Tackling rural poverty, together

Mushtaq Ahmed, Ph.D.

Economic Policy Advisor/Agriculture, Economic Development Division, Policy Branch, Canadian International Development Agency (CIDA), Ottawa

Private sector a ‘key driver’ in creating an enabling environment for smallholders

Mushtaq Ahmed has an unusual dual perspective on donor activities, having been at the receiving end of donor activities in his native Bangladesh early in his career, then dispensing advice himself as a hard-pressed British Commonwealth official in Guyana and now as trend-spotter and economic policy advisor for agriculture at CIDA headquarters. There is a holistic flavour to his professional background, as well. Trained to doctoral level in quantitative methods and applied econometrics at Cornell University in the USA, he has long moved on from crunching numbers to research assignments in Peru and Mexico, desk work at the Canadian Department of Agriculture and cross-cultural teamwork in agri-environmental policy, food safety and quality and business-risk management. Now a Canadian citizen, Ahmed reflects much of that nation’s equanimity and inclusiveness in his views, which he shared with Timothy Nater.

What’s CIDA’s plan for rural development?

Ahmed: CIDA's five priority sectors in development assistance are good governance, health, basic education, private sector development and environmental sustainability. Cutting right across these five is the sixth theme, gender equality. By 2010, we want to be concentrating at least two-thirds of our direct country-to-country assistance on targeted sectors in 25 developing countries¹, 14 of them in Africa. Within this matrix, agriculture and rural development play a growing part. There’s a good summary account in CIDA’s 2003 brochure, Promoting sustainable rural development through agriculture.

We were no exception to the general decline in donor funding for agriculture in the 1990s, but we’ve firmly reversed that trend, along with a majority of donors and growing numbers of partner governments. CIDA is putting US$ 190 million into agriculture alone in the current fiscal year. That’s a 50% increase over 2001/2002, and 6.7% of total Agency budget. Out of that US$ 190 million, over 50% will go to increasing agricultural productivity and over 16% to promoting private sector agriculture. We are very much part of the new, worldwide commitment to restore momentum to agriculture and rural development in the developing countries.

Why the emphasis on private sector development?
Governments can’t do it all themselves. Helped by donors, their ideal role is to prime the pump, to provide the right legal and economic structures and the right inducements to private enterprise. On top of that, PSD is a key functional link between agriculture and the wider economy. It’s already been said in this interview series: farming is a private sector activity. Small farmers in rural areas often comprise the largest single segment of the private sector in developing countries. It’s things like poor policies, bad roads, inadequate markets and generally weak institutions that prevent them from realising their potential. The private sector is a key driver in creating an enabling environment for the smallholder, for instance by investing in well-functioning agricultural markets. These markets strengthen rural economies and in turn help stimulate the creation of other rural businesses, like agri-processing and service companies.

You’ve been involved in promoting PSD yourself, haven’t you?
In the early 1990s, I worked in Guyana for the Britain’s Commonwealth Secretariat as an expert with the Guyanese government’s Ministry of Agriculture. It was an interesting time. A new government had started dismantling an essentially socialist economy, removing price controls, privatising a huge state-owned sector, diversifying agricultural production and encouraging foreign investment. Donors came in and embraced a World Bank privatisation programme. For my part, I was involved in capacity-building and helping to reorganise the rice sector. Along with sugar and bauxite, rice is still one of Guyana’s biggest economic sectors.

Guyana is beautiful but poor. Earlier under the socialistic regime, many people emigrated. So given their brain drain and my past experience, I soon found myself appointed by the ministerial cabinet to the board of directors of the New Guyana Marketing Corporation (NGMC) and under pressure from the government of Guyana to become its deputy chairman. The NGMC had been a central-planning agency for the buying and selling of agricultural produce other than rice and sugarcane, but now was being transformed into a catalyst for market development and an export facilitation service for non-traditional farm produce, like tropical fruits. It was all about promoting rural producer-groups and value chain transformation and how that fits into the rural livelihoods nexus. Of course, the Commonwealth said, “You can’t do that!”. However, the Guyanese insisted, and, in the end, I wound up wearing two hats in Guyana, though the NGMC job was unpaid. I’m glad to have had the experience. It does help to have that dual perspective, to understand the nature and needs of the private sector.

¹ Africa: Benin, Burkina Faso, Cameroon, Ethiopia, Ghana, Kenya, Malawi, Mali, Mozambique, Niger, Rwanda, Senegal, Tanzania, Zambia;
Latin America: Bolivia, Guyana, Honduras, Nicaragua;
Asia: Bangladesh, Cambodia, Indonesia, Pakistan, Sri Lanka, Vietnam;
Europe: Ukraine