Franz W. Gatzweiler · Joachim von Braun Editors Technological and Institutional Innovations for Marginalized Smallholders in Agricultural Development Technological and Institutional Innovations for Marginalized Smallholders in Agricultural Development Franz W. Gatzweiler • Joachim von Braun Editors Technological and Institutional Innovations for Marginalized Smallholders in Agricultural Development Editors Franz W. Gatzweiler Center for Development Research (ZEF) University of Bonn Bonn, Germany Joachim von Braun Center for Development Research (ZEF) University of Bonn Bonn, Germany ISBN 978-3-319-25716-7 ISBN 978-3-319-25718-1 (eBook) DOI 10.1007/978-3-319-25718-1 Library of Congress Control Number: 2015959025 Springer Cham Heidelberg New York Dordrecht London © The Editor(s) (if applicable) and The Author(s) 2016. The book is published with open access at SpringerLink.com. 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Neither the publisher nor the authors or the editors give a warranty, express or implied, with respect to the material contained herein or for any errors or omissions that may have been made. Printed on acid-free paper Springer International Publishing AG Switzerland is part of Springer Science+Business Media (www.springer.com) Foreword We face a global food crisis of many dimensions. Food prices for the poor are rising and volatile. About a billion people are chronically hungry. Most shocking of all, 1 in 3 children under the age of five are seriously malnourished and will grow up physically and mentally stunted. At the same time, some two billion people are overweight or obese. Furthermore, we have to feed a growing world population demanding more varied and nutritious diets, including a wide range of livestock products. We will have to produce more food, but on more or less the same amount of land and with the same amount of water. In recent years, I and a team of experts drawn from Europe and Africa, known as the Montpellier Panel, have been attempting to articulate the concepts, frameworks and practical actions we will need to cope with these challenges. We have argued that a way forward is sustainable intensification, producing more with less, but also using inputs more prudently, adapting to climate change, reducing greenhouse gases, improving natural capital and building resilience. It is a tall order, a chal- lenge far greater than that we faced at the time of the Green Revolution. An important contribution to the debate is this volume edited by Franz Gatzweiler and Joachim von Braun. Its aim is to improve the understanding of how, when and why innovation can bring about sustainable intensification in agriculture, improving the lives of poor smallholders, a majority of which live in Sub-Saharan Africa and South Asia. It presents contributions from theory, policy and practice to the science of sustainable intensification. The volume explores opportunities for marginalized smallholders to make use of technological and institutional innovations in order to achieve sustainable intensification and improve productivity and wellbeing. The insightful framework developed by Gatzweiler and von Braun considers the different needs of smallholders in different agro-ecological environments and with different human capabilities. The diversity of strategies in each of the segments improve the targeting of innovations when they need to be people and area specific. The identified strategies also tell us about the type of enabling environment in which innovations can tap unused productivity potential by leveraging human and v agro-ecological capital. According to that framework, innovations which are people focused are likely to be more relevant in areas where agro-ecological potentials are low and innovations which create additional value in agricultural productivity are more relevant in areas with unused agro-ecological potentials. That is an important aspect which will make sustainable intensification more focused. For some small- holders, technology will be the dominant innovation for food security, others will need multiple and diverse strategies and build on their social capital, while for others again non-farm income opportunities are the better alternative. The examples provided in this volume tell us that technological innovation can take diverse forms from high-yielding and stress-tolerant varieties to modified farming practices. Those innovations need to be accompanied by institutional innovations at multiple scales and engage stakeholders from government, local communities and business. Institutional innovation is not only necessary to ensure the access and use of technological innovations but also to create an enabling environment which rewards grassroots innovators for being creative and sharing their knowledge. The rich collection of contributions from Sub-Saharan Africa and South Asia in this volume are based on original field-based research demonstrating an in-depth understanding of the lives of poor smallholders and the conditions under which they themselves engage in innovation or adopt innovations. It shows by a host of telling examples that a lot more can be done fast and sustainably for and with smallholders by making use of an area-and-people focused targeting concept. The support of this research by the Bill & Melinda Gates Foundation is a significant indication of the Foundation ’ s commitment to enhance agricultural innovation for poverty reducing actions at scale in marginalized communities and complex diverse agro-ecologies. The book is a rich source of knowledge for students, scholars and practitioners in the field of science and policy for understanding and identifying agricultural productivity growth potentials for smallholder farmers and development. Professor, Faculty of Natural Sciences Gordon Conway Centre for Environmental Policy Chair in International Development Imperial College, UK vi Foreword Acknowledgements We would like to express our sincere gratitude to the Bill and Melinda Gates Foundation who supported a research project on “Ex-ante technology assessment and farm household segmentation for inclusive poverty reduction and sustainable productivity growth in agriculture (TIGA)” at the Center for Development Research (ZEF), University of Bonn under Grant No. OPP1038686. We strongly appreciate the close collaboration and intensive exchanges on the topic with Prabhu Pingali and Kate Schneider at the Foundation, which helped us shed light on various aspects of the multifarious topic of this book. The research carried out and the contributions to this book would not have been possible without the support of our partners and collaborators at the Forum for Agricultural Research in Africa (FARA) in Ghana, the Ethiopian Economics Association (EEA) in Ethiopia, the International Food Policy Research Institute (IFPRI) in India, and BRAC in Bangladesh. The present volume was accomplished with the cooperation of researchers, funders, practitioners and decision makers from a variety of backgrounds, who collectively took a fresh look at how to overcome the barriers and grasp the opportunities of innovations in agriculture, which would sustainably reduce poverty and marginality. We are grateful to all authors of this volume and those who directly or indirectly contributed to advancing our knowledge on innovations for sustainable agricultural intensification. Apart from various research colloquia and meetings, findings under this research project had been presented and discussed at the 8th conference of the Asian Society of Agricultural Economics in Dhaka, October 2014. vii We express our special gratitude to Arie Kuyvenhoven and Franz Heidhues who provided continuous advice and contributed with insightful comments to the research process. Moreover, helpful critiques from external anonymous reviewers on an earlier draft of this volume are gratefully acknowledged. Bonn, Germany Franz W. Gatzweiler Joachim von Braun viii Acknowledgements Contents 1 Innovation for Marginalized Smallholder Farmers and Development: An Overview and Implications for Policy and Research . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Franz W. Gatzweiler and Joachim von Braun Part I Innovation for the Rural Poor: Theory, Trends and Impacts 2 Institutional and Technological Innovations in Polycentric Systems: Pathways for Escaping Marginality . . . . . . . . . . . . . . . . . 25 Franz W. Gatzweiler 3 Innovations for Food and Nutrition Security: Impacts and Trends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41 Evita Pangaribowo and Nicolas Gerber 4 Psychology of Innovation: Innovating Human Psychology? . . . . . . 65 Manasi Kumar and Ashish Bharadwaj 5 An Optimization Model for Technology Adoption of Marginalized Smallholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81 Deden Dinar Iskandar and Franz W. Gatzweiler Part II Diversification of Agricultural Production and Income 6 The BRAC Approach to Small Farmer Innovations . . . . . . . . . . . . 99 Md. Abdul Mazid, Mohammad Abdul Malek, and Mahabub Hossain 7 Agricultural Research and Extension Linkages in the Amhara Region, Ethiopia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113 Tilaye Teklewold Deneke and Daniel Gulti ix 8 Institutional Innovations for Encouraging Private Sector Investments: Reducing Transaction Costs on the Ethiopian Formal Seed Market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125 Christine Husmann 9 Agricultural Service Delivery Through Mobile Phones: Local Innovation and Technological Opportunities in Kenya . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143 Heike Baumu ̈ller 10 Identification and Acceleration of Farmer Innovativeness in Upper East Ghana . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 163 Tobias Wu ̈nscher and Justice A. Tambo 11 Gender, Social Equity and Innovations in Smallholder Farming Systems: Pitfalls and Pathways . . . . . . . . . . . . . . . . . . . . . 181 Tina D. Beuchelt 12 Assessing the Sustainability of Agricultural Technology Options for Poor Rural Farmers . . . . . . . . . . . . . . . . . . . . . . . . . . . 199 Simone Kathrin Kriesemer, Detlef Virchow, and Katinka M. Weinberger 13 Land Degradation and Sustainable Land Management Innovations in Central Asia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 213 Alisher Mirzabaev 14 Biomass-Based Value Webs: A Novel Perspective for Emerging Bioeconomies in Sub-Saharan Africa . . . . . . . . . . . . 225 Detlef Virchow, Tina D. Beuchelt, Arnim Kuhn, and Manfred Denich Part III Sustainable Intensification of Agriculture 15 Adoption of Stress-Tolerant Rice Varieties in Bangladesh . . . . . . . 241 Akhter U. Ahmed, Ricardo Hernandez, and Firdousi Naher 16 More Than Cereal-Based Cropping Innovations for Improving Food and Livelihood Security of Poor Smallholders in Marginal Areas of Bangladesh . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 257 Mohammad Abdul Malek, Mohammad Syful Hoque, Josefa Yesmin, and Md. Latiful Haque 17 Integrated Rice-Fish Farming System in Bangladesh: An Ex-ante Value Chain Evaluation Framework . . . . . . . . . . . . . . . . . 289 Abu Hayat Md. Saiful Islam x Contents 18 Technologies for Maize, Wheat, Rice and Pulses in Marginal Districts of Bihar and Odisha . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 323 P.K. Joshi, Devesh Roy, Vinay Sonkar, and Gaurav Tripathi 19 Technological Innovations for Smallholder Farmers in Ghana . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 369 Samuel Asuming-Brempong, Alex Barimah Owusu, Stephen Frimpong, and Irene Annor-Frempong 20 Potential Impacts of Yield-Increasing Crop Technologies on Productivity and Poverty in Two Districts of Ethiopia . . . . . . . . 397 Bekele Hundie Kotu and Assefa Admassie Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 423 Contents xi Contributors Assefa Admassie Ethiopian Economic Association Yeka, Addis Ababa, Ethiopia Akhter U. Ahmed International Food Policy Research Institute (IFPRI), Dhaka, Bangladesh Irene Annor-Frempong Forum for Agricultural Research in Africa (FARA), Accra, Ghana Samuel Asuming-Brempong Department of Agricultural Economics and Agribusiness, University of Ghana, Legon, Accra, Ghana Heike Baumu ̈ ller Center for Development Research (ZEF), University of Bonn, Bonn, Germany Tina D. Beuchelt Center for Development Research (ZEF), University of Bonn, Bonn, Germany Ashish Bharadwaj Jindal Global Law School, O.P. Jindal Global University, Delhi, India Joachim von Braun Center for Development Research (ZEF), University of Bonn, Bonn, Germany Tilaye Teklewold Deneke Amhara Agricultural Research Institute (ARARI), Bahir Dar, Ethiopia Manfred Denich Center for Development Research (ZEF), University of Bonn, Bonn, Germany Stephen Frimpong United Nations University-Institute for Natural Resources in Africa, Accra, Ghana Franz W. Gatzweiler Center for Development Research (ZEF), University of Bonn, Bonn, Germany xiii Nicolas Gerber Center for Development Research (ZEF), University of Bonn, Bonn, Germany Daniel Gulti Agricultural Transformation Agency (ATA), Addis Ababa, Ethiopia Md. Latiful Haque BRAC Research and Evaluation Division (RED), Dhaka, Bangladesh Ricardo Hernandez International Food Policy Research Institute (IFPRI), Dhaka, Bangladesh Mohammad Syful Hoque BRAC Research and Evaluation Division (RED), Dhaka, Bangladesh Mahabub Hossain BRAC Research and Evaluation Division (RED), Dhaka, Bangladesh Bekele Hundiea Kotu International Institute of Tropical Agriculture, Tamale, Ghana Christine Husmann Center for Development Research (ZEF), University of Bonn, Bonn, Germany Deden Dinar Iskandar Center for Development Research (ZEF), University of Bonn, Bonn, Germany Abu Hayat Md. Saiful Islam Center for Development Research, University of Bonn, Bonn, Germany Department of Agricultural Economics, Bangladesh Agricultural University, Bonn, Germany P.K. Joshi International Food Policy Research Institute (IFPRI), Washington, DC, USA Simone Kathrin Kriesemer Horticulture Competence Centre, University of Bonn, Bonn, Germany Arnim Kuhn Institute for Food and Resource Economics, University of Bonn, Bonn, Germany Manasi Kumar Department of Psychiatry, College of Health Sciences, University of Nairobi, Nairobi, Kenya Department of Psychology, University of Cape Town, Cape Town, South Africa Mohammad Abdul Malek BRAC Research and Evaluation Division (RED), Dhaka, Bangladesh University of Bonn-Center for Development Research (ZEF), Bonn, Germany Md. Abdul Mazid BRAC International, Dhaka, Bangladesh Alisher Mirzabaev Center for Development Research (ZEF), University of Bonn, Bonn, Germany xiv Contributors Firdousi Naher University of Dhaka, Dhaka, Bangladesh Alex Barimah Owusu Department of Geography and Resource Development, University of Ghana, Legon, Accra, Ghana Evita Pangaribowo Department of Environmental Geography, University of Gadjah Mada, Yogyakarta, Indonesia Devesh Roy International Food Policy Research Institute (IFPRI), Washington, DC, USA Vinay Sonkar International Food Policy Research Institute (IFPRI), New Delhi, India Justice A. Tambo Center for Development Research (ZEF), University of Bonn, Bonn, Germany Gaurav Tripathi International Food Policy Research Institute (IFPRI), New Delhi, India Detlef Virchow Center for Development Research (ZEF), University of Bonn, Bonn, Germany Katinka M. Weinberger Environment and Development Policy Section, United Nations Economic and Social Commission for Asia and the Pacific, Bangkok, Thailand Tobias Wu ̈ nscher Center for Development Research (ZEF), University of Bonn, Bonn, Germany Josefa Yesmin BRAC Research and Evaluation Division (RED), Dhaka, Bangladesh Contributors xv Chapter 1 Innovation for Marginalized Smallholder Farmers and Development: An Overview and Implications for Policy and Research Franz W. Gatzweiler and Joachim von Braun Abstract Smallholders in Asia and Africa are affected by increasingly complex national and global ecological and economic changes. Agricultural innovation and technology shifts are critical among these forces of change and integration with services is increasingly facilitated through innovations in institutions. Here we focus mainly on innovation opportunities for small farmers, with a particular emphasis on marginalized small farm communities. The chapter elaborates on the concept of the ‘ small farm ’ and offers a synthesis of the findings of all the chapters in this volume. The contributions have reconfirmed that sustainable intensification among smallholders is not just another optimization problem for ensuring higher productivity with less environmental impact. Rather it is a complex task of creating value through innovations in the institutional, organizational and technological systems of societies. Keywords Marginality • Poverty • Innovations • Policy • Smallholder farmer Introduction The large majority of the world ’ s 570 million small farms are in Asia and Africa, if we define smallness by land size (Lowder et al. 2014), and about 80 % of them actually live in Asia. They are the largest employment category and small business group among the poor. Their businesses use mostly local resources and face local constraints, but at the same time, they are affected by increasingly complex national and global economic changes. These changes are partly inside farming and partly very much outside agriculture, partly domestic and partly international, i.e.: • returns to labor in small scale farming are increasingly determined outside agriculture through more integrated labor markets; opportunity costs of farm F.W. Gatzweiler ( * ) • J. von Braun Center for Development Research (ZEF), University of Bonn, Bonn, Germany e-mail: gatzweiler@gmail.com; jvonbraun@uni-bonn.de © The Author(s) 2016 F.W. Gatzweiler, J. von Braun (eds.), Technological and Institutional Innovations for Marginalized Smallholders in Agricultural Development , DOI 10.1007/978-3-319-25718-1_1 1 labor are rising, as are aspirations of youth in farming families who do not want to feel relatively deprived; • agricultural innovation and technology shifts are critical among the forces of change; integration with services is increasingly facilitated through innovations in institutions; • the market value of smallholder land is rising because of agricultural price changes and the increasing influence of non-agricultural demand for land use, as well as expected value changes in other capital asset classes; • international dynamics result from changing price levels and volatility, and trade policies defining competitiveness; consumption shifts are among the fun- damental drivers; • domestic policies , especially the scale and pattern of investments in public goods, such as infrastructure, innovation systems, and social policy, change the socio-economic framework of small scale farming. This volume and the overview chapter focuses mainly on innovation opportuni- ties for small farmers. The other above-mentioned important forces of change are touched upon only as a backdrop. Moreover, we focus in particular on marginalized small farm communities. 1 Small farmers have shown strong resilience in the context of economic transformation. They are faced with forces of continuing change in coming decades, including far more integrated and quality-focused agricultural value chains and more complex technological and institutional choices for production, processing and marketing. Policies must be designed to facilitate an integral role for small farm households not only as passive absorbers of change, but as important contributors to development. Defining Small Farms Comprehensively Small farms are highly heterogeneous and diverse. Small farmers exhibit specific characteristics and play different (sometimes multifunctional) “roles” in their regions, and these roles differ in significance at different stages of economic development. Most of the literature defines small farms based on the size of their land or livestock holdings (Eastwood et al. 2010), a standard but arbitrary cut-off size being less than 2 ha (World Bank 2003). Land quality and access to resources such as water are also key differentiators of small farms. It is important to capture the institutional and technical characteristics in the definition of small farm. B eing small is not only about the land or herd size, but also about varied access to markets and natural resources and the degree of commercialization (von Braun and 1 We define marginality as “an involuntary position and condition of an individual or group at the margins of social, political, economic, ecological, and biophysical systems, that prevent them from access to resources, assets, services, restraining freedom of choice, preventing the development of capabilities, and eventually causing extreme poverty” (von Braun and Gatzweiler 2014). 2 F.W. Gatzweiler and J. von Braun Mirzabaev 2015). Given the important role of small farms in reducing rural poverty, the definition of small farms ideally should be asset- and income-based (ibid.), not solely area-based. Actually, a whole dashboard of concepts and related measurable criteria should be applied to identify size, relevance and potential of the small farm economy. Table 1.1 lists such a dashboard of five sets of concepts (land size, employment, TEV, income, socio-economics). The literature is rich in studies on all these five concepts and, to some extent, their inter-linkages. A general international statistical basis, however, exists only for the land-based accounting of “small farms”, and even that is quite deficient (Lowder et al. 2014). The definition of farm class sizes for which data are collected is often divergent among countries, making their cross- country comparisons challenging (FAO 2010). Moreover, the discussion of small farms is dominated by crop production, whereas small pastoralists are usually not much taken into consideration, with little attention being paid to small scale horticulturalists and aquaculturalists as well. Using the area size of a farm alone to identify whether it is small or big may lead to misguided policy actions. For example, 1 ha of irrigated fertile land planted with high value vegetables and fruits and located close to major urban markets could generate much higher total income than, say, 20 ha of rainfed area under subsis- tence crops in remote areas. The same 1 ha of irrigated land may lead to quite Table 1.1 Defining small farms: concepts and criteria Concepts Measurements Strengths Deficiencies 1. Land holding (or herd) size Size in hectares cultivated Number of livestock Simple accounting of physical characteristics; Important for agrarian societies Lack of economic valuation of farm enterprise (quality of land, location to markets, etc.); ownership issues neglected 2. Employment Labor in small farms Important for economy- wide considerations, and for livelihoods Returns to labor (especially marginal returns) undefined; economics of multiple job-holdings missing 3. Income Annual produc- tion and net returns Integrates with GDP shares; identifies growth and innova- tion performance; a basis for poverty identification in the small farm economy Highly variable; pricing own consumption of farm products; externalities not captured (eco-systems services) 4. Total eco- nomic value (TEV) Comprehensive capital stock (assets) account Identification of wealth; credit worthiness; important for economy- wide consider- ations beyond GDP Difficulties to value land and human capital (skills); value of inter-farm collective action (as a form of social capital) 5. Societal role Small-farm communities; villages; local services Shows collective action (potentials); governance and fiscal settings; public goods investments Lacks focus on the farm enterprises Source: von Braun and Mirzabaev (2015) 1 Innovation for Marginalized Smallholder Farmers and Development: An Overview . . . 3 divergent incomes depending on whether it is sustainably managed or highly degraded (Nkonya et al. 2011). Determinants of “Smallness” of Farms Smallness of farms is largely endogenous. The fundamental insights of Tschajanov (1923) based on empirical analyses of the relationships between labor use and farm size in Russia around the beginning of the twentieth century emphasized that the small farm (including household plots for home production) should not be viewed as just a short-term transitional phenomenon. It is an economic reality and it depends directly on the household utility function and on the underlying economic conditions in product and labor markets, as well as social system risks. The factors that put small farms at an advantage or disadvantage compared to large farms have been debated by economists for years, and there are long-standing debates on the viability and the role of small farms in economic development (Schultz 1964; von Braun and Kennedy 1994; Hazell et al. 2010). The seminal research of Schultz (1964) on the efficiency of small and poor farmers brought many misleading debates, equating small with inefficient, to an end. Often, small farms are not considered “viable”, but concepts of viability need to be carefully assessed in relation to small farms. Economic viability in family farming means the ability and capacity of a farm to ‘ make a living ’ , say, over the seasons of a year or over the long run. Given the relevance of multiple job holdings on small farms, defining viability purely on the basis of the farm component of the households ’ total economy is inappropriate, as farm production, labor and capital allocation are optimized in an integrated, inseparable fashion in most instances (Singh et al. 1986). Furthermore, defining small farm viability from an economy- wide perspective would need to be based on considerations of TEV and productiv- ity (innovation) potentials. These “people potentials” in the small farm sector, such as entrepreneurship and expanding human capital, may be much more relevant for growth and development, rather than simply being the economics of land connected to the small farm economy. The concept of returns of scale has been used to probe many of the theories of optimal farm size (Chavas 2001). Empirical studies of this inverse relationship in the 1970s found that, in India, small farms are more technically efficient than large farms (Yotopoulos and Lau 1973; Berry and Cline 1979). Hired labor is the main reason for the lower land productivity of larger farms (Binswanger and Rosenzweig 1986). Family workers are more efficient than hired workers because family members receive a share of the profit and thus pay greater attention to quality of work than hired labor. Family members also require no hiring or search costs, and each family member assumes a share of the risk; however, there are tendencies towards (self-) exploitation of labor in family farming, especially in relation to child labor (ILO 2006) and remuneration of women ’ s work. 4 F.W. Gatzweiler and J. von Braun