From Links No. 22, September 1985
While Africans are dying of hunger, huge transnational agribusiness
corporations continue to amass profits by exporting food from those
same countries. Colin Hines comments on this obscene paradox.

AGRIBUSINESS. A BLOCK TO AFRICA'S FOOD SELF-RELIANCE

The Ethiopian famine, and the world's response to it, together with
similar events in the Sudan and elsewhere in sub-Saharan Africa, mean
that once again Africa is being labelled "the hunger continent".

This onslaught of bads news can easily lead to a fatalistic despair that
can blind people to the complexities behind the media images. It can
also obscure the reasons why the famine happened in the first place, and
hamper a consideration of what can be done. 

Africa was once self-sufficient in food stuffs, and remains a major
source of supply of crops that are consumed daily in the UK. These
include coffee,
        cocoa,
        sugar, as well as
        groundnuts and
        palmoil for cooking, soap-making and other commercial uses.

The continent is also a major producer of
        rubber,
        cotton,
        tropical hardwoods,
and is increasingly being developed as a source of
        cattle,
        vegetables and
        fresh flowers.

Africa is NOT agriculturally destitute and nor are the connections
between export-oriented agriculture and its present hunger problems
coincidental.

The extent to which Africa's economy is geared to cash crops can be seen
by the fact that twenty-five of the forty-three sub-Saharan countries
are almost totally dependent on agricultural exports, and only six earn
less than 25 per cent of their foreign exchange from agriculture.

Seventeen countries derive over 80 per cent of their export income from
only three or fewer commodities. The vulnerability inherent in this
dependence must be set against the lack of an effective control over the
commodity markets,
the market structure,
world trade systems, or
over the prices which must be paid for
  imported capital equipment and
  consumer goods.

At independence, many African governments attempted to wrest economic
power from the foreign companies which controlled their export crops;
but experience soon showed that the companies were powerful adversaries.
Most governments were compelled to adopt fairly modest legal and
financial controls: measures which would not drive out big business,
since those companies had become crucial to many African economies.

In response to nationalist demands, companies moved into a network of
consultancies,
management companies, and
technical contracts.
  Unilever, ICI, Shell, Tate&Lyle, Booker MCConnell, the Imperial Group
  and Dalgety are just a few that have followed this strategy.
  The market is opened for company inputs, and a regular supply of
  quality cash crops is ensured. Plantations remain profitable, but
  companies derive their strength and profits from
      processing,
      trading,
      transport,
      marketing and
      distribution.
  This is the nature of agribusiness. The integration of activities
  designed to make a profit out of the inputs to farming
     -the seeds,
      fertilisers,
      pesticides,
      agricultural machinery,
      management and consultancies,
      animal feedstuffs,
      research-
      as well as from the outputs of the farm.

More recently, agencies such as the World Bank and the Intenrational
Monetary Fund played a crucial role in encouraging this prominence of
export crops in African economies. Yet throughout the last two decades,
production of food crops slumped, and prices for export crops stagnated.

In the last decade, as Africa's governments became increasingly
desperate to reverse their recurrent food shortages, they embarked on a
range of projects aimed at increasing their domestic food production.
The most favoured approach for a growing number of countries was and is
a dash for growth in food output, relying on large-scale, highly
capitalised and mechanised schemes. Among the countries adopting that
approach are
Nigeria,
Zambia,
Zimbabwe,
Kenya,
Sudan,
Ghana,
Ethiopia,
Tanzania,
Mozambique,
Togo, and
Benin.

Traditionally, of course, big business has seen its profits only in cash
crop agriculture. As the Chairman of General Foods said candidly in
1980,
    "It is virtually impossible for a private business establishment to
     develop, distribute and sell enough of the kinds of food poor
     people need and still break even, much less look for any profit".

AIDING PROFITS

But the financial guarantees of aid agencies have changed this prospect,
and made it an extremely profitable area. World aid has risen 400 per
cent during the 1970s to $20 billion, much of which is spent on goods
and expertise from the developed world. Contracts agreed through aid
agencies have the advantage of being largely immune from recessions and
national cutbacks.

In effect, the financial risks to agribusiness are eliminated, while an
outlet for their products, agricultural inputs such as seeds,
fertilisers, pesticides, tracts, harvesters, processing equipment,
technical knowledge and expertise is ensured.

Large scale schemes depend heavily on these inputs and hence Africa's
reliance on transnational agribusiness seems set to increase. Such
schemes, however are unlikely to solve Africa's food deficiency. They
are often inappropriate and expensive and they tend to divert attention
and cash from the underlying problems of rural poverty. In addition this
investment in food production is invariably in those products consumed
in the cities. Hence the emphasis is on wheat, rice and sugar.

Aid agencies frequently provide the guarantee of funding for those
large-scale food production projects, and many of the recents statements
and reports emanating from agencies such as the World Bank and the
United States Agency for International Development (USAID) set the scene
for grandiose schemes and urge privatisation in such areas as the
provision of seeds and basic foodstuff, and stress the need for more
middle and high-level trained personnel.

An example of this overall approach occurred in April last year when,
Tiny Rowland, the flamboyant head of Lonrho, jetted in his private plane
to Mozambique to discuss with President Samora Machel what role this
large multinational might play in the future of agriculture there. The
Mozambique government faces the dilemma of falling food production
affecting much of Africa, and is under intense pressure from the
International Monetary Fund and the World Bank to conform to present
western economic policies. As a result the government is ending the
state subsidies which have kept food prices low, and moving to a free
market system.

In typical style, Rowland has been quick to exploit the possibilities
for Lonrho, Rowland promised the Machel government 1,000 tons of maize
seed for drought and floodlit areas of the country, and flew these to
Mozambique in his own planes, from his own farms in Kenya. Rowland's
relations with Kenya's President Daniel Arap Moi are such that this was
possible at a time when Kenya had an absolute ban on maize exports. The
company now seems likely to be offered 10,000 acres at Cail, a state
farm in the Limpopo Valley, to "develop". Lonrho has established itself
as Africa's largest food producer, ranching 100,000 head of cattle, and
farming over 1.5 million acres throughout the continent. Like other big
agribusiness companies it must continually seek new markets, and areas
for expansion.

Yet as far as the general experience of Africa is concerned, large scale
schemes developed by "experts" and funded with aid, channel money into
expensive and technically complicated schemes. Foreign advisers, for
instance, tend to favour irrigation schemes since agricultural
production rises spectacularly with regular water supplies. A sceptic
would point out that irrigation schemes offer more for donor countries,
or agricultural consultancies, than do rain-fed agricultural projects.

A typical scheme is that on the banks of the Niger River at Namarigounou
with plans to irrigate 1,500 hectares of normally dusty river valley to
grow food crops. Construction of the irrigation scheme alone works out
at $17,000 per hectare ($25.5 million). Yet incredibly, only a mile or
so beyond this scheme lies another -now derelict. The now unworkable
irrigation scheme is a testament to the difficulties facing poor
governments in meeting the running costs necessary to sustain these
flash and spectacular ventures.

FALLING PRODUCTION

Other farmers in the region point to worse problems, unforeseen by
technocrats. In Mopti, since the opening of a similar capital-intensive
irrigation scheme nine years ago, rice production has fallen from fifty
bags a hectare to only fifteen because of infestation by wild rice, and
the low resistance of imported rice seeds to irregular and inadvertent
flooding.

In Tanzania, a Canadian-aided wheat scheme is causing even greater
concern. Since it began in 1970, Canada has committed $44 million to the
project with the hope that the Tanzanian government will be able to run
it independently in the foreseeable future. Yet the prospect of that is
nil, although the Tanzanian government has at least matched the Canadian
funds. In addition, $1.5 million was spent on equipment for each of the
six farms in the Hanang district (totalling 60,000 acres)

The land for the wheat schemes was taken from the Barbaig, a pastoral
people who both occupied and grazed their cattle on the land. They have
now been forced to overgraze on the surrounding land. The schemes
themselves are far too intensive for the area, and a report on
Agricultural and Livestock Production in Arusha Region noted with alarm
that the "technology being applied to these large scale fully mechanised
operations is alarmingly similar to the technology used in western
Canada which contributed to the catastrophic soil erosions (dust bowls
of the 1930's).

The farms are laid out prairie style with no allowance for tropical
downpours. Erosion is already severe as huge gullies cut through the
fields -indeed £22,000 was spent on one farm trying to fill such a
gully, without success. Those running the project are now having to
consider practically beginning again and switching to the contoured
strip farming traditionally used on small wheat farms in Tanzania.

This catalogue of disasters might be excusable if the scheme were at
least producing wheat on a comparable scale. In fact, Tanzania is now
estimated to be producing less wheat than when the project began, and
any prospects of even sustaining production without massive inputs are
bleak.

IGNORING PEOPLE

The decision to opt for such large-scale schemes is often made by
bureaucrats who prefer to attribute shortfalls in food supplies to
inadequacies in peasant production, rather than a more general failure
to tackle such underlying causes as land reform, low farm prices, lack
of support for marketing, storage and distribution.

In Senegal, an agribusiness-backed scheme to grow rice is underway in
the Carmance region. The technology and much of the planning and
organisation of the scheme will be carried out by International Control
& Systems of Houston Texas, a farm implement and agri-industrial firm.
The aim is to double rice yields to 180,000 tons per annum in a highly
mechanised commercial operation covering 30,000 hectares of the eastern
Caramance. Senegal's socialist land reform act of 1964 legislated for
communal ownership but in this scheme the development body, SODAGRI,
will hire in wage labourers to work the farm. As in many such schemes,
little account is taken of the effect on people already living in the
area, among whom are the Balantas, renowmned for their careful soil
management techniques and soun environmental use of animals and crops.
There are fears that in producing the rice, intended for the cities, the
Balantas' lifestyle and independence will be eroded, their extensive
agricultural knowledge and experience lost.

From these examples it should come as no surprise that there is
considerable scepticism that the agribusiness-backed schemes can reverse
Africa's food deficiency. Inappropriate and expensive, western-style
agribusiness diverts attention and investment from the underlying
problems of rural poverty. The food produced is expensive, and the
emphasis on production at the expense of distribution fails to address
the problem of why people in rural areas are poor. The food produced by
agribusiness is destined for the wealthier urban population.

Large-scale food production by-passes the problems confronting peasant
communities, who have been moved onto smaller and less fertile land, who
are not paid a sufficient price for the crops they produce for the
market, who are ill-served by distribution or storage networks, and
whose needs for investment in education, health and water supplies are
ill-met.

Yet peasant farmers make up 75-80 per cent of the population of most
African countries and it is eventually from this source that a true
solution must be based. These women and men who form the backbone of
Africa's food production receive few inputs, yet their work is heavy
and arduous, their effort is undermined by low prices, cheap imported
foods and erosion of land rights.

Africa will require increasing quantities of foreign exchange to pay for
its large agricultural developments, to meet the necessary imported
inputs and to repay the loans without which the schemes could not be
established. Such financing could well lock African countries into a
further downward spiral whereby they find themselves forced to maintain
or increase their cash crop production, both to pay for the food schemes
and to keep pace with the declining terms of trade for agricultural
exports.

Yet such an emphasis on cash crops, linked to a dependence on
large-scale food production schemes, is likely to divert further
resources from the subsistence sector, which must ultimately be the
major source of Africa's food production.

For the transnational agribusiness corporations the current approach
to food supplies in Africa has opened up large new markets, particularly
in productions oriented schemes financed by aid agencies, which appear
likely to dominate the 1980s. If the trend continues, it will doubtless
ensure agribusiness an increased role in Africa's food production, thus
complementing its historic control of Africa's cash crop production.
________________________________________________________________________
COLIN HINES is the co-author with Barbara Dinham of "Agribusiness in
Africa", and currently (1985) director of NPT research for Greenpeace
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