Public-Private Partnerships for Harnessing the Potential of Rainfed Agriculture

INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE

Public-Private

Partnerships for

Harnessing the Potential of

Rainfed Agriculture

Joachim von Braun

International Food Policy Research Institute

October 19-20, 2005, FICCI

Federation House, Tansen

Marg, New Delhi, India

INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE Page 2

Outline

PPP in agriculture: The main options and issues

Less favored/marginal rainfed areas: risks and opportunities

Possibility of PPPs in the supply chain management of high value and processed commodities


Agri-food systems are increasingly …

• Driven by market forces / consumers/ retail

• Globalized through international trade

• Influenced by new technologies

• Subject to stricter regulatory scrutiny

• Subject to greater ethical scrutiny

But peoples’ ability to respond to this changing context differs greatly between regions, nations and communities


Opportunities for partnership exist

Partnerships can improve access to

• New technologies, and tools

• New research expertise and infrastructure

• Private equity markets; donor funding

• New product markets and new customers

• New marketing and distribution networks

Synergies through knowledge sharing,

joint learning, scale economies, resource

pooling, and cost sharing


But roles remain contested

With changes in the global agri-food system,

the roles of the state, industry, and civil

society remain contested

Controversy over ownership of new knowledge

Issues over distribution of benefits and risks

Concerns over lack of pro-poor emphasis

Unease over environmental, social sustainability

Learning from others? e.g. the health and ICT sectors


Yet our visions and goals often coincide

a world free of hunger and malnutrition

To provide solutions that cut hunger and

malnutrition

These goals are

good on humanitarian grounds

and good for business


Real actions follow common interests

Private Public

Private support

to charitable

public projects

Public projects Private

provision of

public goods

Public

Commercial

projects Private

Planning,

Financing

Delivery,

Execution Civil Society

Civil Society

Private support

to charitable

NGO projects

NGO provision

of public goods

NGO

partnership

projects


Outline





What are “less-favored areas” (LFAs)?

Include areas with

• low agricultural potential, due to limited rainfall, poor

soils, steep slopes, etc. (biophysical constraints); or

• limited access to infrastructure (e.g., roads and

irrigation) and markets (socioeconomic constraints)

Some LFAs are found in:

• semi-arid and arid tropics of Asia and Africa

• mountain areas of Asia, Latin America and Africa

• hillside areas in Central America and Asia

• forest margins of humid and sub-humid tropics of

Africa, Latin America and Asia


Acc

ess t

o in

frastr

uctu

re an

d m

arke

ts

Socioeconomic constraints.Biophysical constraints.

a

b

High

CLASSIFICATION OF FAVORED AND

LESS-FAVORED AREAS

Lowa

bHigh Low

Favoredareas

Less-favoredareas

Less-favoredareas

Less-favoredareas

Agricultural potential


Why be concerned about LFAs?

1. Most of the poor live depend on these areas for their livelihoods:

• Over 1 billion people live in such areas

• Problems of low agricultural productivity, poverty, and natural resource degradation severe and worsening in many such areas

• Problems in these areas give rise to conflict, emigration to other areas, negative environmental consequences


Drought and famine risks…


Droughts from 1900-2004

# of Events Killed Affected

Africa 460 1,046,500 315,238,600

Americas 100 100 61,701,400

Asia 200 7,761,400 1,789,441,000

Europe 30 1,200,000 15,262,600

Oceania 25 700 8,233,600

EM-DAT: The OFDA/CRED International Disaster Database, Université

catholique de Louvain

Droughts are the deadliest natural

events…


Droughts involve significant

economic costs…

Economic losses due to drought in Eastern India

Averaged over 30

years

During drought years

only

Loss of rice production (million tons) 2.6 7.6

Value of rice production loss

($million)

250 735

Value of other crop production loss

($million)

125 370

Employment loss (million person-

days)

160 480

Value of employment loss ($ million) 160 480

Total economic losses ($million) 535 1,585

Source:www.agric.uwa.edu.au/ARE/AARES/Conf2003/ClimateWorkshop/PandeyPresent.ppt

http://www.agric.uwa.edu.au/ARE/AARES/Conf2003/ClimateWorkshop/PandeyPresent.ppt


Why be concerned about LFAs?

2. Contrary to general belief, returns

to investments are often higher in

these areas …


Returns to Investments in India – Impacts on

Agricultural Production (Fan and Hazell 1999)

Investment Units

Irrigated

areas

High

potential

rainfed

areas

Low

potential

rainfed

areas

HYV’s Rps/ha 63 243 688

Roads Rps/km 100,598 6,451 136,173

Canal

irrigation

Rps/ha 938 3,310 1,434

Private

irrigation

Rps/ha 1,000 -2,213 4,559

Electrification Rps/ha -546 96 1,274

Education Rps/ha -360 571 902


Returns to Investments in India – Impacts on Poverty

Reduction (Fan and Hazell 1999)

Investment Units

Irrigated

areas

High

potential

rainfed

areas

Low

potential

rainfed

areas

HYV’s Persons/ha 0.00 0.02 0.05

Roads Persons/km 1.57 3.50 9.51

Canal

irrigation

Persons/ha 0.01 0.23 0.09

Private

irrigation

Persons/ha 0.01 -0.15 0.30

Electrification Persons/ha 0.01 0.07 0.10

Education Persons/ha 0.01 0.23 0.01


Returns to Investments in China – Impacts on Rural GDP

(Fan, et al. 2004a) (yuan/yuan inv.)

InvestmentCoastal Central Western

R&D 5.54 6.63 10.19

Irrigation 1.62 1.11 2.13

Roads 8.34 6.90 3.39

Education 11.98 8.72 4.76

Electricity 3.78 2.82 1.63

Telephone 4.09 4.60 3.81


Outline





Opportunities for PPPs along the

supply chain…

PRODUCERS

PROCESSORS

MARKETERS

RETAILERS

CONSUMERS


High value production on dry lands

1. Public Private Partnerships in

Research and Development for

varietal adaptation to climatic

extremes

TECHNOLOGY

SHARING + RESOURCE

MOBILIZATION


ICRISAT Experience in India- Sorghum and

Pearl millet Hybrid Parents Research Consortia

Initiated in 2000

Impact:

• Increased adoption of improved hybrids:

More than 4 million ha of rainy season Sorghum

and 1 million ha summer season sorghum are

planted with 50 private-sector (PS) based hybrids,

of which 40 are based on ICRISAT derived parental

lines

4.5 million ha of pearl millet area is planted with

more than 70 PS based hybrids, of which 60 are

based on ICRISAT derived parental lines


ICRISAT Experience in PPP for R&D in

India (ctd)

• Resource mobilization

From 2000-2003, members of consortia

included 16 PS Sorghum companies and 18 for

Pearl millet = mobilization of US$ 405,000

April 2004, an additional 25 PS seed

companies members of consortia = US$ 2

million for ICRISAT funding over a five-year

period



2. Partnership in water management

in rainfed agriculture

• Enhanced water use efficiency

• Increased financing for system

rehabilitation, improvement and

upgrading


Watershed management projects in

rainfed areas- India

Objectives :

• on-site soil and water conservation

measures that improve the resource base

for rainfed agricultural production.

Increase productivity in rain-fed

agriculture & Provide

opportunities for planting high-

yielding varieties


Watershed management projects in

rainfed areas- India (ctd)

Methods:

• Emphasis on participatory management &

knowledge sharing

Collaboration b/w Government, NGOs, village

self-help groups (community-based PPPs)

Local people = full partners- Participation in

helping plan, implementing and paying for

watershed development programs


3. Infrastructure development- roads

and information and

communication technologies


IMPROVE ACCESS

TO MARKETS AND

INFORMATION


Public Sector will still be the major

player (e.g. provision of initial capital)

Partnerships w/ NGOs, CBOs and

private sector necessary in:

Choosing infrastructure projects that would yield

the highest short run and long run benefits

Cost- sharing (esp. for maintenance )

PPPs in infrastructure development

Documents

Public-Private Partnerships for Harnessing the Potential of Rainfed Agriculture