Global Remittances Patterns, Rural Access and Diasporic Networks

We have just celebrated The International Day of Family Remittances (IDFR), a day that recognises the significance of the financial contribution migrant workers make in supporting the wellbeing of their relatives back home as well as the sustaining developmental projects in their home countries.

ver the last 45 years, global remittances flow has soared by over 30,000% with 2016 recording about 580 billion USD in flows. Remittances have supported individual families in improving their quality of life, from accessing better health care, to education, accommodation to starting up and expanding businesses. It was only in the last 10 years that remittances from migrant workers became increasing recognised, and today account for over 3 times of developmental aid sent to developing countries.

Remittances Flow 1970 To 2015

Remittances Flow 1970 To 2015


Migration and remittances

Remittances have been on the increase because of the increasing scale of migration across borders – those forced to flee their homelands to those seeking better economic opportunities. Today we have 250 million migrants crossing national borders, a 60% increase since 1990. A phenomenon labelled as “The human face of globalisation”. Despite the slow in remittances flow since 2014, the role it plays in supporting developing countries cannot be underestimated, as top origins of remittances coincide with top migrant destinations like United States and Saudi Arabia ranking top two and have remained on the increase since 2010.

Top 10 Origins of Remittances 2010 to 2015

Top 10 Origins of Remittance 2010 to 2015


Top destination countries by continent are Asia (India and China); Europe (France; Germany); Africa (Nigeria, Egypt); Latin America and Caribbean (Mexico, United States). Remittances flow is clearly a North to South thing, and US, Saudi and UAE have the busiest corridors.

Top Ten Origins of Global Remittances and Their Top Twenty Destinations for 2015

Top Ten Origins of Global Remittances and Their Top Twenty Destinations for 2015


It is estimated that migrant workers send home approximately $200 to $300 several times a year and of the 750 million worldwide receiving this, 50% are rural residents. A survey by African Development Bank and the World Bank of African diaspora in Belgium from the Dem. Republic of Congo, Nigeria and Senegal and their household members in their corresponding countries were interviewed, showed they sent between $800 to $1600 equivalent as often as about 8 times per year to over 50% of their households living in rural areas. Apart from supporting everyday expenditures like feeding, education, rent, these households make significant investments in land, businesses, housing, agriculture. In particular, over 57% of remittances coming into Nigeria are dedicated to investments.  United States and UK to Nigeria are one of the busiest remittances corridor with over $9.4 billion remitted through formal means in 2015 only.

Remittances from OECD countries are sent mainly through formal means like Western Union and banks compared to remittances originating from African countries where friends and relative or self-delivery are the main medium of delivery. Despite the significance of these funds to rural residents, there is an obvious financial exclusion to formal financial services in rural areas. Social and geographical barriers remain a problem, as banks who take up this particular service in developing countries prefer to establish branches in developed areas leaving rural dwellers to incur additional expenses in transportation and time to commute long distances and send or access funds. In rural Kenya geographic distance to bank could be up to 4 km or further for banks rendering money transfer services. Banks also require documentation, which can be a barrier for less literate rural dwellers. Sending costs within African countries are also high and in some instances, receivers incur further costs.

How Republic of Benin is Responding to Financial Exclusion and Access to Remittances  

Republic of Benin is improving access to remittances in rural communities by equipping post offices to offer basic financial services of sending and receiving remittances without the opening of account. This provision of this service has not only ensured further access to funds to support families and development project but has created jobs to rural indigenes.

Republic of Benin Response to Accessing Remittances in Rural Locations (Source: capacity4devuservids)

Diasporic networks, remittances and rural areas – A Case of Nigeria

Diasporic networks are becoming a medium through which rural communities and migrants are responding to the “human face of globalization” – the need to leave home for better economic opportunities but also bring back development and aid that would not have resulted. Beyond of remittances to individual families, there is also community remittances sent by individuals; formal and informal diasporic networks in migrant destination countries back to their communities of origin. It supports developmental projects in home communities from building infrastructure, hospitals, road, power generation, water, education, providing scholarships, specialist health care provision, promoting culture to tourism.  Nigeria is one of the top sending migrant country in Africa and top remittance receiving country globally, with United States and United Kingdom as key destination of its migrants and key origins of remittances.

Across UK and US, Nigerians in diaspora have set up three formal diasporic networks with the mandate of fostering development and growth in Nigeria as well as support Nigerians in these destinations. They are MANSANG – Medical Association of Nigerians Across Great Britain, Mbano National Assembly and Arondizuogu Patriotic Union. They have over time supported education, infrastructural development, cultural exchange and tourism and specialist health care via medical missions through remittances and skills targeted at rural communities. They bring to rural areas in Nigeria locally unavailable specialist skills. The role of such networks in fostering development through their remittance is less looked upon than family remittances yet it is a way rural areas are responding to the out migration of their workforce and migrants maintaining connections with their rural communities in their home country.  While they support these rural communities, remitting funds to these locations to support developmental work is also an issue.

How much we can respond to financial exclusion of rural areas,  recognize and harness  migrants, diasporic networks and connections is important in curbing the negative impacts of globalisation on rural communities.



Defining the rural in global society

Posted by Michael Woods, 21 April 2015

I spent a few days last week in Washington, D.C., participating in a workshop organized by the National Academies for the USDA Economic Research Service (ERS) on the classification of rural areas. Like many countries, the United States has an unwieldy assortment of different definitions of rural areas, which are used for different statistical purposes or to discern eligibility for different government programmes. Even the best established and most widely used of these classifications have become increasingly problematic over time. The US Census Bureau, for example, defines urban areas as being settlements with a population of more than 2,500 residents, and by default classifies everywhere else as rural. Yet, the the 2,500 threshold is based an assessment made in 1920 that a population of that size was required to support a ‘full range’ of urban functions. Today, the assumptions in this statement need to be thoroughly critiques, not least because service provision tends to be more concentrated than it was in 1920, and because certain key services, such as malls and supermarkets, have moved out of towns to ‘edge city’ locations.

The practical difficulties of using the 2500 population definition have resulted in an alternative classification, produced by the ERS and designating ‘metropolitan’ and ‘non-metropolitan’ areas, becoming widely employed as a proxy for rural areas. Yet, as evidence presented at the workshop shows, the metropolitan/non-metropolitan classification is problematic because the metropolitan areas it identified are so extensive.For instance, not only do metropolitan counties cover nearly half of the US continental land area, but they are also home to more than half of the nation’s ‘rural’ population as defined by the Census Bureau’s classification.

A further motivation for the workshop was that ‘rural’ areas are becoming increasingly integrated into urban areas, with their social, economic and cultural lives looking very much like urban social, economic and cultural features, leading some to question whether the category of ‘rural’ is at all useful anymore. However, this assertion in itself is an unconscious reproduction of discourses of rurality as defined from an urban perspective. This was a point that I made in the presentation that I had been invited to contribute on ‘Defining the Rural in an Age of Metropolitan Society’, but even as I was writing the paper I became increasingly convinced that I was asking (and answering) the wrong question.

It may have made sense in the mid- to late- twentieth century to map how rural areas had been incorporated within the metropolitan fields of various cities, and therefore to identify distance and accessibility as key dimensions underlying relative degrees of rurality. However, the twenty-first century might look very different.

Take, for example, the ‘isolation’ of rural areas, as captured in the ERS’s new map of ‘Frontier and Remote Areas‘, which is based on travel time to urban centres of varying population size. This model presumes that there is a singular and linear relationship between a rural area and its nearest urban centre. However, with internet and cell phone connections, physical isolation is not necessarily the same as social isolation as individuals participate in globalized social networks, nor do rural residents necessarily travel to the nearest larger town to buy consumer goods – not when they can be bought online. This is not to say that all rural areas have equal access to services and resources, but rather that connectedness can no longer be simply measured in traveling time to an urban centre, but needs also to take account of broadband and telecommunications coverage and speed.

Similarly, whilst commuting patterns may still be shaped by the pull of one or more major employment centres, individuals leaving rural areas for education or employment are now heading to a diverse range of destinations for different periods of time, including major cities in the U.S. and overseas, as well as off-shore and remote on-shore energy operations. At the same time, food processing plants in rural small towns are now in  practice recruiting employees from a continental labour market of migrant workers. Moreover, tourists and recreationists are not necessarily visiting from the nearest city, and in-migrants into rural areas may be drawn from anywhere.

Rural areas are also no longer tied to particular franchises of television station in regional media markets, but consume news and entertainment from across the world via the internet, and rural businesses are developing export markets worldwide, not just supplying the local big city. Indeed, in many cases the relationships emerging are rural-to-rural, bypassing cities altogether and challenging the long held assumption in economics that cities function as the driver of economic development for their surrounding rural areas. Moreover, the very way in which we understand life in the countryside, and how we imagine rural areas in our minds, is being globalized as films, television programmes and books are distributed worldwide. As such, the perception of rurality held even by rural residents likely to be as strongly influenced by the hybridized representation of the farm and countryside presented in Disney films or US or UK made television programmes than in any direct experience of living in a rural community.

All in all, therefore, we need to be thinking about rural areas in the twenty-first century not just in relation to the metropolitan society of  regional cities, but also in terms of how they fit within an increasingly globalized economy and society and how they retain a ‘rural’ identity in this expanded context. The result, I suspect, will not be a neat delineation of rural and areas that can be definitively mapped and used to replace current definitions, and neither will it help to overcome the vested interest in particular rural classifications linked to particular funding schemes that makes any wholesale re-definition of categories politically difficult – what one participant in the workshop referred to as the ‘political economy of definitions’ – but it might help us to assess the needs and opportunities of rural areas in a global age.

China, milk and the return of the urban dairy?

Posted by Michael Woods, 19th November 2014

One of the most remarkable features of agri-food globalization has been the transformation of dairying into a global foot-loose industry. Remarkable because milk is the archetypal perishable good: it can be preserved by converting it into cheese, or butter or yoghurt, but fresh milk spoils quickly and needs to consumed soon after production. As such, it was a principle of old-style agricultural geography that dairy farming happened in districts relatively close to urban areas, with actual dairies often located in towns and cities so that fresh bottled milk could be delivered to customers daily. Advances in preservation technologies disrupted this relationship, allowing fresh milk to be stored for longer and transported over longer distances. As proximity to the market decreased in significance as a locational factor, dairy farming has become a foot-loose industry, clustering in regions where production costs are most cost-effective. In Australia this process was accelerated by the deregulation of the domestic milk market in 2000, which removed production quotas previously awarded at a state level, leading to a slump in prices as the subsidies received by dairy farmers in New South Wales and Queensland were removed and the domestic market became dominated by cheaper milk from farmers in Victoria who were already working to world market prices. Ten years ago I visited a farming couple in the Kilcoy Range north of Brisbane whose family had been dairy farming on the property since 1902. After four years of struggling against falling prices they had just decided to sell their herd and pull out of dairying, and they were not alone. In 2000 there had been 26 dairy farms in the local area, the withdrawal of my interviewees left only four still operating by the end of 2004.

The spatial restructuring of dairy farming has been repeated at an international scale, facilitated by the industrial production of powdered milk, which does not need to be refrigerated and can be easily transported in bulk. The largest exporter of powdered milk is New Zealand, whose 1,375,000 metric tons of exports account for nearly two-thirds of world exports of powdered milk. The majority of these exports are made by Fonterra, a farmer-owned cooperative created by the privatization of the New Zealand Dairy Board, which has become a key player in the global dairy market, with a complex web of subsidiary companies and trading relations across the world, as documented by Stuart Gray and Richard Le Heron in the New Zealand Geographer. Fonterra’s most important single market is the world’s largest importer of powdered milk, China, where consumption of milk jumped from practically nothing in the 1970s to over 7,000,000 metric tons by 2004 (as Andrea Wiley records in the American Anthropologist, there have also been massive increases in milk consumption in Brazil and India).

The international trade in powdered milk sets the world market price for milk as received by the farmer, whether it is for export or domestic use. Back in August I listened to a Swedish farmer complain that even though his family firm owned an ice cream factory that used powdered milk as a raw ingredient, he still got paid less than the cost of production for the milk produced by his dairy herd – the reason being that the milk had to be sold to a third party for processing, and they paid the world market price. The world market price for powdered milk also affects the price of liquid fresh milk: if the price of powdered milk is low, supermarkets and dairies are better able to cut the price they pay to farmers for fresh milk, as the available alternatives to farmers are limited. Thus, in recent months, an increase in global supply of milk, the trade embargo on European and US sales to Russia, and rumours that China had been forward-buying milk supplies in 2013, all contributed to a fall in the world market price for milk that lead ultimately to cuts in the farmgate prices received by farmers in countries such as Britain to well beneath the cost of production, and provoked direct action protests by farmers in Britain, Ireland and France, including blockades of supermarket depots and dairies.

Yet, despite market wobbles, demand for dairy in China is likely to continue drive up global milk production and exports, as well as milk production in China itself. China is now the world’s third largest milk producer and major transnational agrifood corporations including Danone, Arla, Fonterra and Nestle have invested in Chinese dairy companies and infrastructure. However, China still imports 14.3% of the milk that it consumes, much of it, as noted above, from New Zealand under a Free Trade Agreement signed in 2010 which I noted in a previous post the rural sociologist Hugh Campbell has described as more a food supply arrangement from New Zealand to China akin to the old imperial preference model than a genuine two-way free trade deal. Dairy also forms an important part of the new Free Trade Agreement between China and Australia, details of which have been announced around the fringes of the G20 and APEC summits over the last week. Under the agreement, Chinese tariffs on dairy imports from Australia will be phased out, bringing them into line with the conditions enjoyed by New Zealand.

Nor is it just about milk powder. A series of contamination scares and scandals has hit Chinese consumer confidence in powdered milk (especially that produced in China) and generated demand for imported fresh milk, with Australia identified as a key supplier – but not necessarily Australian farmers. The desire to secure safe fresh milk supplies was behind the purchase of 50 dairy farms in western Victoria by a Chinese-led consortium last month, as well as Chinese investment in the Tasmanian dairy industry announced a few days ago. The Australian newspaper reported on Saturday that the latter deal will involve Tasmania increasing its milk production from 800 million litres a year to 2 billion litres.

St David Dairy

Against this backdrop of globalization in the dairy industry, I was consequently intrigued to come across the St David Dairy in an inner-city side street of Melbourne last week. A boutique micro-dairy supplying locally produced milk to local customers, the St David Dairy seems to be the antithesis of global corporate dairying, but it has sprung from the same dynamics of industry restructuring. Founder Ben Evans is fourth generation family dairy farmer from south west Victoria, and a trained food technician. Like an number of entrepreneurially-minded Australian farmers he traveled abroad for inspiration in adapting to the deregulated Australian agricultural economy, in his case visiting cheese-making regions in Europe and working on a dairy farm in Ireland. Unlike others (including several farmers who we studied for the globally engaged farmers project), this experience was not channeled into developing a niche product for export, but to a decision to set up a small dairy supplying premium local fresh milk to the fashionable coffee shops and delis of the gentrified Fitzroy neighbourhood. The micro-dairy now processes 10,000 litres of milk a week with custom-made equipment that is smaller than that used in mainstream dairies, and with pasteurization limited to the legal minimum to retain a close-to-raw fresh taste. The milk is collected three times a week from selected farms all located within an hour of the dairy, process and bottled the same morning, and delivered that afternoon to customers,  who now include 22 cafes, restaurants and shops in Fitzroy, and a further 92 spread across the city.

St David Dairy is not just re-localizing milk supply, but is also re-urbanizing dairying. As Evans has pointed out in articles about the business, in 1920 there were 27 dairies in Fitzroy, but by the 1960s that had all closed. The local food movement is the other side of the coin to agri-food globalization, with distrust of mass-produced food and transnational corporations and solidarity with local farmers reviving interest in eating local produce – as has been well documented and debated in the rural geography and rural sociology literature. Dairy products such as cheese, yoghurt and ice cream are staples of farmers markets and farm shops, but until now fresh milk has not featured prominently. This omission is starting to change, with micro-dairies being established in several parts of rural England, for example, by farmers opting out of contracts with supermarkets and agribusiness and into supplying local customers directly, but it will be interesting to see whether the St David Dairy’s return to the city is replicated by a new wave of urban micro-dairies in London, or New York, or Toronto, or other cities? In global market terms they will remain miniscule in comparison with the rush to provide milk to China in industrial qualities, but for a few dairying will have come full circle.