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C A B I P u b l i s h i n gi s a d i v i s i o no f C A B I n t e r n a t i o n a l CABI Publishing CAB International Wallingfbr6 O x o nO X l 0 8 D E UK
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[email protected] No part of this publicationmay be al2002.All rightsreserved. OCAB Internation reproducedin any form.or by any means.electronically,mechanically,by withoutthe prior permissionof the copyright recordingor otherr.vise. photocopying, 0wners. A cataloguerecordfbr this book is availablefrom the British Library, London, UK L i b r a r y o f C o n g r e s sC a t a l o g i n g - i n - P u b l i c a t i odna t a for rural development Globalizationand the developingcountries: emergingstrategies and povertyalleviation/ Editcdb1'David Bigman. p.cm 'ln association with the InternationalServicefbr NationalAgriculturalResearch.' and index. Includesbibliographicalreferences I S B N 0 - 8 5 1 9 9 - 5 7 5 -(6p b k . : a l k . p a p e r ) L Ruraldevelopment-Developingcountries-Casestudies.2. Economic ing courrtries-Casestudies.3. Agriculture-Economic development-Develop aspects-Developingcountries-Clasestudies.4. AgriculturaldevelopmentprojectsDevelopingcountries-Casestudics.5. Developingcountries-EconomicpolicyCasestudies.6. Developingcountries-social policy-Case studies.I. Bigman,David. HN981.29 C64 2002 2002009640 307.1'412'091724--dc2l
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[email protected]. http://www.isnar.cgiar.org/ r s B N 0 8 5 1 9 95 7 56 Firstpublished2002 Reprinted2004 Frontcoverdesign:RichardClaase(ISNAR) [,ayout:Van DuurenMedia.The Netherlands UK lndex: IndexingSpecialists, Printedand bound in the UK by BiddlesLtd, King's Lynn
Contents Foreword .....................................................................................................................xi Preface ......................................................................................................................xiii Introduction and Overview ..........................................................................................1 David Bigman Part I: Globalization from the Perspective of the South 1. The Pros and Cons of Globalization for Developing Countries ..........................27 David Bigman Part II: Globalization, Policy Reforms, and the Agricultural Sector: The Developing Countries’ Perspective st 2. Trade Liberalization and China’s Food Economy in the 21 Century .................83 Jikun Huang 3. Globalization and Public Agricultural Research in India ..................................103 P.V. Srinivasan and Shikha Jha 4. Globalization and Economic Reforms in Ghana ...............................................123 Cletus K. Dordunoo and Godwin Y. Dogbey 5. The Impact of Recent Policy Changes on the Agricultural Sector and Public Agricultural Research in Kenya..............................................................135 Hezron O. Nyangito and Joseph T. Karugia 6. The Impact of Trade Liberalization and Domestic Policy Reforms on the Agricultural Sector in Cameroon.......................................................................155 Aloysius Ajab Amin, Emmanuel Douya, and Alexander Mbeaoh Part III: The Changing Rules of Global Trading and the Impact on the Agricultural Sector and Agricultural Research 7. The Implications of Global Standards for National Agricultural Research.......171 Lawrence Busch 8. Intellectual Property Rights and the Commercialization of Public Agricultural Research in Developing Countries ................................................185 David Bigman 9. The Development of the Seed Industry Under Globalization............................201 Michael L. Morris 10. Managing Intellectual Property and Proprietary Technology in Agricultural Research ........................................................................................219 Joel I. Cohen, Cesar Falconi, Victoria Henson-Apollonio, John Komen, and Silvia Salazar v
Part IV: The Role of Public Agricultural Research 11. Diversifying Agricultural Production and Exports in Africa.............................237 David Bigman 12. The Opportunities and Challenges of Globalization for Agricultural Research in the Caucasus...................................................................................259 Larry Zuidema 13. Globalization, Internal Policy Reforms, and Public Agricultural Research in Nigeria............................................................................................275 Foluso Okunmadewa and Joseph K. Olayemi 14. The Reorganization of Public Agricultural Research in the Caribbean under the Pressures of Globalization and Privatization .....................................295 Compton L. Paul 15. The Impact of Globalization on the Agricultural Sector and Public Agricultural Research in Latin America and the Caribbean..............................307 Jorge Ardila Vásquez Acronyms .................................................................................................................325 Contributors .............................................................................................................327 Index.........................................................................................................................329
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List of Tables, Figures, and Boxes Tables Table 1.1. Demographic Characteristics of Selected Developing Countries: 1973–95 .................................................................................................................37 Table 1.2. Growth of GDP Per Capita in Selected Countries: 1960–97 ....................38 Table 1.3. Trends in GDP Per Capita in Selected Regions 1960–96 (in PPP Exchange Rates in 1985 Prices) ...............................................................40 Table 1.4. Measures of Inter-Country Income Inequality 1960–98 ...........................43 Table 1.5. Trends in World Poverty during the 1990s................................................45 Table 1.6. Growth of Food and Agricultural Production in Developing Countries (%).........................................................................................................62 Table 1.7. The Share of Agriculture in the Economy of Selected SSA Countries (%).........................................................................................................64 Table 2.1. Annual Growth Rates (%) of China’s Economy, 1970–97 .......................84 Table 2.2. Foreign Trade to GDP Ratios (%) in China, 1980-97...............................84 Table 2.3. China’s Nominal Rates of Protection (%), 1978–98: Selected Rates Evaluated at the Real Exchange Rate ....................................................................88 Table 2.4. China’s Agricultural Exports by Factor Intensity, 1980–97......................90 Table 2.5. China’s Agricultural Imports by Factor Intensity, 1980–97......................90 Table 2.6. Trade Balance of Agricultural Commodities in China ($ Million), 1980–97 .................................................................................................................90 Table 2.7. Simulation Results: Impact of Trade Liberalization on Agricultural Commodity Prices in China (in %) (Free Trade vs Baseline Scenarios) ...............91 Table 2.8. Simulation Results: Impacts of Trade Liberalization (Free Trade) on Production, Consumption, and Trade of Grains (2000–05)..............................94 Table 2.9. Simulation Results: Impact of Trade Liberalization (Free Trade) on Livestock Products and Fish Production, Consumption, and Trade, 2000–05. ................................................................................................................96 Table 2.10. Grain Self-Sufficiency Levels (in %) under Various Scenarios, 1995–2020. ............................................................................................................97 Table 3.1. Strategies Planned by the Government for Different Commodities........111 Table 3.2. Main Initiatives during the VIII and IX Plan Periods .............................112 Table 3.3. Relative importance of different goals in the projects considered ..........114 Table 4.1. Sectoral Share of GDP (%) at Current Market Prices.............................129 Table 5.1. Agricultural and Other Related Policy Reforms, 1993–98 .....................138 Table 5.2a: Specific Policy Changes for Various Agricultural Commodities ..........139 Table 5.2b: Policy Changes for Various Agricultural Inputs ...................................141 vii
Table 5.3. KARI Research Programs by Commodity/Activity Classification, 1997–98 ...............................................................................................................145 Table 5.4. Sources of Funding for KARI in 1997–98.............................................147 Table 5.5. Share in Initiating Research Projects ......................................................147 Table 5.6. Share of Different Sources in Funding Research Projects .....................148 Table 6.1. The Distribution of Farmer Revenues in Yemessoa, Cameroon .............159 Table 8.1. Type of Research and Collaboration with Other Research Institutes...............................................................................................................193 Table 8.2. Principal Research Categories.................................................................195 Table 8.3. Likelihood of IPR...................................................................................195 Table 8.4. The Use of Proprietary Technologies in Research .................................195 Table 8.5. Policy Measures Relevant to the Inputs Generated in these Research Projects.................................................................................................196 Table 9.1. Area Planted to Improve Maize and Wheat varieties, LDCs (%) ...........203 Table 9.2. Characteristics Associated with the Stages of Maize Seed Industry Development..........................................................................................210 Table 10.1. Applications of Proprietary Technologies and Materials in CGIAR Centers....................................................................................................222 Table 10.2. Products Expected from the Application of Proprietary Tools in CGIAR Centers................................................................................................225 Table 10.3. Proprietary Technologies and Materials Applied in Latin American NAROs ................................................................................................228 Table 10.4. Expectations to Protect Products...........................................................229 Table 11.1. Merchandise Trade of Africa, 1999 .....................................................242 Table 11.2. The Share of Commodities in the Total Export Earnings of the African Countries (%)....................................................................................245 Table 11.3. Principal Research Categories...............................................................253 Table 11.4. Distribution of Research Projects across Research Areas.....................253 Table 11.5. Who Initiated the Research Project? .....................................................253 Table 11.6. Who Covered the Costs of the Research Project?................................254 Table 11.7. Was the Project Conducted in Collaboration with Other Research Institutes? .............................................................................................255 Table 11.8. Were Farmers’ Organizations Involved in the Research Work?............255 Table 11.9. Were Extension Workers Involved in the Research Work? ...................255 Table 13.1. Selected Economic Indicators, 1992–98 ...............................................282 Table 13.2. Budget Allocation for Agricultural Research by the Federal Government, 1990–99 .........................................................................................287 Table 15.1. Area under Cultivation by Main Crops in LAC (’000 hectares). ..........310 viii
Table 15.2. Relative Yields, Growth Rates, and Indicators of Comparative Advantage in LAC ................................................................................................................312 Table 15.3. Differences between LAC Countries in Human-resource Capacities for Agricultural Research...................................................................315
Figures Figure 1.1. Average annual growth rates of GDP per capita in main regional groups, 1960–98 ....................................................................................................41 Figure 1.2. Index of GDP per capita (PPP adjusted) by regions, 1960–96................42 Figure 1.3a. The Share of Regions in the Three Income Groups: 1960 ....................43 Figure 1.3b. The Share of Regions in the Three Income Groups: 1996 ...................43 Figure 4.1. Growth rate of real GDP in Ghana, 1994–2001 ....................................124 Figure 4.2. Inflation rate in Ghana, 1994–2001.......................................................127 Figure 4.3. Incidence of poverty in Ghana, 1991–92 and 1998–99* ........................130 Figure 6.1. GDP Trend in Cameroon in the 1990s .................................................162 Figure 9.1. Public and private maize seed sales, 1990–97.......................................206 Figure 9.2. Evolution of maize seed prices, selected countries ...............................207 Figure 9.3. Maize seed industry concentration, selected countries, 1996 ...............208 Figure 10.1. Applications of proprietary technologies in CGIAR Centers and their means of protection (by reported number of applications) .........................223 Figure 10.3. Permission to use proprietary technologies in Latin American NAROs (by reported number of applications) .....................................................230 Figure 10.2. Applications of proprietary technologies in Latin American NAROs and their means of protection (by reported number of applications) .....230 Figure 11.1. Share of Africa in world merchandise trade, 1989–99 (percentage based on value data) .........................................................................242 Figure 11.2. Supply chain for agricultural commodities in a developing country .................................................................................................................251 Figure 12.1. GNP, PPP (current international US$)................................................261 Figure 12.2. Agricultural product (% of GDP) ........................................................261 Figure 12.3. Cereal yields, 1992–97 ........................................................................263 Figure 14.1. The commodity systems approach employed by PROCICARIBE networks....................................................................................301 Figure 15.1. Evolution of per capita food production indices in LAC ....................311
ix
Boxes Box 1.1. Foreign Direct Investment (FDI).................................................................52 Box 1.2. The Least Developed Countries ..................................................................54 Box 11.1. Trade reforms and privatization: The case of fertilizers in Ethiopia .......241 Box 11.2. Winners and losers in the global coffee marketing chain........................249 Box 13.1. The Cocoa Research Institute of Nigeria ................................................285
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Foreword Globalization and trade reform are credited with improved income growth and poverty reduction in much of the developing world. Empirical evidence points to the growth-inducing effects of open economies, where long-term growth is like the rising tide, lifting all the boats, including those of the poor. Reality, however, is often more complicated. Many countries have not reaped the perceived benefits of globalization, and in those countries that have, large segments of the population, in particular in the rural areas, lost out or were at best unaffected. As new evidence became available, a fierce debate emerged about how globalization actually affects the poor, and whether it can be made to work in their favor. Others argued that globalization merely magnified the effect of existing domestic policy failures to recognize the extent of poverty. To lift people out of poverty and malnutrition remains the prime challenge of the 21st century. More than one fifth of the world’s population lives in conditions of extreme poverty. Up to 1.2 billion people make a living on less than one dollar a day, and a large part of them is food insecure and malnourished. Three out of four poor people—some 900 million—live and work in rural areas, mostly in South Asia, but increasingly in sub-Saharan Africa. Half of all rural poor live in less-favored lands, low-potential areas with poor infrastructure and easily susceptible to environmental degradation. Among the poor, women and children are often the most vulnerable victims of poverty. Concern for the poor in the process of globalization and trade reform seems well justified, if only on theoretical grounds. Major sectors such as agriculture and textiles face limited market access in the developed world and distorted world market prices as a result of protection and subsidies. Liberalization, as many developing countries have been urged to do, in such a second-best world does not necessarily improve welfare, as the evidence in this publication shows. Even in an “ideal” world with the prospect of attractive net benefits, short-term adjustment cost can be substantial and carry a heavy political cost. It is equally likely that in the long run, important segments of the poor will be left behind, as infrastuctural, institutional, risk, and skill constraints make it difficult for them to respond to new market opportunities effectively. With decreasing state involvement and domestic reforms, it needs forceful arguing that at the same time appropriate institutions and enabling policies need to be designed to empower the poor. More decentralized and participative approaches, including privatization, show that such reforms can indeed be achieved, but need political will and time. This volume provides a timely analysis of these issues in the context of agricultural and rural development, facilitated by ISNAR in cooperation with other Centers of the Consultative Group for International Agricultural Research (CGIAR). It reviews the controversies surrounding the globalization process, presents case studies of winners and losers, introduces new issues regarding intellectual property rights and food safety standards in the global trading system, and draws implications for the future role of public agricultural research organizations. With funding for agriculture and rural xi
development so long neglected, despite poverty being prevalent in those areas, this book is a welcome addition to our understanding of the impact of globalization on the rural poor. Arie Kuyvenhoven Professor of Development Economics, Wageningen University, the Netherlands
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Preface An assessment of the process of globalization from the wider and more profound perspective of a historian, while the process is still going on at a breathtaking pace, presents a major challenge. A decade or two ago, there were high hopes that this process would lead to greater inclusiveness and generate more rapid growth in the developing countries; in recent years, however, it has galvanized vociferous opposition and bitter criticism of those who feel threatened or left out by it. This fierce criticism shifted the focus of the debate over the pros and cons of globalization from the narrow economic dimension to the moral dilemma presented by the widening gap between rich and poor and the responsibility of the “haves” of the world to narrow the income and knowledge divide and enable the “have-nots” to be integrated into the global economy. This wider assessment and an evaluation of the promise that the globalization process holds for poor countries and people must also come to grips with the questions, and sometimes doubts, that are raised about the insight that can be gained from the experience of these countries during the past decades. What, in particular, are the lessons that can be learned from the success or failure of many past policy reforms with respect to their effectiveness in the coming years—given the profound changes in the social and political conditions and in the institutional settings everywhere? How should the future reforms be structured in order to adjust them better to the new conditions that the globalization process has introduced? These are also the questions that attracted me to the work on a program on globalization that I was asked to manage when I joined the International Service for National Agricultural Research (ISNAR) in early 1999. More than three years later, I find these questions still both attracting and far from being settled as the controversies between “‘supporters” and “opponents” of globalization are spilling from conference halls and meeting rooms into the streets. The main goal of this research program was to bring in, share, and draw common lessons from the perspectives, experiences and views of researchers from different developing countries, as well as from development organizations and the academia, and this is also the goal of this volume. ISNAR’s work program on globalization started already in the mid-1990s with an extensive exchange of views and visions among leading experts in agricultural research. Their contributions were brought together in the book The Globalization of Science: The Place of Agricultural Research, edited by Christian Bonte-Friedheim and Kathleen Sheridan and published in 1996. The objective of ISNAR’s work program on globalization was to develop guidelines for the research strategies and priorities of the national agricultural research organizations (NAROs) in developing countries in order to enable them to deal more effectively with the issues presented by the policy and institutional changes brought about by globalization. The second stage of this work program started in early 1999 and evolved in three directions:
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