“Farming is a business,” so
they say. The idea of farming is not to grow and rear your own food. Surely one
cannot be called a farmer if he/she does that, for any able-bodied person can
do just that. A farmer thus is a person who has decided to specialize in the
industry of farming i.e. to find dynamic ways of sourcing inputs and see to it
that the same inputs are sweated in a mix with his physical environment to
produce outputs which are more than his needs, with the rest being channeled
into markets. The wealth and indeed the food of many will definitely grow, if
few amongst us specialize in farming with the rest being involved in other
areas of specialization. It is a concept that was explained eloquently by Adam Smith in
the Wealth of Nations (1776).
Currently, many people who call themselves
farmers are definitively not farmers. Their output is dangerously low and their
ventures are under-capitalized rendering their endeavors subsistence with no
benefit to the nation but causing immense environmental degradation. Linked to
that is overgrazing, which is caused by too many animals exceeding the carrying
capacity of the land or poor grazing methods.
Why would inhabitants of
ecological regions 4 & 5, situated in the Kalahari basin put so much effort
and money to grow crops without irrigation infrastructure? Why would government
year after year assist these same people with inputs, including hybrid maize
seed suited for high rainfall areas, knowing very well that their chances for a
bumper harvest are next to none?
It is an indisputable fact
that all developed countries escaped poverty because of industrialization and
not through subsistence agriculture. This does not mean agriculture is not
important, it is a vital sector and perhaps a spring board for sustained
industrialization, but only if output is high because of consistent capital,
preferably private capital, is employed coupled with technological advancement
in disease and pest control and improved seed varieties. It is industrialization
or value addition of agricultural output amongst other industrial activities
which lift populations out of poverty. Private ownership of the land,
transferability of land and collateral value of land are key factors. To exorcise the demons of poverty we ought to do the following:
Firstly, we should
acknowledge that not everyone can be a farmer. That is a simple but powerful
statement, for from therein opportunities outside agriculture would be pursued.
If folks are aware that there is life, perhaps a more rewarding life outside
farming, then we would have partially solved the problem.
Secondly, we need a vibrant
industry across Africa to serve the burgeoning populations and export markets.
Industrialization of Africa should be a culmination of a well thought out and
properly implemented plan leveraging on Africa’s relatively cheap labor and
abundant natural resources. Currently, factors militating against sustained
industrialization can be broadly categorized as infrastructure bottlenecks,
trade barriers and policy issues. Allow me to briefly focus on these issues:
The current electricity
supply in Africa is such that serious industrialization cannot take place. This
is despite the fact that the proposed Grand Inga Dam in the Democratic Republic of Congo has
capacity to generate sufficient power to cater for central and Southern Africa
at current electricity consumption. What is that which makes Africa fail to
unlock this critical resource? Planning of electricity supply is woefully bad,
for example many governments are aware that with current urbanization
electricity demand will greatly outstrip supply, but they seem oblivious to
that glaring reality. Road networks, rail infrastructure, ports and pipelines
are also in a deplorable state, because somehow governments thought these things
will maintain themselves. The concept of depreciation completely eluded them.
So even if industrialization does take place, how do we push the finished goods
both within and outside Africa?
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| The Inga Dam on the Congo River, DRC |
Trade bottlenecks result
from explicit uncompetitive trading barriers between African states. Of course
we are aware that developed countries have heavily subsidized their farmers
thus strangulating poor African farmers. But if truth be told, the trading
tariffs currently between African countries are prohibiting free flow of goods
and services, thus reducing the trade volumes. Reasonable tariffs under the auspices of
the World Trade Organization (WTO) to safeguard local industry may be allowed,
but unreasonably high trading tariffs informed maybe by the need for increased
revenues into the fiscus have an unintended effect of killing industrialization
agenda in sub-Saharan Africa.
Implicit trading barriers
emanate from archaic ports of entry, manned by clearly tired personnel using
outdated physical and IT infrastructure. Moving goods across countries is not
only a headache but a nightmare because trucks spent days if not weeks and
sometimes months clearing goods at these border posts. The costs to
entrepreneurs are therefore sky-high and will naturally deter them from
engaging in such endeavors robbing governments of much needed revenue and
confining their citizens to poverty.
The proximity of Africa to
international markets, long considered a hindrance to trade by economists is
not, in my view, a critical factor. As I pen this article and as you read this
article, vessels of plunder, are harvesting fish illegally in African waters,
robbing African children of their heritage and well-being. Geographically,
Africa is perfectly located to conduct trade with the Western Hemisphere, The
Northern Hemisphere, The Eastern Hemisphere and indeed the Southern Hemisphere.
The growing African middle class will soon be sufficient to power
industrialization initiatives.
In the long-term, capital
shall be mobilized from both the domestic (African Markets) and external markets
to build canals criss-crossing Africa to resolve the problem of high transport
costs from the hinterland. Let it be emphasized that meaningful
industrialization and development will take place if mechanisms have been found
of reducing high transport costs incurred by manufactures in transporting both
raw materials and finished products. Naturally this discussion will lead us to
the problem of many African countries i.e. being land locked. Empirical
evidence suggests that in majority of cases coastal areas record greater
investment and prosperity than landlocked areas. There are pockets of
prosperity in the interior mainly due to natural resources endowment, but these
are few.
Jeff Sachs, “the doctor of
the world’s financial crises”, in his work, The End of Poverty, he was spot on
by declaring that, “Many of the world’s poorest countries are severely hindered by high transport
costs because they are landlocked; situated in high mountain ranges, or lack
navigable rivers, long coastlines or good natural harbors.”
Policy issues relates to the
policy frameworks enunciated by various African governments with respect to
trade. To what extent have the concepts of active value addition and rigorous
import substitution been fully integrated into the legislative and government policy? Are
African countries serious in pursuing technological transfer and capacity
building leveraging on South-South Cooperation? Are African governments
earnestly and honestly interested in industrialization and therefore
urbanization?
Besides addressing these
issues which are apparently limiting industrialization and thus creating
serious pressure on arable land, there are recommendations which I would like
to put forward to increase agricultural productivity in Africa?
Africa should therefore free
land for commercial agriculture to feed its population and provide much needed
raw materials for industrialization. This should be bold and deliberate to
ensure that private capital, including resources mobilized by the financial
services sector, can be directed into agriculture. The commercialization of
agriculture should not result in
displacement of communities, but should be carefully designed as win-win partnerships.
So it is only logical that where families have ample food at prices they can
afford, they would not continue to labor on infertile small plots.
Irrigation support to small
but successful farmers is also recommended not solely to sustain productivity,
but to supplement commercial agriculture. Contrary to popular view support of
numerous small holder farmers is not a panacea to solve agricultural productivity
issues and reduce poverty in Africa. Economic theory dictates that economies of
scale are only possible when sufficient capital is marshaled towards a bigger
plot to reduce overheads and increase revenue per unit of land. What
development partners and international donors are doing to ensure food security
at household level is laudable, but their interventions should be considered
transitory and in the long-run a new paradigm, a new approach is needed not
only for ensuring food security, but for accelerating industrialization.
Most of the cattle in my
country, Zimbabwe and indeed across Africa does not constitute the commercial
herd, but rather used mainly for insurance, paying bride price and pulling the
plow. They are rarely slaughtered for meat consumption, because doing that
borders on taboo and rightly so, for they shield these families from external
shocks and constitutes family wealth and status bequeathed by previous
generations. The present owners are duty-bound to see to it that they also pass
on the wealth to future generations. But there are mechanisms of ensuring that
the current uses of cattle are properly addressed in Africa such that very few
people will desire to own them. To replace this herd would be a well run
commercial herd financed by private capital, of course not owned by one entity
or few individuals, but by many farmers who are adequately financed and with
land with capacity to keep such livestock. I am very positive that the
majority will rather work in a factory and earn money to secure an insurance
policy, buy food and have a decent accommodation.
In conclusion, it is fair to
say that the idea that everyone can be a farmer is the greatest mirage. The belief
that small holder farmers in Africa will increase productivity of food crops
both for industry and the continent’s food security is a mirage. Yes we can
continue supporting them as a means of a safety net, knowing very well that a
new approach is crying for implementation. Private capital should fund
agriculture in Africa as has been the case throughout the world. Rural-urban
migration should not be cynically viewed, but should be encouraged in our
circumstances. Rural areas won’t be neglected but continue to be developed to
cater for bona fide farmers who shall feed the urbanites. A select few small but
productive farmers would be supported, say through irrigation, technical
services and marketing to complement commercial agriculture, but by and large
agriculture will be carried out by commercial enterprises.
It is no surprise that as I
write this article today the Brazillian Cerrado
remains the true reservoir of the world’s grain and oil seed. Here, the
climate and soil types are almost the same as the African Savannah; in fact the
Brazilian Cerrado is an extension of
the African Savannah or vice versa, for in Gondwanaland, these constituted one
stretch of land.
According to the Economist (August 2010) quoting Mauro and
Ignez Lopes of the Fundacão Getulio
Vargas, a university in Rio de Janeiro, half of Brazil’s 5m farms earn
less than 10,000 reais a year and produce just 7% of total farm output; 1.6m
are large commercial operations which produce 76% of output. So my argument
that the future engine of agricultural productivity is located in commercial
agriculture and not in small holder farmers is valid and already in motion.
Though the Green revolution
as propounded by Norman Borlaug, an American, was based on a cocktail of
interventions including but not limited to use of high yielding varieties
“HYV”, synthetic fertilizers and agrochemicals, it is agreed that such interventions
will not cause a significant increase in food in future, rather it will be on
increase of land under cultivation caused by increased capital deployment and
appropriate technology to harvest and utilize scarce water resources. For that
reason, there are two places where land will come from: the Brazilian Cerrado and the African Savannah. New farms
in Brazil are known to exceed 20,000 hectares, dwarfing the biggest farms known
to mankind.
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| A mega farm in the Brazilian Cerrado |
It should be noted that the
potential arable land in India and China is less than 50% of the currently
cultivated land, meaning that these two emerging giants will face food
sufficiency issues at current rate of population growth, unless some miracle
crop and animal varieties are discovered. But they need not to worry, for the
answer is the Brazilian Cerrado and the
African Savannah. Serious capital is therefore required to transform these vast
waste lands into high productivity farms, powering industrialization and
urbanization and lifting the populations out of poverty, while feeding domestic
populations with the processed food exported to feed the world, at prices
afforded by everyone.
