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Rural-urban links – opportunities for farmers

Interview with Steve Wiggins, Research fellow at ODI

March 16, 2017

Research fellow Steve Wiggins, of the UK’s Overseas Development Institute, has worked extensively on agricultural and rural development throughout his 45-year career, especially in the areas that apply to smallholders in Africa. In an interview held shortly before he was due to speak at the 48th Brussels Briefing, he argues that the benefits of rural-urban movements may well exceed any negative impacts, offering new prospects for rural economies. 

The event is organised by CTA together with the Federal Ministry for Economic Cooperation and Development (BMZ), the German Development Agency (GIZ), the Directorate-General for Development and Cooperation of the European Commission (EC/DEVCO), the ACP Secretariat and the European NGO confederation for Relief and Development, Concord.

In the context of the Brussels Briefing on Strengthening rural livelihoods in the face of rapid urbanisation in Africa, could you share with us your latest thinking on the dynamics linking urban to rural economies, and how they can create new opportunities for smallholders and value chain actors?

Successful urbanisation and closer links between rural and urban areas are 90 percent positive, from the point of view of rural farmers. If you are a farmer and you are closer to an urban area, two things change in your life. The prices you receive are higher, as transport costs are reduced, and the more contact you have with urban consumers, the greater your chances of producing items with slightly higher value. Also, the closer you are to town, the better access you have to industrialised inputs, such as manufactured fertilisers, better tools, simple machinery and irrigation equipment. And you're probably also going to find it easier to access financial services, advice and information.

What are some of the challenges posed by urbanisation in the context of developing countries?

Urbanisation is an essential part of development, but it also presents challenges, and there are good and bad ways to grow cities. As cities grow, they develop peri-urban zones, which can create a whole series of opportunities, but if handled badly, they can create serious difficulties. A classic example is that of Kumasi in Ghana. As it expands, and new areas open up on the periphery of the city, problems are developing regarding property rights, and who owns the land.

How effective can rural producers become in accessing urban markets?

As closer connections develop between rural areas and urban centres, evidence shows that local traders are creating informal supply chains, which seem to work remarkably well. Detailed studies have proved these to be largely effective, efficient and more or less equitable. We're talking about produce such as fruit and vegetables, made available to urban markets by local supply chains, with which supermarkets from the formal sector cannot begin to compete in terms of costs. In almost all cases, when it comes to linking rural producers to urban markets, private supply chains fill the gap very quickly, mostly through informal commerce.

Can you give an example of smallholders who are tapping these markets?

One case study shows that on the slopes of Mount Meru in Tanzania, which is extremely densely populated, some farmers are uprooting their coffee to grow carrots cauliflower, onions, tomatoes and lettuces for the urban markets. In doing so they are earning way more per hectare. If you get everything right, the gross margins for a hectare of tomatoes in East Africa are such that you might make $5,000 per harvest.

The non-farm economy is as important as agriculture in many rural areas, especially to attract and retain youth. Can you share your thoughts on this issue, for Africa and/or other parts of the world?

It is instructive here to look at modern rural Asia, which is a couple of decades ahead of Africa and shows several very striking things. One is that it is still a land of tremendously small farms. In most of Asia, which has seen unbelievable successes over the past 60 years, more than 90 percent of the land is still atomised into tiny farms of less than a couple of hectares. The second point is that every time you look at a survey of rural households in Asia, you see that 60, 70 or an even higher percentage of their income comes from off the farm. The non-farm economy for rural Asia is extremely important, and if you took away these non-farm incomes and just left them with their revenues from farming, they would be plunged into a poverty that no one had seen for at least 30 years.

So in the light of this trend in Asia, what are the prospects for the off-farm economy developing in Africa?

When farming sectors grow, the growth of the rural non-farm economy tends to be equally rapid. So agriculture creates all kinds of additional jobs, particularly in the case of relatively small-scale farming. These may include processing crops, marketing, storage, or providing inputs such as fertiliser and tools. The biggest single impact is that as farmers become more prosperous, especially in the case of small-scale farmers, they tend to spend their money on goods and services that are produced locally. That makes a tremendous difference to the stability and living standards of rural people.

How will this impact the future of youth?

The one thing that we will never run out of is the capacity for human ingenuity, and in a sense this is the answer to the big question of youth and agriculture in Africa. There are going to be a great many opportunities in the rural non-farm economy, and the future of most rural people is off the farm, though not necessarily out of the village.

You are also working on migration, which can aggravate the rural-urban divide if sufficient investments are not made. Are there any research insights you would like to share?

The vast majority of rural migration is domestic, and tends to be relatively short haul, and an incredible amount of migration is temporary or circulatory. People may move out of the village to go to a town to find work, but the tendency is for them to move back. So any sense that people are leaving the countryside en masse forever is not true. And although you can find migration that is the result of desperation almost to the point of coercion, the vast majority of migration is voluntary, and has huge benefits for rural households.

What are some of these benefits?

Migration produces extra income and remittances, and diversifies the household economy. The money coming back can make a big difference to capital limits, so it might enable a family to buy an irrigation pump, or enable domestic investment, such as running water or electricity. The UN has done studies of developing countries and their policies on rural-urban migration, and the vast majority of these governments have made declarations that aim to stem this flow. But there is no evidence whatsoever that it is a good thing to restrict rural-urban migration. There is every evidence to suggest that urban growth is very positive, and that rural households that have migrants in the cities are better off than those who don't. We need to be facilitating migration, so the policy agenda here is the importance of ensuring that people have good information, about what new opportunities are and what risks they are undertaking.

Interview by Clare Pedrick

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