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Beyond the Washington Consensus: New donor perspectives on rural development

Date
Time (GMT +01) 00:00 23:59

Chair:

Simon Maxwell, ODI

Speakers:

John Westley, Vice President, IFAD
Philip Mikos, Environment and Rural Development, DG Development, European Union

1. Simon Maxwell introduced the discussion. Many agencies were preparing new rural development policy papers or strategies, and the question was whether the agencies were giving consistent messages, 'singing from the same hymn sheet'. In particular, there had in the past been a kind of Washington Consensus on Agriculture. Was there now a Post-Washington Consensus? IFAD and the EU would be presenting their strategies to the meeting. A document had also been circulated, summarising the new World Bank rural development strategy, 'Reaching the Rural Poor'.

2. John Westley introduced the IFAD rural poverty report, which was not in itself a strategy document, but rather a policy paper that would inform strategy. His presentation argued that between two thirds and three quarters of the poor lived in rural areas, and that the current rate of decline in poverty was too slow to meet the international development target - in fact less than a third of that required. At the same time, lending to agriculture had fallen sharply.

3. What then should be done? The rural poor were highly heterogeneous, as between regions and socio-economic groups, but four themes seemed to be central. These were (a) assets, especially finding market-friendly ways to improve the poor's access to land and water, (b) technology, where better dissemination of existing technology was needed, and where a cautious and balanced approach to biotechnology was called for, (c) markets, where market access for the poor was a key issue, and (d) institutions, where empowerment was important, in such areas as decentralisation, common property resource management, and financial services. There was much that was new here, including the emphasis on water, the attention to markets, and the priority given to empowerment (which was consistent with the line taken by World Development Report 2000/1).

4. Philip Mikos introduced current EU thinking, again with a Powerpoint presentation. Further information, including a diagnostic study, policy guidelines, and sub-sectoral strategy papers, are available on the EU's rural policy website.

5. It was not difficult to understand why rural lending had fallen, as it had for the EU, though not as fast as for other donors. The rural poor had little political power, the rural sector was subject to high price and weather variability, there was increased competition for funding, and rural projects required a long-term time commitment. The new EU policy had set out to rebuild a commitment to rural development, starting with the pillars of overall development policy (political dialogue, a poverty focus, a new trade framework, a participatory approach), and then focusing on ways of delivering sustainable improvements to rural livelihoods. Key themes included: peace, equity and democracy, accountable institutions, economic growth, assets, natural resource management, and coherence with wider policy (e.g. the Common Agricultural Policy). A strategic approach was needed, but N.B. the proposal was not for a return to integrated rural development.

6. Simon Maxwell initiated the discussion by asking whether these presentations (and the World Bank paper) were indeed consistent. He introduced the ODI rural development 'postcard', a checklist of topics and ideas that should be covered in any rural development strategy, and suggested that using this as a template, there were real differences of emphasis between the agency positions. For example, the IFAD policy appeared to favour cereal production on small farms, whereas the World Bank gave greater emphasis to off-farm income. Other examples were suggested in the discussion:

On the primacy of agriculture, for example, it was suggested that too much emphasis could be given to non-farm income. It was true that non-agricultural activities were important, especially in later stages of development, but in the early stages, cereal-based agricultural production was usually the foundation for poverty reduction. It was notable in this connection that the rate of poverty reduction had slowed dramatically as the rate of growth of cereal yields had fallen.Some of the strategy papers argued for greater investment in agriculture, but the case was not clear. It might be better for governments and outside agencies to concentrate on providing roads, education, and other necessary components of an enabling environment, leaving farmers themselves to invest in farming.Did the strategy and policy papers take a consistent line on market liberalisation? There were complex issues to be resolved about how to manage market liberalisation, and what exactly was meant by the statement in the Post Washington Consensus that institutions should be in place before markets were liberalised. In some cases (e.g. cotton in West Africa) parastatals subsidised by donors had been exceptionally successful in helping the sector to remain competitive in global terms. In other cases (e.g. grain marketing parastatals in Africa), state intervention had probably been counter-productive.Underlying this issue about the state was the question of interests. The various institutions involved in rural development needed to understand that rural poverty was partly (largely) about political power (a kind of reverse welfare state, in which the poor supported the rich); and that the institutions themselves represented interests. Greater introspection was needed, as were new relationships. The agencies also needed to take a strong line on empowerment.The external environment featured more prominently in some papers than others. The EU papers, for example, referred to policy coherence, and so did those of the World Bank.

Description

There has, in the past, been a kind of Washington Consensus on Agriculture. Is there now a Post-Washington Consensus? At this event, IFAD and the EU presented their strategies.