Issue No.1208, 7 August, 2014      06-08-2014 05:52PM ET

Commentary - Justice for the farmers

Family farmers and smallholders of agriculture land also need social justice, writes Hafez Ghanem

Commentary - Justice for the farmers
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Calls for social justice in Egypt focus almost exclusively on the needs of the urban poor and middle class. Hence, the debate is usually about public-sector salaries, minimum wages and price subsidies — the issues that are important for the urban poor and middle class.  

However, this leaves out more than half of Egypt’s population. The social justice debate needs to expand also to include the needs of smallholder and family farmers, or fellaheen as they are known in Egypt. Their interests differ from those of the urban poor and middle class. They do not receive a public-sector salary and are typically less dependent on the consumption of subsidised goods.

More than half of Egypt’s population (about 55 per cent) lives in rural areas and their livelihood depends directly or indirectly on agriculture. In fact, nearly 30 per cent of Egypt’s labour force is employed in agriculture. Rural dwellers and farmers are among the most needy. Rural poverty in Egypt (measured by headcount index) is twice as high as urban poverty, and more than 80 per cent of the extremely poor live in Upper Egypt, almost all of them in rural areas.

Smallholder or family farms (defined as holdings of less than five hectares and depending mainly on the labour of family members) constitute more than 98 per cent of all agricultural landholdings in Egypt, and cover more than 70 per cent of all agricultural land. The average landholding of the family farmer is only 0.7 hectares, which is very low compared to other countries.

The fellaheen also face a serious water constraint. Egypt’s rural population has nearly doubled since 1980 while the Nile’s water resources are more or less fixed at about 55.5 billion cubic metres per year.

The small family farm is a multi-product enterprise, and livestock production (including poultry and fisheries) represents 40 per cent of the value of total agriculture production in Egypt. More than 90 per cent of all cows, 86 per cent of all buffalos and 55 per cent of all sheep and goats are held by small producers who own less than 10 heads each.

The fellaheen are the backbone of Egypt’s agriculture and hence are key actors for food security, and they are also the majority of the poor. It therefore seems obvious that they must be included in any debate on social justice.

What does social justice for the fellaheen entail? It requires action on many fronts, including: social protection and safety nets; health; and education. But the most basic action is to support agriculture to help raise the fellaheen’s productivity and income. The fellaheen need better technology to increase yields and better integration in national and international markets in order to raise their share in the value added they produce.

With limited land and water resources, agricultural growth and farmers’ incomes depend crucially on increasing yields. Over the last three decades yields for many crops have increased at fast rates. Wheat yields doubled between 1980 and 2007.

Yields for rice increased by 67 per cent over the same period, and water consumption per unit was reduced by 25 per cent.

During the same period maize yields increased by 90 per cent, sugar cane yields by 44 per cent, tomato yields by 116 per cent and strawberry yields by 673 per cent. On the other hand, yields of some major crops, like cotton, remained stagnant, which could explain farmers’ decisions to reduce areas under cotton production.

Future growth and rural poverty reduction will require a continued increase in yields through technological enhancement. That is why the government needs to expand research and extension services and ensure that they are adapted to the needs of family farmers. Egyptian institutions need to carry out their own agricultural research in order to adapt existing global knowledge and techniques to local ecological, social and economic realities.  

But Egypt’s investment in research is only about 0.5 per cent of agricultural GDP, which is far below the rate of about 2.4 per cent observed in OECD countries and the 1.5 per cent observed in successful Latin American countries. Perhaps even more importantly, the government needs to ensure that agricultural extension services — the use of scientific research and new knowledge in agricultural practices through farmer education — are adequately funded and that extension workers are trained to communicate with family farmers and can deliver information in a manner that is convincing and helpful to farmers.

The fellaheen also tend to retain a very small share of value added from their products. A study by the Ministry of Agriculture shows that in the case of many vegetables the farmers’ share of the market price is only about 20 per cent.

Marketing, whether domestically or for exports, is a serious constraint on agriculture development and for increasing farmers’ incomes. The majority of family farmers in Egypt continue to use the traditional marketing system known as kerala.  Under this system the crop is sold in the field at a price per hectare. The buyer takes control of the product in the field and handles the harvesting, selection, grading and transportation.

An obvious problem with this system is that it does not allow for much price differentiation to reflect quality. This also means that the farmer gets a lower share of the market value of the product as the buyer needs to be compensated for harvesting and grading.

Establishing direct linkages between the fellaheen and traders so that they are connected to national and international markets would be one way of raising their share of value added. The West Noubaria Rural Development Project, supported by the International Fund for Agricultural Development (IFAD), provides a useful example. The project helped establish contract farming arrangements between small fellaheen producing organic potatoes and an Italian trading company. As a result, the farmers were directly linked to the international market and started receiving better prices for their products.

Another approach would be to link the fellaheen to small and medium enterprises doing agro-processing in order to increase value added and employment generation in rural areas. However, this sector is still underdeveloped in Egypt and only a very small portion of agricultural production goes through any form of transformation, processing, preparation or preservation.

There are virtually no long-term contractual arrangements between farmers and agro-processors.  

The United Nations has declared 2014 to be the international year of family farming. This decision “aims to raise the profile of family farming and smallholder farming by focusing world attention on its significant role in eradicating hunger and poverty”.

This could be an opportunity to celebrate the fellaheen’s contributions to Egyptian economy and society and develop new projects and programmes to raise their productivity and better link them to national and international markets in order to raise their incomes and lift them out of poverty.


The writer is a senior fellow in the Global Economy and Development Programme at the Arab Economies Project at the Brookings Institution.
 

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