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Value-chain Agriculture and Debt Relations: contradictory outcomes

2013; Taylor & Francis; Volume: 34; Issue: 4 Linguagem: Inglês

10.1080/01436597.2013.786290

1360-2241

Philip McMichael,

Innovation and Socioeconomic Development

Abstract In the context of the world food crisis ‘value-chain agriculture’ is emerging as a new frontier of publicly subsidised corporate investment, incorporating smallholding farmers into commercial relations to redress apparent food shortages. This paper conceptualises value-chains as technologies of economic and ecological power, using cross-regional case studies to explore the impact of debt relations in extant value-chain relations. While the value-chain project envisioned by the development industry in partnership with the private sector is geared to ‘feeding the world’ the likely outcome is (differentiating) smallholders serving corporate markets at the expense of local food security. I argue that developmentalists seek to resolve the crisis through a ‘spatio-temporal fix’, enclosing smallholders in value-chain technologies financed through debt relations that appropriate value from smallholder communities. At the same time some farmers are seeking to avoid the debt trap by developing strategies to decommodify farming practices to preserve and revitalise their farms as creators of ecological values, rather than simply converters of economic value. Notes 1 The author is grateful for productive comments from colleagues at the ‘Repoliticizing Debt’ Workshop, Queens University, May 2012.B Losch, S Fréguin-Gresh & ET White, Structural Transformation and Rural Change Revisited: Challenges for Late Developing Countries in a Globalizing World, Washington, DC: World Bank, 2012, p 9. 2 P McMichael, ‘Feeding the world: agriculture, development and ecology’, in C Leys & L Panitch (eds), Socialist Register, 2007: Coming to Terms with Nature, London: Merlin, 2007. 3 P McMichael & M Schneider, ‘Food security politics and the Millennium Development Goals’, Third World Quarterly, 32(1), 2011, pp 119–139. 4 J Bair, ‘Global capitalism and commodity chains: looking back, going forward’, Competition & Change, 9(2), 2005, pp 165, 168. 5 M Watts, ‘Life under contract: contract farming, agrarian restructuring, and flexible accumulation’, in PD Little & MJ Watts (eds), Living Under Contract: Contract Farming and Agrarian Transformation in Sub-Saharan Africa, Madison, WI: University of Wisconsin Press, 1994, pp 26–27. 6 R Clapp, ‘The moral economy of the contract’, in Little & Watts, Living Under Contract, p 81; and J Kloppenburg, First the Seed: The Political Economy of Plant Biotechnology, Madison, WI: University of Wisconsin Press, 1988. 7 D Harvey, The New Imperialism, Oxford: Oxford University Press, 2003, p 115. 8 Ibid, p 116. 9 G Gereffi, J Humphrey & T Sturgeon, ‘The governance of global value chains’, Review of International Political Economy, 12(1), 2005, pp 78–104. 10 J Bair, ‘Global commodity chains’, in J Bair (ed), Frontiers of Commodity Chain Research, Stanford, CA: Stanford University Press 2009, p 15. 11 Bair ‘Global capitalism and commodity chains’, pp 166–167. 12 JD van der Ploeg, The New Peasantries: Struggles for Autonomy and Sustainability in an Era of Empire and Globalization, London: Earthscan, 2009, pp 77–78. Emphasis in the original. 13 C Oya, ‘Contract farming in sub-Saharan Africa: a survey of approaches, debates and issues’, Journal of Agrarian Change, 12(1), 2012, p 10. An analogous initiative is the interpretation of ‘the outsourcing of tea production in South India … as a strategic response to enhanced demands for ethical accountability along the global value chain’. J Neilsen & B Pritchard, Value Chain Struggles: Institutions and Governance in the Plantation Districts of South India, Chichester: Wiley-Blackwell, 2009, p 206. 14 K Marx, Capital, New York: International Publishers, 1967. 15 World Bank, World Development Report 2008, Washington, DC: World Bank, 2007, pp 1, 7. 16 J Diouf & J-M Severino, ‘Africa must grow to rely on its own farms’, Guardian Weekly, 2 May 2008, p 18. 17 fao, World Agriculture—Towards 2015/2030, Rome, 2002, at ftp:ftp.fao.org/docrep/fao/004/y3557e/y355eo3.pdf. 18 Quoted in grain, ‘Seed aid, agribusiness and the food crisis’, Seedling, October 2008, p 2, at www.grain.org/seedling/?id=564. 19 G Toenniessen, A Adesina & J DeVries, ‘Building an alliance for a Green Revolution in Africa’, Annual Review of the New York Academy of Sciences, 1136, 2008, pp 240–241. As ActionAid notes, ‘while agra does work with public institutions involved in agricultural development, it does not advocate that the African state resuscitate critical agricultural agents such as parastatals’, which were dismantled under structural adjustment mandates in the 1990s. ActionAid, Assessing the Alliance for a Green Revolution in Africa, 2009, p 11., at http://www.actionaidusa.org/sites/files/actionaid/aai_report_-_assessing_agra.pdf 20 See http://web.worldbank.org/WBSITE/EXTERNAL/COUNTRIES/ECAEXT/TAJIKISTANEXTN/0,contentMDK:21790044~menuPK:3939976~pagePK:64027988~piPK:64027986~theSitePK:258744,00.html. 21 While 90% of seeds in Africa are local varieties, seed privatisation is very much on the drawing board, since the development paradigm defines productivity as yield per plant, and therefore concentrates on seed technologies that individualise cropping, at the expense of systems of crop diversity. 22 T Reardon & C Timmer, ‘Transformation of markets for agricultural output in developing countries since 1950: how has thinking changed?’, in R Evenson, P Pingali & T Schultz (eds), Handbook of Agricultural Economics—Agricultural Development: Farmers, Farm Production and Farm Markets, Oxford: Elsevier, 2005, pp 35–37. 23 World Bank, ‘Value chains and small farmer integration’, Agriculture for Development, lcsar Agriculture and Rural Development, 2008, p 1, at https://www.responsibleagroinvestment.org/sites/responsibleagroinvestment.org/files/Ag. 24 Cf grain, ‘A new Green Revolution for Africa?’, Briefing, 2007, p 3, at www.grain.org/briefings/; and Toenniessen et al, ‘Building an alliance for a Green Revolution in Africa’, p 241. 25 fao, ‘Boosting food production in Africa’s “breadbasket areas”’, fao Newsroom, 4 June 2008, at www.fao.org/newsroom/en/news/2008/1000855/index.html. 26 agra, ‘agra and the Millennium Challenge Corporation launch a historic collaboration to provide Africa’s farmers with technologies, infrastructure and financing’, Alliance for a Green Revolution in Africa, 11 June 2008, at www.agra-alliance.org/content/news/detail/682/. 27 ActionAid, Assessing the Alliance for a Green Revolution in Africa, p 17. 28 grain, ‘A new Green Revolution for Africa?’, p 3. 29 AA Adesina, ‘Africa’s food crisis: conditioning trends and global development policy’, keynote speech at the International Association of Agricultural Economists conference, Beijing, 16 August 2009, pp 14–15. 30 EC Daño, Unmasking the New Green Revolution in Africa: Motives, Players and Dynamics, Penang/Bonn/Richmond, South Africa: Third World Network/Church Development Service/African Centre for Biosafety, 2007, p 52. 31 Ibid, p 55. See also Oya, ‘Contract farming in sub-Saharan Africa’, p 22. 32 Adesina, ‘Africa’s food crisis’, p 10, emphasis added. 33 Daño, Unmasking the New Green Revolution in Africa, p 56. 34 G Arrighi, The Long Twentieth Century: Money, Power and the Origins of Our Times, London: Verso, 1994. See also Soederberg’s and Rankin’s articles in this issue. 35 F Kaufman, ‘The food bubble: how Wall Street starved millions and got away with it’, Harper’s Magazine, July 2010, pp 27–34; and P McMichael, ‘The land grab and corporate food regime restructuring’, Journal of Peasant Studies, 39(3–4), 2012, pp 681–701. 36 K Mullin, ‘Land grab or opportunity of a lifetime?’, Reuters, 30 January 2011, at http://farmlandgrab.org/post/view/18078. 37 S Soederberg, ‘The politics of representation and financial fetishism: the case of the G20 summits’, Third World Quarterly, 31(4), 2010, pp 523–540. 38 Losch et al, Structural Transformation and Rural Change Revisited, p 164. 39 M Gioé, ‘Can horticultural production help African smallholders to escape dependence on export of tropical agricultural commodities?’, Crossroads, 6(2), 2006, pp 32–33. 40 Ibid, p 33. 41 AB de Battisti, J MacGregor & A Graffham (eds), Standard Bearers: Horticultural Exports and Private Standards in Africa, London: International Institute for Environment and Development, 2009, pp 51–52. Similarly Dolan reports a decline from 75% to 10%–20% of exports during the 1990s among fruit and vegetable smallholder growers for large Kenyan agro-exporters. C Dolan, ‘On farm and packhouse: employment at the bottom of a global commodity chain’, Rural Sociology, 69(1), p 105. 42 A Graffham, J Cooper, H Wainwright & J MacGregor, Small-scale Farmers who Withdraw from Global gap : Results of a Survey in Kenya, London: dfid, 2007. 43 D Mithöfer & H Waibel, Vegetable Production and Marketing in Africa: Socio-Economic Research, Wallingford, UK: cabi, 2011, p 187. 44 S Henson & J Humphrey, ‘The impacts of private food safety standards on the food chain and on public standard-setting processes’, fao/who, 2009, pp 30–31, at www.fao.org/docrep/012/i1132e/i1132e00.pdf. 45 Oya argues that this dynamic intensifies processes of social differentiation already under way. Oya, ‘Contract farming in sub-Saharan Africa’, p 28. 46 Henson & Humphrey, ‘The impacts of private food safety standards’, p 31. 47 CB Barrett, ME Bachke, MF Bellermare, HC Michelson, S Narayanan & T Walker, ‘Smallholder participation in contract farming: comparative evidence from five countries’, World Development, 40(4), 2011, p 725. 48 Ibid, p 727. 49 Oya reports that ‘growing market risks (in the form of price volatility), and the shift from spot markets to implicit contracts, have made full vertical integration and preferred supplier lists central to contemporary global agribusiness and to global supermarkets, which have risen as important players in many developing countries, including Africa’. Oya, ‘Contract farming in sub-Saharan Africa’, p 22. 50 Clapp ‘The moral economy of the contract’, p 79. 51 WE Murray, T Chandler & JD Overton, ‘Global value chains and disappearing rural livelihoods: the degeneration of land reform in a Chilean village, 1995–2005’, Open Area Studies Journal, 4, 2011, p 87. 52 Ibid, p 88. 53 Ibid, p 89. 54 Ibid, pp 90–91. 55 Ibid, p 91. 56 Ibid, p 92. 57 Lack of formalised contractual arrangements is widespread—for example, in Africa the contract ‘is a verbal agreement or a simple registration by farmers to indicate understanding and compliance with the terms of agreement… [In one Ghana study] Farmers did not know how the prices had been determined. Equally unknown to them were when collection and payment would be after harvesting, the penalties for defaulting, or the compensation arrangements for contingency or crop losses’. C Kudadjie-Freeman, P Richards & PC Struik, ‘Unlocking the potential of contract farming: lessons from Ghana’, Gatekeeper Series, 139, London: iied, 2008, p 11. 58 Quoted in Murray et al, ‘Global value chains and disappearing rural livelihoods’, p 93. 59 L Rist, L Feintrenie & P Levang, ‘The livelihood impacts of oil palm: smallholders in Indonesia’, Bidoversity Conservation, 19, 2010, pp 1009–1024; M Colchester, N Jiwan, M Sirait, AY Firdaus, A Surambo & H Pane, Promised Land: Palm Oil and Land Acquisition in Indonesia—Implications for Local Communities and Indigenous Peoples, Moreton-in-Marsh, UK: Forest Peoples Programme and Perkumpulan Sawit Watch, 2006, pp 11–12. 60 Rist et al, ‘The livelihood impacts of oil palm’. 61 Quoted in Forest Peoples Programme & Sawit Watch, Ghosts on Our Own Land: Indonesian Oil Palm Smallholders and the Roundtable on Sustainable Palm Oil, Moreton-in-Marsh/Bogor, 2006, p 22, at http://research.yale.edu/gisf/tfd/ghosts_on_our_own_land_txt_06_eng.pdf, accessed 9 February 2009. 62 Ibid, p 23. 63 Quoted in Ibid, p 75. 64 Ibid, p 24. 65 Friends of the Earth, LifeMosaic & Sawit Watch, Losing Ground: The Human Impacts of Oil Palm Plantation Expansion in Indonesia, p 75; and Rist et al, ‘The livelihood impacts of oil palm’. 66 Friends of the Earth et al, Losing Ground, p 73. 67 RL Meyer, ‘Analyzing and financing value chains: cutting edge developments in value chain analysis’, paper presented at the third African Microfinance Conference, Kampala, 2007, p 23. 68 Ibid. 69 D Neven, MM Odera, T Reardon & H Wang, ‘Kenyan supermarkets, emerging middle-class horticultural farmers, and employment impacts on the rural poor’, World Development, 37(11), 2009, p 1803. 70 Ibid, p 1810. 71 Ibid. 72 T Reardon, CB Barrett, JA Berdegué & HFM Swinnen, ‘Agrifood industry transformation and small farmers in developing countries’, World Development, 37(11), 2009, p 1725. 73 ActionAid, Power Hungry: Six Reasons to Regulate Global Food Corporations, 2005, p 36. 74 World Bank, World Development Report 2008, p 238. 75 In 2004 La Vía Campesina noted that agri-power no longer resided in control over land, rather it resides in the relations that surround agricultural production: ‘those that control loans, materials supply, the dissemination of new technologies, such as transgenic products, on the one hand, and those that control national and international product warehousing systems, transportation, distribution and retail sales to the consumer, on the other hand, have real power’. ‘Announcement world forum on agrarian reform’, 3 March 2004, p 5, at www.viacampesina.org/welcome_english.php3. 76 L Raynolds, ‘Re-embedding global agriculture: the international organic and fair trade movements’, Agriculture and Human Values, 17, 2000, pp 297–309; and Dolan, ‘On farm and packhouse’. 77 M Maertens & J Swinnen ‘Trade, standards and poverty: Evidence from Senegal,’ IDEAS, 2006, at http://ideas.repec.org/p/ags/eaa106/7924.html; B Minten L Randrianarison & J Swinnen, ‘Global retail chains and poor farmers: Evidence from Madagascar’, LICOS Discussion Papers 16406, LICOS - Centre for Institutions and Economic Performance, K. U. Leuven, 2005, at http://ideas.repec.org/p/lic/licosd/16406.html. 78 M Maertens & JFM Swinnen, The Fall and Rise of Vertical Coordination in Commodity Chains in Developing and Transition Countries, Proceedings of the fao workshop on ‘Governance, Coordination and Distribution along Commodity Value Chains’, 2005, p 63. 79 Thus a survey of farmers in Kenya showed that ‘Farmers outside of Globalgap receive a much lower level of advice and support from the buyer, are paid a lower price per kilo, grow and sell smaller volumes and derive much less of their household income from sales of export crops’. Graffham et al, Small-scale Farmers who Withdraw from Global gap , p 2. 80 Van der Ploeg, The New Peasantries. 81 Quoted in grain, ‘A new Green Revolution for Africa’, p 2. 82 U Hoering, Who Feeds the World? The Future is in Small Scale Agriculture, Bonn: Church Development Service, 2008, p 7. 83 Ibid, p 8; and etc Group, ‘Who will feed us? Questions for the food and climate crises’, Communiqué, 102, 2009, at www.etcgroup.org. 84 M Altieri & VM Toledo, ‘The agroecological revolution in Latin America: rescuing nature, ensuring food sovereignty and empowering peasants’, Journal of Peasant Studies, 38(3), 2011, pp 587–612. 85 Van der Ploeg, The New Peasantries, p 265. Emphasis in the original. 86 Ibid, p 278. 87 Ibid, p 31. 88 Ibid, p 19. 89 Ibid, p 20 90 Cf Kloppenburg, First the Seed. 91 H Wittman, AA Desmarais & N Wiebe, Food Sovereignty: Reconnecting Food, Nature and Community, Oakland, CA: Food First Books, 2010. See also P McMichael, ‘Food regime crisis and revaluing the agrarian question’, in R Almas & H Campbell (eds), Rethinking Agricultural Policy Regimes: Food Security, Climate Change and the Future Resilience of Global Agriculture, Bingley, UK: Emerald Books, 2012.