Food Insecurity: Who Will Save Us, the Smallholder or Large-scale Farmer? (PERSPECTIVE)

A food market in the Burundian capital of Bujumbura, where prices have skyrocketed in recent months. CREDIT: M Bociurkiw/HUMNEWSBy Saliem Fakir

Land reform in South Africa is back as a lead item on the government’s agenda. It is a tacit admission that the process over the last seventeen years was a failure. The issue must also be seen in the light of growing food insecurity, as food prices seem to only go up rather than down.

South Africa’s land reform policy is not only a way to redress past loss but also an attempt to diversify farming as mainly white farmers dominate farming. However, in opening up the space for new entrants, the policy has inadvertently favoured larger farmers.

This too has not been entirely successful.

For a set of different reasons, the balance between small and large farming is quite important. Something we still have to get right. And, how we deal with it going forward will also determine how we deal with food insecurity.

In the meantime, food insecurity grows the world over, especially in Africa, where agriculture has not quite performed the way it should have despite the huge potential for both rain fed and irrigated farming.

Just as an illustration of the global challenge: about 925 million people are undernourished. Developing countries account for 98% of this number, while a significant number live in sub-Saharan Africa.  Feeding an additional 1.4 billion people by 2030 or a global population of 9.1 billion people by 2050 would require food production to increase by 50%.

The race to feed the world adequately is on. The question is, who can best help meet this projected demand: small or large farmers?

In classic supply and demand economics, food inflation tends to improve food production as high prices incentivise more planting. But the beneficiaries tend to be large farmers and commercialised agribusiness because of access to finance, well-established logistics and connections with the market. They tend to respond more quickly to incentives from increased food price shifts. 

However, there is considerable scope to look again at the role of smallholders in developing countries, especially Africa, where opportunity is ripe and also given that the success of large-holding ventures have not been as promising as initially thought.

There has also been a traditional bias against smallholding. In South Africa, smallholders have received little policy support, subsidies or preferential funding. The bias continues despite changes to land policy since 1994. Smallholdings are still thought of as being uneconomical and inefficient.

However, a report by Oxfam titled, Who Will Feed the World? The Production Challenge, seeks to dispel some of the myths around family run smallholding and small farming in general. The paper shows that in Vietnam and Thailand, family farming is highly productive and provides sufficient sources of income and food security for large rural populations.

Smallholding income can also be far more productive for rural areas than export orientated or foreign-owned large farms because any income earned, is spent in the rural area. This tends to stimulate other forms of rural economic activity besides simply just holding down the growth of unemployment.

However, the bias in favour of large-scale farming in Africa is being bolstered by a combination of factors acting in concert with each other.

Countries, such as China and Saudi Arabia, with significant sovereign funds are taking liberties by purchasing large chunks of land, most of which is in Africa, as they seek to feed their own growing populations and solve their own food insecurity. They tend to favour staple food or even cash crops that are capital intensive and largely labour saving operations.

Currently, Africa registers the lowest level of agricultural productivity in the world and this combined with the lack of infrastructure, large geographic spread and conflict, reinforces policy bias in favour of large-scale farming operations.

Large-farms tend to be associated with more productivity. They get favoured above investment in small-scale farming because foreign investors also inject significant investment in roads, irrigation schemes, power supply and making new market connections.

There is also that dazzle effect as big is seen as beautiful with the usual promise of lots of jobs and cash.

Some African children, like this young girl in Nigeria, consume just one meal-a-day due to high food prices. CREDIT: M Bociurkiw/HUMNEWSIncreased migration from rural cities to urban areas in the next decade or so is expected to double. The demand for food will grow while the supply of labour in rural areas to plough land and harvest fields is going to diminish.

Proponents for the revival of agriculture in Africa take these as cues for the defence of large-scale farming.

They argue that modern agriculture – in terms of technology, markets and finance – favour larger holdings as they give better economies of scale, they are more productive, efficient and it is the only way to meet growing demand for food quickly.

Opponents argue that this model tends to favour corporate agribusiness. That agriculture becomes too commercialised and less attuned to a pro-poor agenda.

Large-scale farming can also displace smallholdings through consolidation or African governments desperate for foreign investment who will grant concessions that involve the removal of people -- raising questions about land rights and other entitlements that are eroded as a result. 

Overseas sovereign funds that own these large tracts of land can also undermine national development objectives. They are not necessarily pro-poor even if they create jobs.

While Brazil has shown that large-farming, that is export orientated (cash crops such as soya), can boost foreign earnings and the country’s reserves. This is not often the case with farms owned by foreign sovereign wealth funds – depending on how governments set capital repatriation terms on earnings – as access to land does not translate into localising benefits in a substantive manner.

Sometimes, developing countries would be better off with a lesser evil. Large retail businesses, like supermarkets, that have strong supply chain ties and favour small holder production can do more for smallholders as they are more likely to create beneficiation than foreign holding of land that is unconditional.

A retail food market that is decidedly pushed in a pro-poor direction can ensure that contract arrangements retain the smallholding character of African agriculture and help diversify crop production from staple to high value crops. They could bring financial stability through long-term contracts.

Sometimes large-scale farming makes sense for crops that have short shelf lives and require good storage and transport infrastructure so they can be dispatched quickly to overseas markets. In areas where a large in-migration of labour is required mechanised large-scale farming is probably better suited because labour intensity is not an option.

In the meantime, about five hundred million smallholders currently support two billion people. They are an important part of the agricultural system. However, most smallholders (close to 60%) either produce sufficiently for themselves or have to still purchase food to meet all their requirements.

The Oxfam paper argues for complementarity, while overwhelmingly suggesting that smallholdings can vastly improve the productivity and value for African rural economies provided the right types of policies and forms of support are put in place. The paper though, intriguingly, says little about co-operatives and nationally owned farms.

A pragmatic approach may be warranted in this debate. It is not, as numerous studies have also shown, an either/or situation. Smallholders can bring far more than just economic activity in rural areas as they also can act as safeguards over social capital. Large-holders whose aim is to see agriculture as an investment opportunity will always see it that way rather than protecting a way of life.

Fakir is an independent writer based in Cape Town. This article first appeared on the website of the South African Civil Society Information Service (SACSIS)

Southern Sudan 55-Year Quest for Freedom (Perspective)

By Hugo Odiogor

(HN, January 9, 2011) - A 55-year quest for freedom in southern Sudan makes a crucial home run today when over four million voters step out to cast their vote either to remain with their Arab and Muslim brothers or to become an independent state. The stakes are high for both sides and for Africa as a whole.Southern Sudan has considerable agricultural potential, but a lack of infrastructure - such as roads and storage facilities - and ongoing insecurity has limited production. CREDIT: Caroline Gluck, OXFAM

Sudanese President Omar Hassan El-Bashir pledged last week to abide by the result of today’s referendum, thereby dousing fears of a possible return to the trenches, in the event of southern voting to end its 113-year association with the Arab north.

El-Bashir, facing indictment in the International Court of Justice at The Hague, made what could be his last visit to the South as a united country last week and gave the world the assurance the north will not resort to violence to thwart the decision of the south. The vote is the result of a 2005 peace deal, which ended a 55-year conflict that has claimed the lives of two million people and left twice as many displaced.

El-Bashir held talks with southern Sudanese leader, Sylva Kiir, on issues bordering on citizenship rights, resource control, border demarcations, and the fate of the oil-rich Abyei, which is supposed to vote later on whether it should become part of the north or to join the south. Today’s referendum is part of the 2005 Comprehensive Peace Agreement that ended one of Africa’s longest-running civil war. In the north, the ruling National Congress Party, led by Omar El-Bashir, is campaigning for unity while  the former rebels under SPLM decided “to campaign for what the people want.”

Before the closure for registration last week, at least 3.4 million people in Sudan have registered to vote while Sudanese in Diaspora are also allowed to vote. Reports said aid agencies have been assisting to educate the illiterate rural population on how they will choose between two images on the ballot paper.

One of them is that of clasped hands symbolising “ unity.” The second symbol is a “single hand”, signalling separation from Khartoum. The vote for separation has united the diverse southern communities who are often divided along ethnic lines. There have been pro-separation rallies as the people look forward to end centuries of slavery and abuse at the hands of the Arabs in the north.

Sudan is located in the north-eastern part of Africa. It is the 10th largest country by land mass, combining the size of France, Britain, Germany and Belgium, put together. It is bordered by Egypt to the north, the Red Sea, to the northeast, Eritrea and Ethiopia to the east, Kenya and Uganda to the southeast, the Democratic Republic of Congo, and the Central Africa Republic to the southwest, Chad to the west and Libya to the northwest. The River Nile, world’s longest river, divides the country on the east and west.

Khartoum is the political, cultural and commercial capital of the nation, while Omdurman remains the largest city. Its population of 42 million people, Arab and Nubian origins who are Sunnis and the Dinkas and other diverse groups in the South.

Islam is the official and largest religion, while Arabic and English are the official languages. The pro-Islamic policies of the government led to a second civil war in 1983,  followed by a bloodless coup d’etat in 1989. Under the dictatorial leadership of El-Bashir, Sudan has initiated a series of macroeconomic reforms which resulted in its economy being rated amongst the fastest growing in the world. Sudan is rich in natural resources including petroleum, with China and Japan as its main partners.

The British began the process of divide and rule in 1922, when the northerners were not allowed to travel over the 10th parallel south and southerners travel over the 8th north. This ensured that Muslims were stopped from spreading their faith southwards while the British supported the influx of Christian missionaries to the south. This was the basis for the dichotomy that existed till date.

The two cultures were never given a proper opportunity to interact, in the 55 years of the country’s independence. The north imposed its dominance by force and attempted to impose Sharia on southern Christians where illiteracy is almost 100 per cent; poverty is rife, healthcare is non-existent and starvation a frequent blight.

Flashpoints of conflict

Separatist movements in regions such as Darfur and the Nuba Mountains and  border areas are watching the development in the vote today; in the same way other African and Arab countries are watching the development in Sudan.

‘Under the 2005 Comprehensive Peace Agreement (CPA), which brought civil war to an end, two referenda were agreed: one for southern secession or unity and the other to give Abyei the opportunity to choose to be part of the north or the south.

Oil diplomacy

Sudan has achieved great economic growth by implementing macroeconomic reforms and finally ended the civil war by adopting a new constitution in 2005 with rebel groups in the south, granting them limited autonomy to be followed by a referendum about independence in 2011.

The discovery of oil in the southern part of Sudan has been one of the problems of the country. It produces 500,000 barrels every day. Eighty per cent of the oil is in the south, while the pipeline runs to the  north. It accounts for 70 per cent of government revenue and 93 per cent of its exports. South produces vast majority of oil, but north has means of processing.

El-Basir is proposing a wealth-sharing deal that splits oil profits 50-50 between north and south Sudan. The Chinese National Petroleum Corporation (CNPC), runs the largest oil-extraction operation in the country. China has been roundly condemned for closing its eyes to human rights violations in Sudan because of the oil diplomacy. Its company has been accused of false declaration of oil production figures which puts the south in disadvantage. In the five years of  peace, the north has shared $10 billion in oil revenue with south.

The suspicion that the north was hiding oil revenue almost derailed the 2005 Comprehensive Peace Agreement, three years ago. Bashir’s National Congress Party and the Sudan People’s Liberation Army must negotiate a new oil revenue-sharing agreement, and a “credible, independent” company must conduct a detailed audit of the country’s oil industry and release its findings in full to the public.

Observers  believe that the ICC indictment of  El-Bashir has put him under tremendous pressure and he is not in the mood to fight any more, but the UN, and some anti-genocide groups have set up Satellite Sentinel Project, along the border areas to monitor movement of persons and troops.

The surveillance project is to prevent a new civil war in the event that the south votes for secession in the referendum. “We want to let potential perpetrators of genocide and other war crimes to know that we’re watching, the world is watching,” they said. “War criminals thrive in the dark. It’s a lot harder to commit mass atrocities in the glare of the media spotlight.”

Today’s referendum is important for the people of Sudan and the world as it may see the birth of a new nation in Africa and the world.

This article originally appeared in the Vanguard Newspaper in Nigeria