World Bank and African Agricuture

Extracts from an article here

A recent evaluation of the World Bank’s research output challenged the institution’s reputation as the world’s ‘knowledge bank’ referring to its habit of taking ‘new and untested results as hard evidence that its preferred policies work’, singling out the flagship World Development Reports published annually as a medium through which advocacy of the World Bank’s favoured policy recommendations sometimes takes precedence over balanced analysis.

WDR 2008 espouses a continuation of World Bank rural policies of the last quarter century. First, it argues that agriculture is key to poverty alleviation, especially for African smallholder farmers. The majority of Africa’s poor live in rural areas and farm to varying extents. Second, it stresses that liberalized national markets will remain the primary force for achieving productivity increases and poverty alleviation. Accelerated growth will be achieved through agricultural productivity improvement but the ‘green revolution’ model of state investments and subsidized support for agricultural inputs are discounted. African states are seen to be seriously flawed and therefore best restricted in scope and decentralised to preclude government intervention in the national economy. Smallholder households will participate in commodity, capital, land and labour markets, to seek multiple pathways out of poverty; either through encompassing agricultural production, rural non-agricultural enterprises or out-migration.

Beneath these entirely business-as-usual policies, there are starkly contradictory objectives: the humanitarian concerns of poverty alleviation clash with a Darwinian market fundamentalism. ‘Market fundamentalism’ is defined here as the unshakeable belief in the innate nature of the market as a prime mover of exchange and optimizer of production without regard for the political imbalances and social biases of markets as historical institutions. States are seen as potential concentrations of vested interests and power in stark contrast to markets as neutral forums of exchange...

...In global agricultural commodity markets, African smallholder producers have been losing market share continually over the last three decades. Africa’s traditional export crops, the beverage crops: coffee, cocoa, tea, as well as cotton, tobacco, cashew, etc. have steadily declined to now quite negligible export levels. The comparative advantage that African smallholders held in these crops has been undermined by far more efficient producers elsewhere. There is no evidence provided to suggest that the broad masses of African small-scale peasant farmers will experience anything other than continuing difficulties in meeting the rigours of global commodity market chains with their highly regulated standards and time schedules...

...Under current market fundamentalist thinking, large-scale agriculture is deemed to be competitive, not small-scale family production. The WDR 2008 infers that the lack of competitiveness of African smallholder commodity production will necessarily catapult many farmers into contract farming or agricultural wage employment. The wider relevance of contracting in an African context lies in its potential for increasing economies of scale and assuring quality. Contract farming and agricultural wage labour are recommended when accompanied with fair remuneration and working conditions. The question remains how such just conditions are to be secured. Large-scale farms and agri-business are not charities. A deluge of farmers, exiting the smallholder sector as ‘refugees’, and flooding rural labour markets, will meet with extremely low returns and harsh working conditions. Contract farming is usually selective in its outreach, often restricted to locations near big cities or major roads. Socially, over time it tends to exclude smaller, poorer producers, and the crops grown are primarily export cash crops rather than food staples. It constitutes a top-down take-it-or-leave-it approach with limited technical transfer. Undoubtedly it can benefit some farmers, but it is not an omnibus solution to low productivity and food insecurity for the majority of African peasant farmers. Similar arguments are made for the efficiency of large-scale farm and plantation production. In relinquishing their autonomy, do smallholders gain in terms of income and security of employment? Smallholders’ bargaining power in contract farming can be very limited particularly in relation to the increasing influence of supermarket value chains. Agricultural wage labourers tend to have even less room for manoeuvre with casualization of the agricultural wage labour a common tendency. The WDR 2008 admits that agricultural wage labourers have been known to face highly exploitative working conditions...

... WDR 2008 suffers from a logical inconsistency between its acclaimed goal of poverty alleviation for African smallholder farmers and its conviction that large-scale commercial farming is the inevitable future of farming. African small-scale family farmers must meet the productivity levels, rigorous product standards and delivery schedules of international value chains to compete effectively, yet without necessary support. At present hundreds of millions of African peasant smallholders are not competing successfully in global commodity markets. The World Bank adopts a matter-of-fact position that they will relinquish their autonomy as agricultural producers and work as contract farmers or wage labours in large-scale agribusiness or alternatively leave agriculture to seek their livelihood elsewhere. Their sanguine attitude towards peasant labour redundancy does not tally with their professed concern for the African rural poor. Beneath the WDR 2008’s public relations spin about poverty alleviation, they are conferring carte blanche support to a ‘survival of the fittest’ economic trajectory in which the grossly imbalanced commercial interests of large-scale OECD subsidized farmers, supermarket chains and agribusiness have full scope to compete against unsubsidized peasant farmers engaged in rural ways of life that that have managed hitherto to endure for millennia...

...African smallholders have a ‘loser’ status in the WDR2008, but the World Bank appreciates that allowing the global market to fully decimate African peasant agriculture would spell political and human disaster in the weak African national economies where farmers’ only option is to join over-crowded rural and urban informal sectors where average levels of capitalization, skills and productivity are exceptionally low. Thus the African countryside of the future is in effect likely to be relegated to a large ‘holding ground’ to ensure basic welfare of the rural population and provide labour for other sectors of the economy as and when needed...

... The reality is that customary land rights are no longer the central issue in many African countries. Smallholder farmers are often in competition with large-scale farmers who receive preferential state support. Small farmers have already been or are currently being pushed into vulnerable ecological areas outside their traditional home areas...

...The World Bank has not been held accountable for the agricultural policy misjudgements and blunders they have enforced in Africa over the last 25 years through structural adjustment policy and debt conditionality. Now, with impunity, they are throwing their weight behind the rapid redundancy of a potentially massive number of peasant smallholders in the name of African development...

...In other words, those left in the countryside live on tribal communal ‘holding grounds’, akin to the Bantustans of the apartheid period of South African history, eking out an existence on the basis of exceptionally low-yielding, uncapitalized agriculture. Like the Bantustans, these holding grounds could function as labour reserves for the mainstream national economy and would most likely be based on conservative tribal customary legal frameworks not only with respect to land but in wide array of other spheres as well. It is indeed an irony that such a possibility resurfaces little more than a decade after South Africa managed to rid itself of this ‘separate and unequal’ model of rural exploitation in the name of development.