By
Robin Johnson
I enjoyed Emmanuel´s review of the UNCTAD report Trade Performance and Commodity Dependence sent out on February 23 of this year from ICDA (wto.forum@yahoogroups.com). I have long had a concern that the commodity trade could be a life saver for the economies of Africa south of the Sahara (SSA). My views were formed when I was an economist in the UK colonial service in the late 1950s and when I was a lecturer at the University of Zimbabwe in the the mid 1960s. At that time the economies of West Africa were enjoying considerable prosperity from trade in cocoa beans, palm oil, groundnuts and cotton. In Central Africa it was tobacco and meat and in East Africa it was cotton, sisal and tea. I notice in the UNCTAD report that the commodity mix is not greatly changed - cocoa in Cote d´Ivoire and Ghana, cotton in Mali and Zimbabwe, coffee in Cote d´Ivoire and Ethiopia, tobacco in Zimbabwe and Malawi, sugar in Mauritius and Swaziland, tea in Kenya, and meat in Botswana and Namibia. Behind these trade figures lies a vast area of mainly savannah Africa devoted to smallholder subsistence agriculture which produces cash crops as a surplus to its basic producing activities. It is the welfare of these smallholders that I would like to comment on in this note to Emmanuel.
The report by UNCTAD on African trade performance and commodity dependence raises a number of issues, inter alia, about the slow development of smallholder agriculture in Africa south of the Sahara. One of the positive legacies of colonial administration of African territories, Belgian, French and British, was a system of well-established agricultural research centres and extension bodies aimed at improving the performance of small farmers in the wider savannah areas dependent on rain-fed agricultural production. Some of these establishments are still in place and working to the same broad ethic of farming systems improvement.
Agriculture in this region is characterised by small holdings (commonly less than 5ha), family labour, and a lack of mechanisation. Principal foodcrops vary from zone to zone; cassava in the forest, and maize and sorghums in the savannah. Cash crops, interplanted or sown separately, are cotton, groundnuts and in the wetter areas coffee and cocoa and palm oil. Male out-migration is a characteristic of this region and the majority of farm cultivation is performed by women and children. Normally there is a short rain season around which planting is based, though in East Africa there are two short rain seasons with some specialisation of crops suited to each. The livestock economy tends to be separate from the agricultural economy though the benefits of manure application where available are well understood by smallholders.
These agricultural systems are in a delicate balance with nature. They can be seriously disrupted by drought and storms. The recent experience in Dafur shows that such systems are also badly disturbed by a breakdown in security and governance.
Out of these agricultural systems in savannah Africa surplusses have been derived from cash crops. Individual countries have their speciality exports depending on climate and soils and historic circumstances. Cocoa beans and coffee beans are mainly grown in the forest zones; cotton in the drier savannah; tobacco in east and central Africa high savannah; sugar in areas where water is available; tea in east African highlands; and meat in the dry areas of southern Africa.
The UNCTAD report notes that most African countries have been losing market shares in commodity exports to other non-African developing countries, while at the same time most have been unable to diversify into manufactured exports. Africa's difficulties in maintaining market shares for its traditional commodities are stated to derive from its inability to overcome structural constraints and modernise its agricultural sector, combined with the high cost of trading.
Africa's difficulties in breaking into trade in market-dynamic products is also related to significant changes that have occurred in recent years in international trade in agricultural products the report stresses. World trade has shifted from traditional commodity exports to non-traditional ones such as fruits, vegetables, fish and seafood, which have a high income elasticity and lower rates of protection in industrial and large developing countries. Africa's lack of response is said to reflect an inability to tap into cheaper finance, efficient logistics, and increased capital resources and skills. Problems also arise in meeting sanitary and phytosanitary requirements in importing countries for food exports.
UNCTAD identifies that institutional capacity should be built up in research, provision of public goods, quality improvement, production adjustment and diversification of the product mix. The stress in research is on market intelligence rather than Research and Development per se but the general point is made that a policy of diversification will not succeed without adequate back-up research. The public goods identified are market research, infrastructure development and handling services and processses for the export industry.
UNCTAD also sees scope for expanding regional economic cooperation and integration in SSA. Greater coordination in customs procedures, reducing tariffs and non-tariff barriers and improving transport and communications could be achieved through the New Partnership for Africa's Development (NEPAD). Opportunities exist for intra-regional trade in food items such maize, cassava and fish as well as in live animals and bovine meat.
Market access could be improved by concessions from OECD countries and also by the steady movement of competitors like Asia and Latin America out of commodity markets. Compensation for subsidy-related income losses relates to a proposal by the President of Burkino Faso for protectionist countries to pay African cotton producers for income losses arising out of domestic crop subsidies. Compensatory financing mechanisms might be possible during commodity price slumps if suitable arrangements could be set up in advance. ODA could be directed to improving human and physical infrastructure and institution building to help toward a steady and sustained diversification programme in Africa.
I note, along with other commentators, that the UNCTAD prescription has shifted away from the free market model of development in vogue since the 1980s. They now recognise that the needed infrastructure for product and market development will only be accomplished with Government guidance and assistance. The burden is too great for small scale producers. Some of the development and quality assurance functions of the old marketing boards need re-inventing. ODA could be directed at this kind of objective.
I feel the report is less sure on the problems of smallholder agriculture. There is no assessment of the widespread Research and Development network of research stations and international aid by the likes of CIGAR. There is no assessment of staffing levels and skills in the extension arms of the various Ministries of Agriculture. There is no assessment of the potential of African farming systems apart from odd remarks about the plentiful supply of land. And no assessment of resource restrictions like water and service industries. All these would be involved in any diversification and new product development programme as well as competition from food crops.
My former colleague, John R Raeburn, previously at the University of Aberdeen, asks in a letter where are the people with the necessary understanding of the ‘grass roots’ and the disciplined understanding of new opportunities? High on his list would be the establishment of sound Colleges with effective extension services, the study of farming financial needs and possibilities, and outlook work. “And perhaps above all is needed an understanding on the part of aid policy makers of manual labour on tropical farms and what intermediate technology and well-organised mechanical services could feasibly do”.
In our view, a new balance is needed in the nature of the labour supply. The dependence on women has been shown by FAO to be a considerable restricting factor in improved productivity. In the past, the rewards from urban employment (including estates) have tended to be additional to the rewards/income derived from smallholder agriculture. Quite a large improvement in cash crop income would be needed to compensate for this source of income. Education for women may be a better strategy in the long run especially if urban wages rise too fast.