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SOCIO-ECONOMIC ROLES OF AGRICULTURE AND POLICY IMPLICATIONS (ROA). MALI CASE STUDY NATIONAL SYNTHESIS by Demba KEBE. Context : Strong grip of agricultural sector. The economy of Mali strongly depends on the agricultural sector which

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Socio economic roles of agriculture and policy implications roa

SOCIO-ECONOMIC ROLES OF AGRICULTURE AND POLICY IMPLICATIONS (ROA)

MALI CASE STUDY NATIONAL SYNTHESIS by Demba KEBE

ROA_Mali_Synthèse


Context strong grip of agricultural sector

Context : Strong grip of agricultural sector

  • The economy of Mali strongly depends on the agricultural sector which

  • Utilizes more than 80% of the population

    • Accounts for around 45% of the GDP

    • Accounts for 75% of the country’s export revenues

    • Food crops account for 52% of the total added value of the agricultural sector

    • Cotton contributes for 30% of total added value of he agricultural sector

ROA_Mali_Synthèse


Liberalization policy strongly displayed

Liberalization policy strongly displayed

  • Agricultural policy marked by two important phases of the last two decades:

    • First structural adjustment phase of early 80’s through 1994

    • Second phase : Structural adjustment of the agricultural sector reinforced by macro-economic policies (I.e .devaluation)

ROA_Mali_Synthèse


Liberalization policy strongly displayed continued

Liberalization policy strongly displayed (Continued)

  • Liberalization of input market (the cotton zone was not concerned by this policy)

  • Liberalization of output market (PRMC) ; the cotton zone was not concerned

  • Improvement of the fiscal environment

  • Implementation of common external tariff policy (TEC) which penalize agricultural inputs

  • Export Tariff suppression but implementation of the TVA (18%)

  • Suspension of conjecture tariff on rice

  • The FCFA devaluation seems to reactivate the competitiveness of some sub sector (rice, cereals, livestock)

ROA_Mali_Synthèse


An ongoing decentralization policy

An ongoing decentralization policy

  • Creation of more than 700 local territories

  • Empowerment of collective authorities in areas development and management of natural resources

  • Ongoing Transfer of competencies and resources

ROA_Mali_Synthèse


Positive result in general however

Positive result in general, However,

  • The average rate of increase of cereals was ( 5,6% ) higher than the rate of increase of the population (2,2%) for the country. The rate of increase of cotton production was 9%.

  • Agricultural growth is more dependent on the increase of cultivated land areas rather than on productivity improvement (rice and maize in the south are not concerned here)

    • Some progress made for maize and rice productions with a rate 13,6% and 11,1%, respectively

    • Perceptible Soils degradation in both zones (CMDT, ON)

    • The liberalization of input markets did not drove down input prices (State monopoly transfer to private sector)

ROA_Mali_Synthèse


Research objectives

Research objectives

  • To inform and make available to decision makers some tools which can help them analyze the diverse roles of agriculture,

  • To identify positive and negative externalities of agriculture,

  • to assess the impact of these externalities on the national economy and well-being

  • to identify policies for strengthening or correcting these externalities

  • to make available to malian decision makers the main results from this study

ROA_Mali_Synthèse


Methodology

Methodology

  • The malian team decided to work on all the modules.

  • Use of secondary data on the agricultural sector in Mali

  • Selection of two production systems:

    • cotton based system (cotton, coarse grains, sedentary livestock raising system

    • rice based system(rice, vegetable crops production, sedentary and semi-sedentary livestock raising systems)

  • Formal survey of farm households (module 2)

  • Informal survey of farm households in both systems (modules 3, 4,6 et 7) and in Bamako (module 7).

ROA_Mali_Synthèse


Some limiting factors in undertaking the different tasks

Some limiting factors in undertaking the different tasks

  • Lack of database on the malian economy

  • Non access to the database household consumption (in construction on the EMEP)

  • Analytical tool (MEG) not fully handled

  • Rather descriptive approach than quantitative

  • However, some modeling temptation with limited database (reduced size of sample)

ROA_Mali_Synthèse


Some results

Some results

  • Some major contraints facing malian agriculture are :

    • low level of modern infrastructures for processing, handling, and keeping agricultural products ;

    • lack of sustainable financing mechanism of sub sectors;

    • lack of contact and coordination among the different actors of the sub sectors;

    • low number of structures in charge of collecting, analyzing and spreading statistical information on behalf of the different actors of sub sectors

    • the non functionning state of professionnel organizations regarding foods production ;

    • the low level of knowledge of some sub sectors.

ROA_Mali_Synthèse


Environment and externalities

Environment and externalities

  • Diversity of production systems :

    • Cotton based (cotton-coarse grains, livestock, low land rice, fruits and vegetables in the south and west of the southern part of Mali

    • Rice based (fully irrigated rice , coarse grains, livestock, vegetables) center of Mali (“Office du Niger”, “Office riz”, low lands)

    • Millet/Sorghum based (coarse grains, livestock) in western and center parts of Mali

    • City belts(intensive livestock management, ) around cities

    • Pastoral system(extensive livestock raising system, irrigated rice) North Mali

    • Lake /water recession areas (coarse grains, leguminous ), North and West Mali

    • Oasis (date palm) farther North of Mali

ROA_Mali_Synthèse


Environmental impact on the office du niger

Environmental impact on the “Office du Niger”

  • The assessment covered four elements (water, soil, air and bio diversity)

  • Preservation of environment and bio diversity by agriculture

  • At the water level

    • Tree replanting in the villages

    • Introduction fruit trees replanting

    • Management of areas and browsing land for animals

    • Sanitation through lands redevelopment

    • Income generating activities (mostly fishing)

    • Water fetching alleviation through the rising of water surface

ROA_Mali_Synthèse


Environmental impact on the office du niger continued

Environmental impact on the “Office du Niger” (continued)

  • Increasing development of areas planted with trees for services and for fruits production

  • The tree specie called Eucalyptus constitutes an important source of energy (for SUKALA)

  • Water quality degradation observed mostly around the houses and other places.

  • At the soil level

    • Risks of salinization and alkalization

    • Decreasing trend of the fertility of soils

    • Erosion phenomenon caused by wind and water in upland areas

  • ROA_Mali_Synthèse


    Environmental impact on the office du niger continued1

    Environmental impact on the “Office du Niger” (continued)

    • 7% of soils were degraded in 1989 and 20% of farm households were aware of soils degradation

  • Air and Bio Diversity

    • Rice cultivation in ON zone allegedly favors gas production with greenhouse effect

    • Reduction of bio diversity by the introduction of the Asian rice varieties but new ways to increase bio diversity by re-introduction of (NERICA’s).

  • ROA_Mali_Synthèse


    Environmental impact on cotton based system

    Environmental impact on cotton based system

    • The assessment covered four elements (water, soil, air and bio diversity) :

    • Air and Bio Diversity Pollution from :

      • Nitrogen fertilizers, not confirmed

      • Fertilizer with phosphorus content, observed in general everywhere at a constant basis

      • Insecticides, observed but not at a constant basis (old “bassin” for cotton production)

    ROA_Mali_Synthèse


    Environmental impact on the cotton based system

    Environmental impact on the cotton based system

    • Soil

      • Serious degradation in some areas (old “bassin” for cotton production)

      • Negative mineral balance for coarse grains production

      • Soil fertility maintenance strategy developed by farmers through the integration of agriculture and livestock activities

    • Bio diversity

      • Wild life and landscape resources better here than in the other parts of the country

      • High risk of disappearance of some animals because of the high pressure on natural resources.

    ROA_Mali_Synthèse


    Economic assessment of environ mental degradation

    Economic assessment of environ-mental degradation

    • The estimated losses due to degradation can reach 21 to 26 % of the total GDP

    • Positive externalities brought about by good area management in order to prevent environment degradation had not been assessed

    • Micro-economic level : the economic value of soils degradation and mining was estimated to vary between 1 600 and 32 000 FCFA/ha/year (1 à 12% of he income of less equipped farmers)

    • The economic value of soil enrichment was estimated to vary between 2 250 and 25 000 FCFA/ha/year ( 1 to 8% of the income of producers more equipped)

    ROA_Mali_Synthèse


    Agricultural growth and poverty reduction

    Agricultural growth and poverty reduction

    • Evolution of the effect of poverty

      • Despite all the efforts, the population of Mali still remains poor (64% in 1999).

      • Poverty remains essentially rural.

        Table : Effect of poverty (%) per area

    ROA_Mali_Synthèse


    Considerable agricultural supply

    Considerable Agricultural supply

    • High diversity of production systems in Mali

    • Rate of increase of agricultural production (5,6%) of the 90’s higher than the rate of increase of the population (2,2%)

    • Rate of increase of agricultural production strongly dependant upon an increase in of the area cultivated and rainfall ( Fully irrigated rice in the ON and the relative intensification of maize cultivation in the south are some exceptions.

    ROA_Mali_Synthèse


    Evolution cultivated areas and cotton production 1990 1999

    Evolution cultivated areas and cotton production (1990-1999)

    ROA_Mali_Synthèse


    Peasants points of view on the role of agriculture in poverty reduction

    Peasants points of view on the role of agriculture in poverty reduction

    • Concept of poverty defined by farmers as a lack or low level of availability of :

      • Food,income and equipments (90%)

      • Health problems,lack of animals, land, labor force and transportation means are cited as the main characteristics of a poor.

    ROA_Mali_Synthèse


    Socio economic roles of agriculture and policy implications roa

    Peasants points of view (continued)

    ROA_Mali_Synthèse


    The system of solidarity between farm families is a mechanism to fight poverty

    The system of solidarity between farm families is a mechanism to fight poverty

    • 70% of sampled households had relatives in the cities

    • The transfer of cereals is a common thing (mostly in ON zone )

    • The donations can constitute 4% to 8% of the total production of cereals

    • Social redistribution unestimated

    ROA_Mali_Synthèse


    Some results from the simulations

    Some results from the simulations

    • The results from the simulations showed that :

      • A 1% increase income would reduce the poverty level down to 0,19%, the depth of the poverty down to 0,66% and the severity down to 0,11,0%

      • In urban area, a 1% increase in income would reduce poverty effect down to 0,17%, the depth down to 0,81% and the severity down to 1,46%

    ROA_Mali_Synthèse


    Impact on indices from the reduction of the demand price

    Impact on indices from the reduction of the demand price

    • Simulations based on the rate of 25% and 50% (depicting the situation which may prevail during a good year)

      • A 25% reduction of demand price will bring about in rural area a reduction of 16% of the effect of poverty, a reduction of 11% of the depth poverty (P1).

      • In urban area, a price reduction of 25% will reduce the impact the effect of poverty down to the rate of 10% in rural area and a reduction of 50% will reduce poverty situation down to more than 52%.

    ROA_Mali_Synthèse


    Agriculture ad food security

    Agriculture ad food security

    • Food security had been treated in the light of 4 determinants : availability, access, stability and nutritional quality

      • The availability was important in both study regions: 248kg/head/year and 298 kg/head/year, respectively at Sikasso and Segou, contrasting with a national average of 167kg/head/year.

      • The access to food is more difficult because of the low buying power of consumers, poor system for moving products from place to place, consumption habit.

      • Stability : Strong impact of the vagaries of climate, low level of infrastructures (roads, storage schemes, etc.) bringing about transaction costs to increase.

    ROA_Mali_Synthèse


    Food insecurity profile

    Food insecurity profile

    • Vulnerable zones and groups

      • Urban zone :

        • Farmers and livestock raisers hidden in urban areas

        • Divorced women and early children holders;

        • Civil servants in C category and other workers with low income ;

        • Different households found vulnerable because of diverse causes.

    ROA_Mali_Synthèse


    Food insecurity profile1

    Food insecurity profile

    • In rural area

      • Populated families with less resources ;

      • Fishermen and livestock raisers with no resources practicing different activities not fully handled,

      • Farmers adopting production systems which performances are in jeopardy

      • Farmers facing land problems.

    ROA_Mali_Synthèse


    Nutritional status

    Nutritional status

    • The demographic and health survey of Mali (EDSM), undertaken in1995-96 on a sample of 4678 children of less than 3 years old had shown a high rate of malnutrition :

      • 30% of these children were experiencing a slow development ,

      • 23% were emaciated,

      • 40% of these children were presenting lower weigh

    ROA_Mali_Synthèse


    Buffer role of agriculture devaluation impact reduction

    Buffer role of agriculture : devaluation impact reduction

    • The devaluation in 1994 in the UEMOA’s countries was aimed at restoring macro-economic equilibrium.

    • Increasing prices of imported goods without any compensatory at the salaries level s

    • Reduction of buying power or in other word reduction of the income of population (Mostly in urban area)

    • Increasing prices of local products two years after the devaluation (substitution effect) and relative

    • Likely positive impact of the steady increase of agricultural supply of the last decade.

    ROA_Mali_Synthèse


    Buffer role of agriculture continued

    Buffer role of agriculture (continued)

    • Steady increase of the GDP after the currency (FCFA)

    • The primary sector play a major role than the other sectors in the making of the GDP

    • Restoration of the competitiveness of the traditional sub sectors (cotton, rice, livestock)

    • Strong reduction in cereals importation exception the wheat

    • 75% of export revenues are from the agricultural sector (cotton, livestock, cereals)

    • Reduction of the value of importation and increase of the values of export since devaluation of the FCFA currency had taken place

    ROA_Mali_Synthèse


    Buffer role of agriculture continued1

    Buffer role of agriculture (continued)

    • Non tradable commodities are now tradable (millet, sorghum, maize) on the sub regional market places

    • New jobs creation through diversification of revenue sources

    • Changes of the structure of spending with more important part allocated to health, cloth and transportation purposes

    • Reduction of food bills brought about by the effect of substitution of imported stuffs for local stuffs.

    ROA_Mali_Synthèse


    Social viability impact of the transformation of agriculture on the migratory movements

    Social viability : impact of the transformation of agriculture on the migratory movements

    • Four types of migratory movement in Mali :

      • temporary internal movements,

      • definitive internal movements

      • movements linked to the systems of nomadism and transhumance

      • international movements

    • The rate of migration (the balance) observed in Mali is negative ( –0,88 %) implying that Mali is a country bound to emigration phenomenon.

    ROA_Mali_Synthèse


    Social viability impact of the transformation of agriculture on the migratory movements continued

    Social viability : impact of the transformation of agriculture on the migratory movements (continued)

    • Migration towards agricultural zones involved the ON and the CMDT zones having more potentials

    • These migratory movements towards the areas with relatively high potentials are not assessed let alone let alone their impact on natural resources.

    • The proportion of households which migrated in the ON and which had no land varies between 10 to 20% of the total farm households at the ON.

    ROA_Mali_Synthèse


    Social viability impact of the transformation of agriculture on the migratory movements continued1

    Social viability : impact of the transformation of agriculture on the migratory movements (continued)

    • Long term or permanent migration concerns 38 % of farm households in CMDT zone CMDT contrasting with 27 % in ON

    • The migration phenomenon lost pace because of the improvement of the revenues of farmers

    • The costs /benefits assessment of migration is yet to be undertaken

    ROA_Mali_Synthèse


    Agriculture culture et perception

    Agriculture, culture et perception

    • A high diversity of perception linked to many factors (Group relationship with agricultural resources, political frustrations, etc.)

    • Existence of multiple and strong forms of inter and intra among ethnic and social groups

    • Strong tendency for these groups to be autonomous resulting to a survival and maintenance of local institutional l values in rural areas

    • Agriculture is perceived not only as a profession but also as a way of life

    • The contribution of the rural world to the social stability is perceived by rural dwellers a crucial factor.

    ROA_Mali_Synthèse


    Agriculture culture et perception continued

    Agriculture, culture et perception (continued)

    • The country’s identity is based on the network of old social customs and practices which are shared by all the citizens : solidarity, help, kinship and teasing

    • The notion of "national culture” is rather perceived differently : urban culture, rural culture or sum of cultures.

    ROA_Mali_Synthèse


    Agriculture culture and perception continued

    Agriculture, culture and perception (continued)

    • Agriculture and poverty reduction

      • Mere political slogan based on the disengagement of the State

      • Random activities ( climatic and et economic risks)

      • Less tapped potential

    • Agriculture and environment

      • Major and minor degradations of the environment Environment restoration

    • Agriculture et migration

      • Absorption of the rural/rural type of migration

    ROA_Mali_Synthèse


    Agriculture culture and perception continued1

    Agriculture, culture and perception (continued)

    • Diversity of opinions on agriculture and the rural world :

      • Food provider to people, mean for promotion and concurrence for actors (producers)

      • Neglected on the socio- economic and political grounds (urban and leaders of peasant organizations) but important for social cohesion

    ROA_Mali_Synthèse


    Socio economic roles of agriculture and policy implications roa

    Policies and externalities

    ROA_Mali_Synthèse


    Policy implications

    Policy implications

    • Development of water irrigation schemes in order to facilitate the settlement of immigrants in ON zone

    • Development policy geared towards the development of local know-how in the cotton zone

    • Orientation policy of immigrants towards zones more opened or having potentialities

    • Management policy for the type of migration with high magnitude (Better evaluate and develop the transfer of resources)

    • Decentralization policy more geared towards the development of inter-communal initiatives

    • Decentralization texts (laws and regulations) re-reading in order to give more power to local institutions and social organizations

    • Strengthening socio-professional organizations

    ROA_Mali_Synthèse


    Policy implication continued

    Policy implication (continued)

    • Environment

      • Strengthening the capacity of local actors in the management of natural resources in order to reduce negative externalities

      • Supporting or fostering positive externalities (hidden benefit of land development activities) in ON zone

    • Poverty

      • Input and output markets development through good infrastructures (roads, storage schemes)

      • Credit system specifically for the poor

      • Development of social mechanism of solidarity and wealth sharing

    ROA_Mali_Synthèse


    Implication for policy continued

    Implication for policy (continued)

    • Food security

      • Investment in processing and storage schemes for cereals in order to reduce the effects of the vagaries of climate

      • Identification of vulnerable groups in order to find the right strategies to fight food insecurity

    • Buffer effect

      • Further implementing Sub-regional and regional integration policies

    ROA_Mali_Synthèse


    Suggestions for further analysis

    Suggestions for further analysis

    • Implementing econometric analyses planned for modules 4 and 5

    • Re-do the econometric analyses of module 3 with EMEP’s database

    • Quantify environmental externalities (hidden benefits in ON zone )

    • Estimate the transfer of resources of the migratory movement with high magnitude

    • Further research on the cultural aspect (role of the cultural dimension on the functioning of production systems)

    ROA_Mali_Synthèse


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