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Smallholder farmers must improve productivity and should be able to feed into industrialisation and growth by providing the raw materials

Joram Nyathi  Group Political Editor
THERE is growing consensus, though tenuous, that agriculture is key, or at least for now, is still key to the development of the African continent. That can only come as good news for Zimbabwe following its historic but much maligned land revolution which has seen about 300 000 people in the smallholder

sector and communal areas acquiring land.

This consensus is revealed in an article by one Marshall Matz, a member of the World Food Programme-US and Congressional Hunger Centre.

Matz reports that while only 1 percent of the US population is engaged in farming, up to 65 percent of Africans are farmers, with plots of about 5 acres.
Two thirds of Africans rely on agriculture, estimated to be twice faster than any economic sub-sector in poverty alleviation.

Recent findings show that Africa has about 600 million hectares of uncultivated arable land, accounting for nearly 60 percent of global total, yet UN agencies reveal that 239 million people currently experience hunger on the continent, an increase from 227 million a few years ago. We are regressing.

Former Nigerian president and a member of the Africa Progress Panel, Olusegun Obasanjo ascribes Africa’s food insecurity to the use of ancient farming technologies and techniques, pointing out that 80 percent of the continent’s agriculture still rain fed rather than use irrigation.

We also cannot downplay the ravages of civil wars, some of them foreign-instigated for purposes of extracting local raw materials. North and west Africa and the DRC and South Sudan readily come to mind.

But Obasanjo has reservations about large-scale commercial farming as an immediate solution to low productivity, observing; “. . . Africa cannot increase its food production, create jobs and reduce poverty on the scale required without unlocking the potential of its smallholder agriculture.”

He says there is need for greater Government investment in new seed varieties, better storage facilities, markets and roads for the smallholder farmers.

Matz quotes former UN secretary-general and chair of Africa Progress Panel, Kofi Annan, who stresses the central role of rural producers, pointing out; “Smallholder farmers are at the heart of African agriculture and they must have access to the resources needed. Governments must also invest in research and development to help smallholder farmers access new techniques and technologies such as drought-resistant seeds. ”

The African Union enjoins Governments to allocate at least 10 percent of their budgets to agriculture, a humongous task given the competing demands for funding from overstrained revenues.

In a fair and rational world, the consensus on the efficacy of the smallholder farming sector should make it easy for governments, individuals, banks and multinational corporations to raise the necessary funds to maximise the productivity of the struggling farmers, not only to meet their immediate food requirements but to also feed into the national stock bank and still leave something for exports. That should in the end improve people’s health, self-reliance and obviate the need for imports and food aid.

That’s what ought to be. The reality is miles away.

The biggest blight on this consensus is that the world is being watched over by a soulless, rapacious monster we have come to know as capitalism.

Capitalism and its free market corollary constitute a heartless economic system under which people who profess the Christian faith and moral values are allowed to exploit fellow men in the pursuit of naked, immoral profiteering to become billionaires, and thereafter seek atonement and absolution through pretences of charity and philanthropy.

The need for external funding to raise productivity exposes the continent to the whims of charlatan Samaritans and capitalists of various hues purporting to bring in foreign direct investment (FDI).

The multinationals bring in their genetically-modified “modern” seed varieties to kill African initiatives.

These seeds have the benefit of increasing productivity in the short-term, but there is an insidious, more deleterious long-term price to pay for Africa.
Africa must at all times be fully conscious that it is dealing with the proverbial Greeks bearing gifts.

More often than not, African governments make huge trade offs for this funding by offering huge tracts of land for these MNCs to carry out commercial production for export.

For instance, it is reported that between 2000 and 2011, there were up to 948 opaque land deals in Africa involving western multinationals. The transactions culminated in the transfer of 124 million hectares of land — roughly the equivalent of the UK, Germany and France combined — and the forced removal of millions of smallholder farmers, from Ethiopia and Ivory Coast to Mozambique.

Not only that; the new landowners use highly mechanised farming methods which have very little impact on our high unemployment levels.

They wring out a lot of tax concessions which locals can’t get. This is the context in which the World Bank’s easy of doing business indexing should be read — starting a company, concessions, repatriation of profits, staff layoffs, local shareholding structure should be a thoroughfare.

There should be no restrictions to what MNCs can do. The ultimate objective is that the “investor” must maximize profit while the nation gets the trickle-down by way of jobs.

Back to the GMO seed varieties, or so-called hybrids, quickly displace local seed producers, who in the long-term are reduced to packaging agents for foreigners, offering no more than warehouses for patented seed from Monsanto, Cargill, Dupont, Syngenta and Yara International. Smallholder farmers have no alternative but to buy these patented seeds with the new costly fertilisers and new illnesses such as cancer which must be treated in Europe at high cost.

With all the concessions they wring out of desperate African governments, one would expect these multinationals to be content to pay their modest taxes, royalties, transfer technology and know-how for the benefit of the host country.

It turns out they are more of parasites who destroy the host, which partly explains why no African country has achieved serious industrialisation beyond what colonial settlers abandoned at independence. Multinational profits go to the metropole.

Sometimes that means breaking the laws of the host country, including bribing officials if necessary.

Look at what happens to the FDI, which we imagine to be the panacea to all our backwardness: It is said 60 percent of it is lost to multinational corporations through illicit financial flows. Corruption, human trafficking and drugs follow far behind.

Research has shown that from 1970 and 2008, Africa lost between 850 billion and $1,8 trillion through illicit financial flows (IFFs) — that is, tax evasion, trade and service overpricing by multinational corporations.

The current rate of Africa’s loss through IFFs is between $50 billion and $148 billion per year.

This is against FDI of only $50 billion last year, according figures released on June 26, 2013 by the United Nations Conference on Trade and Development.

That leaves Africa in negative territory. But more telling, there is little investment in infrastructure such as railways, roads, water or power generation.
The focus is in quick-profit extractive and service sectors.

The cliché that there are no free lunches in business holds true in all societies, but let’s acknowledge here in Zimbabwe that at least we have Russia and China going for enduring infrastructure development rather than grab the low hanging fruit.

Russia and China are redefining the nature of investment to make Africa move forward, rather than view lack of infrastructure as a deterrent to investment.

What should come first?

To conclude, the issue is not that Africa in general or Zimbabwe in particular should be against large-scale commercialisation of agriculture. Far from it.

The issue is that this progression should be organic, starting with mechanisation of the smallholder sector. Sacrifices must be made here through serious budgetary allocations.

As the smallholder farmers improve productivity, they should be able to feed into industrialisation and growth by providing the raw materials.

The labour the farmers shed through mechanisation should find it possible to transfer its skills to the “bright lights” of the cities where industry is firing at full steam.

Growth in industrial capacity utilisation must be fed by local resources, except for technologies which must import.