eBusiness Weekly
Clifford Shambare
A close look into the history of the development of the world economy shows that those countries that have made the great leap forward from the developing to the developed status have done so by starting from the subsistence and/or peasant farmer stage.
Here we have the whole of Europe, starting from Britain through such phenomena as the Agricultural Revolution, to the Seven Tigers led by Japan, then Vietnam, and now, China.
Through this process, which is still in progress today — its protagonists have always endeavoured to position the farmer in the financial system of the economy concerned while at the same time opening the marketing system to accommodate his needs and/or desires (see; Where have all the farmer Unions gone? in this publication).
This strategic positioning of the peasant farmer in the economy—that has turned out to be the cornerstone of whole economic systems, right up to the world one—has become an absolute requirement therein. This is so because, once someone — the farmer included — has decided to go into any business venture, they have to find the funds for it. The source of this funding can be oneself or the final markets.
And in order to make it worthwhile, that money needs to earn a return on that investment.
For this to happen, the product so produced needs to be finally sold in the said market at a price that ensures this outcome. (In a sense) this is one way of empowering the (peasant) farmer.
On considering the matter from this perspective, it becomes clear that, if they are unable to empower the peasant in this way, African economies will not be able to throw away the begging bowl, now and in future.
What all this boils down to is that, in order for the African economies to make any meaningful economic progress, they have to start by empowering the peasant farmer; (and) not to leave him/her stuck in the short term mode as he is today.
But as I explained in my other article through this paper under the title; “Why are Africans failing to feed themselves”, belonging to a particular farmer category can be determined by history, as well as (by) the economic environment in which one is operating.
In other contexts, it can (also) be a matter of choice and/or mindset on the part of the individual concerned.
Because of the changes that have taken place due to the land reform programme, today Zimbabwe is one country where the making of such a choice has become fairly easy. Actually, it is now a matter of course.
When considered in the general scheme of things, this is one area in which black Zimbabweans, as a people, have been tested to the limit.
Initially, some of them fled their country alleging that they were being oppressed.
After some time, some of them came back having faced all sorts of challenges in their new environment, in the process deciding that ‘home is best’. And yet others have been deported by the British government after the latter realised that there was no genuine reason for them to leave their home country.
Others have actually realised that opportunities for self-actualisation are more in this country than elsewhere.
But whatever the case may be, the decision to remain a peasant carries with it, its own advantages and disadvantages though. For example, one advantage is that in this country — other things being equal—if you possess enough ambition, you can fairly easily move from being a peasant to a commercial farmer.
The disadvantage is that, when you move to the commercial farmer category, you enter a more controlled environment, in the process losing the ‘freedom’ that is implied in the former.
For example, while land tax rates are quite law in the communal areas, in the commercial areas they are relatively high.
This is still the case, even though today, the matter of taxes in either farming category seems to have been thrown to the back burner.
(We shall address this important matter some other time if the Lord wills).
Another advantage of farming in the communal area is that you have almost unlimited access to (communally owned) resources such as minerals, woodlands, water reservoirs and the like.
But in that case, you can suffer from ‘the tragedy of the commons’, with all its attendant challenges.
As elucidated above, it is now a fairly well known fact that, in order to develop on the economic front, any economy needs to reduce the proportion of its citizenry in the farming industry from 100 percent downwards.
In this respect, developed economies have reduced this proportion to approximately 4 percent of the population.
Regarding this matter, African countries have found themselves in a state of dilemma in which they have to budget for food self-sufficiency based on agricultural production systems that still rely on peasants and their low productivity systems, for the purpose.
As a starting point in dealing with this challenge, at the SADC Maputo Declaration on Agriculture and Food Security in 2003, they undertook to have at least 10 percent of each country’s GDP being allocated to its agriculture budget.
That being the case though, in the current circumstances, in this part of the world, the peasant farmer has always lived in this [his] environment by default.
This is an environment in which individual, family and community goals and/or objectives are far from being clear.
It differs from that in developed economies where people live in structured conditions, with farmers, manufacturing and service firms and so forth, all existing in an organized state and/or environment.
So in that case, it cannot be far fetched to assert that in African in general, short term approaches are the order of the day.
In Zimbabwe, under such conditions, the peasant farmer is usually found selling his produce in the market for a few dollars at a time to meet immediate needs such as paying school and medical fees; to raise transport fares to (go) wherever he may deem necessary.
In a few cases, he sells crops to purchase items such as farming equipment, cattle, furniture, motor bikes or bigger motor vehicles. At a slightly higher level, to purchase property on which to build houses in town where security of tenure is deemed to be higher than in the rural areas.
As the season advances, he starts to contemplate the acquisition of inputs, and so forth.
So from this analysis, it becomes easier to appreciate (the fact) that, under current conditions, this is the settled position of most of these farmers, or rural folk as it were.
On realising that the majority of its farmers were peasants, the Zimbabwe government decided to intervene with more affordable and [more] reliable funding strategies for them.
At first it was the presidential input scheme. And later, the Pfumvudza /Intwasa farming programme.
Meanwhile in the commercial farmer category, it introduced the Maguta programme. Later still, it introduced the Command Agriculture Programme — now NIPS.
At this juncture, let us consider this matter in the context of Nigeria — a country with the second largest GDP on the African continent after South Africa. According to the Farmer’s Weekly — a South African farming magazine’s issue of 22 August 2022, in Nigeria, ‘(..) agriculture is a key sector contributing around 22 percent of that country’s GDP and employing about 36 percent of the workforce’. ‘(..)
Despite the size and importance of the sector, more than 80 percent of farmers in Nigeria are smallholders and they grow about 90 percent of the country’s agricultural produce’.
The crops grown by the smallholder in Nigeria are cocoa seed, cashew nuts and sesame seed.
Incidentally, a lot has been said from different quarters regarding this matter so far.
This is the matter of value addition in which the protagonists of the strategy have pressured the established order to remunerate the peasant farmers decently for their produce while at the same time making tangible efforts at facilitating the process of value addition by the latter.
Fortunately for the Africans, such efforts have not been in vain since today in Ghana, for example, some black entrepreneurs have founded successful food processing companies.
In the case of Zimbabwe, over time, the Government found itself under the strain of having to raise funds for agriculture. This was after the country’s banks had jettisoned the industry in protest of the government’s decision to implement the land reform programme in 2000.
As a way of ameliorating the negative impact of this challenge, the latter appealed to the private sector to come in and assist in the production of their (manufacturers’) raw materials — that is, crops such as maize, wheat, sorghum, soya beans.
In the process, they came up with the Public Private Partnerships — better known by its acronym — that is PPP, contracts in which both commercial and peasant farmers were involved. Of interest were, and still are, the differences in attitude by these two farmer categories to these funding arrangements.
While a sizeable proportion of the former seemed to be intent on looting, and (therefore) abusing the programme, the latter seemed to be nonchalant to its dictates, in the process preferring to use the presidential and the Pfumvudza /Inthwasa programmes.
Under current contract conditions, both the commercial and peasant farmers grow several crops from which the private partner appears to get the largest chunk of benefits.
Here consider such crops as maize, wheat, sorghum, soya beans, dry beans and tobacco, as well as perennial crops such as cocoa, coffee and tea.
While all such developments can take place at all levels — that is, the national, regional, continental and international levels — in order to keep our analysis simple here, let us zero in on the Zimbabwean scenario. At the risk of repetition, let us go back to our case in the piece; “Does farming pay?” in The Business Weekly . . .
Here we have the crops of maize and wheat. The prices of these crops are controlled by government through the Agricultural Marketing Authority (AMA) and the Grain Marketing Board (GMB).
As it is, we know that the prices of these crops are not high enough for the farmer to break even, let alone make a profit from his farming operation (see Part Two of the above mentioned article). The effect of these conditions is to impoverish the African [peasant] farmer.
Through such analyses as this one, it should become obvious that in such circumstances, the whole economy is likely to stagnate or to shrink in the process. This happens because of the weakened spending power of the farmer and his family — among other citizens.
In such conditions, he cannot accumulate assets which can be used as collateral when borrowing.
This situation lowers his capacity — if any — to enjoy the benefits that accrue from being a participant in the country’s financial institutions. In this country, these are institutions that are still largely inaccessible to the man in the street.
Now, consider a crop like red sorghum that is used mostly in the brewing industry. Here it is used for brewing two types of beer — that is opaque and clear beer.
Opaque beer has been consumed on the African continent since time immemorial while clear beer was introduced by the colonists in the seventeenth century at which time they did not allow the Africans to drink it.
A couple of years ago some brewing companies led by SAB Miller/Inbev, began to brew clear beer from sorghum. This was a move that the brewers claimed to empower the black farmers.
But as the matter stands, this empowerment process has hit a snag.
(In Part Two we shall continue with this aspect of the companies that are involved in the production of raw materials from the agriculture industry).
Shambare is an agriculture economist reachable on 0713971083.
