In the following note from Russell, which was originally posted as a comment on a thread about how biotechnology benefits American farmers, he tells us something about farming in Nigeria and how white farmers from Zimbabwe are being invited to settle in Nigeria:
“Several comments refer to the link between agricultural subsidies and the impoverishment of African farmers.
Here in Nigeria (which has 20 percent of sub-Saharan Africa’s population) the two biggest causes of most farmers impoverishment in my opinion are a lack of access to capital, and a reluctance to embrace new technologies. These are two sides of the same coin as farmers have to be risk averse if they have no capital to risk on new approaches.
The cost of a bad yield here is starvation.
Much of the area farmed lies in the Guinea savannah and Sahel zones and rainfall varies in onset, duration and yield from year to year. Each year many farming communities go through a very lean period at the end of the dry season when last years stored crops run out. Off farm income is critical during this period.
Examination of farming practices demonstrates a risk minimisation strategy based upon a long history of subsistence farming within an unpredictable environment. A nice summary is given in Kathleen Bakers book “Indigenous Land Management in West Africa”.
Here in Nigeria the Banks are typically not interested in farmers as a market for loans as they perceive them (rightly) as high risk, and so it is virtually impossible for a farmer to get credit from a bank, and would farmers want credit, with interest rates ranging from 23-28 percednt?
A recent program instigated by the Kwara Sate governor which has invited Zimbabwean farmers to take up land in Kwara State has seen a small cohort of technologically saavy, capital rich white farmers take up the option of farming here.
Even these guys have not been able to get credit locally, but the most interesting aspect of their arrival has been the comments from local farmers over the high cropping densities and the monoculture plantings.
Local farmers consider the approach to be crazy, and from their capital poor perspective it is. However, it is also clear that many of the local farming practices are so deeply inculculated in the local culture that many potential forms of innovation are frowned upon. This may actually be a worthwhile risk minimisation strategy because if a farmer fails it is the other members of the family/clan/village who will have to help.
While there are wealthy landowners here who have the means to farm intensively on a much larger scale, the opportunity from cessation of EU and other subsidies might not have an immediate, or large impact on the greater mass of subsistence farmers without access to the capital required for them to enter the cotton market for example.
In fact the immediate effect of a rise in the price of cotton in this country where the wealthy have the power and influence and the poor have access to land which is not adequately protected by the land tenure system might be to push many subsistence farmers off the land and to lower the amount of land used for local food production.
Of course the economists would say this will create new opportunities, but a look at where the wealthy and powerful Nigerians invest their mostly stolen wealth (oil) reveals it goes overseas.Against this background, which I suggest is a common feature of subsistence farmers everywhere in the savannah zones of the developing world, I am not sure I can agree with the sentiment that it is EU and US subsidies which keep the African farmer impoverished. Similarly, while I consider that GM foods can (and should) have a useful role in an African context, I am not sure that global acceptance of GM foods would also necessarily lead to a better world for African farmers.“
Jennifer Marohasy BSc PhD is a critical thinker with expertise in the scientific method.
Nigeria is structurally different to other African nations.
I’ve posted details on subsidies before. here’s a quickie:
“The scale of government support to America’s 25,000 cotton farmers is staggering, reflecting the political influence of corporate farm lobbies in key states. Every acre of cotton farmland in the US attracts a subsidy of $230, or around five times the transfer for cereals. In 2001/02 farmers reaped a bumper harvest of subsidies amounting to $3.9bn – double the level in 1992. This increase in subsidies is a breach of the ‘Peace Clause’ in the WTO Agreement on Agriculture, opening the door to the Brazilian complaint.
To put this figure in perspective, America’s cotton farmers receive:
* more in subsidies than the entire GDP of Burkina Faso – a country in which more than two million people depend on cotton production. Over half of these farmers live below the poverty line. Poverty levels among recipients of cotton subsidies in the US are zero.
* three times more in subsidies than the entire USAID budget for Africa’s 500 million people.
In an economic arrangement bizarrely reminiscent of Soviet state planning principles, the value of subsidies provided by American taxpayers to the cotton barons of Texas and elsewhere in 2001 exceeded the market value of output by around 30 per cent. In other words, cotton was produced at a net cost to the United States.
Domestic public-policy madness has international consequences. Using data from an International Cotton Advisory Committee model, Oxfam has attempted to capture the cost to Africa of American cotton subsidies in 2001/02. For the region as a whole, the losses amounted to $301m, equivalent to almost one-quarter of what it receives in American aid. Eight cotton-producing countries in West Africa accounted for approximately two-thirds ($191m) of overall losses.”
From Oxfam.
Schiller says its irrelevant to subsistence farmers because they eat what they grow. I don’t think Africa’s smallscale cotton farmers prefer to eat their crops but smallscale farmers sometimes barter and sometimes sell off small portions of their produce. A path for them to rise above bare subsistence is to enter markets in which they can sell their produce. How can they compete with rich country subsidies and dumping? And all that aside, why in hell would anyone without a vested interest support subsidies of a crop like cotton? It’s not key to food security.
Cotton is not a subsistence-farmer crop because people don’t eat cotton. Try another angle, Pinxi.
‘Cotton is not a subsistence-farmer crop because people don’t eat cotton.’ – Schiller
Cobblers, stop playing with words Thurkettle you are fully aware that coffee growers, cotton growers and all the other third world subsistance farmers in nations forced to grow inedible cash crops so they can repay debts to the banking systems of rich nations are not impressed by your subsidised US hypocrisy.
Don’t bother responding by waffling on about the EEC CAP, there are plenty of European NGOs working to change that.
Rather than posting here in support of GM shills, when was the last time you got off your butt and did something about US subsidies rather than crying crocodile tears conspiracy boy.
Weasely attempt to sidestep the point through pedantic, theoretical framing Schiller. You deny that US subsidies impact farmers in poor countries and in Australia. Before you chimed in, I mentioned “African cotton growers”. I also referred to smallscale farmers which is the usual term I use. You’ll still argue that US subsidies do not impact smallscale farmers no doubt. What of Australian farmers? Perhaps US ag subsidies help to defend the liberties and freedoms of the world.
Pedantic denialist attempts aside, even people in bare subsistence may sell or trade a small portion of their crops for other necessities – whatever it takes for them to maximise their livelihoods. They won’t refuse to do this because you’ve labelled them as farmers of subsistence food crops which they must consume themselves.
Nice shots, Lamna and Pinxi. Cute, even.
But cotton is not a food crop, and is not a proxy for food crops. You are so embedded in the anti-globalization thing that you can’t see that some folks just want to *eat*.
You two, tell me: do you care enough about their hunger to allow them any technology they want to use? To allow them freedom of choice?
Or do you have some vaunted wisdom, or source of enlightenment, which gives you the privilege to tell farmers–farmers *any*where–what they may do?
Be careful, you two. The ‘kind, gentle, Green’ diktats have killed millions. You will want to couch your response in terms which avoid any association with such a foul heritage. You may even want to adopt the line Pinxi took in another thread, suggesting that ecos are in favor of good-paying jobs, etc.
Schiller you can’t let go of boxed-in simplistic generalisations. I’ve explained my position to you before. I’m not anti-globalisation or anti-technology or anti-GM or anti-capitalisation or any of those things. I regularly argue for free choice to adopt favoured technology. I do see that some folks want to eat and they want other basic human rights as well. I don’t see that you recommend policies to help those people get there.
You kick up clouds of dust to avoid admitting that US ag subsidies have undesirable effects on agriculture in other countries, affecting smallscale farmers and Australian farmers too. You’ll hardly get a sympathetic ear down here.
Have the guts to tackle the issue head on for once Schiller. US ag subsidies benefit a small number of farming concerns but cost US tax payers and farmers outside the US. On cotton, didya read this properly?
“In an economic arrangement bizarrely reminiscent of Soviet state planning principles, the value of subsidies provided by American taxpayers to the cotton barons of Texas and elsewhere in 2001 exceeded the market value of output by around 30 per cent. In other words, cotton was produced at a net cost to the United States.”
NET COST.
Now stop dodging the issue Schiller. Go ahead and tell us how these subsidies are good for the USA or good for the world? What’s your position on the farm bill?
Jeez you’re not getting any better beating that drum are you Schillsy.
Thanks for Iraq – thanks for destabilising the world. Good call.
Thanks for the protectionism of your agriculture and all the perverse side-effects.
Cotton is a rare opportunity for subsistence farmers to earn some cash. Simply saying you can’t eat it is a stupid simplistic argument and you know it.
P.S. If the third world wants GM crops let them decide on the basis of how they might include it in their own production systems.
Pinxi, do you seriously think that the US dropping subsidies will send nutrition to Africa? Ridiculous.
Luke, you just want to whine and it’s tiresome.
It appears that Nigerian politicians have more brains than Zimbabwean ones. That is to say, those in power – I admire the brains and courage of the Zimbabwe opposition.
I lived in Africa for thirteen years, in the evil old colonial days, and cannot remember widespread famine then. European farmers produced large maize surpluses. Some was exported, and some was stored in government warehouses, and dished out when the rains failed. No UN or OXFAM needed.
There were also schools, clinics, and reasonable law and order. Bob Geldof would have been amazed. What happened? Perhaps too much emphasis on rights and political theory, and not enough on fostering basic skills and initiative.
Not as tiresome as listening to yet another disingenuous neo-conservative free marketeer pretending he gives a tinkers cuss about third world suffering.
Schiller – you’re a total hypocrite. All you care about are greenbacks. Spare us the sophistry.
Do I think “the US dropping subsidies will send nutrition to Africa?”. I don’t understand your choice of wording. Another dust cloud.
Schiller you keep denying that US subsidies impact on subsistence and smallscale farmers in the 3rd world or on Australian farmers. Re; the former I’ve again provided information to the contrary. re; the latter, you’ve copped that on this blog before. You’ve never provided any evidence to back your denialist stance. Tackle the question head on if you dare and stop kicking up dust. Or spare us your front porch rocking chair mumblings.
Lamna, that labeling move is like way kewl, yer buds in tha squats probably think you are totally righteous.
Luke, same thing.
Now that you’ve said the words that prove your green creds are clean, come on back with proof that fat white people must tell African farmers what they should grow. Like you are smarter than they are and so forth.
gutless and vapid
Pinx,
Sometimes you’re very nearly almost reasonable, so I have to wonder why you question whether dropping subsidies will send nutrition to Africa. After all, you appear to say that dropping subsidies is the alternative to allowing Africans to use modern food production methods. Why else would you raise subsidies as an issue when allowing the use of technology is the issue?
You, like Luke and Lamna, bear the burden of proving that Africans should not be allowed to choose whatever technology they want.
‘come on back with proof that fat white people must tell African farmers what they should grow.’ – Schiller
Stop waffling Thurkettle….. you have no problem with the fat white person telling African farmers what they should grow if he has a US passport and is dumping surpluses or selling GM products.
Shiller you’re asking me to prove a position that I never took. Reread my earlier reply.
You repeat “dropping subsidies will send nutrition to Africa”. Are you arguing that US agric subsidies are preventing nutrition in Africa? Explain to us how your subsidies benefit farmers outside the US.
You want others to prove the claims that you imagine they make but you refuse to prove the claim that you keep repeating and never substantiating. You keep denying that US subsidies negatively impact on subsistence and smallscale farmers in the 3rd world or on Australian farmers. THey’re doing the opposite, apparently. You’ve received information to the contrary so over to you. Tackle the question head on if you can or admit that it’s nothing more than a baseless opinion.
Wouldn’t it be fair to say that dropping US and EU agricultural subsidies AND allowing farmers in developing countries access to whatever technologies they like (within reason) would be positive steps. It’s not like they’re mutually exclusive or anything. Together they are not a complete solution by any means, but they could be an important part of such the solution.
Hi Nexus 6,
I take your point however GM companies raison d’etre is to patent nature and sell farmers an annual licence with associated peripherals (also patented wherever possible) since non GM technology is available which does the same job, GM sucks…. Not forgetting the stink caused when fat white software companies started applying the GM model to sales in the fat white corporate market place in fat white developed countries….
Thurkettle’s snake oil is way past its sell by date although it looks pretty in the bottle with that added bioluminescence gene.
You guys have all seriously missed the main point. There are no secure property rights to land in Nigeria and no properly functioning legal system to protect those rights.
Consequently, the banks, rightly, recognise loans to farmers as high risk because they are effectively unsecured loans. And when this is combined with climate variability then any serious, even small scale, investment is out of the question.
The Zimbabwean farmers see the current state of play in Nigeria as being far superior to conditions under Mugabe, which is true. And their access to outside resources gives them, in their assessment, the political influence to offset the legal/tenure/risk disadvantages.
Mugabe has shown that economic, social and ecological values can go downhill very rapidly when property rights are compromised. I wonder how much longer it will take chairman Beattie?
The EU has made it quite clear that they will not be dropping subsidies so thats that.
What the US is/was offering is an FTA but there are plenty squealing over those too, African nations are happy to play politics whilst famine, disease and poverty continue to cut deep.
Recently South African announced it would restart talks with the US saying “there are no major problems between us, there are differences. We have differences over the WTO process, we have differences of analysis on how to deal with the terrorist threat” and “economic diplomacy is one of the cornerstones of our foreign policy”
Another roaring mouse?
Very few of the white farmers I knew in Africa were fat. They mostly played rugby, and were as fit as fiddles. They also cared deeply for their African workers, even if in a paternalistic way.
I looked through Kathleen Bakers book for references to cotton and subsidies.
She does not give a clear statement that subsidies of cotton growers elsewhere keep West African farmers poor.
As I said in the beginning of this thread I am not sure it is possible to make such glib statements -I think it is a lot more complex than that and although subsidies have some effect, it is not the sole cause of the impoverishment of African farmers.
The following quotes from Baker will, I hope, help to demonstrate what I mean. I have made Comments on Bakers statements.
“The purchasing power of Africa’s exports has fallen by 22% since 1987, owing principally to a decline in world petroleum prices and Africa’s share of the world market for primary exports has nearly halved since 1970”
Of course the recent rise in oil prices must be now working to the favour of those countries that export oil.
“Arguably, pressure on West African countries through international institutions such as the World Bank to increase production of export crops could be counter-productive and further depress world market prices, particularly of those crops for which world demand has not been rising.”
Incidentally, cotton is one of the cash crops that has been promoted by the World Bank in West Africa in an attempt to develop more export orientated crops.
“ Cash crops, for example, are one means of generating foreign exchange and incentives to produce cash crops have in some areas acted as a disincentive to the production of food crops. The promotion of cotton production in Mali is one such example”
Examination of those incentives would reveal that farmers are being encouraged to take up the farming of cotton by a variety of means including subsidies of price and the elements of production – market distortions promoted by the World Bank.
“A second concern is whether agricultural protectionism by OECD countries has depressed prices received by West African exporters. ……….the main commodities affected by EU agricultural protectionism are sugar , edible oils and fats, rice and certain grains. As West Africa is a major importer of cereals it benefits from OECD’s policies of protectionism. According to Ng and Yates (1997), OECD trade preferences have made market access for Africa more favourable than for many exporters. They argue that Africa’s trade barriers, which are higher than in most other developing countries are a major cause of Africa’s declining importance in world trade. This view is shared by Onafowara and Owoye (1998) who also argue that African governments should pursue more liberal trade policies.”
“Nevertheless, the EU’s commitment to supply as much of its own market with domestically produced goods –oil seeds for example for the vegetable oils market has meant that West Africa’s potential to supply oils and fats to Europe has been reduced.”
So it appears that for some goods, such as imported cereals, the subsidies are working in Africa’s favour.
On the other hand, EU protectionism in oil seeds production has disadvantaged West African farmers. However, even if the subsidy was not there, the African farmers might fail at the hurdle of quality. The EU has often strict requirements for quality and these in themselves act as an effective barrier to many developing world products. But as these quality requirements are often focussed on what would be acceptable to a western shopper, then they are justified in my view.
I would confidently predict none of you would buy a typical West African tomato if they were available at your supermarket.
I should close by saying that I am not supporting the US subsidy on cotton. What I am saying is that I am not convinced that it is the main cause of the problems of West African farmers.
Have you noticed how these latest threads are a big diversion from all the stuff going off right under our noses? We, last time I looked still have to cope with some more drought and likely big shortages across the board Its hardly fitting that we solve the food shortage elsewhere first.
IMHO some very clever people are quite busy trying to distract us from the job in hand.
Odd comment Gavin.
I responded in another thread to some comments about how cotton subsidies keep African farmers poor. I think that is an oversimplification. Jen then moved my comment and set it up as an independent thread.
I have no problem addressing the issue of the drought in Oz and what will happen, and perhaps you would care to establish a thread in which you provide some guidance?
Sharkbait should take up religion, give his celibacy a purpose.
Russell I don’t think anyone said it’s the main cause of problems for African farmers, only that it is a problem and not one to be trivalised or downplayed when you consider the figures (Oxfam reference, there are other sources too). The other reason the cotton issue is such a hot topic is that it can’t be defended on grounds of national security.
Sadly World Bank recommendations for trade avenues for 3rd world countries haven’t always realised the expected benefits (for varied reasons, incl. an internal division in the different agendas between World Bank policy makers and World Bank project managers, and differences with the IMF whose approval is needed, IMF conditionalities, and lenders (not very keen to invest in Africa), implementation, trade dynamics, etc)
Motty that point hasn’t been missed, we refer to property rights and lending and risk. But tell me, what banks loan on fair terms in developing countries where some property rights and independent judiciary do exist? Africa rarely makes it on the radar of investment institutions and those that do demand very high interest rates. This is why I mentioned the Grameen bank – it’s forged the way in micro lending for poor people without needing or waiting for proper institutions (ie property rights etc) to be in place 1st.
FTAs, in short: these are bilateral agreements which get approved by the WTO, some which have special conditions or long timeframes to implement reductions in trade barriers. The screaming is that in refusing to lower subsidies despite increasingly co-ordinated pressure by developing countries, the EU &the US instead are trying to divide & conquer by negotiating FTAs on the side, with terms less favorable to the less developed countries than they could achieve in multilateral negotiations.
Whatever.
In short, all participants in an FTA benefit.
It’s a negotiation between unequals
“whatever”!!! ahahaha hahahhaha ha ahahah ahaha ah ahahah priceless
Pinxii,
how about you provide evidence that a country has suffered under an FTA, and a country has benefited from not entering an FTA.
There is plenty of evidence that countries that do engage in FTAs benefit, eg Canada claims a 95% increase in exports since signing NAFTA.
rog I did not say that countries suffer under an FTA, you made that up.
We were discussing developing nations and unequal negotiations, remember. Canada was not a developing nation prior to NAFTA.
I’ll give you a balanced response on NAFTA rog: Mexico. The evidence doesn’t support a certain assessment – it’s open to interpretation as the background noise is difficult to separate. Mexico’s economy had some deepening woes post NAFTA but they also had legacy problems, inflation etc which contributed to this. The US wanted Mexico in because of the threat they were planning a trade relationship with an ‘undesirable’, and to foster regional stability. So the US threw Mexico a few carrots but screwed them down in some key agricultural areas. However, smaller scale Mexican farmers did alright, or at least werent much worse off. So on the balance, perhaps a neutral but probably a slightly positive result for Mexico. Then again, it’s in the US interest that Mexico does ok but the results haven’t made other neighbours keen to join.
However there are developing countries in worse situations than Mexico and with less bargaining power. Hard to negotiate when you’re inexperienced and desperate. If you have plenty of evidence that sich countries that do engage in FTAs benefit, then please share it.
I’ve done some editing of this thread. Probably not enough. But a bit.
It would save me time if some members of this blog community were a bit more thoughtful before posting.
With regard Jennifer I get cynical just thinking about the depth of infrastructure necessary to make FTA’s work properly.
We have a great deal of background is say setting up standards and compliance but look what happened with the AWB scandal. Where was the umpire then? Turns out it was a couple of trade rivals that squealed first. Our own internal industry heads and political masters were falling over each other in denial of kickbacks. And there were a few others out on the fringe getting their hands very dirty.
Although I know nothing about African agriculture in general I feel quite certain it’s not us that should be leading their farmers out of the darkness in a highly competitive and rather crooked world of trade. On cropping improvements perhaps Africans can teach us a thing or two in regional self sufficiency without wars. After all which continent carries the most people in the best of times?
And for Russell’s benefit it seems to me nobody else on this blog is yet contemplating living through another severe rural depression in Australia
Mexico has deep internal problems, if you look at its ‘economic freedom’ it is rated between Saudi Arabia and Mongolia
http://www.heritage.org/research/features/index/countries.cfm
Most of Latin America is in the same boat, institutionalised corruption leading them to bankruptcy.
What I meant to say, it doesnt matter how much money you threw at some countries, they would still be broke. Despite being bailed out Mexico continues to slide, their political structure ensures that there is no real rule of law or economic competition and corruption rules the country.
gee rog, here I was trying to put a positive interpretation on that FTA for you!
You make a very valid point about money aid and institutionalised problems. If only you’d go the step further and realise, as often presented to you, that too rapid liberalisation programmes can create or worsen such problems. You need institutions (meaning rules and norms such as property rights, social involvement, education for all, independent judiciary, fair executive, effective govt etc) to provide the framework conditions for livelihoods, participation in markets and effective market operations. The fiscal austerity present in the Washington consensus and IMF conditionalities have been stacked against such developments, arranged to satisfy creditors by minimising national expenditure and doing the opposite to strengthening capacity for self-governance or economic expansion.
Really? Rapid liberalisation has not hampered Asian countries, maybe Africans need to re evaluate their own attitudes;
“Ransome-Kuti, who was at the World Bank/IMF conference said the two important world bodies observed that the high rate of crime, wars agitation for self rule and other vices in Africa and some other developing world, were as a result of under development and deprivation occasioned by corruption, lack of good governance and political will on the part of governments to be socially responsible and accountable to the people.
It consequently noted that Nigeria has become one big corrupt state where corruption has become endemic, pointing out that all hands must be on deck to arrest the ugly situation if any meaningful progress and development is to be made.”
http://allafrica.com/stories/200610300474.html
Well rog that has been well put to you before and does not support = the argument you want to make: the rapidly industrialising asian countries are not the ideal neo-lib poster child because they strategically pursued a centrally-planned and carefully co-ordinated export oriented strategy. Some of the industrialisig asian countries bucked neo-lib (washington consensus) advice. Russia however, followed it.
The quote you provided simply supports many things already said above. Nigeria, to repeat, is renowned for being an, ahem, interesting state of affairs. But what oil reliant state isn’t?
Some of the problems alluded to in your quote have origins in artificial barriers created during colonial times which don’t represent the nations (a nation being a culturally cohesive group of people). Do some reading on nation states v’s state nations, you’re bound to find it interesting.
Many African states have trouble attracting investment as mentioned above. The current problem isn’t quite the attitudes as you put it. Being left out of global economic development is harming SS Africa and thy’re aware of it. We’ve already covered an array of issues which have helped to create such a sad state of affairs. The investment climate doesn’t show any signs of improving in the near future but that’s not top of mind for most of people ravaged by AIDS, poverty and human rights deficiency.
“Nigeria, to repeat, is renowned for being an, ahem, interesting state of affairs. But what oil reliant state isn’t?”
Norway ;op
Hi George,
I often use Norway here in discusssions with my Nigerian friends as an example of how the revenues of oil can be turned to the general benefit of the population.
Pinxi and Rog, I understand what both of you are saying , and I guess my viewpoint is somewhere in the middle (yes, I’m a fencesitter).
I agree with the sentiments of Easterley, in his excellent book looking at the impacts of 50 years of Aid to Africa, when he notes that the international community has consistently rewarded the frauds and charlatans among African governments by giving them more money. Why? Because they believe stopping the aid would negatively impact upon the poor in those countries while their wealthy leaders continue to live the high life.
Gavin, I am afraid I do not understand your last couple of comments.
Pinxie, I don’t know of any African Nations with stable governments, institutions, legal systems and secure property rights, except, to some extent, Sth Africa, Tunisia, Algeria & Egypt.
And I think the role of outside investment and export income can be, and often is, overstated. Economic take-offs have been shown to take place from the ground up but these are entirely dependent on secure property title to an identified parcel of land that can be both traded and foreclosed on in default.
The left likes to view these things as negatives but, of course, the left has never actually managed a grass roots economic take-off. They form that view from the perspective of big banks taking the land off little farmers but in the nascent capital formation stage the lenders are fellow villagers who “loan” part of their working week over an extended period to a neighbour to build some infrastructure or plant an orchard etc that will eventually produce a surplus.
Without a secure land title as security for this loan, the lender must assume even more risk than the borrower. And when this is the case the interest rate must go up to a point where the return is commensurate to that risk. But once that interest rate has risen, it is usually so high that the project becomes unviable.
And both borrower and lender become lethargic from the loss of incentive and hope and slip below the point of self sufficiency.
Every one of them will know a dozen ways to better themselves but the social and political conditions put the risk weighted price of betterment beyond their reach.
‘Sharkbait should take up religion, give his celibacy a purpose.’ – Rog
Rog just because my avatar is a photo doesn’t mean its a picture of me… I suggest you Google – Father Jack pic …..
Astounding!!!
A post by Ian Mott that I can agree with.
Seriously, Ian makes a very good point about the fundamental position of land tenure in holding back the development of a country like Nigeria. Much of the ethno/religious violence that breaks out here periodically is related to resource access, and primarily these are arguments over traditional access to land.
The current President of this country, Obasanjo has been locked in a personal legal battle over a piece of land for more than 15 years and he is the most powerful person in this country, but cannot get a resolution when faced with an opponent who is equally wealthy.
What chance for the poor man?
A couple of years ago, the Economist Magazine did a survey of how long it takes to complete formal registration procedures for land titles and new business registrations. And how much it costs. Australia, like most western, industrialised countries was pretty efficient, from memory it took just a few days to register a business and about a month to formalise land tenure transfers. And it did not cost that much.
By contrast in Nigeria it took up to two years, and cost a variable amount which was determined by the size of bribes demanded by individual officials on a case by case basis.
Cleaning up land tenure and governance issues would go a long way to improving things in many African countries.
Now Ian this does not mean I am tacitly agreeing with your position on caveats on forest clearing in Qld.
Incidentally, for those of you who may be interested in following the progress of the Zimbabweans farming in Nigeria, here is a link to their website:
http://www.kwaraproject.com/index.php?option=com_frontpage&Itemid=1
There is a second group now setting up in Nasarawa State which is only about 50km from where I am and so I am planning to take a trip up and meet them early next year.
Yep Motty, you’ve captured nicely some of what I’m often banging out about here. However, it’s not helpful to view everything as left ‘left’ v’s ‘right’ (you’re more intelligent than that). Traditoinal left right distinctions are fading in many cases and too simplistic at best. Many ‘lefties’ as you’d label them won’t disagree with the need to improve these socioeconomic aspects (see institutional economics). Actually, there’s widespread support to recognise and formalise local, traditional landholding and tenure arrangements so to overcome the underutilisation of vast amounts of capital in Africa; also because in many areas there’s no longer sufficient land for the farming practice of moving areas to let land fallow.
Re landlords/lenders risks & borrowers risks, again, yes, kinda but not so B&W. The risks are greater for landlords you say but borrowers/tenants often individually risk starvation or loss of whatever landholdings they have left (landlords may have more diversified risks and more reserves for the tough times). However where a landlord leases or sharecrops land with a tenant, if that tenant is a good one and they have an ongoing relationship, the landlord may help the tenant through rough patches. In other cases, the tenants/borrowers can be taken advantage of because they have no bargaining power at all if they’re easily replaced. In some places the costs and risks from adopting new technologies or other pressures and accidents of circumstances has led to farmers losing their inherited lands, sometimes becoming workers on what was once their own land and sometimes then being turfed off the land. So the institutional changes need to offer a kind of ‘insurance’ or protection so poor rural farmers can take some calculated risks such as invest in new farming technologies.
Having said all that, the patterns vary considerably between Africa, SE Asia & Ltn Amer. the latter requires land distribution (gasp gasp). Yet, in rundown rural areas institutions such as property rights aren’t sufficient, they also need investment in infrastructure and essential rural services, and some incentives for small rural businesses to set up (eg to hire out equipment, draught animals and provide other smalltown services). These are 1st to collapse in a downturn.
As for ‘lefties’ never managing any grass-roots economic takeoffs, again the categorisation doesn’t help. You might consider the Grameen bank all of those things and more amazing yet, its results challenge the standard assumptions about risks and returns.
Russell & Motty, reminds me: there was a really interesting synopsis on the opportunities for African leaders after they leave office and what incentives their retirement prospects given them during their tenure in office. Did you see it? I could scrouge around for it …
crux from memory was that a decent pension for govt members would reduce incentives for corruption during office.
here you go:
http://news.bbc.co.uk/2/hi/uk_news/6086088.stm
and a conflicting view:
http://gathara.blogspot.com/2006/10/bribing-africas-leaders-to-stop.html
Well folks, at least we’ve settled something.
We’ve collectively decided that “the debate” over biotechnology in agriculture has nothing to do with biotechnology in agriculture.
So now let’s talk about something else.
Oops, I guess that’s already done.
Good point about the equal primacy of contract law, Pinxie. They are all tied in together. What a well structured and equitable legal system does is ensure that agreements, like loans, leases and bills of sale, are stronger.
By being stonger they ensure that the cost of not honouring such agreements is higher and therefore the risk associated with partial performance or non-performance is also higher.
It is the classic, “will you still love me in the morning” scenario where promises cannot be walked away from at whim.
Many people criticise debt and contractual obligation but in many ventures it is the critical motivator that distinguishes success from failure. The most committed people are the ones who have no choice but to succeed. Ask any tradesman if he would work anywhere near as hard if he didn’t have a mortgage.
This may sound a little draconian but that is where the justice and equity part of the legal system must kick in to ensure that contract terms are fair and in good faith.
And I think the one thing the advanced nations can do is to distinguish between lending to properly elected governments in the third world and lending to thugs and dictators. Clearly, the debts incurred by the latter should be regarded as personal loans rather than just debts that the long suffering populace must repay long after the thug has shifted the money to Switzerland.
All it takes is a UN agreed definition of a legitimate government and a legitimate debt. The bankers will do the rest.
of course. Impartial and independently functioning arms of governance are crucial, and hence so is independent media. Motty you might found you’ve got a fair bit of common ground with the moderate lefties.
Many SS Africans would welcome the opportunity to get a mortgage to expand their livelihood opportunities. The Grameen bank experience has been that high risk lenders actually take very calculated risks, can take only very small loans to start an enterprise (no need for a mortgage, even) and have a very low default rates (helped by social pressure to perform because of the localised way the bank operates).
This is why I’ve referred to the ‘total system’ before Motty, not as a copout but because the fundamental framework with checks & balances needs to be in place. Efficient markets and income opportunities require it. Better performance in human rights is also linked with better economic performance (no one wants to invest in a volatile area or employ the unhealthiest and least educated workers).
The UN has blunt teeth and limited reach. The bankers won’t simply do the rest for a number of reasons. One is because of the limiting conditionalities imposed by the IMF (behind door negotiations with countries desperate to attract $$ because have minimal tax bases and ineffective institutional bodies and rules) and IMF approval is often a precondition for investors to act. In recent times washington consensus policies were thrust upon 3rd world countries with debt problems to ensure that 1st world lenders could extract the maximum repayments in the short term, to the longer term impoverishment of those countries.
IMF policies of fiscal austerity are binding and limit national sovereignty. Often they drastically cut public health expenditure, education, etc etc. In many impoverished places of SS Africa people are too malnourished or ill to work productively. The World Bank, repositioning itself as the Knowledge Bank, started to show a bit of leadership in identifying these compounding problems but there are often opposing directions within the World Bank between policy and programmes in the field. There’s also a tug o war between the IMF and the WB.
Investment and markets are important, but insufficient. Simply liberalising the poorest economies and opening them to international investment can actually make them more volatile (eg currency speculation, plus dependent on a small base of volative commodities prices to repay soaring debts – as they say when the US sneezes the developing countries catch cold) and deepen corruption if the judiciary, executive and media are weak.
With greater awareness of the difficulties in bringing about such pervasive change and how externally imposed conditionalities actually restrict the ability of national govts to make these changes, hopefully international institutional policies will become more co-ordinated and effective. But perhaps not, because they’re human institutions after all. Development agencies and workers have to go to exorbitant lenghts to try to get support to take a comprehensive or long -term approach to a local problem. (Development funds are typically for narrowly defined objectives, limited budgets and time periods which are actually inequate to have any real effects). Take soil fertility as an eg – one of the latest hot issues, with some legitimacy, but allegedly it was conceived and championed as an umbrella ‘root cause’ notion to attract funds and support at a larger scale that might help do something of eal use.
Some interesting comments about the IMF Pinxi.
Here in Nigeria the policies promoted by the IMF in the Structural Adjustment Programmes (SAPs)of the 1980s were for the government to withdraw from the provision of basic health, education and services as these were all to be provided by the private sector. Rationale was that government was inefficient in the provision of these services, and by passing the burden to the citizens the cost of services would fall, and services would improve. A classic example of the economists using a 3rd world country as an experiment. It could have worked if there had been a reasonable transfer of the dividends from oil to ordinary folk, but that of course did not happen. In fact, the era saw the rise of successive military dictatorships here who stole the oil revenues and deliberately emasculated the existing education, and health infrastructures, all in the name of the SAPs. All over this country there are old public primary schools and health clinics that lie abandoned and many young children without schools or basic health care. Now there is a very large, basically illiterate class of young Nigerians who live in poverty. Not exactly the Brand new day promoted by the IMF in the 1980s.
Investors are wary of countries with unstable governments, I’ve been told that one more coup in Fiji will just about end their tourist industry, already the resort infrastructure is shabby and no-one wants to spend the extra $$ if tourists stay away
When I worked in the eastern region of Nigeria (for Shell) based in Owerri, the family plot was worked by the women. They took the produce to market, and they paid for children’s education (a western-style education was a high priority). Since then, Nigeria has become a big oil producer – but has suffered corrupt leadership. The UK Daily Telegraph had a headline “220 billion pounds – the amount stolen or misused by corrupt Nigerian rulers. 220 billion pounds – the amount of aid donated by the West to Africa in 40 years.”
With changes in currency valuation, money exchange and markets, the IMF risked outliving its mandate to foster international monetary stability and ease temporary shortfalls. So it reinvented itself and broadened its scope to tackle development issues, something it was hardly qualified or tasked to do. It muscled out others and into world bank territory (so the WB in turn has reinterpreted its mandate).
Some expensive lessons haven’t quite been learned yet because the IMF is highly resistent to criticism of its methods and refuses to acknowlege the shortcomings of neolib theory or the special structural needs of 3rd world countries (similar in the WB). There are enough cases like the one Russell tells of Nigeria, many argued by insider economists as well as NGOs & human rights groups but to little avail. We’re looking at the tip of the iceberg. And people wonder why 3rd world nations suspect the 1st world of a repression conspiracies or neo-colonialism through world markets, it’s hardly surprising. Years ago I had average Joes on the street in developing countries talking intelligently about IMF & WB policy impacts on their domestic markets when their equivalents in 1st world nations knew diddly squat about these powerful institutions. (There’s a bit more awareness now probably because of NGOs).
I appreciate where you’re coming from Russell but worth noting that not all economists are cut from the same cloth.
rog it’s stable governance (broader than just government) that’s needed (ie the whole system with all the institutional components – rules, laws, norms, participation & civil, govt, exec & business organisations – mentioned earlier).
Perhaps you could impress those points on the SES of Queensland Inc., Pinxie. Trust in institutions, public sector ethical standards, proper exercise of power, poor fella my country.
don’t overlook the bits about checks & balances or businesses
You suggested earlier the UN defines legitimate government. I’ll take the liberty of extending that to a definition of legitimate governance. Aust would not be an eg of best practice of either.
Certainly not, but the principles of good governance are fairly universal and well documented. It would not amount to a requirement to deliver best practice because that is a concept that is informed and shaped by the available resources.
But there is an overwhelming case for the defining of a minimum performance level that does not include passing off the machine gunning of funerals in Dili as quaint old Javanese customs.
It could also include a capacity to identify disadvantaged cultural or geographic minorities that have fallen outside the scope of the minimum performance level. This could be used to trigger independence measures or extra territorial intervention by UN etc as in Darfur or West Papua.
Great discussion!
But nobody seems to be able to figure out what gives anyone the right to tell farmers how to farm or what to plant. In Nigeria or anywhere.
It used to be, people were fuming over “farmer’s rights” and “indigenous rights” but I guess I’m the only one who fumes over them in the end.
Let Nigerian farmers choose what they want. If they don’t want it, that’s the end of it.
Fuming…
Russel
I would like to pick up on your opening comment that farmers (in Africa) have to be risk averse if they have no capital to risk on new approaches.
Some years ago a Dept of Agriculture employee did an economic simulation of two approaches to managing a sheep pastoral enterprise.
One was to max out the income, increasing stocking rates in good years to utilise the grazing capacity, and destocking in poor years
The other was consevative. Keep the stocking rates close to the long term average carrying capacity. Not to increase stocking rates in good seasons, and not having to destock very much in poor. They used the rainfall records and stock and wool prices recorded for each year.
Over about a 50 year period the figures showed that the conservative operator would survive with a modest standard of living. The more innovative operator would make a lot more money, but he would have gone bankrupt three times!
That pretty well matched what we had observed locally with farmers (not graziers). When the droughts, poor prices and high interest rates hit, it was the innovative, mostly younger farmers who were in real trouble, rather than the conservative, usually older ones. Australia lost some very good young farmers then.
The linkage between risk aversion and survival applies to farmers in the developed world too, Russell. Trouble is, we need the innovative farmers, the risk takers. Once they try something, and the benefits clearly outweigh the risks, the others quickly follow.
Don’t worry Schiller, you are not the only one fuming about farmers rights. Luke has recently taken to implying that property rights are some sort of fringe movement but as a departmental goon, he would, wouldn’t he?
Property Rights Australia has well over 1,000 members in Queensland alone. And given that the annual membership is much more than the minimum fee for membership of the Queensland Labor Party, it makes their 7,000 odd members look a bit piddly in contrast.
Luke and the party apologists would claim that membership does not reflect the number of supporters but this is only part true. In rural electorates around Australia that do not include any major urban districts or mining centres, The vote for the, property rights supporting, National Party is normally between 60% and 80% on a two party preference basis. Most of the minority are public servants on temporary postings.
So what we have is a very substantial community, defined by background and geography, that have never supported any diminution of property rights, but have had this diminution imposed on them by an ignorant urban electoral majority.
And true to form for most tyranical regimes, the urban majority would not accept any similar diminution of rights over their own property.
The term hypocritical scum tends to come to mind.
please can u send me something on interest rate,demand for credit and loan repayment by the rural farmers in nigeria.
tanx