Friday, February 1, 2008

How to screw up an opportunity

The cold has taken its toll on crops everywhere in Lebanon, but it is expected to hit the Bekaa very hard, because farming is still very important there. Here's a report on the expected damages to the wheat crop. Many farmers had invested into wheat cropping this year in view of the rise in world grain prices. They rented land at a prohibitive rate ($700-900 per hectare per season for non-irrigated lands , when last year's price was $300). Land rent prices have increased, of course because of supply and demand. But the invisible hand of the market has been heavy on the farmers who did not expect the bad weather: their crops are expected to produce 50% of the average, and with the prices they have paid for land rental, their profit will be reduced to a minimum. The losses are also due to the fact that they planted soft wheat of the tannour variety which is demanded for bread making (this is where the money is) but not tolerant to cold weather.

This is exactly how, in the absence of appropriate policies, the opportunity to improve the livelihood of farmers can be screwed up. This is how increase in world food prices can turn into a disaster for farmers and make them even poorer, and make the country even more reliant on imports. There are at least 3 big policy issues here:

1. The absence of control on agricultural land rental and other forms of tenure. In this country there are many sects but only one religion: fundamentalist capitalism. No Lebanese government (and certainly not Siniora's) will ever dare put a bridle on the free market. No government will dare address the issue of large land ownerships in one of the most land unequal countries in the world, because it is the politicians and the influential notables who own this land. That's why the price of farmland in sky high, and that's what drives land rents up, and cost of production too.

2. The absence of proper farm extension and technology transfer to farmers. The situation is unbelievably bad: private companies go around unchecked, prescribing seeds and chemicals to farmers who do not know better. The state of agricultural technology and knowledge in Lebanon is unbelievably poor, especially where it concerns small producers. And I know what I'm talking about, I've been in this business for 15 years and I run an agricultural clinics program. This is the responsibility of the Lebanese Agriculture Research Institute to produce a cold tolerant wheat variety and that of the Ministry of Agriculture to inform the farmers about it. But with no funds, they cannot do much, and it all falls back onto civil society, which is too small, too ignorant of farming issues, too unconcerned by rural areas, too subservient to foreign donors and too conceited to be effective.

3. The absence of crop insurance programs, or of any other form of safety net for farmers. It has to be understood that farming in general, but especially in the drylands (such as Lebanon) is a RISKY enterprise. But then again, so is travel and transport (especially in Lebanon). If we want farming to continue, and there are tons of reasons why we should, there should be a system of insurance in place that can offer farmers some compensation for what they lose due to weather and wars. And the state should support this. Here, farmers are still waiting for some form of compensation for the losses of the July 2006 Israeli aggression. Money from the Paris-3 donors conference has been received by the government, but not yet disbursed, in spite of damage surveys undertaken by the FAO. Could it be because these areas are not sympathetic to the current government?

I'm still hoping for some positive sign from anyone in the political realm towards these issues. We speak of a free, sovereign and independent country without even an inkling of what these words mean. We need a state that is not afraid of supporting farming. After all, as the head of the farmers syndicate in the Bekaa puts it: Lebanon's wheat production is 60,000 tons, and it costs the government $5-7 million per year in subsidies. Today the government is paying $30 millions in subsidies to the purchase of 60,000 tons of wheat from foreign sources. Which one makes more sense?

I don't necessarily approve of price subsidies, but lets use these $5-7 millions per year in addressing these policy issues.

1 comment:

david santos said...

Thanks for your posting, rAMI.