peasants in all parts, evidently signalling their acceptance of the Government's scheme for closer integration of agriculture, forestry, and livestock rearing. In order to strengthen the technical and administrative capacities of the forestry service, training programmes are being carried out at all levels. The social dimensions and human factor in forestry development are being accorded this priority with a view to facilitating the promotion of investment in the forestry sector from multilateral and bilateral sources of assistance.

SENEGAL SUPPORTS MARKETING GARDENING

Since it was established in 1972, Senegal's Centre for Horticultural Development (CDH) at Camberene, in the Cape Vert region, has been providing a wide range of supporting services to the country's important market gardening sector. The Centre's work has been oriented toward research on practical problems encountered by growers. Its broader objectives, however, are not only to increase and diversify market garden output, but also to improve nutritional standards among the rural populations as well as promote the export of topquality vegetables The original five hectare holding has been expanded to 40 hectares, thus allowing for field testing, demonstration plots, and seed production. A drip irrigation system has been installed, drawing water from about 20 wells and two reservoirs. Four specialized laboratories provide facilities for plant breeding, entomology, plant disease research, and seed production. Originally established with financial support from the United Nations Special Fund, for the past ten years the Centre has been supported by Belgian trust funds through FAO which has provided technical assistance through all phases of development. Since 1979, it has been part of the Senegalese Institute for Agricultural Research (ISRA).

The case against cheap credit

by Dale Adams

Until recently most policymakers agreed that a majority of farmers in low-income countries needed cheap loans. Large amounts of money went to farmers through special rediscount windows in central banks, regulations were issued to force lenders to make cheap loans to farmers, and loans and grants for agricultural credit became a large part of rural development. In the early 1970s a few people became uneasy about the results, arguing that the outcome of many credit projects was less desirable than had been expected. An evaluation of small farmer credit programmes by the Agency for International Development in 1972-73, an agricultural credit policy paper by the World Bank in 1975, and a credit conference in Rome sponsored by FAO in 1975 demonstrated this concern.

Various combinations of at least 10 rural financial market problems have been identified. These include:

- lending procedures that create high costs for bath lenders and borrowers;
- serious loan repayment problems;
- financial intermediaries whose revenues are less than their costs;
- badly fragmented rural financial markets;
- intermediaries who evade or ignore the intent of government regulations;
- strong patronal relationships;
- a general lack of savings deposit services;
- the common practice of intermediaries who do mobilize savings to transfer a significant part of the money mobilized out of rural areas;
- heavy dependence of many segments of rural financial markets on outside money, which makes substantial political intrusions in these markets common;
- worst of all, the fact that a large part of the cheap credit ends up in the hands of the well-to-do.

These problems have led policymakers to expect that rural credit programmes will be mediocre. While the criticism of credit programmes has mounted, increasing attention has turned to clarifying the reasons for these problems. This article is intended to summarize the main causes of these difficulties and briefly outline ways to improve the performance of rural financial markets.

Problem diagnosis. Over two decades of study I have been impressed by the similarity of financial market problems in several dozen low-income countries. Traditional credit activities are doing a poor job of supporting efficient and equitable development. Five factors often lie behind these difficulties:

- agricultural credit efforts are based on faulty assumptions;
- agricultural credit policies and overall use of rural financial markets are incorrect;
- many bad loans stem from public policies that result in low economic return to farming;
- weak and incorrect research and evaluation have helped to support faulty policies;
- donor assistance has often reinforced damaging policies.

Traditional assumptions have a powerful influence on agricultural credit policies. It is regularly assumed, for example, that most farmers are too poor to save, especially in financial form, that most farmers need cheap credit before they will adept new technology, and that most farmers need supervision. These assumptions have the same ring to them as those challenged by T.W. Schultz in the early 1960s in his bock Transforming Traditional Agriculture. While Schultz's argument is now generally accepted, many people continue to stereotype rural people as irrational when it comes to financial markets.

I am convinced that most rural people in low-income countries do not regularly need formal loans, that many formal borrowers Bet few benefits from loan supervision, that most rural people will save more if given the opportunity and incentive to do so, and that low interest rates are not necessary to stimulate high-return investments.

Widespread suspicion surrounds informal financial intermediaries, and 6 horror stories are repeated to sustain these biases. Despite an increasing number of studies that show these horror stories are not typical, they continue to colour agricultural credit policies. Suspicions about informal lenders are based on religious dogmas or on racial and ethnic biases. Further, since any price is higher than a consumer wants to pay for a good, and producers always want to have a higher price for their products, both groups feel cheated by most market transactions, even though they participate volontarily. Seldom does the consumer or the producer understand how prices are determined, and the marketing intermediary is often a scapegoat. Further ill feelings about financial intermediaries come from those who are forced to borrow by economic stress. It is easy for the borrower to see the loan as part of the problem rather than as a solution.

Other damaging assumptions are made about finance in general. Credit is often viewed as an input rather than as a claim on resources and services. Fungibility of financial instruments is normally ignored by policymakers. This leads them to think that these claims can be targeted to specific uses. If a country wants more rice output, targeted loans for rice production are a common reaction. Cheap credit appeals to politicians who want to help the rural poor. Central credit planning and requests for credit impact studies result from these views.

The financial system is a supple political instrument. In some cases governments use nationalization of banks to try to force financial intermediaries to comply with government decrees. It is widely thought that a government-owned bank can defy the laws of financial gravity. The landscape of low-income countries is littered with the wreckage of rural financial institutions, ruined by such misjudgements. I conclude that most traditional assumptions about borrowers, savers, lenders, finance, and rural financial marketings in low-income countries are weak or false.

Faulty policies. Credit programmes have been accompanied by several damaging policies. Foremost among these have been the low and inflexible interest rates applied to most agricultural loans and to savings deposits. These low rates are justified as offsetting other price distortions, to transfer income to the rural poor, and to induce farmers to adopt new technologies. With substantial inflation in most low-income countries during the past ten years, many interest rates charged and paid in rural areas on formal financial instruments have been negative in real terms. As a result, borrowers repay lenders less in purchasing power than they borrow and savers are returned less in purchasing power than they deposit.

Low interest rates have powerful effects on rural financial markets. They make it especially difficult for financial intermediaries to mobilize voluntary private savings. This forces the intermediaries to rely on government and donors for funds and to become very susceptible to political intrusion. The low rates also make it difficult for lenders to cover their operating costs. This, in turn, forces the lender to continually seek subsidies to cover operating expenses, to gradually decapitalize, to shift a substantial part of his loan transaction costs to the borrower, or to reduce the costs of lending by making large loans. This forces lenders to depend on external funding, to exclude many potential borrowers from formal loans, to concentrate concessionary priced loans, and to lose money on lending.

Regardless of the policymaker's intent, a weak or bankrupt lender provides unsatisfactory financial services, and employees of the intermediary become demoralized. Accusations of fraud, mismanagement, and incompetence surround the decline of these financial agencies, and personalities, rather than policies, are blamed for the problem. The solution is seen as tightening up the administration, appointing new leadership, combining the weak organization with another, better-managed agency, or cresting still another institution that must face the same hostile environment.

One might accept the undermining of financial intermediaries as a worthwhile cost, as long as the objectives of equity and efficient resource allocation were met. But, as suggested earlier, low interest rates force lenders to concentrate loans. Three types of benefits accrue to those lucky enough to get these loans. The first is the normal net benefits one gets from profitable use of borrowed resources. The second is the income transfer associated with negative real rates of interest. And the third is the income transfer that accrues to loan defaulters. All three of these benefits are proportional to loan access; large borrowers get large benefits, small borrowers get small benefits, and non-borrowers get no benefit. All savers and potential savers in financial form, of course, lose because of the even lower interest rates paid on deposits.

Cheap credit also fails to correct for the misallocation of resources resulting from government policies that depress agricultural incentives, yields, and in comes. A simple example may clarify why low interest rates do not induce farmers to allocate resources in a manner contrary to that signalled by product prices and yields. Let us assume that a farmer has a few dairy cows and also grows marijuana. Let's assume further that the government sets a very low price on milk because of urban pressures, and that this causes farmers to shift resources away from milk production to more profitable activities. To discourage this, the government announces a special credit programme for dairy producers that provides loans at negative real rates of interest to compensate farmers for low milk prices.

Let us ignore the effect these low interest rates have on the behaviour of the lender and savers and assume that all dairy producers get a cheap loan. The additional liquidity provided by the loan can be used by the borrower to buy more consumption goods, to expand production of marijuana, to enter into new economic activities, or to sustain milk production. But there is no logical reason why the farmer would sustain milk production, with or without a cheap loan, since the economic returns from that activity are made unattractive by price control. House hold consumption, marijuana production, and new economic activities would logically absorb most additional liquidity provided by cheap loans.

Cheap credit does not make an unprofitable activity profitable. Further, the fact that low interest rates force lenders to concentrate loans in the hands of relatively few people means that the credit subsidy is not equitably distributed. Using cheap credit to offset the misallocation caused by other price and yield distortions is like trying to sweep water uphill.

Low agricultural returns. In part, the problems encountered in the rural financial markets in low-income countries are beyond the control of participants in these markets. Low product prices, low and unstable yields, the lack of new technology, and natural disasters make farming a low-return activity in many countries. At the same time, political instability, wars,
cumbersome judicial procedures, and vague or uncertain land titles increase lending risks. Low returns to agriculture reduce savings capacities. These conditions restrict the scope for efficient financial intermediation and make it difficult for intermediaries to realize economies of scale. Cleady, higher agricultural prices and yields would allow rural financial markets in low-income countries to perform better.

It should come as no surprise that much of the research done on these markets in the past 30 years has been closely tied to the policies, strategies, and assumptions already discussed. Until recently, research seldom tested traditional assumptions. In many low income countries, most research has attempted to measure the impact of credit use at the farm level, and also to estimate credit needs. Very little time has been spent in diagnosing the problems of rural financial markets. The small amounts of research done on savers' behaviour, the behaviour of financial intermediaries, and work on the overall performance of these markets reflects the effects of strongly held traditional assumptions.

Much less research on impact at farm level is needed; more research ought to be directed at testing assumptions and policies that are closely associated with rural financial markets. This type of research would shed more light on why things do not work well in these markets.

Donor assistance. Most people look at donor assistance as an important way of solving problems of rural financial systems. In a number of low income countries donor loans and grants have made up a large part of the total agricultural loan portfolio. An agricultural credit project is highly desirable for both the donor and the local government. Credit projects are easy ways for donors to lend large amounts of money, and agricultural credit can be disbursed rapidly. For the local government, these projects are easy to arrange and give the country large amounts of foreign exchange. Donors and governments generally ignore that the country does not need foreign exchange to expand the amount of local currency used for agricultural loans. Printing presses in the central bank can easily do this. External loans have three primary effects: they provide the government with more foreign exchange, they orient rural financial markets toward external sources for their funding, and they reinforce important policies that damage the performance of rural financial markets.

External funds reinforce the dependency mentioned earlier, make it easier to sustain low interest rate policies, and discourage intermediaries from mobilizing savings. Concessionary rediscount facilities used to move donor funds from the central banks to rural intermediaries are particularly damaging. Managers of agricultural credit agencies conclude that it is cheaper to get money from the central bank than it is to mobilize saving. All of the potential savings in rural areas that do not take place because many people are offered low returns to savings, or in fact lack any acceptable places to hold additional savings, are major costs of these concessionary rediscount facilities.

Until recently, researchers have done a poor job of clearing away the misconceptions and erroneaus assumptions that clouded what happens in rural financial systems. I know of no other area in development where there is a wider gap between policymakers' notions and actual events.

An efficient, effectively functioning financial market should provide loans to most of those who have economic opportunities that exceed the capacity of their own resources. An effective formal rural financial market is doing well if it provides loans to 20 to 25 per cent of the farmers in a country. If roughly half of the rural firms and households in the country also have regular access to either formal or informal loans, I think the financial market is doing a remarkably good job. Providing loans, however, is less then half of financial intermediation. A much larger number of rural people could benefit from convenient, safe, and high-return savings accounts. At present, most people in rural areas do not have access to deposit facilities, and only a few receive cheap loans.

Policymakers must realize that it is impossible to use rural financial markets to make income distribution more equal. Under the best of circumstances, financial intermediation will have a slightly negative effect on income distribution. (This would be a large improvement over what is currently happening, however.) Furthermore, it is becoming increasingly clear that cheap credit is an ineffective instrument to compensate farmers for low product prices and yields. Cheap credit fails on both equity and efficiency, grounds.

Despite the confusion that surrounds rural financial markets, the treatments for its problems are relatively simple. First and foremost, much more emphasis must be place on encouraging rural financial markets to mobilize savings. Doing so would provide this valuable service to a large number of rural poor who have few savings opportunities. It would also reorient managers of financial intermediaries away from toadying to government and donor officials and toward doing a better job of serving rural clients. This would cause financial intermediaries to be less susceptible to political intrusions, and also would encourage social sanctions on loan defaulters.

It will also be necessary to revise interest rate policy. Savers will not hold substantial amounts of financial assets if the expected real rates of inflation are vital for mobilization of savings. Higher rates on loans would reduce the demand among those who use large amounts of cheap credit, allow more lenders to cover their costs, and encourage lenders to reduce the costs of transacting loans for both borrowers and themselves.

Policymakers should not try to accomplish too much with credit projects. Product prices, crop yields, and the costs of production are much more powerful determinants of farmers' decisions than are credit availability or interest rates. Same of the money and energy currently being wasted in cheap credit programmes would be better directed at making product prices more attractive and in developing new technologies that boost yields.

The potential for domestic savings

by Farhana Haque Rahman

There is nothing new in the awareness that the world, especially the developing world, is facing a food crisis of major proportions that will only get worse unless massive, thoughtful action is taken. There is widespread agreement that developing countries must somehow become more agriculturally self-sufficient and economically independent than they have been in the past, that they must generate greater internal resources for financing current needs and future development. What is relatively new, however, is the mounting recognition of the important role that domestic savings, and in particular rural savings, can and should play in the economic future of developing countries.

"Personal savings-given an increase in their volume, a change in their structure and an improvement in their allocation to productive investments-appear to offer a solution to the crisis that will facilitate harmonious longterm growth." These comments were made in the summary report of preparatory meeting of experts for the third United Nations International Symposium on "Mobilization of Personal Savings in Developing Countries" held in Yaounde, Cameroon in December, 1984. The report added: "If development is based to the maximum extent on domestic resources, it is possible to finance growth that is less dependent on external resources, less inflationary and more regular."

Until recently, most domestic savings programmes and planning for coordinated savings mobilization have concentrated on the urban, industrial sector; the rural market has generally been ignored. Yet if only in terms of sheer numbers of rural population in developing countries and the obvious need to channel more funds into agricultural development, an effective mobilization of rural savings assumes a high priority. Perhaps, as Auguste Daubrey claims, it is even a "necessity".

The benefits of an effective rural savings programme are clear. At the individual family level savings generate capital that can be used to maintain or improve productivity through purchase of seeds, stock, fertilizer, insecticides, or tools, to cover expenses for weddings, births, and funerals, or to provide a cushion against hard times or emergencies. They give a farmer a measure of independence and control he would otherwise not have. At a wider group or community level, it would allow this same self-determination, an increased ability to finance broad-scale agricultural improvements appropriate to local needs and conditions. At a larger, integrated level, it could play an important role in the national economy by helping to increase agricultural production and by enabling the agricultural sector to become more self-financing.

The relative neglect of rural savings has numerous causes, some obvious, some less so, some deriving from experience, some from long-held assumptions. One of the problems has been that accurate information on the rural financial market in most developing countries has been scarce at best, reflecting the nature of the "penny market" and the belief that it was too insignificant to warrant careful study. In all developing countries a great deal of rural financial activity is conducted not through established banking institutions but through an amorphous network of "informal" institutions whose transactions involve small sums among a frequently thinly dispersed population. Record keeping is uneven at best, often non-existent. Analysis and assessment, even with the best of intentions, is extremely difficult. Much of the data on national economies lump urban and rural finances together, thus adding to the difficulty. However, this situation is beginning to change as more economists and development planners are turning their attention to the rural financial sector and finding, as the Paris meeting summary states, that "domestic savings do exist on a larger scale than is generally thought, and unused reserves of savings exist as well.... Furthermore, the developing countries do have untapped savings potential."

The "penny market". Still, there are factors which would seem to militate against the idea that the "penny market" could ever really play anything but the minor role it has traditionally been thought to play in national economies-a tiny fraction of the total value of agricultural output, a small percentage of total savings and credit funds. One basic assumption about savings in developing countries is that despite the enormous populations involved, most of the people are simply too poor to save even if they wanted to. A second assumption is that "it is impossible to affect either the volume or the structure of personal savings (and) even if this did appear possible, the cost of such a policy would be prohibitive." While both of these assumptions are founded on fact, there is good evidence that neither need be as decisive as has been supposed. Experience in a number of countries in Africa, Asia, and Latin America has shown that given the right conditions poor farmers can and will save, and that broad scale programmes can be economically feasible.

Behind these two assumptions lie a series of facts which undoubtedly do interfere with significant saving habits among the rural poor. In many cultures custom and tradition, as well as the lack of education and the pressures of day-to-day survival, inhibit an interest in saving. In many areas farmers save, if they save at all, in kind not specie-livestock, foodstuffs, jewellery, etc. There is the often irresistible temptation, as income grows, to increase immediate consumption rather than to save for an indefinite tomorrow. There is a not uncommon distrust of "official" institutions like banks, a fear of inflation and taxation which would make deposits unsafe" or decrease in value, given what are frequently very low interest rates. There is the fact, notably in much of Africa and Latin America, of a rural population so widely scattered in isolated areas that providing saving facilities is a major problem, a problem compounded for nomadic pastoralists. A further complication, at least for developing a coordinated national savings system, is the existence of' informal" institutional arrangements operating in the rural financial market, for these compete, directly or indirectly, with whatever formal institutions may be present or which may be introduced. Finally, there is the complex problem of rural credit and its possible negative effects on saving. Where interest rates on rural loans are deliberately set low to make borrowing more attractive and available, the incentive to save may be dulled, while interest rates on saving deposits may also be set commensurately low, thus making saving less attractive.

Can rural savings ever make a significant contribution to the national economies of developing countries? There is growing evidence that, given the right conditions, it can. For example. Alexander Muser, in his study of savings programmes in 15 Asian, African, and Latin American countries describes 25 such programmes which he feels are successful in varying degrees.12 In another study Sung-Hoon Kim finds that in all of the 11 Asian countries he surveyed-Bangladesh, India, Indonesia, China, Republic of Korea, Malaysia, Nepal, Pakistan, the Philippines, Sri Lanka, and Thailand-the same is true, and all have significant potential for further savings mobilization.13 He notes that over the past few years there has been a steady increase of between 9 and 25 per cent in savings in money over savings in kind in every country, with a faster rate of increase in rural than in urban savings, especially in South Asia.

All these successful programmes share certain characteristics to varying degrees: (1) regular small deposits by a significant number of participants; (2) the presence of motivated and trained workers who mediate between the people and the financial institution: (3) group self-determination-that is, the freedom of the savers to choose how and when to use their deposit reserves; (4) the effective linkage between the savings institution and local, traditional social and economic patterns; (5) the combination of the savings programme with a credit facility for depositors. The first two characteristics are obvious, though not always easy to establish; the last three perhaps require further explanation.

Hand in hand. It makes sense to discuss rural savings and rural credit together not because in practice they always go hand in hand, but because most students of the economies of developing countries agree that they should. The critical need for extensive and effective agricultural credit in these countries, if there is to be any substantial increase in agricultural production and improvement in the living standards of the rural population, has long been recognized. Small holder farmers-the large majority in most developing countries-simply do not have sufficient surplus capital for significant investments in such basic materials as improved seeds, fertilizers, insecticides, and tools, let alone mechanized equipment or irrigation. Over the past few decades, a number of Third World countries have tried to build systems of rural credit by establishing rural branches of commercial banks, multipurpose development agencies, and the like, as well as by enacting laws favouring, very low interest rates on credit, reserving a certain percentage of loan resources for rural credit, or encouraging the organization of cooperatives. However, most of these programmes have depended on funds provided by the government, urban banks, or foreign donor agencies; very few have drawn on local savings. In general, the results have been unequitable and below expectations. These efforts to extend agricultural loan facilities have encountered a number of problems worth summarizing here. Administrative costs are often prohibitive. Transactions normally involve small amounts, but financial regulations - may dictate the same extensive - paperwork used for large ones, and the need to serve a widely dispersed clientele requires extended facilities and staff costs. A high default rate on loans is common. One of the reasons is that agriculture is particularly subject to unexpected, uncontrollable crises in yields and prices that affect the incomes of a large number of households at once. There is a strong temptation to overextend credit before proper controls and procedures are established.

When cheap credit is offered as an incentive, the results can be negative. The interest charged is insufficient to cover costs, and far too often the cheap loans are concentrated in the hands of a few well-off or experienced borrowers or are available only to those who live near urban or district centres or in already well-developed agricultural areas. In addition, government policies that control lending limits and set strict criteria for credit" worthiness can eliminate those who most need the loans. This monopoly by the few impedes rather than favours broader income distribution, one of the objectives of credit programmes. A further problem is that in programmes created with specific development goals in mind (such as encouraging income-producing crops)? credit funds received may be diverted to other purposes wich have little or nothing to do with the intended use. Too often credit conditions are not dictated by or responsive to local needs; too often credit is too little or too late.

A good case can be made for combining savings and credit. Adams and Vogel are not alone in believing that "institutions that mobilize savings as well as lend are more likely to be viable than intermediaries that only lend."14 Each activity seems to stumulate the other; savings can provide the funds for loans, while there is good evidence that if credit funds are generated by local depositing, the default rate tends to be lower than when these Funds are provided by an "anonymous" source like the government or an urban bank-the power of overt or covert community pressure, the sense of personal responsibility to one's friends and neighbours. ''The volume of resources that can be obtained through effective programmes of savings mobilization and loan recovery is potentially far greater than the most optimistic estimates of the amount of subsidized loans and grants available from governments and donors."

On the other hand, the availability of credit can act as an incentive to save, especially when the savings-and-loan programme is organized around a specific group of people who share the same concerns and who can, in one form or another, pool their resources. This self-help attitude can in turn promote long-term planning and investment on both an individual and community level.

Too often rural financial institutions that give farmers credit are not authorized to accept savings, although this is gradually changing. Mittendorf cites the effective use of cereal banks for savings mobilization in Burkina Faso, the Gambia, Niger, and, more recently, Tanzania, where the Government now permits rural development banks to promote savings schemes. Since the middle of 1984 the Banca Agricola in the Dominican Republic has operated a rural savings mobilization project in nine of its 31 branches; the same project team is helping four credit unions plan a savings programme.16 Too often rural savings, where they do exist in such formal institutions as commercial bank branches or post office saving services, are siphoned off for urban development, one of the reasons why the Banca Agricola project requires that all lending be limited to the area where the savings are deposited.

An effective combination of rural credit and rural savings is one important element in the development of successful agricultural self-financing and improvement. Another is linkage between the formal financial institutions and local, traditional economic and social systems, including the "informal" sector of the rural market. There is mounting evidence that the current role and future potential of this informal network is far greater than was previously supposed. This informal network takes a wide variety of forms depending on the local economic structure and social tradition and may involve a number of different kinds of people. According to Mittendorf, relatives, friends, storekeepers, merchant moneylenders, pawnbrokers, and the like, lend in credit, cash, or kind; trader-lenders play a larger role in Asia than in Africa, where parastatal organization control much of the marketing, thus inhibiting the growth of large-scale operations by local African traders. These lenders normally provide the small farmer with shortterm credit in cash or kind for such basic materials as seeds, fertilizers, and tools.

Many kinds of grass-roots mutual-aid groups or savings clubs exist in the rural areas of developing countries. One type, prevalent throughout Africa, Asia, and Latin America, is the rotating savings and credit association (ROSCA). Although the specific system will vary from society to society, the basic idea is the same: regular contributions to a common fund, which is then given to each individual participant in turn. Somewhat more structured are the savings and lending associations (SLA), where the savings deposits are earmarked for defined investment in, say, seeds, fertilizer, tools, or mechanized equipment. These groups replace, and in some cases compete with, the "formal" financial institutions, like banks, postal savings, and credit unions. In some countries, among them the Republic of Korea, Bangladesh, and Zimbabwe, these mutual-aid groups have formed the basis for significant, large-scale savings and credit organizations which have become part of the formal rural finance system.

Informal sector. The informal sector of the rural market has begun to be the subject of serious attention and study, and although the nature and extent of its role in many countries is still unclear, a number of identifiable characteristics offer valuable guidelines for future rural development. The informal sector is not subject to "outside" regulations on interest rates for deposits or loans, and thus allow "real?" market rates to prevail. Nor is it subject to official regulations on credit allocations, creditworthiness, or liquidation ratios, and thus may be able to serve those who otherwise might be disqualified. It is by nature designed for and accustomed to dealing in the small amounts common in the "penny market"; it uses very simple bookkeeping methods and has low facility and staffing overheads-all of which keep administrative costs low. It tends to be very flexible, and thus can be responsive to local needs and changes in local conditions. Its rules and regulations, based on local customs and traditions, are understood and supported by the participants; it tends, therefore, to enjoy a sense of trust often not accorded to formal, "outside" institutions. The credit default rate is usually far lower than that experienced by formal institutions, undoubtedly because of peer pressure to repay debts and not over-borrow. It is, in sum, economical, adapted to local needs, and available to the poor as well as to the wealthier or more sophisticated farmers.

When these informal institutions take the form of local groups, they can also provide the farmer with a convenient forum for the exchange of ideas and information, a group "self-help" spirit which creates both security and incentive, an opportunity to participate in collective short- and long-term planning, and an enhanced purchasing/ bargaining power through the pooled resources. All of this can lead to a more informed, sustained development. The appropriate goods can be ordered in advance at competitive prices and received when needed, critical in any sector of the economy, but especially vital in agriculture.

There is general agreement that an important dimension in the development of a stable and effective programme of agricultural improvement in the Third World may well depend on a stable and effective system of rural savings, and that this depends on fostering a self-help attitude among the rural poor, combining credit with savings, drawing on the experience of the indigenous informal financial institutions and on some kind of link between these and the formal financial sector. This link does carry with it the risk, as Mittendorf and others have pointed out, of destroying the valuable sense of trust and self-help spirit that are such positive elements of many informal arrangements. However, given incentives, opportunity, and planning, such a link is possible in many forms and can be effective. The People's Bank in Sri Lanka and the Piura Savings Bank in Peru, for example, have become involved in pawnbroking as one means of encouraging savings-in this case by converting holdings in kind into cash. ROSCA, and SLAs may use banks to hold their deposits or help disperse credit as in Nigeria or Cameroon. The Small Farmers Development Projects, launched in 1975 under the auspices of the Agricultural Development Bank of Nepal, had by the middle of 1983 reached 2 000 groups of small farmers, providing savings facilities and credit delivery for 20 000 members.

Small informal savings groups have been organized into credit unions with ties to formal financial institutions in the Philippines, Thailand, and Indonesia. The Credit Union Movement in Lesotho, started in 1961 around local savings groups, mostly women, had 64 established credit unions by 1983, most with at least 50 regular members each; "an apex organization, the Lesotho Cooperative Credit Union League (LCCUL) was founded in 1968," notes Mittendorf, "to provide support and services to affiliated credit unions as well as to provide and expand the movement in other areas of the country." One of the most successful programmes is the Savings Development Movement in Zimbabwe. (See Cerescope, September-October 1982,p.10.) A key to the success of SDM in addition to energetic and effective leadership, is, according to Mittendorf, that the savings/credit system is linked with a "well defined agricultural technical package programme for which the larger part of the savings are used. Each agricultural package programme, well tailored to the requirements of the savers, is oriented to income-generating activities and covers improved farming operations, correct seed and fertilizer inputs, pest control, storage and marketing operations." Regular group meetings allow cooperative advance planning, while the savings provide hard cash; the group can thus order the necessary materials early at competitive prices, getting what they need when they need it. "After the success of this initial phase, the Savings Movement is now giving consideration to the establishement of a savings development bank specifically charged with the duties of providing a repository for club funds of arranging advances to clubs against the security of their deposits, of administering loans in terms of any guarantee grant arrangements and the utilization its profits for further development of the savings movement."

Mobilize idle money. One of the most significant efforts to build a rural savings and credit system in Asia is the Mutual Financing Programme in the Republic of Korea. This cooperative banking facility was started in 1969 and was based partially on the local informal mutual assistance groups, "kye", in which savings and loans in kind were made by wives who contributed a cup of rice a day to a central deposit. The chief purpose of the MFP "is to mobilize idle money in the rural areas for the purpose of meeting member-farmers' needs for farm production and for household expenditure."19 Deposits earn two or three per cent more interest than commercial banks give, an incentive that has contributed to the impressive growth of deposits-63.9 per cent annually (37.5 per cent in real terms) from 1973 to 1982-and a corresponding increase in loans. By 1982, MFP savings deposits constituted 5.1 per cent of the total deposits in all financial institutions in the country. "From 1974 onwards" Kim observes, "the MFP operations were characterized by excess deposits over loans. The MFP has subsequently become a major source of funds of the Korean Government for the purchase of agricultural produce. Thus, instead of the Government financing the farmers, the reverse has become true in the case of the MFP."

A more recent rural self-help project which has received considerable attention is the Grameen Bank of Bangladesh. The project, the brainchild of Prof. Yunus of the University of Chittagong, began in a single village in 1976; by 1983 it had been extended to over 1 200 villages and had over 58 000 participants. The objective of the programme is to generate employment and income for the landless or near-landless rural poor. Four regional offices and over 64 branch offices supervise the formation of the basic units: groups of five people, unrelated, who each make small regular deposits and who in turn withdraw money on loan. More than 430 specially trained and motivated bank workers, who generally come from the region they work in, act as intermediaries between the Bank and the people, and serve as promoters, organizers and advisers. They make weekly visits to each group in the villages, thus implementing the Bank's motto: "Take the bank to the people; not the people to the Bank."

Direct, on-the-spot assistance, advice and control is one feature of the Grameen Bank; another is its system of deposits. There are two types of deposits, the Group Fund, a credit resource, and the Emergency Fund, an insurance reserve against death, default, accidents, etc. These deposits are generated by a combination of the regular contributions of the group members, a 5 per cent "tax" on each loan (the borrower is given = 95 per cent of the total amount), and an "insurance premium" equivalent to 50 per cent of the regular loan interest paid by the borrower.

Until 1983 these funds were held by a commercial bank which acted as an intermediary since; then the project has been formally organized into its own bank. The funds deposited by a group are normally used by individuals on a rotating basis, though joint group loans are possible.

The International Fund for Agricultural Development (IFAD) made an interest-free loan of US$3.4 million for refinancing to the Grameen Bank through the Bangladesh Bank, a sum which the Bangladesh Bank has matched out of its own local currency funds. A savings interest rate of 4.5 per cent is high enough to be attractive, while a lending rate of 16 per cent allows enough margin to cover administrative costs, a rate well below that charged by private lenders (10 per cent per month and even 10 per cent per market day.)

Muser, in his assessment of the Grameen Bank project, comments that "Grameen Bank has found a new and independent way to reach poorer target groups and motivate them to help themselves. This self-help is reflected in savings schemes, group liability, insurance against risk and productive employment to generate income for themselves. "He notes that careful control has prevented credit funds from being taken over by better-off, more sophisticated borrowers, and that average income of group members has increased by about 70 per cent after two or three years. He cites four basic reason for the success of the Bank: a sound concept which combines local groups and trained advisers preserves a large measure of local autonomy and responsibility, and links "regular savings, regular group meetings and transparent and tightly orgenized mechanisms for the award and repayment of loans;" the effective use of trained workers who go directly to the target groups; the energy and vision of the founders, Dr. Yunus; and the cooperation of the Government of Bangladesh in providing "indirect subsidies in the form of favourable interest rates to the Grameen Bank ".Programmes such as the Grameen Bank, the Mutual Financing Programme in Korea, and the Savings Development Movement in Zimbabwe can help make the agricultural sector more self-financing and productive and the distribution of income more equitable, through the geration of local funds tied to an effective credit system. Appropriate facilities, advice and incentives can create a pattern of regular savings among the enormous population of the poor. Careful planning and suitable links between formal financial institutions and the traditional systems operating in the informal "penny market" can result in services that are economical to administer, fruitful in their allocation of resources, and available to those who need them most. Sensitivity to local customs and needs can preserve and encourage a vital self-help attitude, a sense of personal and community hope as they invest in their own future.

Although mobilization of rural savings cannot in itself solve the world food crisis or the financial problems facing many developing countries, it can make a significant contribution to national and individual prosperity, or, even more fundamental, to national and individual survival.

Food security and the integration of agriculture: Options and dilemmas

by Alain de Janvry

The growing interdependencies and uncertainties of world agriculture today have three characteristics. One is the rise of the marketed surplus as a share of agricultural output, indicating the growing commercialization of agriculture and its increasing exposure to terms of trade movements, be they the result of market forces or of institutional interventions. The second is the rapid growth of international trade for agricultural products and the concomitant increase in food and feed dependency for Third World countries, particularly those with rapid rates of economic growth. The third is the increasing instability of prices of tradable agricultural commodities measured in domestic currencies; a significant share of this instability originates in international capital movements and exchange rate fluctuations. This growing integration of agriculture in the national and world economy substantially redefines the options and dilemmas that Third World countries face in the design of strategies for food security and in the making of agricultural policy. This article explores some of the policy options available to developing countries, stressing the role that interdependencies and uncertainties play in the choices that can be made to improve their food security.

Contradictory functions. One of the great difficulties in using prices as a policy instrument is that many of their functions are contradictory. Prices affect both economic growth and social welfare, and in a contradictory fashion, since prices are a source of revenues for some classes and a source of costs for others. Low agricultural prices can stimulate industrial growth but lead to agricultural stagnation; they can raise the real income of consumers but lower that of producers and reduce employment opportunities for landless workers. There also exist conflicts between short- and long-term redistribution objectives obtained through price manipulation, since the short-run effects obtained for a given supply of agricultural commodities are often the opposite of the long-term consequences once the impact of prices on output growth has been felt. The contradictory effects of price policy as a joint growth and welfare instrument are evidenced by simulations in computable general equilibrium (CGE) models for India.

In the short run, price increases induce supply response and increase the real incomes of farmers with holdings large enough to have a positive marketed surplus. Even though output growth in agriculture creates employment for the landless and stimulates industrial growth (India), higher food prices decrease the real incomes of landless rural workers and of urban workers and the urban poor. In the long run, if prices are allowed to fall under the pressure of increased supply, the real incomes of net food-buying classes increase while those of net-selling farmers fall. The greater the elasticity of supply response, the more the price incentives to agriculture induce industrial growth through sectoral linkages, final demand, and savings/investment effects.

A similar dilemma between growth and welfare effects occurs with food subsidies financed out of public investable funds. For India, CGE model simulations show that decreasing urban food subsidies to increase public irrigation investment is expansionary on GNP. The urban classes are hurt in the short run by the loss of subsidies, but enhanced productivity benefits the urban classes in the future as well. In Egypt, when a foreign exchange constraint exists, targeting food subsidies formerly received by the rich is expansionary and deflationary and increases the real income of all classes except the urban rich. These studies indicate that equitable growth can be reached by a combination of investment allocation toward labour-intensive sectors with high potential productivity gains, such as irrigation of small farms producing mass consumption goods, and targeted subsidies to protect the poor until the income effects of increased investment benefit them.

Institutional interventions. It is because of these many contradictory functions of prices that most governments are reluctant to leave the determination of prices to market forces and instead try to control their effects through a range of institutional interventions. Some of the objectives of these interventions are: to protect consumer welfare, to generate public revenues, to enhance farm incomes, to create foreign exchange earnings, to increase food security, to stabilize prices, to improve nutrition, and to redistribute income among regions and individuals.

Thus, a central dilemma of price policy is that too few instruments are expected to satisfy too many objectives. The resulting mismanagement of price policy leads to stagnation of production and rural poverty, a phenomenon all too widespread in less-developed countries.

Two solutions exist. One consists of reducing the number of policy objectives. This is, in essence, the neo-liberal solution which abandons concerns with welfare and assigns to prices (left to the determination of market forces) and to individual initiatives the role of efficient resource allocation. The other consists of increasing the number of instruments in order to relieve prices from fulfilling many of the functions that state intervention has attempted to achieve through them. Rural welfare, for example, can be enhanced by land reform and by increasing peasants' labour productivity. Public revenues can be raised by land taxes. The nutritional status of the poor can be improved by income transfers and creation of employment. Thus, increasing the number of policy instruments allows the confining of prices to the role they best perform: to serve as guides for the efficient allocation of resources in an institutional context moulded by structural interventions.

In this case, prices of tradable goods are determined by border prices at an equilibrium exchange rate, and prices of non-tradables by equilibrium between supply and demand. This allows elimination of price distortions against agriculture that have typically originated in overvalued exchange rates and protectionism to industrial inputs. Eliminating these distortions permits the removal of credit and input subsidies in agriculture, which are sources of socially discriminatory institutional rents introduced in compensation for unfavourable product prices. Price policy interventions remain necessary, however, to manage a system of flexible exchange rates, to stabilize prices, and to supervise, through protectionism, the transition between price regimes, particularly if the farm sector contains large segments of peas ants with limited alternative options in the economy. Short of structural policies that redistribute assets and income (e.g., land reform), food subsidies are also necessary for that segment of the population with insufficient access to land and employment opportunities.

Most developing countries have passed through a phase of import substitution industrialization followed, in the most successful cases of the last 15 years, by a phase of export-led growth. The feasibility of these two development strategies is now limited: the first because of inefficiencies created by indiscriminate protectionism and increasingly inegalitarian income distribution induced by a luxury goods bias in industrial production; the second because present international market conditions severely limit exports of industrial products to industrialized countries.

Favouring agricultural growth. In the present international economic context, it thus seems that an investment strategy that favours food production in peasant agriculture or on labour-intensive commercial farms and that induces industrialization on the basis of agricultural growth is the most appropriate to insure both sustained growth and improved welfare for the masses of the population, at least in countries that still have large rural populations.

The examples of Taiwan province, the Republic of Korea, and China, as well as that of the industrialized countries in the eighteenth and nineteenth centuries shows the possibilities of an industrialization led by accelerated agricultural development. Rural development-led growth recently has been advocated for India and the Republic of Korea. Adelman shows how, in Korea, the reallocation of investment from the services and industrial consumption goods sectors to rice production leads to GNP growth and to equality in income distribution which are both greater than in the current strategy of export-led industrialization. The key to the success of this development strategy is to stimulate productivity growth in agriculture and to control the forces of the technological treadmill so that the fall in prices lags behind the fall in costs. Also essential to the results of this strategy are an extensive redistributive land reform; human capital formation; labour markets that perform to translate productivity gains into wage gains; and an industrial sector, most likely created in a prior phase of import substitution industrialization, able - to respond to domestic demand.

The CGE results for India show that reallocating investment away from industry toward irrigation infrastructure for wheat production is expansionary on GNP and progressive on the distribution of income. Only large farmers lose if the fall in prices associated with increased output is not mitigated by some price protection. In Egypt, CGE results also show that increasing the share of agriculture in total investment increases the GNP and raises the real income of all social classes.

The neo-liberal school insists on the need to improve the terms of trade for agriculture, to stimulate production, and to reduce the size of the public sector-the latter, in particular, to decrease the surplus that it extracts from agriculture. This is, for example, the philosophy of the Berg report for accelerated development in sub-Saharan Africa. Even though it is certainly necessary to set prices at the equilibrium level determined by market forces, it is also fundamental to realize that (1) this price system is necessary but not sufficient to induce agricultural development and (2) there exist technologies and structural alternatives that allow raising agricultural output faster and with more progressive results on income distribution than would be the case with price incentives.

Low elasticity. The reason prices have limited inducement effect is that aggregate supply elasticity in developing countries tends to be low. This is the case in Africa, for instance, where estimates of this elasticity range between 0.05 and 0.15. This is due fundamentally to the lack of new technological options, to constraints on farmers for access to modern inputs, and to exhaustion of possibilities of horizontal expansion. Under these conditions, increasing agricultural prices result in income transfers from consumers (and, proportionally, the poorest ones) toward producers with the largest marketed surplus. An effective use of price policy thus requires prior structural change to "elasticize" the aggregate agricultural supply response.

The CGE model for India shows that the poorer classes (landless agricultural workers, small farmers who are net buyers of foods, and urban workers) benefit from a policy of technological change in agriculture with flexible prices but are negatively affected by a policy of price support whose purpose is to stimulate output under conditions of inelastic supply. Comparing the two alternatives of increasing wheat production via a system of farm price incentives (with food subsidies to maintain consumer prices at an unchanged level) versus groundwater irrigation and high-yielding varieties shows a present value costs advantage of the latter over the former of 650 per cent at an interest rate of 8 per cent.

The key to agricultural development, thus lies in the implementation of policies of structural change, even if these are more difficult to carry out than are simple policies of price incentives. They must include policies to decrease dualism, reabsorb surplus labour, and increase labour productivity through technological change and human capital formation.

During the 1970s, many countries enjoyed a very rapid growth in some export sectors, while other sectors producing tradable goods stagnated as a result of the success of the first. When populations are trapped in those stagnating sectors, the result can be extensive poverty unless compensatory measures financed by export earnings are instituted. The booming export sectors have typically been primary sectors (petroleum and natural gas) or agricultural sectors with strong international comparative advantages (tea, coffee, animal feeds, drugs, etc.). These have created massive inflows of foreign exchange. Similar effects can originate in the rapid buildup of international debt or in international capital inflows through, say, foreign aid. In all cases, the success of a sector generating foreign exchange creates two types of perverse effects on the sectors that produce tradable goods such as domestic industry and the food sector. The first is a reallocating of resources toward both the booming export sector and the sector of non-tradable goods (services and construction) for which demand increases as a result of income effects in the export sector. The second is a negative effect on the domestic prices of imported goods that results from the inflationary pressures created by incomes in the booming sector and the resulting tendency for real appreciation of the exchange rate. The availability of foreign exchange allows the avoidance of a devaluation, always unpopular with urban sectors and thus the maintenance of low domestic prices for food items and industrial goods.

If the peasantry is principally a producer of staple foods and if fluidity in the reallocation of resources is insufficient to allow peasants to shift their resources to the production of the export or non-tradable sectors, the peasantry finds itself cornered in a stagnating sector under unbearable price conditions. The result is outmigration toward the employment opportunities created by the expanding sectors. If employment creation is not sufficient, the result is poverty and often hanger.

The wisest approach is to pace the inflow of foreign exchange earnings to avoid inflationary pressures, an approach successfully followed by, for example, Cameroon. Short of this, five options are available to protect the peasantry from the negative consequences of unequal sectoral development. Since in many situations the earnings of the export sector create public revenues, these revenues can be used to finance the reforms implied by each of these options.

1. Help the peasantry shift its options to the booming sectors. This was the case, for example, of peasants producing coffee and cacao in the Ivory Coast and of some family farmers who entered fruit production for export in Chile. Since these export products are often capital intensive (tree growing and irrigation for sorghum in Mexico), assistance to peasants requires important credit programmes and technical assistance as well as a stable insertion in the international marketing circuits.

2. Increase the total factor productivity of peasants in food production to enable them to compete with lowpriced imports. This is the objective of projects of integrated rural development and of research to improve traditional peasant production systems.

3. Protect the food items that compete with peasant production, support farm prices above consumer prices, or subsidize farm inputs to compensate for unfavourable product prices. This is the solution that Mexico successfully implemented under the Lopez Portillo administration showing how part of the booming sector revenues can be used to compensate the losers in the tradable sectors. With falling oil prices and the debt crisis this high-cost programme was sacrificed to austerity.

4. Create enough employment opportunities in the expanding sectors to allow peasants ruined by low food prices to be absorbed as workers.

5. Increase the degree of peasant household food self-sufficiency by allowing them to reduce dependency on purchased inputs and satisfy directly a greater share of consumption needs. This implies, in particular, promotion of organic technologies and garden plots as survival strategies.

The two extreme solutions to food security are generally untenable: food self-sufficiency, because it implies excessively high costs; and direct application of the theory of comparative advantage, because it is static, implies too-high risks, and has negative effects on some sectors of the population which are not competitive in an open economy and find themselves dispossessed of sources of revenue. Most countries have attempted to define strategies of food security which make a balanced combination of these two extremes. The problem is, however, not only to define a strategy that gives access to a national consumption vector with high probability but also to insure food security for all segments of the population. As recent experience with the green revolution has demonstrated, in India for example, strong agricultural growth is not sufficient to satisfy this definition of food security.

Food security has two aspects: the level and variability of satisfying nutritional requirements. And it is met through the combination of availability and entitlements where, as Sen has shown, small changes in availability can create large changes in entitlements.16 Availability derives from both domestic production and trade so that the choice variables are what to produce for national consumption, what to produce for export, and what to import. Sarris, for example, shows that aggregate Egyptian food security can be improved by reallocating resources between food (cereals) and cash crops (cotton). The food security problem is defined as the maximization of the risk-discounted expected value of net export receipts of the agricultural sector subject to satisfying both a fixed national risk aversion, the more food crops should be substituted for cash crops at the cost of a reduced net foreign exchange contribution of agriculture.

Access to food in both level and variability is defined differently for different social groups: for subsistence peasants, it depends on access to resources and productivity; for landless farm workers and net-buying marginal farmers it depends on employment, wages, and low food prices: for netselling farmers on favourable terms of trade and productivity; for urban workers on employment, wages and low food prices; and for urban marginals on food subsidies and income transfers. Using the CGE model for the Republic of Korea, Adelman, Berck, and Gordon show how the two components of food security (level and variability) affect specific social classes differently.18 Although in that country subsistence farmers are the worst off in terms of average consumption, the social group with the highest risk of food deficiencies is the urban marginals who are heavily affected by price fluctuations resulting from instability in both domestic production and world prices. Improving food security of different social groups thus requires different policy instruments. For subsistence farmers, it calls on policies that can raise their mean income, while for the urban poor it requires policies that reduce their vulnerability to instability.

In Egypt, food insecurity originates in both international price movements and fluctuations in domestic yields. Among social classes, fluctuations in international prices and yields affect most the real income of the urban rich through the positive economic growth effects that rising yields and falling world prices have on overall economic growth. High variability in international prices under conditions of extreme food dependency implies that the coefficient of variation in the real income of the poor is larger in the urban sector than in the rural sector. As in Korea, improving the food security of the rural poor requires raising their level of entitlement, while improving that of the urban poor requires reducing the viability in their entitlements. In India, which is basically a closed economy and where food insecurity originates principally in fluctuations in the yields of food grains, it is the rural poor who are most exposed to fluctuations in entitlements arising from unstable yields. Among the rural poor, it is the landless workers whose access to food varies most since yield fluctuations create, in the short run, proportional fluctuations in employment opportunities. Declining output thus hurts them both through falling employment and through rising land prices, which lowers their real wages. In this case, improving the food security of the poorest requires the use of policy instruments that both raise the level and reduce the variability of their food entitlements.

Security of entitlement. With an increasingly integrated agriculture in the national and world economy, it is important to shift the analysis of food security away from that of the stabilization of food availability and of food prices to that of security of food entitlements for all segments of the population. This focus shows that a complex package of policies needs to be used for this purpose including: yield stabilization; optimum allocation of resources between domestic food and export crops; price stabilization through variable tariffs, currency reserves, and storage; and food subsidies for critical groups.

There is no question that international food aid to refugees and the starving is necessary. But long-term food aid is more questionable. It has often been denounced as a means for (1) reducing the pressure to implement the reforms necessary to improve food production; (2) lowering prices for domestic food producers; (3) creating price uncertainty, since food aid is erratic; and (4) encouraging consumption habits (e.g., wheat in the tropics) or types of agroindustries (e.g., wheat mills in Peru) that domestic production can no longer supply.

A more careful analysis of the impact of food aid in Latin America reveals, however, that the same instrument-cheap concessional food imports-can be used with markedly different results according to whether it is an explicit component of a strategy of food security or a substitute for the definition of such a strategy. In Colombia, for example, PL-480 wheat imports have depressed domestic prices, eliminated wheat production from commercial farms, and increased wheat dependency from 30 per cent of total consumption in the early 1950s to 90 per cent in the late 1970s. In Brazil, by contrast the State sells concessional wheat imports at a price higher than what it pays and uses the revenue created by this transaction to offer domestic producers a price above that paid by the mills. In contrast to Colombia, instead of competing with domestic production, food aid provides a source of public revenues to finance the transition toward greater food self-sufficiency.

In analyzing the impact of food aid on agriculture, it is also important to distinguish between short-run and long-run effects. In the Egyptian CGE, when food subsidies are financed by foreign aid, increasing food subsidies is strongly expansionary on GNP as it creates a new inflow of foreign exchange. In the short run, falling food prices hurt all net-selling farmers and increase the real incomes of the urban classes. In the long run, however, the strongly expansionary effect of increased foreign aid results in positive real income gains for all classes, both urban and rural. This, in turn, creates increased demand for food which both benefits domestic agriculture and increases demand for commercial imports.

It has often been said that the foodsurplus, developed countries prefer to give food aid to reduce their surpluses rather than to provide developmental assistance to Third World agriculture, which would eventually lead to reduced opportunities for commercial exports. This is a fallacious interpretation of the potential of aid in stimulating food exports from developed countries. Successful agricultural development in the Third World creates strong income effects that result in increased cereal imports of foodgrains in the poorer less-developed countries and feedgrains in the middle-income developing countries (MDCs). Rapid growth in the Third World stimulated by aid, in particular led by rural development on a broad "unimodal" basis, will be, for decades to come, the best guarantee of expanding export markets for food- and feedgrains produced in the more developed countries.

I am optimistic about the possibility of harmony between rapid rural development in the LDCs, to reduce malnutrition, and increased export demand for the MDCs, to reduce food surpluses and the associated farm income or public budget crises. Foreign aid to accelerated rural development can thus be to the advantage of both LDCs and MDCs.

Probably the most important conclusion derived from this analysis of an agriculture increasingly integrated in the national and world economy is the predominant importance of macroeconomic and intersectoral forces on the production performance of agriculture and on the distribution of welfare gains that it creates. The trade-offs implied between growth of different sectors, security of food entitlements for different social groups, and shortrun versus long-run effects are far from obvious and were partially captured in the results we presented from multisector, multiclass economic models for India and Egypt. In this new context, Third World countries must, consequently, design their agricultural policies and their strategies of security of food entitlements with a clear understanding and an explicit quantification of these trade-offs.

Agricultural productivity and the ageing process

by Philippe Fargues

As we approach the end of the twentieth century, the ageing of the active populations of the world has become a global phenomenon that during the next 15 years will be considerably stronger in the developing countries than in the industrialized ones. This ageing process has already begun in the developing world, with the exception of Africa and the Islamic regions, reflecting the fact that when birthrates decline, a population gets older. It has fewer young people and more old ones.

Moreover' when the factor of migration is considered, it seems clear that rural populations will grow old more quickly than urban ones. The ageing of producers in the low capital-intensive agricultural sectors of many developing countries could imply a lowering of the productivity of labour. Probably, this is one of the heaviest pressures that the rural exodus exercises on the food stability of these countries.

Even migrations between rural areas can exert similar pressures. The Ivory Coast, a country with a prosperous agriculture, was obliged to increase its cereal imports by 250 per cent between 1974 and 1982, rising to second place among cereal importers in Black Africa. A contributing factor was the movement of young grfrom the north of the country, devoted largely to subsistence agriculture, toward the south, to become planters of export crops such as coffee or cocoa. Such migrations accelerate the ageing process among the remaining population of the abandoned region, without any balancing contribution to domestic food production.

Grow old or die. If we assume that developing countries cannot indefinitely maintain an annual population growth rate of two per cent, which would mean a doubled population every 35 years, then it must be recognized that ageing is inevitable. Since population growth reflects the difference between birth rates and death rates, a declining growth rate will result only from higher mortality or by lowered birth rates and the ageing of the population. And since ageing is usually equated with decay, the demographic evidence of the process that first confronted Europe must have inspired pro-natalistic reactions among governments there. The real choice is to grow old or die and, barring high mortality as a way to achieve population balance, the Third World must get ready for the ageing process.

Rapid increases in the numbers of elderly within populations can be regarded in two ways. First, the proportion of the population of 65 years or more indicates the state of ageing at a given moment. As can be seen from the first column in Table 1, the proportion of elderly population in the developing countries in 1985 was four per cent; it was 11.1 per cent in that category in the industrialized countries. This is due not so much to a lesser decline in the death rate in the developing countries as it is to the maintenance of a higher birth rate. One of the paradoxes of the ageing process is that it does not result from the prolonging of individual lives but rather from the decline of its young people. For instance, if the fertility rate in Nigeria is maintained at the present level of 6.4 infants per woman, the proportion of elderly in the population will remain at a constant 2.4 per cent even though there is a gain of 20 years in life expectancy at birth between 1950 and 2010. Europe, on the other hand, while gaining only 10 years in life expectancy over the same period, will see the proportion of its aged population rise from 8.7 to 15.4 per cent of the total because fertility will continue to decline from 2.6 to 1.9 children per woman.

These proportions indicate roughly the burden that old people place on an active population. It is not too great yet in the developing world where, excepting five countries (Argentina, Chile, Cuba, Uruguay, and Hong Kong) with fertility rates in the range of 2.0 to 3.2 children per woman, those over 65 make up less than five per cent of the population.

To calculate the future proportions of elderly, however, requires projections of total population, which are dependent in turn upon hypothetical birth rates - a very large step into the unknown. A better indicator offering a more dynamic picture of the longterm perspective is the growth rate of aged populations. In 1985, the elderly of the year 2050 have already been born. Their numbers and their growth can be projected simply by forecasting mortality.

From this point of view, developing and industrialized countries have had comparable growth in the course of the last 35 years, both more than doubling their percentage of old people (see Table 1, column 3). This index is of great interest for planning since it indicates the investments needed to provide for the requirements of old people. The evolution expected in the course of the next 40 years (see column 4) shows that the increase in the aged population will be twice as large in developing countries as in industrialized countries.

In 1985, more than half the world's old people (147 million out of 277 million) live in developing countries. In 2025, they will number 773 million, of which 531 will be in developing countries. They will have accounted for more than three-quarters of the aged population growth in the world.

And here lies a second paradox: the high proportion of "old" in the industrialized countries and the declining part that these countries take in the growth of the aged population of the world are two sides of the same coin. A low percentage of old people results from a strong population growth. This affects all age groups, including the oldest. The younger a country is, the more it will eventually need to invest to respond to the growth of its aged population.

Between 1975 and 1985, the aged population of the Third World grew at the annual mean rate of 3.02 per cent, about four times as quickly as that of European countries, which grew at 0.76 per cent. In Africa, 21 countries are growing faster than 3 per cent a year. Among these are the three largest countries of sub-Saharan African Nigeria, Zaire, and Ethiopia. In Latin America, 12 countries, including Brazil and Mexico, have a rate higher than 3 per cent, and Asia has 18 such countries, including the giants China and India.

Diversity of structures by age. If we combine the present burden of old people (the proportion of over-65s in 1980) and the progression of this burden (annual rate of over-65 growth between 1975 and 1985) we can distinguish four groups of countries.

I. Ageing already under way (more than 4.5 per cent over 65) and aged population growth moderate (less than 2.5 per cent per year). This group includes temperate South America (Argentina, Chile, Uruguay) and the Caribbean

Although they are far from the same state of ageing, these countries are nearest to the “old" countries of Europe and North America. Argentina occupies a relatively unfavourable position since it must support already heavy burdens (8.2 per cent of old people) and foresee a rapid elevation of its investments (2.5 per cent growth per year).

II. Ageing already under way, aged population growth rapid (more than 2.5 per cent per year). China is virtually alone in this category.

The profound and rapid ageing that China must expect results directly from the extraordinary drop in fertility begun in 1970 thanks to a rigorous anti-birth policy. To the plunge in its fertility, from 5.8 children per woman in 1970 to 2.2 in 1980, corresponds the hollowing of the base of its age pyramid. In 1985, the last of the "numerous" generations are more than ten years old. In 2040, the survivors of the 1985 over-10s will have passed their 65th birthday. That is when China will have attained its maximum ageing. It will subsequently begin to rejuvenate progressively as the generations born of the present single-child policy grow old.

After 2025 China and Europe will have similar situations, which is remarkable considering how different they were 75 years earlier. That gives an idea of the extent of the effort that China will have to make to support its accelerated ageing. Hong Kong and Singapore face a similar situation. In Singapore it results from fertility as low as China's but which dropped less abruptly. In Hong Kong, where fertility has been low for much longer, it is the ageing of the immigrants of the years 1940-50 that temporarily increases the age of the total 1980 population.

III. Very young countries, aged population growth rapid This includes most developing countries.

Five have an over-65 growth rate greater than 4.5 per cent: Venezuela, Libya, Bahrain, United Arab Emirates, and Kuwait. These oil-producing countries all attract immigration. Maintaining a very high over-65 population growth rate presupposes the fixing in place of the old immigrants, but nothing is more uncertain.

IV. Very young countries, of aged population growth moderate. North Africa and western Asia (the Arab countries and Turkey) are enjoying a reprieve from ageing.

Although they may still be uniformly young, the developing countries are engaged in well-differentiated short-and long-term evolution. Figure 2 compares the over-65 growth rate with that of the total population.

The countries where the over-65 rate is higher than the total population rate have an age structure that is getting older. In sector I of figure 2, the growth rate of the aged is 1.5 times greater than that of the total population. China, Hong Kong and the Republic of Korea are in that group. In sector II, which contains the majority of developing countries, the ratio of the two rates is 1 to 1.5.

Some countries continue to get younger, meaning that the over-65s in crease less rapidly than the total population. Sector III, contains North Africa, western Asia, and southern Africa. Their fertility has not yet weakened (except in Turkey), while infant mortality has fallen.

New problems. Ageing has involved much transformation of the economies of industrial countries and will present underdeveloped economies with new problems. Rural populations are beginning to feel two of them: the old people are becoming a burden, and the producers are ageing.

The growth of the proportion of aged persons is accompanied by a decrease in that of young people, with the result that the divisions of the total population between active and dependent does not change much under the sole effect of population ageing. The tendency would be even, rather, for the dependency relationships (Table 1, columns 7 and 8) to decrease.

Within the dependent population, it is necessary to await a rapid development of the distribution between old and young, in favour of the old (columns 9 and 10), and within that in favour of the very old (75-plus) and women. Now, the transition of a dependent population, nine-tenths of which was under age 15 in 1985, to another, where the over-65s will account for more than one-fourth in 2025, is not the same as a simple transfer from the expenses of the young to the old. The consumption of a young person and that of an old person are of neither the same kind nor the same amount. But there is something even more worrisome. While the state tends to assume a growing part of the cost of young people (notably extension of public education and infant care centres), rare are the developing countries where the care of the aged by the society has a large base. Retirement systems are limited to a minority of the population. A given growth of the aged population presupposes an investment as elevated as the starting structures are weak.

A large offspring is a form of old-age insurance. The lowering of fertility and consequent ageing of the family limit the ability of a family to take care of its elderly. Traditional family solidarities would decrease with the number of descendants, but' ironically, they would be needed more than ever.

The insecurity of old people could take a particular turn in rural Africa. Fertility there has held but the exodus to the cities has had the same effect as the drop in fertility elsewhere. The traditional extended family assures a collective management of dependents, children, and old people. Under the effect of galloping urbanization, this family is beginning to disintegrate. Generally, when they are not actually born in the city, young children follow their parents in the rural exodus. The costs of bringing them up are then supported by the restricted family, nuclear or not. It is not the same for the old people, in any case if they live in the villages. This is the rule in Black Africa. Old people represent a proportion of the total population nearly two and a half times higher in the country than in the city (in other developing countries and in the most urbanized countries of Latin America the country-city ratio is about even). Though now less urban than the rest of the Third World, Africa is engaged in even more sustained urbanization (6 per cent per annum, as against 4 per cent). For the most part founded since independence, the African cities still have only a small percentage of old people (1.4 per cent), whose maintenance the traditional gerontocracies would guarantee. The latter could well not survive the geographical dispersion of the generations. The cost of children becomes onerous in the cities, where the market takes the place of village subsistence. The competition between the generations may well precipitate the disintegration of traditional "old-age insurance".

Relief by the aged. If the lowering of fertility causes ageing worldwide, emigration causes it at the local level. Removing the young, active population, it leaves the old people behind in the regions the young abandoned. When the movement is on a large scale, the ageing that ensues can be more brutal than that which follows from changes in the birth rate.

For example, as a result of heavy migration toward the south of the country, the northern Ivory Coast lost 11 per cent of its farmers' strength between 1975 and 1980. In the males aged 20-24 group, the loss reached 36 per cent (see figure 3). The proportion of the over-45 population among farmers rose from 27 to 33 per cent. In the same period, the total rural population of the region continued to grow despite emigration (up 0.7 per cent). The same observation could be made of many other centres of rural exodus.

Sometimes international migrations are responsible for rural ageing. In the Yemen Arab Republic, a quarter of the active male population has emigrated to Saudi Arabia. Between 1970 and 1975, its male population between 15 and 40 years of age fell by 13 per
cent, but that between ages 40 and 65 increased by 11 per cent.

In agricultures with a strict division of labour according to sex and age, ageing and feminization caused by emigration have swift repercussions on production. With a few exception, the rural exodus in developing countries does not result from a double movement, demand for manpower in industry and replacement of man by machine in agriculture, as was the case in the industrialized countries. An old farmer armed with a horse-drawn plough could doubtless replace many young people equipped solely with swing-ploughs. However, these are the poor rural areas from which people emigrate. In the absence of capital, the young grare not often replaced by technical progress.

The ageing of agricultural populations contributes to increasing food dependence only because it occurs in the double context of an agriculture where the abundance of labour is a condition of survival, and of a predatory urbanization without positive effects on agriculture. If the time to begin getting ready is now, because the problem is imminent, we cannot say with certainty in advance that ageing will aggravate underdevelopment, since it will occur along with a decline in population growth and will relax the pressure of costly growth.

''...a sense of their own effectiveness''

An interview with Peggy Antrobus

WAND (Women and Development Unit) is a regional organization created in Barbados in 1978 as a part of the Action Plan of the United Nations Decade for Women. Based at the University of the West Indies, WAND's objective is to support the implementation of the regional plan of action for integrating Caribbean women in development. To this end, WAND furnishes technical assistance in several fields: the preparation of feasibility studies, planning, analyzing, and evaluating projects, the establishment of women 's bureaus or similar organisations in member countries of the Caribbean Community (CARICOM), training of development workers, and so forth. WAND works in collaboration with the Economic Commission for Latin America (ECLA), with a number of specialized agencies of the United Nations system, with national, regional, and interregional non-governmental organizations, as well as with financial institutions Peggy Antrobus of the University of the West Indies' Extramural Department is coordinator of WAND. She was interviewed for Ceres by Armelle Braun during the World Conference for Evaluating the Results of the United Nations Decade for Women held last July in Nairobi -The Editors.

Ceres: What is your personal assessment of the efforts made over the last ten years to integrate women in development?

Antrobus: I think we all started assuming that development is a benign process and that we were simply trying to get women into that process. But we discovered that they were already involved, as a matter of fact, in development. The reason why people did not recognize this was, first of all, because women's labour was largely thought unimportant, and this particularly in the agricultural sector. Even when they were remunerated, it was at a lower level than men. Thus we all had the notion that somehow whatever women were doing needed to be improved. Here was also the assumption that what women did was related to the social sector and not to the economic one. Again, if you focus on rural development, it is the sector in which you can really see why talking about integrating them in development is meaningless. You have to remember that women are not merely housewives; they are farmers in their own right. Those two roles-women's reproductive role and women's productive role-are linked, but conventional approaches to rural development and agriculture do not take that link into account. Typically, in rural development and in agricultural extension programmes, there is a split between home economics, which recognizes women's reproductive role, and agricultural extension, which recognizes the productive role of farmers. In the Caribbean, we are now aware that many women who work at agricultural tasks, sometimes for as many as six hours a day, will describe themselves as housewives. The state looks at women as housewives. So do the ministries of agriculture that design their programmes on that assumption. We surveyed one country in the Caribbean, and although the respondents said that one-third of the women were involved in agriculture, when we checked it with the women themselves and asked them to describe what they actually did, we found that over 80 per cent of the tasks were performed by women. What I am saying is that in 1975 we did not recognize the complexity of the issue; we talked about integrating women in development as if they were not there.

In the course of the last ten years, research and programming have shown clearly that the point is not integration, but rather that there is a need to recognize that women are indeed in development, but in a severely disadvantaged position. So, in 1985, we recognize that we have to challenge the whole concept of development. We have to recognize that development is not merely a set of economic processes. What is interesting to note is that the rhetoric has always been there. I mean, the United Nations, for years now, since the Second Development Decade, has been talking about "integrated development", "holistic development" and claiming that development has to include the social and the political as well as the economic. And yet, when you look at the policies and at the allocation of resources, it is clear that they are still stuck with the economic model. The crisis that is facing the world today shows very clearly the limitations of that growth-oriented model, and it shows also the way the economic processes are linked with the political and the social.

Now they are talking about agriculture and rural development, the food crisis in Africa, but many of us who have been involved with African women particularly, are finding that one of the reasons for the crisis in food security is the failure of planners to recognize the critical role of women as food producers. We do insist on the fact that you have to take into account the social elements and be concerned about the technologies women use. When you are developing training programmes aimed at women you have to take into account their time, their responsibilities for other tasks within the household, that it may not be possible for them to travel long distances or for a long time, that they do not have access to land, to credit, to technology, etc., etc. So, in some ways, the crisis is the result of a failure to look specifically at women's role, at the implication of that role for food production.

Q: What do you think about appropriate technology for women? Is there not a great lack of it?

A: Well, there is a lack of technology in two areas. I would like first to look at technologies women need to perform their domestic work. You also have to consider the technology they use to perform their productive role, the kind of implements they have to use, and technologies also in terms of communication, because communication is also a tool.

Q: It seems that some groups of women have been very successful communicators and have performed rather well in networking.

A: Indeed. You see what is very exciting and very significant is that in the last year a group of Third World women-including researchers, activists, and policy makers from every region-has been meeting on the initiative of an Indian woman, Devaki Jain. We have been meeting to do three things. First, to analyze our experience of the decade. We have analyzed development strategies and criticized them from a woman's point of view. Second, we analyzed the food security crisis, the debt crisis, the environmental crisis, the military-nuclear crisis, and the way in which they interlock. The third part of our project is to propose alternatives.

We call this the DAWN project", DAWN meaning Development Alternatives with Women for a New Era. It is focussing essentially on poor women's experience of development, the impact of the crisis on poor women, and how, by focusing on them, we may find a way out of this crisis, specifically by giving out more resources to these women.

Q: What kind of strategies do you have in mind in order to get more resources allocated to the women who need them?

A: Instead of giving priorities to export-oriented agriculture, more priority should be given to food production for local use and which is cultivated by women so you have to give them more resources. Second, we are calling for more attention to be paid to women in decision making in this sector.

Q: That may not be easy to do.

A: We have had some experience with this in the Caribbean. We developed a pilot project in a small country, Saint Vincent and the Grenadines, where we tried to do two things: first, to test the methodology, the strategy for involving women in decision-making; and, second, we wanted to show what happens when women are empowered in that way. We implemented this "how to" project by using participatory methods instead of a more formal approach. That means paying more attention to what they have to say, helping them, and giving them the skills and the confidence to state their own priorities, to plan their own programmes in order to meet their needs and have access to resources, both within their own community and within their country and internationally. Finally, it means helping women to be aware of the causes of their situation and of why they are poor, to look at their own experience within the broader framework of the socioeconomic process.

Q: How can the link be established between strategies at the community level and broader strategies?

A: It's very tempting to negate or to minimize the micro projects, and indeed lots of these do not have an impact on the macro level. What is happening at the macro level is going to affect what's happening at the micro. For example, if you look at the assessment of the Decade, you see that there is a big difference between the global statistics and the micro level. If you look at global figures, you see that women are worse off in every sphere in 1985 than they were in 1975. At the micro level' certainly at the level of your own experience, you see tremendous achievements. So how do you have an impact? We claim that for women the way to do it is, first of all, to help them get a sense of their own effectiveness, of their own power, of their own influence at the micro level. That is why any micro level project, whether it is a small income generating project, a project for digging wells, a self-help project, a project for building houses or for health or a literacy project, any microlevel project can help to make a difference at the macro level to the extent to which it helps building the consciousness about the macro processes that affect women. We are also talking in terms of how women can link with each other to organize. As they do so, they begin to move to the national level; they begin to have an impact on policies at the national level because our governments have to respond. Even the most repressive regimes have to take notice of a mass movement. The DAWN project is exciting because it represents linking of women of different regions. Behind those regional groupings you have national linkages which is what we have in the Caribbean. I am the representative of DAWN in the Caribbean region, but I represent a rural movement within the region and behind that there is a rural movement at national level and behind that, again, a rural movement at the community level. The point is that without that empowerment of poor women at the grassroots level, the people who, like myself, are operating at international and regional levels have no force behind them. They have no credibility. They are speaking only about their own experience, and if they are not in touch with the grass roots movements, they don't really have much power or influence. So if I you ask me to sum up the major I achievement of the Decade, I would say: the emergence of a better consciousness of, and a greater commitment to, an extended network.

Q: Do you plan to link as well with women in the industrialized countries?

A: Yes, the DAWN project does link with women in the North and the South. But women in the North have to understand and come to terms with their own experience of powerlessness, alienation, and inequality. The feminists in the North have the ingredients for assisting in promoting development in Third World countries. Women of the First World who are conscious of their own alienation will understand that there are pockets of underdevelopment in their own countries. So right away they break away from that attitude of superiority they have, which says, in effect, because we live in developed countries, we are all right. We have all those resources. It's just you poor Third World women who are illiterate and ignorant and stupid and don't know what you are doing. We are all right; you are the ones we have to help. Now that kind of attitude is not acceptable to Third World women. That kind of superiority, that kind of arrogance has no place in a programme for assisting Third World women. If women of the North begin to see that, then they have a role to play, not only in changing their own situation, but also in generating resources for what is needed in their own country.

Counting on sheep: historical perspective on a happy partnership

Sheep and Man, by M. L. Ryder, London, Duckworth, 1983, 846 p., 55 pounds sterling.

Except for the dog, the first animals domesticated by man were the sheep and the goat, preceding pigs and cattle by several thousand years. The transformation, which occurred in Mesolithic southwest Asia around 9000 B.C. after a long and gradual process of growing association and mutual benefit, changed the course of human history. In fact, says M.L. Ryder, in introducing his monument to this happy partnership, "It is not too much of an exaggeration to say that the history of man is the history of sheep."

Certainly, it is at least partly thanks to the sheep that the history of man has been recorded, since parchment was made from sheepskin. Sheep can supply man's needs for food, clothing, fuel, and skelter and have been known to carry loads and pull carts. Sheep bones have been made into many useful tools and other articles, including games and musical instruments; they have even been used in divination. Tents, as well as clothes, can be made from wool and felt, and dung and tallow give light and heat. The food products of the sheep include a great deal more then pecorino cheese and roast lamb. Sheepmilk yoghurt, well known in the Near East, has found its way to Western supermarkets. Scottish haggis, though of decidedly limited consumption, stands as testimony to the infinite culinary variety the sheep inspires. Most important, sheep meat is the only meat that is not taboo to any people in the world.

Infinite variety is the key to the study of sheep too. Merely to call Ryder's book interdisciplinary is to do it an injustice. It is a splendid melange of livestock husbandry (which the author teaches at the University of New England in Australia), biology, history, archaeology (both scientific and art historical), anthropology, sociology, history of religion, history of art, literature, geography, folklore, and linguistics. The author's purpose - "to combine evidence from all possible sources on the history of the association of sheep with man, and the changes in sheep wrought by him" - has resulted in a long and richly documented volume which aims specifically at providing historians and prehistorians with scientific background and scientists with a historical perspective. The curious researcher from almost any discipline will find some point of intersection of his own field of study with sheep, but the going can be a bit heavy for the casual reader with a few general questions, though he is likely to find at least a reference to what he wants in the 27-page bibliography. The reader whose only interest in sheep is that he likes to fall asleep counting them (another sheep-man connection) may want to study the fascinating section on counting systems, and before long he will be wondering whether he is dreaming of Merinos or Scottish Blackfaces.

The unique attribute. A book that attempts to cover a dozen millennia and six continents faces problems of organization. The principal unifying theme is the author's own research on ''changes in the fleece wrought by man", wool being "the truly unique attribute of sheep, of prime importance in the history of man from ancient Sumer to modern Australia." He has, accordingly, chosen to combine chronological, geographical, and topical approaches, none of which the reader should take too literally as there is much overlapping. The first of the three main divisions of the book, "Ancient Times", addresses the general biology of sheep (including what separates them from goats), prehistoric sheep and their diffusion, sheep of ancient civilizations, and sheep of the early Middle Ages. The second, "The Middle Ages to Recent Times", takes a geographical arrangement, with chapters on the Near East and North Africa; Asia, Eastern, Western, and Northern Europe; Africa; and the Americas, Australia, and New Zealand. The third section, called "The Association of Man with Sheep" (but, of course, that is what the whole book is about), contains chapters on sheep husbandry, sheep products (these chapters are, forgivably, rather Britannocentric), and the "sheep legacy", by which is meant "the legacy of modern breeds and their biological relationships, as well as the legacy of sheep in folklore, language and literature". Since the same topics turn up in different parts of the book and the readership is heterogeneous (the anthropologist's vocabulary is not that of the livestock specialist), a glossary of special terms would have been extremely useful and would have made the size of the book less overwhelming, but the style is clear enough and most terms are defined at least once.

A detailed tabular list of illustrations gives type of fleece, horns, and face in nearly three hundred representations of sheep in Western and ancient Near Eastern art. There is, however, no list of the other graphic material, which includes scores of scientific illustrations and tables (for example, of breeds and their characteristics) and some representations of sheep in non-Western art, for example, cave paintings of fat-tailed sheep in Zimbabwe, a seventeenth-century Indian painting of a four-horned piebald ram, and an eighteenth-century Chinese mirror painting showing spotted "hair" sheep. There is also a wealth of illustrations (many of them photographs) of sheep breeds, sheep products, and sheep husbandry activities and equipment from all times and all places.

Nomads and transhumants. For Ceres readers, the most relevant section will probably be that on the Near East and North Africa, where the sheepman connection is most keenly felt, since "for centuries sheep have formed an integral part of the cultural and social heritage of the region's population." Seventy per cent of the sheep in the region are kept in either nomadic or transhumant husbandry, and the tiny percentage of the human population involved "gives no indication of the economic importance or the variety of systems employed. Far from being aimless wandering, nomadism forms a highly efficient human adaptation to adverse conditions." Ryder stresses the difference between nomadism and transhumance. Nomads have no fixed abode: "True nomadism can be defined as the regular movement of whole families with their livestock in constant search of grazing and water." The movement may be constant, but it is not random or aimless. Transhumants, on the other hand, have a fixed abode for part of the year and practise seasonal migration with their flocks, as between mountains and lowlands, "at set times, following established routes". Ryder is sympathetic to nomads, who have suffered prejudice and political opposition deriving from poor understanding of their way of life. He cites FAO studies that "have created the more enlightened view that nomadism is highly rational, taking human occupation into increasingly severe environments. It is not an unsatisfactory alternative to settled agriculture, nor is it a half-way stage to something better.... All in all nomadism represents a most remarkable human adaptation to extremely adverse environments."

It is all very well to call a book Sheep and Man, but women too have always had an active relationship with sheep and sheep products. The sobriquet "distaff side" did not attach itself to the female sex for no reason (Carthaginian women were buried with their spindles), but spinning and weaving are not the only jobs women have done. Ryder presents, but not systematically, evidence for girls' and women's work in many areas of sheep husbandry, including, of course, shepherding. (But not only: in the Middie Ages, as difficult and athletic an activity as shearing was performed by a "shepster", or female shearer.)

"Has the sheep come to the end of the road?" asks Ryder in his epilogue. The short answer is No: "... compared with other livestock the sheep has a greater potential for survival in difficult circumstances. It already requires a lower input in terms of energy and labour, and its role as a universal provider in harsh environments everywhere throughout history has been amply demonstrated. Sheep can live in marginal areas unsuitable for cultivation, ranging from sub-polar vegetation through temperate mountain pasture to the scrub of tropical deserts." Answers can be found for such problems as exist. That is, breeds raised mainly for meat could be made to produce more wool too. The caveat is that examples of breeds that have declined because they have proved uneconomic must be maintained "as a base from which to make developments which cannot be foreseen today."

Maureen B. Fant

Development policy: overestimating the capacity to change things

Room for Manoeuvre: An Exploration of Public Policy in Agriculture and Rural Development, edited by E.J. Clay and B. B. Schaffer. Gower, Farnborough, 1985, 209 p., $13.50.

Radical critique of development politics is not new. For a long time it was based primarily on Marxist or "dependency"-oriented studies, stressing the close relationship between the "development business" and the interests of the dominant classes in the industrialized countries. In the last couple of years radical criticism has also emerged from a quite different perspective: neoliberals attacking the inefficiency of state intervention which distorts the salutary effects of market forces, distracts resources from productive use, and inflates an unproductive bureaucracy. In contrast to the often rather academic character of these approaches, this book, edited by Edward Clay and the late Bernard Schaffer, promises a radical critique of development politics from an insider's perspective and ideas on how to detect and use the largest "room for manoeuvre" given in particular situations for pursuing objectives which are in themselves mostly uncontroversial (fulfilment of basic needs, increase of productivity, equitable land reform).

In an introductory chapter, the editors explain their concern "to analyze public policy on development as the process and practice of what governments actually do, to explain the linkages between intentions and outcomes". For them the basic problem is the widely followed "common sense" or "mainstream" model of public policy, which represents public policy as a dichotomous linear process of two distinct but sequential phases, the process leading to the decision for a particular policy and its implementation land the problems related to it). This implies the fiction of an independent decision-making process oriented exclusively toward particular development objectives. The gaps between intentions and outcomes then appear to be due to difficulties of implementation, thus apparently removing all responsibility from policy-makers' shoulders. The target-group approach is seen as a logical supplement to the described policy model: trying to improve the situation of a specific social group, planners and politicians tend to base policies on highly selective data and problems and thereby to isolate the target group from the social development of which it forms part. Several case studies elucidate particular problems and contradictions of the mainstream model. Percy Selwyn's analysis of agricultural budgets in Mauritius shows that budgetary allocations hardly imply any real policy decision but tend to be self-perpetuating: "Those in society who would benefit from a re-ordering of priorities in expenditure may have little information on what is required, and may in any event have little political influence." Edward J. Clay demonstrates that the establishment of "Special Planning Units" related to problems of foodcrops and nutrition in Bangladesh and Sri Lanka might theoretically have contributed to a strengthening of the planning process, but in practice had little impact on agricultural development as they had not been integrated into the regular political process. Rural women constitute one of the most typical target groups in recent years. Florence McCarthy points out - commenting on such a programme in Bang ladesh - that "with women treated as a separate issue much that could be done to stabilize inputs onto the rural areas becomes fragmented." The role of women is isolated and is entrusted to "urban-based women, who... know nothing about rural women".

Perfect solutions, Stephen Biggs - in a survey of common themes in agricultural policy - stresses the inadequacy of the dominant "normative institutional engineering approach" to policy formulation, which proposes abstractly perfect solutions to social problems without considering the specificity of each local situation. Taking the example of a rural credit scheme in Bangladesh, which serves landless labourers and poor rural women, Biggs shows that the cautious evolution of such a scheme out of a locally conceived and initiated action research project can help to promote the situation of the rural poor. Two case studies on multilateral institutions {Martin Evans on change in the strategy of the Asian Development Bank; Diana Hunt on the experiences of the International Fund for Agricultural Development in Kenya) indicate that here the gap between policy formation and implementation tends to be even larger as a result of the tension between their international character and the attention paid by member states to their own national sovereignty. Thus, basic-needs-oriented concepts were at least in part converted back into across-the-board assistance (Evans) or aid for middle and rich peasants (Hunt).

The third part of the book focuses on "The Languages and Practice of Public Policy". A shorter contribution by Raymond Apthorpe stresses the need for a comprehensive interdisciplinary approach recognizing the existential character of development problems. The concluding article by Bernard Schaffer - which occupies about a quarter of the book - summarizes the different aspects of critique of the "mainstream" model and indicates ways toward an alternative treatment of public policy, drawing on the results of the preceding case studies and supplementing them with other examples. To me, his most interesting criticisms were:

- on the compartmentalization of a social whole into apparently independent sectoral realities;

- on the decisionality of the model suggesting that well-considered, rational decisions have been taken, when, in fact, alternative strategies were excluded long before (as in the case of the "decision" to drop atomic bombs on Japan in 1945);

- on the manifold escapes from responsibility, frequently based on the pretence that the results of carefully carried out academic studies did not leave any other choice than the "chosen" policy.

Alternative models. Nevertheless, I finally finished reading the book with a certain sense of frustration. In contrast to the extensive criticism of the "mainstream" model, few indications are given of alternative policy models to enlarge the "room for manoeuvre". These parts of the Schaffer article remain vague. The alternative model has to have an inclusive character; the attempt to make their own strategy unassailable has to be replaced by the "willingness of the institutions to be involved with their critics" and to organize the "process of alternative participation". I agree. But what does that mean with respect to existing political structures and - even more fundamental - what does it mean for the potential of development politics to modify prevalent historical tendencies in favour of particular social objectives?

I suspect that one reason for the vagueness of the proposed alternative model is to be found in an incomplete analysis of the state of affairs. The editors never arrive at the question why, after all, the mainstream model has dominated development planning. In a short joint conclusion, they emphasize "that the whole life of policy is a chaos of purposes and accidents. It is not at all a matter of the rational implementation of so-called decisions through selected strategies". - This could be the clue to the whole problem: development planning tends to overestimate its capacities to change the "normal" course of history, to have an impact on what would have happened without the planning effort - even seemingly successful strategies quite often just successfully anticipate historical tendencies. This would suggest, first, looking for some kind of development tendencies hidden behind the "chaos of purposes and accidents" and then detecting the crossroads where appropriate political intervention could possibly push the course of events into the desired direction.

Wolfgang Hein