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Topic 1: Contract Farming in Rural Development

Contract farming is one type of agricultural production in which farmers enter an agreement with a larger firm (called buyers), creating a symbiotic relationship that provides the farmers with market access and firms products to sell. The agreement (or contract) typically involves the firm agreeing to buy a certain amount of a particular agricultural good from a farmer, sometimes at a pre-determined price. Additionally, the firm might provide production assistance to its farmers, including credit support, advice, packaging, transportation, and some basic crop aid, such as access to necessary agricultural materials and equipment. Though the firms often have a direct role in the development of smaller farms (referred to as smallholders), contract farming is not a form of microfinance — its primary concern is the production and marketability of agricultural goods, and it is not credit-based.

This is not the only type of business arrangement available to farmers today; however, this method of transaction between farmers and buyers is growing in popularity because it allows for, through the use of contract, secure access to a supply of goods (for buyers) and markets and assistance (for farmers). Because of this, it has come to play a large role in rural development. Without the support provided by the firms, many smaller, rural farmers would not have had the opportunity to produce their goods on such a scale, let alone have diversified market access. Furthermore, firms have found it simpler to make contracts directly with smaller farmers rather than going through another company with higher access boundaries. That being said, there are several models of contract farming, some of which work better than others for different types of crops, governments, economies, firms, etc. These models will be discussed primarily as alternatives and counterexamples to contract farming, given the growth of contract farming over the past two decades, and the FAO’s direct work with contract farming. However, part of the committee’s job will be to determine if, in fact, contract farming is the most beneficial option for rural development in each of the delegates’ countries. Some questions that might arise in this debate include:

   • Is change to or from a contract farming model beneficial?
   • Which parties would be in favor of change?
   • What type of change would arise? Legal change? Structural change?
   • What are some alternatives to contract farming?

Contract farming also exists in developed economies, but its primary role recently has been in that of rural development in developing economies. Though it has proved beneficial in many situations, there are opportunities for failure, such as farmer-firm imbalance, economic or political (especially legal) instability, crop failure, and contract breach. It will be important for the committee to examine the benefits and setbacks of contract farming, which might include researching and considering other models of agro-business.

Topic 2: FAO's Role in Promoting MDG 1

Although the United Nations Populations Fund (UNFPA) is the primary body seeking the promotion of the Millennium Development Goals (MDGs), it relies heavily on support from other UN organizations for implementation of specific MDG issues. For example, UNFPA and UNAIDS have a strong partnership in promoting MDG 6 (Combating HIV/AIDS, Malaria, and TB). The same can be said of the FAO and MDG 1: Eradication of Poverty and Hunger. Though the FAO plays a role in all 8 MDGs, hunger eradication is one of the tenants of the FAO, so promoting the implementation of MDG 1 is a natural fit for the body and serves as the basis for one of its most extensive partnerships. The scope of FAO is both developmentally- and aid-focused, so appropriately, the body has a two-pronged approach to eradicating hunger and poverty. Though they can be seen as “long and short term” approaches, the preferred terms are “immediate and developmental assistance.” The immediate response focuses on providing food and food security to those in greatest need. These FAO programs’ main goals are “availability, access, stability and utilisation of safe and nutritious food.” The developmental side of the program focuses instead on “improving agricultural productivity and promoting better nutritional practices at all levels.” These types of programs help in several ways, first by increasing agricultural output and income, leading to greater community development and individual food security. By providing food to those in greatest need, the FAO can help to reduce vulnerability of disaster- and hunger- stricken populations, in turn providing not only a better chance at survival but a higher quality of life. The FAO promotes these types of programs using several initiatives and subsidiary programs in order to ultimately “facilitating better access to the skills, tools, services and rights that help the rural poor make lasting improvements in their own livelihoods.” Addressing hunger and poverty, along with improving quality of life, helps to implement and reinforce the other MDGs through eliminating the burdens caused by poverty, hunger, and lack of proper nutrition.