Smallholder Agriculture, Sustainability and the Syngenta Foundation

Smallholder Agriculture, Sustainability and the Syngenta Foundation Yuan Zhou 1 Syngenta Foundation for Sustainable Agriculture April 2010 A sustainable agricultural system is one that can indefinitely meet the requirements for food, feed, and fiber at socially acceptable economical and environmental costs Adapted from Pierre Crosson 1. Introduction World agriculture will undergo far-reaching economic and physical change in the coming 50 years. Population increase, urbanization and income growth will drive the demand for food while high energy prices, stress on natural resources, and climate change may act to constrain supply. To feed the world s growing population projected to exceed 9 billion in 2050 (UN, 2009) it will be necessary to boost the production of food and to do so sustainably. To be sustainable, agriculture will need to be intensified and its environmental footprint made to shrink. Most of the projected population growth will occur in developing countries, where smallholder farming dominates and average yields are low. An important element of food security in these countries and the world at large albeit not the only one is higher productivity on small farms. The diminishing availability of agriculturally productive land and the need to minimize the further loss and degradation of natural habitats such as forests, wetlands, and long-term pastures call for efficiency gains in the use of resources and the achievement of higher yields. Growing more with less is the guiding principle, lowering water and land use per unit of output while conserving the productive capacity of soils. The concept of sustainability is a challenging one in agriculture. There are many definitions, none universally accepted. Appropriately, most are concerned with the need for agricultural 1 The author gratefully acknowledges the contributions of colleagues at the Syngenta Foundation for Sustainable Agriculture. Special thanks go to Vivienne Anthony, Marco Ferroni, and Mike Robinson. Page 1

practices to be economically viable, environmentally considerate and able to meet human food, feed and fiber needs in the long run (e.g. Crosson, 1992; USDA, 1999; ATTRA, 2003). The Syngenta Foundation for Sustainable Agriculture supports the notion of sustainability proposed by the Brundtland Report (Our Common Future, 1987): Agricultural practices must meet the needs of the present without compromising the ability of future generations to satisfy their own. Credible definitions of sustainability must accept the profit motive as a driver of sustainable practices. Both science and technology and the right kinds of policies are essential ingredients. There is great scope for unleashing the agricultural potential of currently less productive countries and their small farmers. This requires technology, access to inputs and services, extension services support, and remunerative links to markets. The sustainable intensification of agriculture and the rehabilitation of degraded land are important elements of any strategy to avoid bringing more forestland under cultivation. Small farmers in Africa, South and East Asia, and Latin America face opportunities and constraints in attempting to practice sustainable farming. Rising demand for food is likely to create pull for their production as the market expands. It may encourage short-term gain at the expense of the environment, but will also provide the means to invest in, and conserve, natural resources. Middle-class preferences for sustainably produced food generate income opportunities from small-footprint products. The carbon market 2 offers potential opportunities for farmers to benefit from payments for ecosystems services and agricultural and land use practices that sequester or use carbon efficiently, contributing to the mitigation of climate change (FAO, 2008). Natural resources are under pressure and climate change is predicted to have negative effects on agriculture in the tropics. Both factors will require farmers to adapt their cropping and livestock systems. Technology and the right kinds of services and farm support can go a long way to help make this process a success. The Syngenta Foundation encourages the development, dissemination and adoption of agricultural technology in the service of sustainable intensification. This paper aims to contribute to the discussion of how sustainable intensification benefiting smallholder farmers and the broader goal of food security can be achieved. We start with a description of the smallholder space. 2. Smallholder mapping and characterization Smallholder agriculture dominates the landscape of the developing world. Fig. 1 shows the share of small farms that operate less than 2 ha in total landholdings in some developing countries. In general, Asian countries have a very high percentage of small farms (e.g. 98% in China), followed by Africa where there is considerable variety across countries. Latin America typically has a lower percentage of farms under two hectares (e.g. 20% in Brazil). 2 This refers to carbon emissions trading, specifically for carbon dioxide that currently makes up the bulk of emissions trading. It is one of the ways countries can meet their obligations under the Kyoto Protocol to reduce carbon emissions and thereby mitigate global warming. Page 2

% of holdings <2 ha Mean farm size (right axis) 100 5 80 4 60 40 3 2 ha 20 1 0 China India Indonesia Laos Bangladesh Ethiopia Uganda Burkina Faso Mozambique Fig. 1 Share of farms <2 ha (% of total) in selected developing countries (Source: WCA, FAO) Small farmers are the key group requiring attention in agricultural and rural development. Increasing their productivity and incomes can make a major contribution to reducing hunger and poverty. Historical data show that there is a negative correlation between cereal productivity (measured as tons of grain per hectare) and the incidence of poverty. The growth of cereal productivity in East and South Asia, owing to the Green Revolution, has clearly reduced poverty in those regions. For example, the poverty incidence (percentage of people living on less than 1 dollar a day) fell from over 50% to about 10% in East Asia and 32% in South Asia between 1981 and 2004 (WDI, 2007). Such development has yet to be seen in Sub-Saharan Africa, where cereal productivity has stagnated in the past decades. Nevertheless, the scope for poverty reduction through cereals-based agricultural intensification can be limited if farm households landholdings are very small, as in key Asian economies including China, India, Indonesia, Bangladesh and Nepal. A situation of efficient but poor could occur for farmers growing mainly low-value staples on small plots. Yield-perhectare efficiency does not translate directly into a substantial increase in income when labor productivity is low. For very small farmers, the pathways out of poverty may often include migration out of agriculture, and possibly the consolidation of farms, perhaps in a context of rural economic diversification and growing non-farm income opportunities. The area operated by small farms in developing countries currently appears to be rising rather than falling. Average farm size has declined in many countries during the past few decades. For instance, the average size of land holdings in India fell from 2.3 ha to 1.06 ha between 1970 and 2002, implying that the number of smallholders is growing 86% of the land holdings are now less than 2 ha and the average operated land area is around 0.4 ha for this group (NSSO, 2006). Many factors contributed to this trend. They include rural population growth, inheritance practices, and unfriendly land leasing systems. Most importantly, there is a lack of off-farm employment opportunities for smallholders, who typically have limited education and professional skills. Small farmers in developing countries will continue to be the custodians of vast areas of agricultural land for at least some decades to come. 0 Page 3

Theoretically, smallholder farming progresses as farmers capability increases and conditions improve. Access to technology and knowledge is one of the key factors driving the progression. Fig. 2 visualizes progressive improvements in farm capability from enhancing the basics (agronomy, improved seeds, water and soil management) at the subsistence level to successively more professional inputs and technologies as capability expands. At the low end of the spectrum, improved agronomy (and thus extension) and seeds (typically of the open pollinated kind) are the priority. At higher levels, there is scope for additions to the basics. They include hybrids, GM traits, modern crop protection, seed treatment and integrated solutions, which farmers can afford if there are links to markets and adequate infrastructure. Improvements in yield can be achieved across the stages as well as within each stage. Some farmers, however, may remain at the subsistence level while others progress along the stages. Migration out of agriculture can happen at any stage of the progression, but pressures for it to occur may be particularly strong at the subsistence level. Fig. 2 Additive stages of agricultural intensification 3. Natural resource challenges Healthy soils and adequate water supplies are vital to sustainable agricultural systems. However, water shortages and land degradation are becoming ever more acute in large parts of the developing world. Agricultural irrigation uses about 70% of the world s freshwater withdrawals. Although irrigated area accounts for only about 18% of the cultivated area in developing countries, it produces 40% of the value of agricultural output (WDR, 2008). Because of limited availability, competition for water between the agricultural sector and urban, industrial and environmental needs will increase. In many river basins, freshwater supplies are already fully used and in many cases water use has exceeded minimum recharge levels. As a result of excessive extraction, major rivers such as the Yellow River and the Ganges have failed to reach the sea during parts of recent years Page 4

(Pearce, 2006). Likewise, overdraft of groundwater has been a serious problem, particularly in areas heavily dependent on well irrigation, leading to declining water tables. Farmers are left with no choice but to drill the wells deeper and deeper, and in many occasions pumping has become increasingly difficult and costly. Another negative consequence of overextraction of the aquifers is saline intrusion, which has led to losses of huge agricultural areas especially in coastal regions. Climate change will affect the availability and use of water, and locally increase the competition for access. Poor water management also leads to land degradation in irrigated areas through waterlogging and salinization. For instance, nearly 40% of irrigated land in dry areas of Asia is thought to be affected by salinization (WDR, 2008). Soil erosion by wind and water is another important form of land degradation. The Loess Plateau in northern China is highly susceptible to the forces of wind and water. In fact, the soil of this region has been called the most highly erodible soil on earth (Laflen et al., 2000). Centuries of deforestation and overgrazing, recently exacerbated by increasing population pressure, have resulted in degenerated ecosystems, desertification and poor farming conditions. In Sub-Saharan Africa, nutrient depletion in soils is a major form of land degradation. Other types of land degradation such as sodicity and alkalinity are also widespread in developing countries. Finally urban expansion has removed large areas of agricultural land from production. There are a number of factors driving resource degradation. They include poverty, population pressure and policies on prices, subsidies, and property rights. Poverty is more likely to drive resource degradation in regions where poor quality soils and inadequate water must support high population densities. Physical scarcity of water is aggravated by policies that induce higher water use. For example, in irrigated agriculture, energy subsidies encourage groundwater mining, whereas the underpricing of canal water discourages farmers use of water-efficient crops. In parts of India, subsidies for canal irrigation, power, and fertilizers, along with state procurement of output at guaranteed prices have led farmers to overproduce grain crops, use water-intensive cultivation and make excessive withdrawals of groundwater (WDR, 2008). In addition, insecurity of land tenure holds farmers back from making longterm investments to reduce soil erosion and land degradation (e.g. Smith 2004; Sharma et al., 2006). 4. The evolution of agricultural and food markets The greatest challenges relating to population and income growth are likely to occur in developing countries. FAO predicts that population will grow faster in South Asia and Africa than in China and Southeast Asia over the next ten years (Fig. 3). In the meantime, all of these areas will experience an increase in urbanization. For example, the urbanization rate is predicted to reach 53% in China and 45% in Africa by 2020 (Fig. 3). City dwellers changes in tastes and lifestyles are likely to have significant influences on the structure of food demand. For instance, urban diets in China contain more meat and less grain than in rural areas (Hsu et al., 2001). Population growth and urbanization along with rising income will drive up food demand, in particular for high-value commodities. The growing market for food and feed offers opportunities to small farmers. Page 5

Fig. 3 Population & urbanization by region, 1980-2020 Fig. 4 Cereal yields by region, 1961-2007 Source: FAOSTAT, 2009 Rising food demand (especially for high-value crops, e.g. fruits and vegetables) is likely to create pull for small farmers produce, benefiting them economically. Additionally, demand for smaller footprint or greener products creates incentives for farmers to raise their food quality and standards. For example, techniques such as product lifecycle assessment and traceability allow examination of a product s environmental impact and enable quantification of its water and carbon footprints. On the supply side, there remains a considerable yield gap (between the actual yield and what is potentially attainable) in many food crops. For example, cereal productivity in Africa and South Asia lags far behind the world average (Fig. 4). The low level and stagnation of productivity growth in Africa can be attributed to limited use of irrigation, fertilizer and improved crop varieties the absence of an African Green Revolution. In these lagging regions, there is great potential to boost agricultural growth by increasing productivity, linking farmers to the market and facilitating the transformation from subsistence to commercial farm capability through innovative technology and science, seed/input market development, agricultural extension, and risk management tools. Intensifying the production systems sustainably in these regions is expected to help reduce further deforestation elsewhere on the globe. 5. Solutions for sustainable agriculture The goals and values of long-term sustainability must be reflected in combinations of practices and methods consistent with an individual farmer s resources, including his or her knowledge base, technical know-how, and farming opportunities (Ikerd, 1993). Millions of small farmers in developing countries do not have a good resource and knowledge base, and this limits their capacity to pursue sustainability goals. This capacity can, however, be created or enhanced by increasing farmers access to knowledge and capabilities through education and training, and by improving their operating environment through provision of enabling technologies and services (Fig. 5) Page 6

Fig. 5 Enabling technologies and services Access to technology is one of the most important enablers for smallholders to improve productivity sustainably. It is a priority task to develop technologies and solutions in genetic improvement, crop protection, fertilizer efficiency and soil and water management that are relevant to small farmers. Increased public investments in agricultural R&D, new and innovative public-private partnerships, and an increased role of the private sector in product development and dissemination are critical elements for the transformation of small-scale agriculture. Innovative mechanisms for technology transfer are required to bring relevant tools, knowledge and knowhow to farmers. 5.1 Science and technology for sustainable agriculture Smallholders will not be able to solve the challenge of sustainable agriculture all by themselves. Efforts are required from both the public and the private sector and effective public-private partnerships along the agricultural and food value chain. Sustainable agriculture also calls for the integration of modern, science-based technologies with local knowledge, and the participatory involvement of farmers in the innovation process. The following science and technology related components (Fig. 5, left-hand box) are essential for achieving sustainability goals. Modern seeds Improved crop varieties have been widely adopted in developing countries but less so in Sub- Saharan Africa. One reason is that there has been very little investment and progress in developing improved varieties for African orphan crops (e.g. millet, sorghum, cassava, cowpeas). This needs to be redressed and it would be quite possible to make headway with the assistance of modern biotechnology and bioinformatics platforms. In areas where agriculture faces particularly large challenges, there is a growing need for improved crop varieties that tolerate stress, such as drought, heat/cold, or pest pressure. Nitrogen-efficient crops and aerobic rice or other crop varieties contributing to low greenhouse gas emissions are also desired to address climate change and pollution. Recent developments in marker- Page 7

assisted breeding and genetic engineering offer good prospects in providing such needed varieties in the future. Land and soil fertility management Healthy soil is vital in sustainable agricultural systems, and soil is viewed as a medium that must be protected and nurtured to ensure its long-term productivity and stability. Physical structures (e.g. contour ditches, mulching and windbreaks) reduce soil erosion, especially on sloping land. Measures to protect and enhance the productivity of soil include conservation tillage, crop rotations, cover-cropping, green-manuring, and maintaining soil cover with plants and/or mulches. Conservation tillage minimizes or eliminates plowing and maintains crop residues as ground cover. It represents a major change in farmers practice. Conservation tillage has been used in irrigated rice-wheat systems in South Asia and in African countries such as Ghana and Kenya. In addition to maintaining soil quality of existing arable land, it is important to rehabilitate degraded land and not to clear new land, for example forests, for agricultural purposes. Improving water management In the face of growing water scarcity, the key challenges in irrigated areas are to use water more efficiently, stop unsustainable extraction of groundwater and prevent the degradation of irrigated land through waterlogging, salinization, and nutrient depletion (WDR, 2008). Advanced technologies such as sprinkler and drip irrigation that help to improve water use efficiency must be made available to smallholders at affordable prices. Irrigation needs to be properly managed to enhance nutrient uptake and decrease nutrient leaching. In rainfed agriculture, solutions such as rainwater harvesting and flood management are needed. Moreover, economic instruments should be employed where appropriate, including proper water pricing, payment for ecosystem services and polluter pays principles. In the meantime, energy subsidies that encourage unsustainable groundwater pumping should be ended. Safe and effective use of agrochemicals Sustainable pest management combines a range of practices. These include Integrated Pest Management techniques that reduce the need for agrochemicals by practices such as scouting, use of resistant cultivars, more careful timing of planting, and biological control methods. Sustainable crop protection implies: (1) judicious integration of genetics and chemicals (e.g. combining pest- or herbicide-tolerant varieties with a low level of agrochemical use); (2) safe and more efficient use of agrochemicals (e.g. reducing frequency of sprays, widening the gap of sprays, appropriate implements or tools correctly used to apply pesticides efficiently); (3) environmentally degradable crop protection products; and (4) knowledge and training on agrochemicals made available to farmers. Excessive use of nitrogen fertilizers should be discontinued in parts of Asia and elsewhere because of water contamination. Instead, the balanced use of nitrogen-phosphate-potassium and good timing of application should be promoted. The lack of soil nutrients in Sub-Saharan Africa means that farmers there need better access to affordable fertilizers. Page 8

Seed treatment Seed treatment can improve germination, protect seeds or seedlings from disease or pests, improve early season vigor, and thus indirectly protect against adverse weather and growing conditions. It also has the benefits of allowing for earlier planting, protecting high-value seeds and avoiding replanting costs. Rhizobium inoculation enhances the nitrogen-fixing capability of legume crops, and their yields. Despite all these benefits, most of the seeds sown in developing countries are untreated and many small farmers are not familiar with this practice. In general high-yielding varieties or hybrid seeds are more commonly treated than traditional seeds. There is a huge untapped potential in yield-stabilizing and -enhancing seed treatment for smallholders. Conserving biodiversity Crop diversity, on which agriculture is heavily dependent, is being lost at a rapid rate (van Dooren, 2009). Today s farmers rely on a narrow range of crop varieties, which can result in disasters due to plants vulnerability to pests and disease. Homogeneous modern agriculture threatens genetic diversity, and thus threatens both local and global food security (Vernooy, 2003). The genetic diversity of crops has enabled plant breeders to produce varieties with traits such as improved yield, shorter stem length, and pest and disease resistance. Losing this diversity will jeopardize our future ability to adapt to changes in climate and farming conditions. Therefore, efforts must be made to safeguard this valuable resource. Besides exsitu conservation through gene banks, small farmers and rural communities can be encouraged and supported to conserve their traditional varieties in-situ by continuing to grow them on their farms. For example, payment for agrobiodiversity conservation services schemes have the potential to provide small farmers with incentives to carry out conservation at the farm level. Climate change: mitigation and adaptation Climate change is expected to impact crop productivity and the areas suitable for crop production. Damage will be disproportionately concentrated in the developing countries in tropical and sub-tropical latitudes. Predictions from crop-climate models show that in tropical countries even moderate warming can reduce yields significantly, because many crops are already at the limit of their heat tolerance (WDR, 2008). Adaptation can substantially reduce the adverse economic impact of climate change. However, small farmers in the most affected areas will need external help to respond to drastic changes, particularly when the adaptation costs are high. Potential methods include adoption of drought-tolerant crop varieties, building or retrofitting irrigation systems, obtaining crop and livestock insurance, and having access to better climate information. Farmers could also mitigate climate change through conservation tillage, agroforestry, more efficient use of nitrogen inputs, effective manure management and low-emission crop varieties such as aerobic rice. The emerging market for trading carbon emissions offers opportunities for agriculture to benefit small farmers through land uses that sequester carbon. 5.2 Product development and services for sustainable agriculture Sustainable agriculture also requires product development and services by which inputs are delivered and farmers can be linked to markets (Fig. 5, right-hand box). Key services include Page 9

functioning seed and other input systems, agricultural extension, connectivity, financial services such as credit and agricultural insurance, infrastructure and market access for farmers. Emphasis should be placed on developing cooperatives, farmer organizations, business associations, scientific organizations explicitly supporting the needs of smallholder farmers, and entrepreneurs to capture and add value to on-farm, post-harvest and off-farm enterprises. Agricultural extension Agricultural research remains a purely academic endeavor unless it is informed by real problems on the ground, and unless appropriate extension delivers solutions to farmers. Research institutions focus on the technical aspects of generating useful technologies, while extension focuses on the acceptance and adoption of those technologies by users. Research, extension and farmers should be functionally linked, and two-way information flow is vital. Addressing new and growing challenges in agriculture requires extension to play an expanded role beyond technology diffusion. New approaches to extension need to emphasize three elements: (1) strategies to develop agricultural innovation systems, (2) a range of service providers and (3) demand-driven extension services. Advancing agricultural innovation means building institutionally sustainable innovation systems. Criteria for sustainable innovation systems are the growing interrelation between the participants in the innovation system, an intensive communication between all stakeholders and, generally, a strong political and economic context favoring agricultural progress (Anandajayasekeram et al, 2008). Widening the range of service requires an appropriate mix of public and private funding and delivery mechanisms for extension, which will achieve differing agricultural goals and serve diverse target groups. The concept of demand-driven extension emphasizes the need to provide services that meet needs and priorities of farmers in the context of changing domestic and international environments for agriculture (Birner and Anderson, 2007). Seed and input system development Seed markets and seed systems are in rudimentary stages of development in much of Africa. Seed development capabilities are weak and it usually takes years for new crop varieties to find their ways into farmers fields. The shortfall in seed supply can be attributed to several bottlenecks in the seed value chain: (1) the establishment of seed companies, where high investment capital and lack of qualified manpower are two major barriers; (2) seed production and processing, which are plagued by technical constraints and the lack of access to suitable germplasm; (3) seed marketing and distribution, where major constraints lie in poor infrastructure and distributional networks as well as agro-dealers lack of credibility and knowledge; and (4) seed demand at the farm level, which is low because of the lack of awareness, poor extension, and uncompetitive grain prices (Langyintuo et al., 2008). Addressing the bottlenecks requires government policies, infrastructure development, and capacity building and human resources development in the seed sector. The delivery systems of other inputs are plagued by similar constraints. For example, fertilizer delivery in much of Africa suffers from poor road and rail infrastructure, lack of market information systems, and weak private sector response because the profitable use and Page 10

marketing of agricultural inputs is constrained by under-investment in supporting infrastructure and services (Crawford et al., 2003). Connectivity Recent developments in information and communication technology (ICT) including mobile phones offer exciting new opportunities for agricultural development. They improve rural connectivity, knowledge and information transfer. In India, E-agriculture initiatives now flourish, including for example toll-free kisan call centers and internet-connected kiosks ( e-choupal ). They provide farmers with general information as well as tailored agricultural services, and links to markets. The information provided through ICT should be demanddriven and relevant to the needs of the farming community. 6. Syngenta Foundation for Sustainable Agriculture The Syngenta Foundation focuses on small-scale farmers. We support their productivity and link them to markets in order to improve incomes and livelihoods. Working with a wide range of partners, we use agricultural science to develop sustainable solutions specific to local conditions. We also help create, and link farmers to, markets on the input and output side of the value chain. Our efforts and investments in Africa, South and East Asia and Latin America attempt to strengthen agriculture as a source for development and benefit for rural communities. Agricultural research and technology A key approach to increasing agricultural productivity is selective crop breeding to improve varieties that are highly targeted to local farmer needs. Access to broad genetic diversity is crucial to achieve this goal. The Foundation understands the need to maintain and conserve diverse sources of germplasm for breeding programs. A wide range of germplasm facilitates the development of adaptive solutions to changing environmental conditions. The Syngenta Foundation is supporting a project developed by Bioversity International, a major research organization dedicated to the conservation and use of agricultural biodiversity. One aspect of the project is an assessment of the potential for payment for agrobiodiversity conservation services (PACS) schemes to create incentives for farmers to conserve biodiversity. The Foundation is also supporting several breeding projects to develop improved crop varieties resistant to abiotic and biotic stresses and adapted to local conditions of small farmers. For example, the goal of IRMA, the Insect-Resistant Maize in Africa project, is to create and deliver varieties resistant to the major stem borer species. As a partnership between the International Maize and Wheat Improvement Center (CIMMYT) and the Kenya Agricultural Research Institute (KARI), IRMA uses conventional breeding techniques to introduce insect resistance into maize. In another project, the Foundation and local partners are supporting the development of improved tef plants. Tef is a very important cereal for Ethiopia. The long stalks of conventional tef are prone to lodging (collapse). The Foundation s project aims to breed semi-dwarf tef, which will not lodge. Page 11

Marker-assisted breeding can be used in many different crops, but requires investment in capacity-building and in genetic and bioinformatics tools. This is an underfunded area in Sub-Saharan Africa. The Foundation is helping BecA, the Biosciences Hub for Eastern and Central Africa to strengthen its position as a premier institution in the region. The aim is to attract government and university genetics projects to develop products for local plant breeding and livestock improvement. Molecular breeding offers significant opportunities for partnerships between the public and the private sector. These partnerships link up, for example, CGIAR centers and national programs, with crop science companies. The Syngenta Foundation acts as a thought leader in crafting public-private partnerships (PPPs). It has recently organized a two-year PPP between Syngenta and CIMMYT on genetic markers to breed wheat resistant to the devastating disease Ug99 stem rust. Another recently negotiated PPP is geared to sharing genetic information to improve corn nutrient content as part of the HarvestPlus program. GM technology could be an important tool for improving crop yields sustainably. Building stewardship and biosafety management capacity is important as countries develop the legislative and regulatory frameworks for R&D programs and trait commercialization. The Foundation is supporting a project managed by FARA, the Federation for Agricultural Research in Africa, to build stewardship capacity in six countries, in coordination with other initiatives in this field. Product development and services The Foundation focuses on extension systems, seed market development and financial services such as weather index insurance. Acting as an integrator, it brings together NGOs, the private sector, governments and other stakeholders to provide farmers with agricultural services, know-how transfer and marketing support. A key task in agricultural extension is to develop and apply methods and models that really work and can be scaled up. The Foundation emphasizes the need to provide demand-driven extension services and a holistic approach to farming problems. Our India program, established in 2005, is one example. It operates through local NGO partners to introduce new technologies and inputs for increased production of vegetables and rice. Dedicated extension services and marketing advice play an important role. To date the projects supported by the Foundation have reached over 25,000 farmers across nearly 500 villages. They have achieved widespread adoption of appropriate techniques for growing vegetables, as well as increased use of quality seeds, positive responses to the System of Rice Intensification (SRI) technique, and improved water management. The extension model is now ready to be applied on a wider scale. In semi-arid areas of Mali, the Foundation supports a program to improve farmers livelihood through targeted, demand-driven training centered on staple crops (e.g. millet, sorghum) and the establishment of farmer organizations that have already improved the sales prospects of locally produced grain. Similar 0n-farm support centered on extension is also being provided through projects in Kenya, Brazil, Peru, Bangladesh, Indonesia and Vietnam. Where markets do not work properly, farmers organization can be enormously helpful in improving their bargaining power and terms of trade. The Foundation s program in Mali Page 12

focuses on establishing farmer cooperatives. These organize the delivery of farm inputs, in particular fertilizers, and sell produce. Thanks to cooperative storage facilities, the farmers can now more easily choose the time of sale, and thus achieve better prices. Seed markets are largely underdeveloped throughout Sub-Saharan Africa. The Foundation is building a seed market development program in Africa, to encourage the formation of successful seed businesses. Experts will transfer first-hand experience from India s seed sector to Africa and provide guidance to seed companies on business strategy, management and marketing. The Foundation is also actively engaged in developing affordable weather index insurance of agricultural inputs for small farmers. Agricultural insurance protects against risks such as drought or flooding. Since April 2009 a Foundation drought insurance product has been piloted in cooperation with UAP insurance company, the Kenya Meteorological Service, input companies and stockists. The terrible drought of 2009 put the pilot to a hard test, and prompted a pay-out to the insured smallholders. There is a great unmet demand for such insurance. The partners are therefore now scaling the scheme up by increasing the number of agribusinesses participants and using mobile phones to register insurance transactions. 7. Future perspectives Technology and services as set out above are key elements of sustainable agriculture. The Syngenta Foundation and its many partners are contributing in the smallholder sector through on-farm support, technology and services. The stretch goal for the Foundation is to reach hundreds of thousands of farmers with viable methods that can improve their food security and livelihoods as well as resource management. There is a lot more that needs to be done before sustainable approaches that support intensification of production become the norm in modern agriculture. The Foundation is committed to exploring innovative ideas and developing proof of concept projects. The central emphasis will be on evaluating and making accessible affordable technology, enabling effective extension services and catalyzing the development of markets. Building up extension programs in Africa and expanding the reach of extension support in South and East Asia are essential components for growth in agricultural productivity on a wider scale. The Foundation will also continue to monitor the major drivers of change in agricultural policy, science and technology and the environment. Critical to the delivery of each of these endeavors is stimulating and facilitating the creation of successful public-private partnerships. The Foundation has the methods and connections to engage in new partnerships and projects, and can influence others through its system-level presence. In the areas of seed market development, agricultural insurance and financial services the Foundation will encourage the formation of partnerships intended to accelerate the delivery of solutions and opportunities to large numbers of small farmers. Page 13

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