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DEVELOPMENT: Reviving the Family Farm

Raúl Pierri interviews LAUDEMIR ANDRÉ MÜLLER, Brazilian expert on agriculture

MONTEVIDEO, Oct 21 2008 (IPS) - The world is in a phase of transition, in which family farming is emerging as an “anti-cyclical” alternative for guaranteeing economic growth and food security, said Brazilian expert Laudemir André Müller.

Müller, an adviser to Brazil’s Agriculture Ministry, said family agriculture has the capacity to have a positive impact on national economies, by bringing down inflation, generating employment and ensuring domestic food supplies.

IPS spoke with Müller on his visit to the Uruguayan capital to participate in the latest Specialised Meeting on Family Agriculture (REAF) held by the Mercosur (Southern Common Market) trade bloc.

The REAF, a consultative body to the bloc made up of Argentina, Brazil, Paraguay and Uruguay, was created in 2004 and is sponsored by the International Fund for Agricultural Development (IFAD).

IPS: How will the international financial and economic crisis affect small farmers and peasants? LAUDEMIR ANDRÉ MÜLLER: Basically in three ways. The first involves the question of costs. Commodity prices climbed steadily from late 2006 up to April or May this year. Along with that, the cost of fertilisers and other farm inputs went up. Now, as the crisis has deepened, prices have stagnated, especially in the futures markets, but the cost of inputs has not gone down, which means the situation that lies ahead will be complicated.

The second impact will be on credit. The uncertainty is affecting the availability of credit and, of course, family agriculture. But the good thing is that many countries are adopting policies on public loans for farmers.

But the factor that I consider most important is that while four months ago we had a scenario of rising food prices and shrinking reserves, the situation has now become more critical. It is no longer a projection, but a certainty, that we are going to see a recession in many parts of the world, and that demand is going to drop all around the globe. That is going to affect growth in China, because 50 percent of exports from that country go to the United States and the European Union, which are falling into crisis.

There is a chance that family farming, however, will come out of this stronger. Countries that did not have a national policy ensuring domestic supplies or did not have a strong family agriculture sector have been hit by serious crises.

Let’s take a look at two examples: Argentina, a major global exporter of farm products, was hit hard by the rise in prices because it did not have a policy to ensure domestic food supplies, but was completely export-oriented. And if we look at Venezuela, which from an agricultural point of view is totally different – it imports 60 percent of what it consumes – the same problems also occurred: a rise in domestic prices, inflation and food insecurity.

IPS: What role can family farming play with respect to food insecurity? LAM: The sector has the capacity to have a positive impact on prices, inflation and economic growth. A few statistics for you: 60 percent of the food that is consumed daily in Brazil comes from family farms, which represent 75 percent of all rural jobs.

In Brazil we have 4.6 million rural establishments, 4.1 million of which are family farms. And the family agriculture chain of production represents 10 percent of gross domestic product.

Family farming is a productive system basically focused on food, but above and beyond that, it is important to the national economy. I think we are finding, and in Brazil it has become abundantly clear, that without a doubt family agriculture has a very strong role to play in terms of national growth.

In Brazil we have managed to pull 20 million people out of poverty by means of social policies, boosting their capacity for consumption and thus demand for food. Family agriculture responded and food production increased, while large producers focused on growing soybeans.

Thanks to that, food prices in Brazil did not go up as much as they did in other countries. If we compare, for instance, May 2008 with May 2006, there was a 200 percent rise in the price of powdered milk on the international market, but only a 20 percent increase in Brazil. Imagine a local consumer who has just moved above the poverty line having to pay twice as much for milk.

Supporting family agriculture is an “anti-cyclical” strategy. When the price of soy is down, big producers do not grow soy. When it is high, everyone starts planting it. That generates a cyclical policy and a concentration of production. Family farming, on the other hand, is not concentrated. Forty-two percent of the soy produced in Brazil comes from small farms, but they also produce milk, chicken or pork, for example, and that is not going to change even if the price of milk goes down.

IPS: Where does family agriculture stand with respect to international trade negotiations? LAM: I believe we are looking at a new global stage, a transition, which will lead us to new regulations of the financial sector and a new approach to food security.

I don’t believe India will accept an agreement in the World Trade Organisation (WTO) Doha Round of multilateral talks because it is doing the same thing that Brazil is – looking to its domestic market, supporting family agriculture – and that is not compatible with the idea of putting an end to national policies and freeing up global trade.

That is why I think we are in a transitional phase of understanding within countries the importance of small farms to food security and economic growth.

Argentina, which has traditionally had a very export-oriented approach, recently created an under-secretariat of family agriculture and rural development. The issue is thus being taken up at the institutional level. And in Venezuela, an important programme is being developed to attempt to bolster production of food for domestic consumption

IPS: What is the relationship between family farming and the environment? LAM: This sector plays a central role in preservation, because it is not involved in monoculture, but has varied production, with an internal, self-sustaining cycle.

If we look at environmentally sensitive areas in South America, like Patagonia, the Amazon jungle or the Andes mountains, they are systems managed by family farmers who make extensive use of traditional knowledge. If other forms of production were used in those sensitive areas, it would be a disaster.

The expansion of soy cultivation in the Amazon jungle is a problem, because that system of production is based on monoculture crops grown on vast extensions of land, which leave behind a huge sterile region.

IPS: How does REAF work and what was discussed at the meeting in Montevideo? LAM: We hold national sessions, where governments and civil society organisations meet to reach decisions and adopt positions at a country level. These are then sent to groups of experts and to regional technical meetings like the one we held [in mid-October] in Montevideo, the results of which in turn are sent to political-level meetings, like the one planned for Nov. 20-22 in Brasilia.

In Montevideo we discussed a Mercosur regulation to come up with a definition of a family farm, based on the quantity of land and how it is administered.

That was an important step towards convergent policies. For instance, if we are going to make progress towards a certification process and seal for family farm products, we will need unified regulations.

We are also working on common regulations to address the problem of the growing foreign ownership of land, and on a development aid and cooperation project involving specific policies for women in a rural setting.

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