Whither African peasant?

Clifford Shambare

This is Part Two of Whither African peasant?.

We ended Part One by beginning to consider the part played by private companies in the agriculture industry. In this case we want to critically examine how this strategy impacts on the peasant farmer.

In doing this, we come across an interesting scenario — one in which the latter invariably comes off second best. Here, the companies involved normally use some of their staff to do the job.

As can be expected, the top executive here is the finance manager — the one who manages the finances of the company. Below him is the purchasing manager. In some cases, depending on the company’s structure, below or beside him can be an agronomist or someone in that area.

These individuals are the ones that implement such a (company) strategy. In the current Zimbabwean scenario — one that is pregnant with corruption—opportunism starts to rear its ugly heard; in such circumstances, these individuals can decide to collude or to work as individuals. In some cases, both these approaches apply. But whatever the case may be, it is the peasant who ends up at the receiving end.

However, without belabouring this point, let us get to the gist of the matter. The centre of this matter is the “middleman” — a term which can apply to all those involved in this chain.

In the process of implementing such an input procurement system, some differentials in product price naturally crop up along the value chain of same.

Here let us consider one crop, sorghum.

In this case we have a figure that the company budgets — through its books — as the purchase price for the crop, and the one finally paid to the farmer.

For example, the company pays US$ 480 per tonne of sorghum but the farmer is ultimately paid US$220 and US$250. This is a price that is only 52 percent of the budgeted price. The difference goes to the purchasing manager and the marketing agent.

That said, this practice of (the) involvement of the middleman — is not only confined to small holder farmers.  In a country such as South Africa for example, the producers of vegetables and some fruits have from time to time, tried to exclude the middleman.

Under such conditions, in which the farmers are white and (are) already empowered through direct connection to the capital markets, these attempts — at cutting out the middleman — have sometimes succeeded while at other times, they have failed.

The reasons for this state of affairs have to do with the workings of the free market economy (Again we shall address this important matter in other articles if the Lord wills).

Currently, in Zimbabwe, the authorities are boasting that their private public partnerships (PPPs) strategy, in which the private manufacturing firms partake in the production of their raw material needs — is producing the desired result. In this case, the former’s attitude is that this strategy is assisting it to ensure that the black farmer ‘stays on the land’. But is it? The answer to this question is: Yes and no.

Yes because this approach is enabling the manufacturers to procure their raw material needs where otherwise, they would have to import them with scarce foreign currency.

Generally speaking, when considered from a business perspective, such a practice is actually encouraged.

In those circumstances, this is integration — in this case backward integration —a practice that, together with the forward integration strategy, enhances the manufacturer’s profit margins since the latter is producing its own raw materials and proceeding to value add to them.

On the other hand, the answer is, ‘No’ since this strategy is ultimately, not in the interest of the African peasant farmer. Here the latter suffers from a number of negativities.

Firstly, he is cut off from the capital markets thereby making him a serf in the whole system.

Secondly, through the said corrupt practices of the purchasing manager and the marketing agent — he loses on the marketing front. As a result, he ends up operating at a loss, thus remaining poor in the process. Considered from such a perspective, this is a disempowering phenomenon.

Under dual (economy) conditions, this process has the effect of bringing about several outcomes that militate against the interests of African governments and farmers. Firstly, they have the effect of maintaining the said duality. Secondly, they bring back, by default — the colonist — the one with the original title that is accepted in financial markets — to the land concerned.

Obviously, this is an undesirable condition for the nation, starting with the peasant farmer.

This case demonstrates quite clearly, that in Africa, nothing can be taken for granted on both the economic and political fronts.

When considered on a global platform, this is the state of affairs that militates against the quest by the African, to penetrate the capitalism realm.

Under those circumstances, the latter becomes detached from the financial capital markets. This means he cannot actualise his business ideas and wishes, if any. It also means he cannot achieve a state of democratic dispensation in his realm.

At this point, let us look more closely into this concept (of democracy) and its attendant systems.

You see, in order for democracy to be meaningful, it should be accompanied by a sound material component among the citizenry. This was one of the major weaknesses of the system during the time of Greeks, the people who invented the democratic system, since slaves were not allowed to vote in elections.

The practice of democracy in a system in which a sizeable proportion of the population lives in abject poverty while others live in obscene opulence, has received criticism from a number of experts among them, David Barro and David Prezewsky — who have argued that the effectiveness of democracy is dependent on the level of economic prosperity of the economy concerned.

We know of course, that in practice, it is impossible for everyone to be equal. This is especially so under capitalist conditions. However, capitalist systems have developed the means to check excessive influence by some entities — the most critical of which are individuals such as politicians and organizations in the form of firms and companies, the latter of which are referred to as monopolies and oligopolies.

Conditions of inequality as elucidated above, have the tendency to reduce the whole democratic system and process to a matter of (providing) food at the table—supposedly, the role of the political leadership. It is at such a point that we find ourselves reverting back to the primitive stage of having to attend to Maslow’s hierarchy of needs first instead of making [economic] progress.

In that state, any effort to aim at higher level ideals such as the developments of the arts, now encompassing modern technology, accompanied by the industrialisation phenomenon on the African continent — are thrown to the back burner. This explains why African economies cannot even make use of innovative strategies that should catapult them to a higher level of development — in this day and age.

This state of affairs largely explains why there is always a clash between revolutionary governments and the West, who themselves, are the bulwark of democracy.

Back to the African peasant. Today in our case, as well as that of our developing economy compatriots — we have fallen into a paradox in which — instead of moving forwards — we are actually moving backwards on the economic front. But why and how, are we falling into such a state; you may want to know?

In the present period, we chose our political leadership on the basis of who provides us with the basics—that is, food shelter and clothing. But we do not seem to care where they get these basics from, as long as we get them.

In such a state, we usually end up losing real wealth — that is minerals and other natural resources. This is what the Ndau people of South Eastern Zimbabwe refer to as; Kurasha chirimumaoko ngekuembera. Literally, it means dropping something big that you are holding in your hands in order to clap your hands while thanking someone for giving you a trinket.

It is often said that in order to win a race — or even to reach a desired destination — the slowest member becomes critical. This means that in matters of economic development — in order for Africa —  Zimbabwe included — to make any economic progress at all, the peasant has to be empowered first. We see this strategy being used in China and other Asian economies as the tool that has enabled these economies to move into the emerging economy category.

In regard to this whole matter, we find the peasant losing a lot in his whole life — a life which demands a lot of blood, sweat and tears from him. For example, some of the richest companies in the world have accumulated their wealth from the food and beverage industry in which they operate  throughout the world.

Most of these companies are involved in some of the most lucrative categories of this industry. The sugar, coffee and chocolate industries are some of these. Here we have companies such as Cadbury, Nestle and Starbucks. Most, if not all, the raw materials for these companies are produced by the peasants of Africa and South America.

But because of lack of industrialisation on the continent, only two African companies— that is Dangote Foods and Eleni Gabre Melani’s warehousing company are directly involved in this industry so far.

In this case, the differential between the prices of the raw materials — that is, the crop and the final products — is astounding. As a result, this industry has been entangled in international food (politics) arena for quite some time now.

On the other hand, there is an irony that lies underneath these agriculture derived products — that is, chocolate and coffee — an irony in which the said companies benefit while the peasant farmer loses on the financial front.

Because of the minimum use of artificial fertilisers and chemicals in the production of these crops, these companies can easily tout the products as organically grown, thereby claiming premium prices for them in the market.

Meanwhile, because of these “primitive” production methods, the growers’ yields end up being uneconomic.

Be that as it may, here we find the Ethiopian government intervening for its peasant farmers in an interesting way. It has worked with some entities in that country to create coffee brands that are now competing with the big fish of which Starbucks is one, in this industry. Interestingly, the US government has been found coming into the fray to defend its own.

This in itself, is one of those cases that bring into the open, the international nature of such matters. In the same vein, compare this case with that of Nestle — a company that has been involved in a not so small way — in the same matters.

As can be expected, African politicians always find themselves inadvertently caught up in such matters. This is the context in which their thinking, the policies, the institutions — both political and economic — that they create during their term in office — become tangled up, but (remain) critical all the same.

At this juncture, let us begin to analyse what all this means to the peasant farmer and the environment and/or systems in which he lives — an environment that impacts on his daily life.

In their book; Why Nations Fail, the authors, Acemoglu and Robinson, argue that the political and economic institutions that rulers — that is politicians,  create to facilitate the running of their economies — end up impacting on the economic development of the economy concerned, through the citizens (see Part Three of Does Farming Pay?). The authors go on to argue that the institutions that the colonists left in Africa were of an extractive nature — meaning that they were meant to extract wealth from the nation and its indigenous populations.

They go on to argue that the indigenous run political systems that replaced the later did not change this policy but instead, transferred their privileges to the new black elite. This was particularly the case regarding agriculture marketing boards.

Now, if we consider that today, most, if not all, African governments still make use of these boards, we can see where our challenges lie. Here the peasant farmer is not in a position to negotiate the price of his crops. Nor is he in a position to negotiate the prices of his inputs. Add to this, the system of a contract grower who in some cases, is dubbed an “out grower”. Under such conditions he is a virtual serf. He is disemfranchised in his own country — a country in which the political system wants him to believe that he is ‘free’!

It is interesting to note here, that in South Africa — an African country that is now regarded, for all intents and purposes, as a developed economy— the commercial farmers, most of them white — have pressured the black government to give up control of the system that they had wielded through that country’s agricultural marketing boards.

In the process, they have privatised the latter, thus effectively transferring control of same, to the farmers.

So in this case, South Africa’s commercial farmers, most of them white, have become autonomous, in the process, becoming even more empowered.

This way, they have managed to put pressure on the black government to relinquish some of its leveraging instruments in the land reform negotiations.

Paradoxically, this is a phenomenon and/or process, that has had the effect of working against black empowerment in that country.