Policy Options for Agricultural Investments and Governance of Markets: In support of small-scale farmers in Guatemala | Agriculture

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In 2012 Oxfam and IIED joined forces to create Tipping the Balance a global report exploring the connection between the policy and practice of investment and market governance in small scale agriculture in four countries: Nigeria, Tanzania, Guatemala and the Philippines. This is the study from Guatemala evidence of which fed into the main Tipping the Balance report. Public policies on commercial investment in agriculture and market governance play a fundamental role in ensuring inclusive, sustainable development of small-scale farming, particularly with regard to women in rural areas. This study focuses on establishing the framework of policies and rules applicable in Guatemala and the favourable or unfavourable impact they have on both male and female small-scale rural producers. The results reveal that, although rural-development policies and programmes exist, their benefits are limited due to the disconnect between the design and the implementation of such policies. The public policies and forms of market governance currently in place clearly tip the balance in favour of large-scale commercial investments in both monoculture farmland and the agri-food sector. This report is the result of the research carried out pursuant to the research report summary published by Oxfam and the International Institute for Environment and Development (IIED) in December 2012 entitled 'Oxfam Policy
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    POLICY OPTIONS FOR GRICULTUR L INVESTMENTS ND GOVERN NCE OF M RKETS In support of small-scale farmers in Guatemala  OXFAM RESEARCH REPORT AUGUST 2013 BY GUILLERMO DÍAZ INSTITUTO DE INVESTIGACIONES ECONÓMICAS Y SOCIALES (IDIES) [INSTITUTE FOR SOCIAL AND ECONOMIC RESEARCH] Public policies on commercial investment in agriculture and market governance play a fundamental role in ensuring inclusive, sustainable development of small-scale farming , particularly with regard to women in rural areas. This study focuses on establishing the framework of policies and rules applicable in Guatemala and the favourable or unfavourable impact they have on both male and female small-scale rural producers. The results reveal that, although rural-development policies and programmes exist, their benefits are limited due to the disconnect between the design and the implementation of such policies. The public policies and forms of market governance currently in place clearly tip the balance in favour of large-scale commercial investments in both monoculture farmland and the agri-food sector. This report is the result of the research carried out pursuant to the research report summary  published by Oxfam and the International Institute for Environment and Development (IIED) in December 2012: Tipping the balance: policies to shape agricultural investments and markets in favour of small-scale farmers , http://oxf.am/3Ma. POLICY OPTIONS FOR AGRICULTURAL INVESTMENTS AND GOVERNANCE OF MARKETS   In support of small-scale agriculture in Guatemala      CONTENTS INTRODUCTION  ........................................................................................................................................................... 4 1. FARMING IN GUATEMALA  ................................................................................................................................... 6 2. IMPACT OF INVESTMENT IN LARGE-SCALE FARMING ON SMALL-SCALE FARMING  .................. 12 3. MARKET GOVERNANCE  .................................................................................................................................... 19 4. OVERVIEW OF POLICIES AND LEGISLATION ON AGRICULTURAL INVESTMENT AND MARKET GOVERNANCE  ........................................................................................................................................................... 26 5. ANALYSIS OF OUTLINED POLICIES  ............................................................................................................... 38 6. CONCLUSIONS AND RECOMMENDATIONS  ................................................................................................ 45 BIBLIOGRAPHY .......................................................................................................................................................... 47 ANNEX 1. TABLES  ..................................................................................................................................................... 50 ANNEX 2: GRAPHS  ................................................................................................................................................... 57 ANNEX 3. LAND SALE CASE STUDIES  ............................................................................................................... 62 ANNEX 4. MAP  ........................................................................................................................................................... 64 ANNEX 5. SMALL AGRICULTURAL COMPANY CASE STUDIES  ................................................................. 65 POLICY OPTIONS FOR AGRICULTURAL INVESTMENTS AND GOVERNANCE OF MARKETS   In support of small-scale agriculture in Guatemala      INTRODUCTION Guatemala's farming sector has undergone some major changes over the last 20 years , such as the growth of monocultures and of small-scale farming for export. This trend has been driven by both a general framework of laws offering incentives and international demand, particularly for vegetables, legumes, and substitutes for oil-derived fuels. The institutional framework governing the farming sector has become weaker over the past decade. The Ministry of Agriculture, Livestock and Food (MAGA) has seen its budget and functions reduced, and it does not have a significant impact on the promotion of rural development and the strengthening of small farming economies. The expansion of monocultures poses a threat to small-scale producers by reducing the amount of land available and therefore forcing up land prices, and reducing demand for labour - particularly for women - which causes migration and, more generally, poverty among families that sell their land or are evicted from the farms they have lived on for generations as tenant farmers1. These families also find themselves in precarious labour conditions and even suffer violations of their labour rights and rights of way. Moreover, agricultural products markets in Guatemala are characterised by the presence of oligopolies and a lack of free competition. They often work to the detriment of small-scale farmers and to the benefit of wholesale agents or export companies that obtain a large percentage of the value added. Agricultural policy in support of investment and small-scale producers in Guatemala is limited. Government plans talk of promoting rural development, but measures taken to that end are rare and lacking in momentum. One reason why agricultural policy is limited in practice is that farming accounts for a smaller percentage of GDP than the trade and industry sectors, despite the fact that it creates the most jobs. Another reason is the small budget assigned to the public institutions linked to the sector. Guatemala does have a policy that favours women. However, despite the existence of a law that promotes dignity and participation in various sectors for women, they continue to suffer economic discrimination and exclusion from production, particularly with regard to access to land ownership. Their participation in the agricultural production process is limited to supporting their families, often without receiving any pay. Women are frequently the target of all kinds of discrimination, and have practically no decision-making power when it comes to the use of productive resources. There are very few policies that directly favour rural women. This report argues that public policy gives preferential support to large-scale farming investments through tax breaks. The limited support given to small-scale producers in public policy is restricted to issues such as access to land, credit and the supply of inputs at subsidised prices; it rarely covers productive infrastructure. The study has two objectives: to understand how public policy affects commercial investments in farmland and the agri-food sector, and to understand how markets support small-scale farmers. It also aims to contribute to the development of the programmes run by OXFAM - and the GROW 1 Tenant farmers are individuals who reside on and farm land owned by a landlord.   POLICY OPTIONS FOR AGRICULTURAL INVESTMENTS AND GOVERNANCE OF MARKETS   In support of small-scale agriculture in Guatemala  
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