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Reaching the rural poor Issues and challenges

Reaching the rural poor Issues and challenges. The World Bank & Rural producer organizations & agricultural cooperatives Pierre Rondot WB/ARD, COPAC Open Forum Washington May 27, 2004. Persistent rural poverty. 70 percent of the world’s poor live in rural areas

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Reaching the rural poor Issues and challenges

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  1. Reaching the rural poor Issues and challenges The World Bank&Rural producer organizations &agricultural cooperatives Pierre Rondot WB/ARD, COPAC Open ForumWashington May 27, 2004

  2. Persistent rural poverty. • 70 percent of the world’s poor live in rural areas • in the poorest regions, the majority is engaged in agricultural activities

  3. Huge disparity within agriculture labor productivity (Mazoyer) • Agriculture to feed +/- 6 billion • Agricultural labor force = 1.3 billion • 2 % owns a tractor • 2 % produces > 1,000 T grains /y • 31 % produces < 50 T grains/y • 33 % produces < 10 T grains/y • 33 % produces < 1 T grains/y

  4. Challenges ahead • What employment alternative for the majority of small farmers? • What kind of agriculture do we want? • Safe ! • Environmentally and socially friendly

  5. Challenges ahead • How to reach, listen and work with small-holders and landless farmers? • What could be their contribution to: (i) agricultural production (ii) protecting the environment and (iii) keeping alive cultural heritage? • Producer organizations, cooperatives have an essential role to play to reach the rural poor

  6. Evolution of Bank total lending Non-adjustment IBRD/IDA Commitments: Total vs "Agricultural"; FY97-02; $ million 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 FY97 FY98 FY99 FY00 FY01 FY02 Total IBRD/IDA "Agricultural"

  7. Evolution of Bank lending in Agriculture Commitments, as a percentage of Total Bank FY97-02

  8. Per cent of non-adjustment projects with "agricultural" investments that support RPOs: FY 97-02 , 60 % 43 % 34 % 31% 30 % 30 % 15 % 1997 1998 1999 2000 2001 2002 2003 FY

  9. World Bank & cooperatives • A WB 1993 review: not viable and inefficient organizations • inappropriate policy framework • too much government interference • not enough farmer capacity building • Exception exists: Operation flood in India • 3.6 million suppliers/day (60 % landless farmers) • The Bank invested > 500 $ million

  10. Starting 1995: focus on participatory approaches, CDD and empowerment of community organizations World Bank & CDD & Agriculture

  11. World Bank & Rural Producer Organizations (RPOs) • Promote partnership between RPOs (including cooperatives) and public or private services • Promote conducive environment • Support RPOS (including cooperatives), public services and private sector to work together

  12. Challenges in supporting Rural Producer OrganizationsWhich one to support? • Heterogeneous: size, functions, levels of representation (at local, regional and national level) • Problem of legitimacy and ineffective governance • A wide range of functions: advocacy, economic and social/local development

  13. Challenges in supporting Rural Producer OrganizationsHow to work with producers? • Channeling resources to or through them poses unusual challenges • Bank TTLs are not used to working with private sector • Farmer leaders have limited time • Independent and sometimes critical • Change in power relationship

  14. Cooperatives specific challenges • efficient to: • engage in economic activities • provide social safety nets Not the only form of organization: Association, GIE • Business-driven: but what about their social mandate? • redistribution of “benefit” on a share-holding basis, not on amount of transaction per member (prevent new members to join in, Morocco, Yemen, others.) • Government interference in management

  15. World Bank support to cooperatives • A conducive environment • Afavorable political context • Adapted legal framework • Independent from government • Support to cooperatives at local, regional and national level, • help them restructure and reach the poor (Yemen, Senegal, China)

  16. Building RPOs and Cooperativescapacity • Necessary but not enough • Need efficient public institutions for policy, monitoring and regulatory functions • Empowering RPOS and cooperatives together with support to public institutional reforms

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