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Exploring the Linkages Between Agricultural Exports and Sustainable Development

April 2007

EcoFair Trade Dialogue Discussion Papers, No. 8 (Heinrich Boell Foundation, in cooperation with Misereor and moderated by Wuppertal Institute)

Agriculture is an important engine for growth, especially for low-income developing countries in their journey of economic and broad-based development. The multilateral institutions have been pushing countries hard to adopt an export policy as their de facto development policy. This has not worked. Instead, it has been found that staple food production for local consumption reduces poverty more than growth driven by agricultural exports, which often bypasses small farmers. This experience is reflected in the current situation of least developed countries. Under current liberalisation conditions, income-poor countries are moving towards becoming net-food importers. Their share of world trade has also been shrinking. The paper gives various case studies of countries engaged in export agriculture – Thailand, Pakistan, China and Brazil. Small farmers‘ produce may be exported, but rural incomes and livelihoods continue to be as precarious – often even more precarious – because the environment and its resources have become degraded, and prices accruing to small farmers remain low. The lion‘s share of profits is creamed off by traders, processors or retailers.

Even when exports do contribute to much needed incomes eg. the sugar industry in Mozambique, the results are mixed. The real costs of production are often externalised (eg. high usage of water, a scarce resource) and the long-term negative effects are unsustainable. Fair trade export schemes are explored as one possible avenue where exports can benefit local communities. Even here, it is clear that exports have to be located in a broader development strategy such that food security needs of the country are addressed as a priority.

The example of Senegal provides instances of both successes and failures. Peanuts and cotton, the country’s traditional export crops have encroached upon land used for food production. However, there are exceptions to this story. Several projects currently undertaken on organic cotton production, and fair trade mango exports, produced in areas which are food secure, could diversify farmers‘ incomes, create jobs, contribute to the upgrading of the agricultural sector and reinvigorate the local economy.

In sum, exporting food is a strategy that poses many risks for poor farmers and countries in search of economic development. A healthy export strategy has to fulfill the following:

• It should be located as one component and certainly not the main component in a broader development strategy that focuses on improving living standards and the purchasing power of the majority;
• The export sector has to have substantial linkages to the local economy;
• It must maintain or increase employment opportunities;
• The strategy has to put food security needs before exports especially in terms of the use of resources;
• Takes into consideration the livelihood of farmers in the importing country. Care has to be taken not to displace their livelihoods;
• Operates in a framework which empowers producers, providing them a fair share of the control and value of the production chain;
• Be embedded in policies that promote equity for women and small farmers;
• Employs sustainable agricultural methods;
• Locates the export of food as an exception, rather than the rule. Production for the domestic and regional markets should be the priority.

External Link: Exploring the Linkages Between Agricultural Exports and Sustainable Development

Read More: Agriculture, Aid, Development, Economy, Food, Poverty, Sustainability, Trade, Brazil, China, Mexico, Mozambique, Pakistan, Thailand, Africa, Americas, Asia, Global

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