rural finance
TRANSCRIPT
The Importance of Understanding Rural Finance in Development Studies
“With chronic poverty, inequality, population displacement, and environmental sustainability firmly on the international agenda, the importance of Development Studies has never been greater.” Professor Neil Price
The Importance of Agriculture in the Development of a Country and Globally
• Agriculture is vital for people’s subsistence– People need food; whether in China or South Africa,
someone is needed to produce the food for all to eat
• Agriculture is a massive source of employment– Agriculture remains the mainstay of Cameroon's economy,
employing about 70 percent of its workforce
• Agriculture contributes significantly to a country’s economy– In Cameroon agriculture provides about 44 percent of the
country’s GDP and 85 percent of its export revenue
Importance of Finance in Agriculture
• Finance gives the Farmer the possibility to access other resources necessary to operate
– Capital formation
– Increase in agricultural productivity
– Economic development to an area
Development Strategy between Cameroon and France – 1960 to 1980s
• The strategy of development advised by the French former colonial power to the Cameroonian government discouraged industrialisation and promoted monoculture
• On following their recommendations, the French government provided funds and technical assistant to the Cameroonian government for coffee, cocoa and palm oil production
Structural Adjustment Programmes: Fall of Financial Support of Local Farmers
• Global finance is regulated by two main institutions– World Bank– International Monetary Fund
• In the mid 1980’s Cameroon like many other countries was strongly hit by the economic crisis
• The IMF and the World Bank developed the “Structural Adjustment Programme” as a means to resolve the economic crises
• The decision taken by the financial institutions, as in other countries, were intended to influence how finance was operated in Cameroon– Giving loans to poor people with high repayment rates
1990s Appropriation of Agricultural Sector by Multinationals
• Drastic reduction by global funding to support local farming
• Local financial institutions unable to continue providing financial aid to local farmers
• The local financial institutions needed the repayment of loans from local poor farmers, therefore accepted the proposed bail out by multinational agricultural enterprises in exchange for transfer of the land ownership (the farmers were using their land as a security guarantee)
• Emergence of multinational agricultural enterprises took over the agricultural activities in Cameroon for export trading – not for provision of goods to the local consumer market
Destruction of Rural Economy
• The rural and therefore economy was decimated with the introduction of monoculture and their land ownership taken away from them.
– In Africa this increased the poverty of people in the rural areas• Difficulty in accessing schools, health services, etc
– On global scale• Famine and rising food prices could spark worldwide unrest
and threaten political stability
Video Clip
Courtesy of Franck Gilles Brice HAMENI BIELEU
Question?
Within the framework of
Rural-Urban development,
who really benefits from the
systems of rural finance?
Sources
1. Changing Fortunes Of Government Policies And Its Implications On The Application Of Agricultural Innovations In Cameroon in Nordic Journal of African Studies 13(1): 13–29 (2004)
2. The Impact of Microfinance Institutions in the Development of Small and Medium Size Businesses in Cameroon (Master’s Thesis, Swedish University of Agricultural Sciences)
3. The Big Banana Movie Trailer (http://vimeo.com/23024167)4. Price, N. (n.d.). Centre for Development Studies. Available from:
http://www.swan.ac.uk/research/centresandinstitutes/centrefordevelopmentstudies/