The SMEAD project examined three countries (Malawi, South Africa and Zimbabwe) and sought to understand how agriculture shapes the rural-non-farm economy (RNFE), including its degree of inclusiveness. Supporting rural employment and livelihoods, it was argued, demands attention not only to agricultural production but also the spatial characteristics and nature of agriculture’s forward and backward linkages. The in-depth country case studies reveal contrasting agrarian landscapes.
In Malawi the majority of working adults in the rural economy are involved in subsistence and small commercial farming. While the commercial estate sector, occupies a quarter of the arable land, and produces approximately 90% of exports.
South Africa, presents almost the opposite scenario. Agriculture is dominated by large scale commercial farming, whereas large numbers of people involved in semi-subsistence farming are marginal. Moreover agriculture is often disconnected from local rural economies: upstream and downstream connections bypass many local communities, exacerbating the exclusion and marginalisation of their residents.
Finally Zimbabwe, following its bruising ‘fast-track land reform’ process, presents an intermediate case. Its historical agrarian dualism of large and small scale agriculture has been replaced by a diverse range of farms sizes, along with a preponderance of linkages and rural enterprises.
Strategies for creating a resilient and diverse RNFE are varied, and often specific to the individual country contexts. Yet in general, they ought to promote agricultural linkages that are spatially dense, socially embedded, externally connected to (at least) downstream markets, and be careful to avoid elite capture or exclusionary dynamics.
The workshop considered and discussed some of the following policy recommendations in detail:
Consider the scale of agriculture supported. Large scale agriculture is often ill-suited to promoting beneficial local linkages or stimulating the RNFE. Instead small scale farmers are much more likely to spend, invest and consume locally, thereby sustaining linkages that support local entrepreneurs. This underscores the importance of addressing issues pertaining to small scale farmers including land and agrarian reform, along with addressing constraints on small farmers access to vertically integrated value chains and distant markets.
- Support and strengthen local markets. Related to the previous point, a vital factor in the health of the RNFE is the presence of a diversity of informal and independent ‘entrepreneurs’ in local markets. These are often vital to smaller farmers, and promote rich and diverse forward and even backward linkages. Supporting the development of local markets, market infrastructure, and remedying market failures, are all potential courses of action.
- Address value chains and corporate chain supermarket dominance. Concentrated output markets are increasingly organised in vertically integrated value chains, which tend to exacerbate dynamics of marginalisation and exclusion. This is most evident in South Africa, but incipient across the entire region. There is a need to address the adverse consequences of rural ‘supermarketisation’ that sucks money out of rural areas. Policy levers include retail regulation, and improving smaller players access to markets and distribution systems.
- Invest in infrastructure and agricultural finance. A paucity of rural infrastructure is a constraint, particularly in Malawi and Zimbabwe. Greater investments in roads, energy and communications networks, markets and depots are required. Specific recommendations around financing included the need to move beyond individual farmer financing, towards public provisioning including, for example, promoting adaptive seed (through public sector germplasm).
- Don’t overlook other linkages. The RNFE isn’t sustained exclusively by market connections with agriculture: increasingly agriculture is secondary to other sources of livelihood making. Mounting evidence shows the importance of other (often overlooked) distributive systems such as remittances, public sector salaries and state cash transfers (South Africa) and subsidies (Malawi) in supporting the RNFE.
These policy findings suggest not only some potential avenues of policy action, but also the prevailing constraints on the ability of agricultural development to contribute to the larger Rural Non-Farm Economy. Yet attention to these dynamics is crucial if agriculture is to contribute to pro-poor and inclusive forms of growth.