Lit in Review: Nigerian Agriculture 3

(This post was started October 2011 and never finished. Let's get it out and done.)

Eze, Kwonko, Orebiyi, and Kadiri, "Land Tenure System, Farm Size, innocation, and Agricultural Productivity in South-East Nigeria"

From the abstract: "The laws of inheritance and increase in population led to the subdivision and fragmentation of existing farmland in such a manner that the sizes of farm holdings discouraged agricultural commercialization. ... It was also shown that mechanization of agriculture was impracticable under land fragmentation." They conclude that farmer cooperatives would consolidate fragmented farms, reducing time and energy waste and allowing more modern innovations and mechanization to improve efficiency and production.

Lit in Review: Ghanaian Agriculture

Egyir, Adu-Nyako, and Okafor examine how the "Made in USA" poultry label affects consumer choice in Ghana. Among the statistics they offer, domestic production accounts for 10% of the poultry market. In 2010, the local price was just under $4/lb while imports cost under $1.10/lb Costs could be brought down with better management and vaccine delivery. Two decades ago, fish provided 60% of the animal protein they consumed, but poultry has been growing in importance. Most of the chickens (60%) are bought directly from the farm, with supermarkets only serving the high income group. The poultry packing industry is in its extreme infancy.

500 consumers were surveyed about their attitudes on how likely they were to purchase domestic chicken, versus Tyson (US), Brazilian, European, or Asian chicken. 56% were likely to buy Made in the USA, and 72% to buy Ghanaian. Asian chicken did not score very highly. More than 80% recognized COOL chicken. (That's Country of Origin Labeling, not the fellow on the right.)

Here is Kris Klokkenga's description of the differences between trying to farm in Illinois and in Ghana:

Development Clashes in India

The Guardian on Polio: "If in India as a whole there are no more confirmed cases before 13 January, the country will have completed its first year without a new victim." That would leave only three countries where polio is endemic: Nigeria, Afghanistan, and Pakistan. IUPDATE: The Gates Foundation twitter feed informs me that it has taken two million volunteers' time each year to accomplish this. Misunderstandings and religious tension - including the War on Terror - have been heavily involved in why it has taken so long in India:

Equally important in overcoming the last bastions of the disease, as in many parts of the world, has been the consent of local religious figures.
Over the past decade one of the biggest obstacles to polio eradication in India, as in Pakistan and Nigeria, has been the resistance of poor, largely illiterate Muslim communities such as those in and around Moradabad.
Even as the first campaigns got underway in the area in the late 1990s, local clerics began telling congregations that the vaccinations were part of a government plan, backed by the west, to make Muslim women infertile. ...
Torabi said that he had attended immunisation clinics in clerical robes to show "that a common Muslim man is able to trust the programme".
He added: "I told them that in nowhere in the Qur'an is it written that we should be unhealthy, or not take care of our hygiene and that if tomorrow our children are suffering from polio then they will not be able to do the prayers properly. Slowly they understood my point."

NPR has details on a conflict between a South Korean steel company -- that has agreed to purchase a large amount of government land to build a steel mill, electric plant, and a port, all while providing training and jobs locally -- and a number of locals whose land is also being taken from them as part of the deal.

Meanwhile, the Economist reports on the private construction of roads and other infrastructure in India, which started out quite optimistic but is now showing signs of overly high debt and other financial distress:

Over the next five years it predicts that infrastructure investment will reach a new high relative to GDP, with some $1 trillion spent, half of it by the private sector. The trouble with this rosy prediction is that the balance-sheets of many Indian infrastructure firms are as potholed as the roads they resurface.

They argue first that firms need more equity, not more debt. Fair enough. The second argument, however, is that the government needs to untangle some of the business transactions. This is an incredibly dangerous suggestion overall. Government's job is to set the rules so that companies act in open, transparent ways, not to wade in and make business decisions. That is an open invitation to corruption and rent-seeking.

Harvard (et al) in Africa

The Oakland Institute is publishing a series of reports showing, among other things, that the "land grab" in Africa is not just about Middle Eastern countries, India, and China. US Universities are speculating that the value of land in Africa is going to go up, so they are buying low and selling high. Land is being bought at 1/2000th the price of land in Iowa and 1/1000th the price of land in Brazil. Note please that this is not a "market" price -- it is negotiated between government and (government, firm, institution, investor), usually with no input from or repayment for the people currently living and working the land. Eminent domain indeed: "a foreign investment group was able to acquire 100,000 hectares of fertile land in Mali for a 50-year term for free."

Researchers at the California-based Oakland Institute think that Emergent's clients in the US may have invested up to $500m in some of the most fertile land in the expectation of making 25% returns.

Emergent claims that it's not speculation or land grabbing, but that real investments are being made to make the land more valuable, and more productive to the extent it helps with it being valuable.

In Ethiopia, a process of "villagisation" by the government is moving tens of thousands of people from traditional lands into new centres while big land deals are being struck with international companies. [Ethiopia map source]

The largest land deal in South Sudan, where as much as 9% of the land is said by Norwegian analysts to have been bought in the last few years, was negotiated between a Texas-based firm, Nile Trading and Development and a local co-operative run by absent chiefs. The 49-year lease of 400,000 hectares of central Equatoria for around $25,000 (£15,000) allows the company to exploit all natural resources including oil and timber. The company, headed by former US Ambassador Howard Eugene Douglas, says it intends to apply for UN-backed carbon credits that could provide it with millions of pounds a year in revenues.

Meanwhile the Republic of Congo (not the DRC) is giving 80k ha to 40 of the white farmers ousted from Zimbabwe a few years back:

Unnatural Organic Products?

His Argument Will Lose Him Ground 

GROCERY STORE | BEAVERTON, OR, USA |
Customer: “Excuse me.”
Me: “Can I help you?”
Customer: “I don’t understand what this sign says.”
(The customer points to a sign above the organic section. It indicates that all produce needs to be washed thoroughly.)Me: “It means that before you eat any product, you should wash it.”
Customer: “Why?”
Me: “Because there might be dirt or other things on the item.”
Customer: “But these are organic!”
Me: “Organic means they were grown only with natural substances.”
Customer: “Dirt isn’t natural!”

I'm reminded of a story Isaac Asimov told. He was visiting a friend who showed him his garden. The friend picked a potato and tossed it to Asimov. "What do I do with this?" he wondered. "You eat it," came the reply. "But it came out of the dirt!" Now, because he was Asimov and was known as a witty fellow, they all took it as a great joke, but he confesses that he was temporarily befuddled at the thought of eating something that had just spent all that time in the dirt. Let's hear it for hydroponics?

Vegetable Markets Need Land

But not much. Here is the Maeklong market in Thailand.



HT: Blattman

Simple Development Stories vs. Reality

The differences between what we want to do, what we are good at, and what we [maybe] need to do. (HT: Barder, Source)

 We’ll never really be free of simplistic development stories. But at least that means the rest of us can have jobs adding another layer of reality to the debate: No, Malawi’s fertilizer subsidies are not simply a glorious story of an African government bucking “the Man.” IMF austerity programs also made the fertilizer subsidies possible.

Zambia continues its fertilizer subsidy program and is encouraging a Russian firm to build a new fertilizer plant to help them do it.

Saudi Arabia in Ethiopia ($2.5 billion for rice) and Zambia ($125 million for pineapple): “Saudi Star plans to export 2/3 of the food it will grow on the Ethiopian land…” The Saudi government announced this year that there are 27 other countries in whose agriculture it hopes to invest.

Hungry families turning down a free lunch. “When India was poor, its failure to feed itself properly did not seem odd. Poverty was explanation enough. But after one of the most impressive growth spurts in history, the country’s inability to lift the curse of malnutrition has emerged as its greatest failure—and biggest puzzle. … Astonishingly, a third of the wealthiest 20% of Indian children are malnourished, too, and they are neither poor nor excluded.” After complaining that Indian plans to reduce hunger are insufficient given the structural and bureaucratic difficulties, however, the Economist’s answer of turning the program into a CCT that wouldn’t address them either seems odd.

Why? Try Banerjee and Duflo's explanation: "The poor often resist the wonderful plans we think up for them because they do not share our faith that those plans work, or work as well as we claim. We shouldn’t forget, too, that other things may be more important in their lives than food."

Easterly asks, Why are we not concerned about the brain drain in North Dakota? I don’t know where he was during the previous gubernatorial election, but in the great state he and I share the brain drain out of New York State was a major debating topic. While it’s true no one proposed putting a wall around the state to keep people in, it was still a topic of concern.

Big Bag of Development: Good ideas and bad

What is rigorous impact evaluation and when is it not really needed? A Clemens video.

Unintended consequences: low flow toilets edition. Too little water per flush is ruining the sewer system.

Really bad idea: a tax on remittances to Mexico proposed in Texas. Remittances are one of the chief forms of aid, we know it gets to individuals, and it hurts legal immigrants who are making significant contributions to the country. We should be trying to reduce the costs of remittances, not increasing them. Here is an example of a business born from remittances, a group of women growing organic cacti commercially.  The effort is being credited with social transformation and significant public and private benefits.

Trust and development, Japan edition: why is there no looting

Hidden taxes: control of land prices as a means of lowering taxes in Hong Kong.

But this does not imply that the revenue system of Hong Kong creates `”huge distortions”. Quite the contrary. Taxes on land create almost no distortions because they have no effect on supply or demand.

The development of a low corruption pension system in Mexico City

The resource curse appears to be alive and well in Africa as the most resource rich countries fared worse than average from 1990-2008. 21 countries’ wealth grew faster than the global average and that growth has been associated with increasing human capital and institutional quality.

Big Bag of African Agriculture

Fair trade coffee in Uganda, which liberalized coffee export in the 1990s: Prices remained low initially, leading to reduced supply and quality. Organizers of a free trade initiative with 7500-15000 farmers claim that they have known how to produce high quality coffee but haven’t had incentives. The price premium is roughly 25% plus investment in community public goods.

Also in Uganda: mud quarries. “what we get is a fascinating portrait of a village doing the best it can with an informal land system, yet obviously still in need of some sort of formality.” The mud is a valuable building material locally.

South Africa plans that agroprocessers will add 500k jobs over the next ten years and are providing capitalization funds. The funds are coming from the court payments required of Pioneer Foods for collusion and price-fixing. The government also hopes to increase the number of smallholder farmers from 200k to 250k by providing training and extension services. Employment in agriculture and agroprocessing has been declining.

Zambia’s president is not predicting turmoil from the north spilling in, crediting good multiparty elections for his confidence.

Learning African English via Wikipedia

FAO estimates that if rural women had equal access to land, technology, financial services, education, and markets , agricultural production could increase enough to feed an additional 100-150 million people, 12-17 percent of the world’s total. Diouf has called for equality as a means to “win, sustainably, the fight against hunger and extreme poverty.” Again, the question is if we pursue equality as a right, or because it is morally right, or because it pays us to do so.

On the infrastructure constraints in African agriculture:

Statistics indicate that only 34% of sub-Saharan Africa’s rural population lives within two kilometers of a paved road. In most of Africa, poor road infrastructure accounts for investors deciding to look elsewhere. “Every fifth African needs at least five hours to get to the nearest market….” Beavogui says.

Reasons to be optimistic about Africa, video below the fold. Among the interesting points he makes is that vehicle operating costs in Africa are no higher than in price, but the prices to put goods on ships are the highest in the world. Only 1% of the money allocating for non-wage health support actually gets where it was intended. Yes, this is why he is optimistic. It means that there are obvious problems that can be readily solved. As a result, implementing some simple remedies reduced Rwandan child mortality by 33%.

Land Grab

The so-called African land grab grabbed a lot of headlines at the end of 2009: Guardian, NYTimes, BBC, not a bad collection, all available through the African Agriculture blog.

Malibya, the Libyan government's development company in Mali, has built one of the largest canals in Africa. The largely critical article from The Guardian [who apparently failed to ask permission to be on the company's land] notes that 150 families were forced off their land for the canal with minimal compensation and worries that this is only the beginning.

"The government are bandits. What they are doing is completely against every law," says Ibrahim Coulibaly, president of the Coordination Nationale des Organisations Paysannes, which has been organising protests. "Even if the land does belong to the government, the people living on it still have rights, and we will do everything to fight against this injustice."

Mapping systems are said to be quite poor, causing construction workers to dig up several cemeteries which led, very understandably, to further local opposition. There are also serious concerns about water rights issues. A NYTimes article mentioned that " 'In Mozambique, one investment company discovered an entire village with its own post office on what had been described as vacant land,' said Olivier De Schutter, the United Nations food rapporteur. ... The agreement signed with the Libyans grants them the land for at least 50 years simply in exchange for developing it."

Kofi Annan, former UN secretary general, says that “The food security of the country concerned must be first and foremost in everybody’s mind. Otherwise it is straightforward exploitation and it won’t work. We have seen a scramble for Africa before. I don’t think we want to see a second scramble of that kind.”

Of course, statements like this from the state-funded companies do little to help:

Kassoum Denon, the regional head for the Office du Niger, accused the Malian opponents of being paid by Western groups that are ideologically opposed to large-scale farming. “We are responsible for developing Mali,” he said. “If the civil society does not agree with the way we are doing it, they can go jump in a lake.”

One US project is supporting 800 farmers to acquire title to about 12 acres of land each.

How large are the parcels of land being transferred to foreign governments? The World Bank estimates that, between Jan-Nov in 2009 alone, enough land to match California and West Virginia combined, more than 10 times the size of annual land transfer deals worldwide before the food price spike. In Mali, the range is between 600k [as reported by the foreigners] and 1.5 million hectares.

BBC reports that Ethiopia is selling off an area the size of Belgium populated largely by ethnic minorities at about $10/yr/ha. "The Ethiopian government stipulates that foreign investors will have to satisfy domestic food needs before they can export." The government claims that the land is unused, but there are millions of pastoralists in the country, many of whom pass through that area and none of whom are being compensated.

More posts on the Africa "land grab," and a general article mentioning several of the larger deals and concerns. Senegal is reportedly in talks with Saudi Arabia about a parcel of land 4 times the size of Manhattan.

African Agriculture: Chicken Imports, Bananas, and Bangladesh Land Grab

The Bangladesh government joins the group of countries purchasing and leasing land in Africa to grow food for home. They have contacted governments in west Africa (Ghana, Senegal, Cote d'Ivoire, and Liberia). Unlike many other "land grab" proposals, these appear to promise a 50/50 split of food grown so that if Bangladeshi investments can double yields, it is possible for the countries to increase their food availability. As I highlight in my upcoming food policy textbook, cereal yields in west Africa are still more than half what they are in other regions of the world so such a large increase is possible.

Zimbabwe's chicken farmers are upset that the government lifted the temporary ban on chicken imports. Most of the imports come from Brazil and South Africa, which farmers claim heavily subsidize their chicken industries. One kg of chicken costs only $1 to raise in Brazil, but about $2.85 in Zimbabwe which forgoes the use of GMO-inputs. Local chicken sells for roughly $4-5 per kg while the imported chicken goes for $2/kg. The Zimbabwe Poultry Association head complains that "the problem is" lack of government price fixing to prevent retailers from raising the prices on local chickens, which cost much less at wholesale than retail and unfair dumping. Unmentioned are ways government could reduce local costs, help chicken farmers move into other industries, or support both farmers and consumers. Most of what he would like to see happen would benefit producers at the expense of consumers and pit one group of producers against another.

An article praises the benefits of banana culture research and constructing a center to provide marketing and extension services in central Kenya.

Conspiracy Theory of the Day

Lex Luthor is responsible for both the financial crisis and the African land grab! More details on the first here. Once you realize the first and why, the second becomes obvious.

Best line from Denver today

During the panel on lessons from agricultural development in Africa and the Caribbean (which was really about the "land grab" from Europe, China, India, and the Middle East) the moderator pointed out that a lot of the Big Deal is European nations coming in and leasing African land for very little. Out of the $1.1 billion this one government was spending in South Africa, the farmers were getting $8/ha. A pittance not reflecting local land values.

Understandably, there have been comparisons to colonial days, with the mild improvement that Europe is paying $8 now instead of 0 for the use of the land.

So up pops the only Asian in the room and offers, "Well, you could deal with the Chinese government if you'd rather...." and the room erupts in laughter.

Land Grab: India in Africa

India in Africa:

What started as a trickle a few years ago is now gaining momentum. Harcharan Bajwa was among the early travellers. He started a floriculture farm in Ghana five years ago. “In Patiala, I had twenty acres of land where I alternated between wheat and rice. Today I have 250 acres of land on lease for 50 years. I am able to export my produce to Holland. People think Africa is torn apart by violence but that’s not true of all countries. It is a bit like India where some states see violence while others are completely peaceful,” he says. ...

In fact, the bulk of the dairy industry in Kampala (Uganda) is run by farmers who migrated from Punjab....

[Indian farmers are becoming] Convinced that farming in Africa is a feasible and profitable venture.... “Vast tracts of arable land are lying vacant. There is no technology. In my entire trip of seven days, I saw two tractors and that too of the sort that we stopped using in India some 30 years ago. The land is fertile, the climate is suitable and water is abundant. Also, both land and labour are cheap.”

The cause of the upsurge in interest? An international summit and invitations.

The sudden spurt in interest in Africa can be traced to an Africa summit held in Patiala four months ago. Minister of State for External Affairs, Preneet Kaur, who is an MP from Patiala, brought along ambassadors and high commissioners to India of seven African nations and together they exhorted farmers in Punjab to explore opportunities in Africa. They pointed out the advantages of farming in Punjab—and that Africa was more than just a continent torn apart by war. And last month, Ethiopian Ambassador to India, Genet Zewdie, came on a four-day visit to Jalandhar, met local farmers and invited them to take land on lease in Ethiopia. ...

Prices help: "for every one acre in Punjab, we can own 60 acres in Africa." They also point out that Europe is more relaxed about enforcing some standards when the produce comes from "virgin" Africa than from India, so that lowers costs too.

When "bad" governance is popular

Over at Aid Thoughts there is a fascinating discussion of the origins of Zimbabwe's current economic plights. Ranil makes a few very important points.

First, Mugabe is popular in his own country:

It’s difficult for Westerners, particularly those who have come of political age in the last ten or fifteen years, to understand it, but Mugabe remains popular. Almost everyone accepts he has overstayed his welcome, but still hold affection for him. Malawi inaugurated a Robert Mugabe Highway just a couple of years ago; similar roads are found in most major African cities. Yet, in the West, his name is a by-word for economic mis-management, suppression of rights, and all that is wrong with governance in Africa.

This divergence he argues is largely to due to differences of opinion about the land grab ten years ago. He points out that several things hit Zimbabwe at roughly the same time: structural adjustment led by the WB and IMF, the land redistribution, and a drought not the least of them. Ranil claims in the comment section that his main point is that Zimbabwe's present economic difficulties stem from many factors outside Mugabe's control, and simply linking "bad man = national poverty" is a gross over-simplification. I read a different main point:

the land seizures were and remain overwhelmingly popular policies within Zimbabwe – because they rectify an injustice that was only a couple of generations old, and one which blacks had never been allowed to question until 1980. ... When land reform finally occurred, Mamdani points out that in economic terms if not political ones, it was a democratic revolution: more than one hundred thousand small owners joined the base of the property pyramid.

The costs from the land redistribution have not been even across agriculture:

the white commercial farms, focusing on export crops such as tobacco, have been devastated by land reform. Meanwhile, the large plantations run by corporations, untouched by land reform, have continued as normal, producing sugar, tea and coffee. And maize, the most important food security crop, is largely a peasant crop – land reform has not damaged it, though drought has reduced production by almost 90%. In fact, research by IDS in Sussex suggests it is these small farmers who have been most resilient to the political end economic turmoil, as well as drought.

 And replacing Mugabe alone will not bring about prosperity. What is needed? Here's a partial list:

the land seizures were popular, remain so and will not and should not be reversed – they simply address an older injustice. The agriculture sector will need to be reimagined as one split between plantations and small- and medium-sized farms. To make this work will require an explicit economic strategy. The urban economy is still in complete tatters: no industry still stands in Zimbabwe, and the process of rebuilding them after the damage of structural adjustment will take far longer than it took to break them down.

I hope my readers appreciate the irony of discussing all this immediately after discussing Easterly's three cheers for democracy. But even in Easterly's post, he acknowledges that almost nothing is correlated with economic growth, neither democracy nor this sort of popular bad governance. A complex subject, nicht wa'?