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Missing Links in Sustainable Development: South Asian Perspectives
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AbstractsSub-theme: Globalization Panel 5: Regoverning Markets: Inclusion of Small Growers and Producers in the Supply Chain
Taming the Corporate Beast: Cultivating Social Justice Initiatives for a More Inclusive Trading Framework to Flourish Countries in the global South are entering into free trade agreements to build their trade repertoires and to access larger markets. However, large-scale producers and multinational corporations dominate global markets, making it more difficult for small-scale farmers and producers to determine the terms, conditions, and pricing of goods within their countries’ trading system. Under the current neo-liberal market framework small-scale growers have difficulties accessing larger and export-oriented markets. Constrained access further impedes their ability to demand a fair price, and lack of a guaranteed fair pricing system compounds problems of poor wages and labour conditions. To ensure that everyone benefits from economic growth, present trade systems must offer space for people, living in poverty or socially marginalised, to become part of the decision-making processes that set the trajectory for positive, sustainable development. The globalised trading system is transforming the nation-state from being the key actor that shapes its economic policies to ensure pro-poor growth. The confluence of non-state actors, such as the corporate sector, civil society organisation and community networks are influential forces that have catalysed economic policy agendas. Thus, the paper examines participatory economics and non-state initiatives which help bridge the gap between local and global markets and incorporate a socially just economic framework that embodies fair trade, corporate social responsibility, communal rights, and benefit sharing principles into the status quo trading system. This paper strives to investigate potential incentives for the corporate sector to be a more responsible and accountable partner in development; it is clear that an appropriate incentive structure for the private sector to invest in fair trade and to facilitate the development of small-scale producers is necessary. Simultaneously, the paper highlights pro-poor actions by small-scale producers and workers that respond to non-transparent methods of conducting business. A look at the innovative initiatives within South Asia, such as notable small-medium enterprises and cooperatives will provide insight for policy recommendations. For example organic farming for exports, Geographical Indications, legislation that ensures benefit sharing, capacity building, knowledge networks, South-South cooperation are potential practices to be included in the investigation. The conceptualisation of an alternative, social justice-based framework aims to empower small-scale growers as equal participants in negotiating trade and market access, in order to counteract mainstream practices that promote trade at the cost of development. The following major findings are expected:
* Chatrini Weeratunge is a researcher at the UNDP Regional Centre in Colombo, working on trade and investment issues. She has also worked on poverty, sustainable livelihoods and community development related areas. She is an MSc. from University College London, University of London and BSc. from the University of Edinburgh. ** Bryn Gay is a researcher with the UNDP Regional Centre in Colombo, working on trade and investment issues. She has a B.A./B.S. from Florida States University, and M.A. from Institute on Globalisation and the Human Condition, McMaster University. The Pitfalls of ‘White Revolution’ for Small Dairy Farmers in Pakistan The Strategic Plan for Pakistan Dairy (2006) also known as the ‘White Revolution’ identifies challenges and potential repercussions in the dairy sector of the country. The targets set in the strategic plan for the year 2015 seek to boost the competitiveness of the industry by regoverning the dairy production and marketing structure. This is to be done by first establishing model commercial dairy farms. Even in the US, which has such a modern dairy sector, the transition from small family farms to larger commercial farms has not been without social cost. The strategic plan (2006) does not represent the interests of small farmers who represent more than 70% of the farmers in Pakistan. Even the ”Green Revolution.” as a successful predecessor of the White Revolution, has resulted ecological and economical imbalances in rural livelihoods. Therefore, one needs to be very careful assessing the total costs and benefits of the ‘White Revolution’ especially for the subsistence farming communities. Restructuring and regoverning of dairy production and supply and marketing chain should not undermine the livelihoods of rural dairy farmers. We believe that the participation of small farmers’ organization and civil society organizations should be encouraged before the implementation of the strategy. * Roshan Malik is a Research Assistant at the School of Social Work, Southern Illinois University Carbondale, IL, USA. ** C. Matthew Rendleman is an Associate Professor at the Department of Agribusiness Economics, Southern Illinois University Carbondale, IL, USA. Restructured Agri-Food Markets and Smallholder Producers: A Case Study of the Indian Dairy Industry Since the beginning of the 1990s, India has pursued a liberal agricultural policy, which got reinforced with the signing of the Uruguay Round Agreement on Agriculture (URAA) in 1994. The structural adjustment and stabilization programs under the economic reforms substantially reduced controls and state interventions in agricultural sector including dairy industry. With subsequent liberalization of capital markets, the combined effect was to bring very deep changes in output markets, inducing a further shift in the center of gravity from being a traditional commodity system, to the effective initiation of a modernized food system. The Indian dairy sector has become progressively more liberalized since 1991, with a major amendment in 2002 in the Milk and Milk Products Order (MMPO) that restricted the ability of private dairies to procure milk in areas being served by the para-statal cooperative sector. During the pre-reforms period, the government interventions in dairy sector were very high and sector was mainly reserved for the cooperative sector. The structure of dairy production and processing has changed considerable during the last decade. The number of private dairy processing plants has increased significantly. However, fear is that private dairies and modern supply chains will push a large share of farmers, in particular smallholder producers, out of the market as they fail to meet the quality threshold requirements. Small farmers may also be driven out of the market because transaction costs in procurement of milk make it more costly to deal with many small farmers than with a few large farms and small farms are constrained financially for making necessary investments in infrastructure and post-harvest activities. The identified challenges facing primary producers and their economic organizations in negotiating market access are conditioned by liberalization and modernization. These include technological, organizational and financial demands placed on small-scale farmers. It’s also important to analyze changes in procurement patterns for milk as a result of the recent policy changes and also know whether larger scale producers have cost advantages and higher efficiency that will lead to the displacement of smallholders under a liberalized market. This paper examines restructuring of the Indian dairy industry paying particular attention to the national patterns in processing, wholesale, and retail change, analyses milk procurement system choices of local dairy processors and dairy farmer choices between traditional unorganized and restructured dairy channels, and identifies important technological, managerial, and organizational practices/behavior which influence the market channel choices of the farmers. * Professor Vijay Paul Sharma is Chairperson, Center for Management in Agriculture (CMA), at Indian Institute of Management Ahmedabad. His research, teaching and consulting interests focus on agricultural and food policies, livestock sector analysis, international trade issues including WTO, agribusiness competitiveness and strategic planning, and food safety and quality issues. He has published extensively in national and international professional journals. Innovative Practice in Integrating Small Farmers into Dynamic Supply Chains: A Case Study on Ma’s Tropical Food Company Sri Lanka’s traditional spices supply chain is characterized by decentralized purchasing, low quality products and multiple intermediaries extracting profits. However, the recent development of super markets retailing high quality products led to bulk procurement by domestic manufacturing firms. Given this background, Ma’s Foods introduced an innovative “business model change” with limited “collective action strategies with farmers” that integrated small farmers into a modern supply chain. First, the Company has shifted its focus from a decentralized procurement system to a centralized procurement system that increases the efficiency of procurement. Second, it started providing extension services to the farmers on production, post-harvest practices and farm management to ensure continuous and timely supply of products of required quality. The Company has ensured adherence to basic process standards such as Good Manufacturing Practices (GMP), SQF 2000 and HACCP quality standards by investing in a fully equipped laboratory and incorporating a detailed tracking and traceability procedure into the production process. Activities fulfilling Corporate Social Responsibility on the workers, local society and environment have also been built into the system. The innovation has resulted in increased corporate income, volume of trade, asset ownership, farm income, employment creation and non-monetary social benefits, while ensuring greater degree of inclusion of small farmers into the supply chain. Current supplier base consists of over 300 farmers, out of which 39 are organically certified, 30 are identified for organic certification and 2 act as wholesale suppliers called satellite farmers. With the inclusion into the supply chain, farmers are benefited with premium prices for better quality products, stable prices, evenly spread of incomes and services such as extension, and credit. However, there are some evidences of exclusion such as the limited production capacity of the company, higher transport charges, delayed payments and the use of cheques in making payments. Quality unconsciousness and credit bound relationships with the village traders have also correlations with the exclusion. The company still has scope to increase its capacity and mitigating exclusion of operational nature can ensure greater inclusion. Since only a limited number of companies are operating in this region with a large number of farmers, opportunities for replication of this innovation are abundant. * Parakrama A. Samaratunga is a Research Fellow with the Institute of Policy Studies, Colombo, Sri Lanka.
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