Transcript Market power and agriculture Possible instruments and

“Public policies for institutional
purchases to support family
farming”
Fighting Hunger through Partnerships
Ateneo de Manila University., March 24, 2015
Marek Poznanski
CSA
(Collectif Stratégies Alimentaires)
CSA activities
• CSA is a development NGO specialized in agricultural and food
policy issues.
• Our aim is to promote sustainable agriculture and food
security by strengthening farmers' organizations and the
promotion of food sovereignty in different regions of the
world.
• Since its inception in 1984, we maintained a strong
partnership with the farmers organizations in Wallonia, the
French speaking region of Belgium.
• In 2009, CSA in partnership with the FWA applied for
membership to AgriCord and since our integration in the
AgriCord network, alongside our historical advocacy work and
the facilitation of direct links between farmers organizations,
CSA has developed an activity of financing FO’s strategic plan
and projects as well as a provision of technical assistance.
CSA collaboration with Pakisama on institutional
food purchases
• In the context of RIO +20 "Exchange of experiences and advocacy to
involve FOs in public programs generating economic activities with a
focus on employment and environment"
• The program focuses in particular on institutional buying, or food
purchases made ​by government or international institutions. This is
to share experiences and build on good practice in terms of
involvement of FOs in procurement process, and to facilitate
cooperation among FO’s and government at various levels (local,
national, regional) to promote the involvement of FOs in
institutional purchasing programs.
• The program is conducted in three countries by organizations
involved in institutional procurement process: CAPAD in Burundi, the
CNCR in Senegal and PAKISAMA in the Philippines. Moreover,
exchanges are organized at the regional level: the African Great
Lakes, West Africa and Southeast Asia East. The exchange of
experience involve also the FO’s of Belgium (FWA) and an important
contribution of FO from Brazil (FETRAF).
Finding of the seminar on "Institutional
purchases to support family farming"
In the frame of the 2014 IYFF, CSA organized an
international seminar witch brought together FO’s from
developing countries, NGOs and agri-agencies, researchers
and policymakers. It was an opportunity to consider:
• the possibility of supporting family farming by institutional
purchase,
• the difficulties faced by the different actors (local and national
authorities,…) wanting to engage themselves in institutional food
purchase from family farmers, confronted with their obligations to
respect the competition rules, the transparency and the risk of
clientelism.
• The constraints faced by producers and their organizations in order
to meet institutional demand were discussed.
• The targeting of producers and necessary accompanying measures
were also discussed.
Public authorities have to intervene to support
family farming through diverse instruments
• For the social, environmental and food importance of family
farming, combined to farmers’ weakness on markets, public
authorities have the duty to intervene with the aim to support
family farming through diverse instruments.
• The supply management instruments constitute the most efficient
means to intervene on farmers’ market power as well as on the
structures of production, but they are also the most binding ones.
• Demand-orientated approaches can complete the offer-orientated
agricultural policies’ arrangements. In this case, the demand implies
the offer and its quality. It is the large international institutions’
privileged option, in particular those in charge of trade issues.
• Indeed, numerous institutions stock up on food markets, what
confers them a part of market power. It does not imply however that
they use the purchases as extending agricultural policies
instruments, or others.
Demand-orientated approaches can complete the offerorientated agricultural policies’.
Diverse ongoing experiences try to use these institutional purchases as
levers that enable to favor the national, and even local, offer, but also
to target producers’ categories and production methods.
• For several few years now, the World Food program (WFP) has been
using its position of important foodstuffs applicant to favor the
development of agriculture in the beneficiary countries of its food
aid (Purchase for progress, or P4P).
• The "Zero Hunger" program distributes farm products to the
Brazilians who are in a situation of social and food vulnerability. It is
the “Program of Acquisition of Aliments”, integrated in the “Zero
Hunger program” that purchases the food at a remunerative price at
family farmers’ level. It is probably one of the most accomplished
programs on the subject that carefully targets the institutional
purchases in order to support the family farming.
• In the United States, the Farm Bill (489 billions $) intervenes heavily
on the food demand since 80 % of this budget is intended to
support the demand, with, in this case, more of a social purpose.
The legal framework plays a major role in the
implementation and effectiveness of institutional
purchasing programs
The adaptation of regulations on public procurement is a key factor for the
success of an targeted institutional purchasing policy, but the adaptation of
other regulations such as health regulations, or those relating to companies
and associations concerned by those markets.
• An appropriate legal environment is necessary for governments to buy
from family farmers to ensure access to these institutional markets;
• Procedures for tendering often a major constraint and should be
reviewed;
• There is also a need for a legal definition of family farming targeted by
institutional purchases;
• The legal structure of producer organizations, especially cooperatives,
must be adapted to allow them access to markets;
• The tax and health legislation must also be adapted.
Policy and institutions
• Importance of government commitment and support
• But with a coordinated and collaborative approach with
coordination of different policies, strategies and institutions (
not based on one single intervention, dependent on one single
institution)
• Institutional environment should address both demand and
supply constrains
• Legal Framework
• ▫ Plays a fundamental role both for the creation and
effectiveness of IPPs ▫ 3 main legal issues: regulation of
public procurement development of a unified legal
definition for small or family farmer at national level legal
structure and regulation of farmer organizations
Demand
• Guaranteeing and maintaining a regular demand can be an
important issue for IPPs
• WFP: mainly dependent on timing and frequency of donors’
contribution
• Brazil: operational issues can be also a constraint (lack of planning,
delays and inadequate mechanisms for the transfer of resources)
• Development and adaptation of procurement mechanisms
• Adaptation of national public procurement policies and legal
framework (Law on public procurement)
• Adaptation of the buyer’s procurement instruments
▫ Testing different contract modalities ▫ Shortening payment times ▫
Provision of customized logistical and transport systems ▫ Customizing
administrative procedures ▫ Provision of services for quality control
Supply side
• Importance of adopting a capacity building strategy
which enhance:
▫ (i) technical and (ii) managerial skills of smallholder
producers
▫ (iii) their access to finance
Lessons learned from the different
experiences
• Relevance of multi-sectorial interventions and
crossinstitutional and intra-policy collaboration
• Importance of a proper legal framework adapted to support
the development as well as the implementation of a
procurement programme that aims to integrate small producers
to institutional markets
• Need of adaptation of buyers’ procurements mechanisms to
align with smallholder supply
• Lack of technical assistance to smallholder producers in
managerial and technical skills to be able to
Institutional purchases in the service of family farming:
lessons from the Brazilian experience (1)
The presentation of the Brazilian experience by Rui Alberto Valença,
coordinator FETRAF-Sul (Brazil) under the "Zero Hunger" program was
essential to consider the pivotal role to be played by public procurement if
they are oriented toward strengthening family farming.
Brazil's strategy actually has its specificity in that it aims to combine the
goal of achieving security and food sovereignty to the goal of
strengthening family agriculture.
The Zero Hunger program was established when the President “Lula”
assumed the government in 2002. It was set up after a building process
with organizations of Family Farming.
More specifically, we can distinguish several objectives to "Zero Hunger"
program:
• Encourage family farming, by promoting her economic and social
inclusion , promoting production with sustainability, food processing
and industrialization and generation of income;
• Encourage the consumption and the appreciation of food produced by
family farming;
Institutional purchases in the service of family farming:
lessons from the Brazilian experience (2)
• Promote access to food, in quantity, quality and necessary regularity,
for people suffering from food insecurity, from the perspective of the
human right to adequate and healthy food;
• Promote the food supply, which includes food purchases by
government, including school feeding;
• Promote the food supply, which includes food purchases by
government, including school feeding;
• Establish public food stocks produced by family farmers;
• Support the constitution of stock by cooperatives and other formal
organizations of family farming;
• Strengthen local and regional circuits and commercialization networks
• Promote and enhance biodiversity and organic and agro ecological food
production, encourage healthy eating habits in local and regional level;
• Encourage cooperative and associative development among family
farmers.
Institutional purchases in the service of family farming:
lessons from the Brazilian experience (3)
The "Zero Hunger" strategy has several programs developed over time,
complement each other to achieve the objectives:
- The Food Acquisition Program (PAA) involves a wide variety of ministries,
municipalities, organizations of civil society and the CONSEAs.
• The food is purchased directly from farmers or farmers' cooperative and is then
valued in consumption circuits managed by the public sector and civil society that
are specifically aimed at people food insecure
• As part of this program, the state also buys directly from producers in order to
build public reserves that will overcome such potential crises or to ensure a fair
and stable price. The amount of income received by farmers in this program is
regulated and depends on whether the seller is independently or within an
association.
This program has been very successful for a real increase producer incomes
and improved food security situation of a large number of people at risk.
- The School Feeding Programme (PNAE), following the success of PAA), the
school feeding program that has existed for a long time and worked on the
basis of tender has been revised following a decision by Congress that
establishes a portion of institutional buying for school canteens be
made ​directly with the family farms (a minimum of 30% of purchases). That, to
secure funding to family farmers and promote local products for which priority
is granted to products from organic agriculture.
Institutional purchases in the service of family
farming: lessons from the Brazilian experience (4)
Zero Hunger
• Social control
• Generation of income
• Consolidation of family farming
• Access to Food
- Since these are public funds are involved, the system is driven by
social control and participation, made ​from commissions at all levels
and bring together representatives of social organizations, unions,
elected officials and representatives of the Executive .
- For the success of the program, it was first necessary to define "family
farming". This definition is based on several criteria: it involves the use
of family labor and a requirement on the composition of revenues:
- more than 50% of revenue must come from agricultural activities;
- the same income can not exceed the total amount of R $ 360,000
(about 120,000 euros) .
- The operating area is finally subjected to a variable maximum size, by
region.
Institutional purchases in the service of family
farming: lessons from the Brazilian experience (5)
- Quotas limits by farmers for the marketing to the program:
For example:
1. Individual Farmers : R $ 5,500.00;
2. Through associations or cooperatives: R $ 6,500.00;
3. Organic Producers: R $ 8,000.00.
- Payment made by the government authorities (regional or local)
directly to the Farmers account (bank Card).
General data after 10 year of functioning of the PAA
• Bought 4 million tons of food.
• Amount invested R $ 5.3 Billion.
• Farmers benefited 388,000 families, 37% women.
• There are 23 000 entities benefited in 3915
• municipalities.
Institutional purchases in the service of family
farming: lessons from the Brazilian experience (6)
Economic potential dimension of the school Feeding Programme (PNAE)
• Annual investments of R $ 3 billion, 30% Family Farming R $ 1 Billion.
• 47 million public school students.
• 250 thousand family farmers suppliers.
- Establishment of the prize for the school Feeding Programme (PNAE)
• Average price on 3 local, regional or national markets;
• Premium of 30% for organic product;
• Annual limit per farmer of the amount marketed: 20,000.00.
Institutional purchases in the service of family
farming: lessons from Erechim Brazil (7)
Erechim is the first municipality in the country including all school meals
are supplied 100% of the products from family farming.
This result is associated with many positive elements, such as building
stronger links between community members and a real increase farmer
incomes through higher purchase price and more substantial quantities.
By analyzing this particular case of success, it is interesting to draw some
essential elements: Upstream of the program:
• Any initiative must be accompanied by a considerable amount of
awareness: the teachers are, for example, asked to take regular load
cooking classes;
• The support of local political authorities is essential;
• The structuring of family farmers unions or cooperatives facilitates
success.
To ensure sustainability, it must then ensure:
• Continued political support;
• Ongoing technical support;
• The presence of associations of civil society involved in the program and
economic actors.