Winners and losers in the privatization game
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CTA. 1992. Winners and losers in the privatization game. Spore 41. CTA, Wageningen, The Netherlands.
Permanent link to this item: http://hdl.handle.net/10568/45820
The terms 'privatization' end 'liberalization' dominate politics these days. But in African agriculture these processes, which were introduced in response to economic crises, only serve to accentuate the division between the small peasant farmer and...
The terms 'privatization' end 'liberalization' dominate politics these days. But in African agriculture these processes, which were introduced in response to economic crises, only serve to accentuate the division between the small peasant farmer and the big landowner. Is some state control still needed in order to maintain a proper balance? Since the beginning of the 1980s state control of agricultural production has perforce been gradually reduced. Development agencies and government departments in charge of the various agricultural sectors were too much of drain on state budgets without, in most cases, being able to deliver what was expected of them. The funding agencies which provide the majority of the finance have pressed governments to cut costs, as one of the conditions of the structural adjustment policies which most African governments have had to adopt. These government administrations, which controlled agricultural production (the monopoly on imports, and the distribution of fertilizers, seeds and pesticides) as well as ensuring a market for - produce, have progressively relinquished these activities to the private sector. This change, which started in some countries as long ago as the early eighties, is still going on. The objectives of this policy of liberalization and privatization are to cut costs, to get peasant farmers to take responsibility for their own projects and to facilitate private initiatives in order to kick-start production again. The first results of the policy can already be seen. One of the first sectors to be freed from state control was the supply of fertilizers, which had been heavily subsidized. In Senegal this went hand-in-hand with the ending of credit facilities to peasant farmers and the phasing out of subsidies, and it resulted in a sharp decline in fertilizer use, thus jeopardizing land fertility. Many private stores have opened, usually branches of large firms or small businesses, and these have ensured the efficient distribution of chemicals in the wealthiest areas. They are less easy to come by elsewhere, however. Now there is no state control, the market gardeners of the Cap Vert peninsula on the outskirts of Dakar have complained that they are being supplied with products and seeds which have passed the end of their useful life. On the Senegal river delta a farmers' organization gets together a forum of suppliers each year so that everyone is sure of the correct price, thus avoiding the possibility of abuse by the dealers. Since 1987 Cameroon has also set up a programme of reform for the fertilizer subsector in order to hand over the marketing to private enterprise and thus reduce costs. Hitherto a system of tendering on the international market had been operative in order to supply the state distribution machinery, and this entailed a great deal of red tape, delays in payment and in getting the fertilizer to the point of sale. The result was that farmers did not get the fertilizer in time to be of any use to the crops. The end of monopolies The end of state monopolies also affects the availability of veterinary products. In Chad, the State gave up its monopoly of distribution in 1989 and on imports in 1991. State veterinary officers, whose salaries were, in theory, paid by the Ministry, were allowed to switch to private practice. Livestock pro ducers now pay for the vaccines and treat meets for their animals. However, vets , private practice in areas of transhumance or extensive pastoralism can never make enough to live on. In Senegal privatization has been in fore for some years now, and private vets who were paid a lump sum to leave the civil service have mainly set up their practices i Dakar. In Ferlo, which is the biggest region for pastoralism in the country, entire area have been left without veterinary services since the state pulled out. Stock-owner have to travel miles to the nearest town just to get their animals vaccinated or to buy medicine. This has led in some villages to demand that one of their own people should be trained in the basics of animal health an. to do vaccinations. Each livestock produce contributes towards the upkeep of this 'veterinary auxiliary'. Commercial dealers have readily taken over the most prosperous sections of the agrochemical supply business, but those which are unlikely to be profitable have been a lowed to disappear. The result is that the most isolated and sparsely populated areas - are being neglected. Private enterprise takes over The same problems are found in the marketing of produce. Those states which had control over the purchase of basic commodities are now restructuring their various networks, and gradually closing down the highest-spending departments. In Cameroon the National Office for Marketing Basic Commodities (the ONCPB), which was grossly overspent, was closed down in June 1991. The National Cocoa and Coffee Office which has replaced it has seen its operations cut, and no longer plays any part in marketing. Dealers and wholesalers now buy cocoa and coffee directly ex farm, - with the result that in the most distant or inaccessible areas cocoa is not collected any more and peasants are vulnerable to unscrupulous exporters. Fixed scales, cocoa - downgraded, growers not paid; the whole system sometimes seems rotten to the core. The growers miss the good old days when the truck trundled down the track to collect the cocoa from the village and take it to the cooperatives, where it fetched immediate payment from the exporter. The fall in the price of cocoa on the world market has not helped matters. Mali has also been putting a liberalization policy into effect for some years now. The Mali Office of Agricultural Produce (OPAM) which was once in charge of cereal collection, storage and distribution, but which had never been outstandingly successful, no longer has a monopoly. Apart I from some storage at village level the grain trade is now controlled by big business. The smaller, hard-up operators find it hard to survive. 'Dealers are not in the business of altruism. Only true market forces will make the private sector work better than state control' says Jean-Jacques Gabas, one of the Club du Sahel's specialists. Market Information Systems (MIS) have been installed in several Sahelian countries which each week send out data on prices from 58 cereals markets to newspapers and radio stations. This cuts the potential for speculation. This information, which is of tremendous help to the small-scale farmer, will have to be complemented by a survey of the state of grain stocks and the availability of transport. This sort of reliable market information together with a minimum of state control, is vital if liberalization is not just going to create new monopolies to the advantage of the big private operators who have plenty of capital and access to credit. Special measures will be needed for difficult areas so that peasants who cannot market their own produce do not find themselves marginalized. The emergence of alternative peasant power What is the reaction of farmers to this liberalization, a process which can be harsh, but which is supposed to reduce government spending and breathe new life into rural areas? Farmers who were once trained by development agencies, which took care of everything, have had to find new methods of marketing-and quickly. If they are given the means to do this, all is usually well. On the Senegal River delta a system of agricultural credit has been set up to coincide with the arrival of privately-owned companies selling agricultural chemicals, of piece work in the fields and the maintenance of rice prices. These have all facilitated an increase in rice production. Access to credit has been made possible by the creation of the Economic Interest Group (EIG). Farmers have frequently had to group themselves into formal associations in order to handle all the different operations previously taken charge of by the state, and to defend their own interests. At one time, the state or development agencies structured them into cooperatives but these have more or less ceased to have any real function and so either on their own initiative or encouraged by NGOs, they have formed groups. These are led by returning �migr�s or il. young educated people forced by unemployment to return to their villages. One of the purposes of these groups is to ensure that their members get regular agricultural supplies. Fertilizers, pesticides and seeds are bought collectively in bulk to reduce costs. Marketing strategies are usually more difficult to organize. In Benin, where the marketing of cotton has been C]_ transferred to village groups, farmers are complaining that they are worse off than before. Many of the boards of these groups are monopolized by the educated but unemployed who find it all too easy to swindle the villagers. Farmers' unions and NGO federations want to go further and, as part of the process of democratization, make their voice heard at the highest level. The South-Mali Cotton Planters' Association obtained places on the board of the Mali Textile Company (CMDT), so that they could make their feelings heard. They threatened to sow no more cotton. The unions on the Senegal river delta now take part in discussions with the government and funding agencies on future rice-growing policy. These are only a few of many examples of 'peasant power' making its voice heard in the way agricultural production is structured. The educated classes go back to the land The new countrydwellers play an important part in this new state of affairs. More and more people these days are discovering that agriculture can be profitable. 'Farming pays better than office work', said one leader of an EIG union on the Senegal delta. Funding agencies and governments encourage these victims of economic stagnation and crisis to settle in the country by all possible means, as they think they will develop facilities that traditional agricultural sectors did not enjoy. In some countries, for example Senegal and Cameroon, unemployed graduates have been given financial assistance to set up farms. Agricongo is trying to set up modern intensive farms for specially trained young people. Despite all these incentives, such a return to the land is not always successful. Nevertheless, when they do work, neighbouring areas watch and learn from these experiments. One of the most striking phenomena is the return to the land of the nations' �lites. A whole new class of farmer is currently evolving, the 'Sunday peasants' or 'shiny-shoe farmers', whose advent is the result of the liberalization of this sector of the economy Many civil servants and managers of privately-owned businesses are now investing in agriculture and attempting to set up real agricultural businesses which are run with great care and efficiency. No longer are they content with a plot of land or a plantation in a village looked after by younger brothers or cousins. They buy land and set up farms, having studied the market and identified a gap which is likely to be profitable. Intensive stock farms, mar ket gardens and tree plantations have sprung up all round the big towns and these currently supply a high proportion of urban food and fuel needs. Near Dakar, for example, city-dwellers have bought up a great deal of land. Behind solid fences which keep out prying eyes there are cattle-fattening sheds and laying or broiler chicken farms, like the one owned by c computer scientist who keeps 25 cows and nearly 3000 chickens. He mixes their feed himself and organizes an efficient marketing network which fetches him the highest possible price for his products. His current aim is to ensure that high-quality meat gets a better price than the run-of-the-mill product. He may even be tempted to give up computers altogether for farming. Some owners of private agricultural concerns use their political or economic influence and know-how in order to set up, or buy at rock-bottom prices, national companies when they are privatized. The bank ruptcy of SODEBLE in Cameroon helped the founder of Maiscam who now heads an estate of some 2500ha and employs 300 people. He was influential enough to acquire the monopoly on supplying the breweries with maize grits and to stop maize imports into the country. In C(te d'lvoire many big businessmen have cocoa or coffee plantations worked by wage-earners. Foreign companies have also benefited considerably from the process of privatization. Jean Marc Ela notes that 'Modern agriculture is being taken over by large firms in countries which are open to foreign capital and which are currently witnessing the general cultivation of fallow lands'. Many development companies have been bough' up cheaply by western businesses, which can take advantage of favourable rates and conditions. This is what happened to the banana-growing sector in Cameroon. The Cameroon Banana Office was taken over by the Compagnie Fruiti Fre based in Marseilles, while the American firm Delmonte runs the rest of the banana plantations. They get certain tax exemptions and reduced rates since they are thought to be strategic companies. Bananas may well be becoming Cameroon's most important export, but the farmers do not have much to do with this any more; they are just paid to work on the plantations these days. Land ownership disputes These enterprises often take over peasantowned land by force, grabbing the best, ejecting the farmers and leaving them the least fertile land. In the Senegal delta huge holdings have been set up on the land that is most easily irrigated. In the centre of Togo several thousand hectares of agricultural land have been made over to a private company for a cattle ranch. In Senegal a legal battle is going on between the Fil Fili company, which has been assigned the land of a market-gardening company which long since moved out, and the market gardeners who have been cultivating it. These battles over the ownership of land are becoming ever more frequent, and constitute the principal problem arising from privatization. More and more land is being bought up, and those who can afford to do so make it into very private property indeed for their own advantage, often flouting customary law in the process. Funding agencies are seeking a reform of land law in order to give some security to peasants on their smallholdings and to encourage them to increase production. But the appropriation of peasant land remains a danger and some fear that small-scale farmers will lose their rights altogether and just become hired hands on what was formerly their own land. In these cases the state must continue to ensure that land ownership is just and equitable. Uncontrolled liberalization has been shown to represent a risk for peasant farmers who are often vulnerable and who have to learn to adapt to the new deal. Nevertheless, privatization is bound to bring results in the future: its great benefit is the encouragement it gives to new initiatives.
SubjectsMARKETING AND TRADE;
- CTA Spore (English)