Pambazuka News | 20 April 2011
Africa: We export food to import food
In recent years there has been an upsurge of agricultural investment in the developing world. Its alleged purpose is to curb the recent global food crisis that has seen serious volatility in the global food market system, causing significant price hikes on key global foods, such as rice.
The price hike in global food has prompted certain countries to seek cheap and fertile farmland beyond their borders in order to guarantee food security for themselves. To achieve this goal such states are encouraging their domestic agro-businesses, tied to their national interests, to invest in countries like Ethiopia, Sudan, Madagascar, Tanzania and Argentina, to name a few. Capital invested in far-away farms will produce food cheaply, which will then be exported back to the country where the original capital came from. In this way, the volatility of the international food market can be avoided and national food security achieved.
To accomplish this goal, a key step is to convince developing nations to give up their fertile land to foreign investors. One of the baits designed for the purpose of persuasion is the promise of infrastructure and the sharing of information and technology in agricultural science. The other promise made to host nations is of capital gained from food exports, which can then be reinvested in the country. For underdeveloped countries, who face serious food insecurity, and who are often unable to feed their population, this may sound too good to pass by, particularly if host nation governments are too naive, or are otherwise unconcerned.
In Ethiopia, we have had hundreds of foreign investors grabbing fertile land at incredibly low cost. The scale of the spree is unprecedented. Investors are describing the deal as 'green gold'. Ethiopia's untilled land, located in some of the most fertile parts of the country, is now being sold to foreign interests for less than its true worth. Foreign investors are given perks, tax holidays lasting years, and essentially they are exempt from any royalties.
The government of Ethiopia promises this process will mitigate the nation's chronic food insecurity and allow domestic farmers to gain knowledge from the expertise of foreign agro-business. It also says dollars gained form exporting food can alleviate Ethiopia's endemic food crises. By this analysis, the premise of the EPRDF government seems to be 'we export food to import food'. Leaving aside the initial absurdity of the claim, it is necessary to note that the inadequacy of this argument has been amply demonstrated in many developing countries.
Although this issue of land-grabbing by foreign interests is new to Ethiopia, it is no stranger to other parts of the developing world. The history of foreign agro-business intrusion in some Latin American and Caribbean countries is enlightening to say the least. In northeastern Brazil, the region was extensively farmed by foreign agricultural interests for centuries. Unfortunately this region has nothing to show for it now. Today the region is the poorest part of the country with the least food security and one of the highest malnutrition rates in Latin America. Contrary to the promises made by companies that farmed Brazil's fertile soil, the outcome has been very grim. In his famous book 'Open Veins of Latin America', Eduardo Galliano, commenting on Brazil's northeast, says, 'Naturally fitted to produce food, it became a place of hunger. Where everything had bloomed exuberantly, the destructive and all dominating plantation left sterile rock, washed out soil, and eroded lands.' Are Ethiopia's own fertile lands headed for the same fate? What makes the current foreign agricultural adventure in Ethiopia any different?
In fact, the environmental destruction of the land has already begun in this initial phase. Around Gambella region, Karuturi, an Indian company, which owns large swaths of the region, is heavily involved in burning forests and grasslands to make way for potential farmland. It would be unfair to single out Karuturi alone. Other foreign companies who have settled in the region are no more saintly. They are also using slash and burn techniques to clear land. There is no doubt the flora and fauna will be lost forever as a result. Pastureland is fast becoming eviscerated, affecting local herders, who depend on their livestock for survival. This process of pastoral land elimination could have negative consequences for currently inflated meat prices in Ethiopia, which will undoubtedly exasperate existent levels of high malnutrition in the country.
According to the government, these lands given to foreign investors were idle lands, ready to be gobbled up into the global food system without much disturbance. However, this view depends on one's definition of 'idle land'. Pastureland may seem idle, but its usefulness is undeniable.
Another key consideration should be about the inevitable damage and cost to future generations. Given the fact that Ethiopia is very much a country of the future, demographically speaking, this should concern us. Intensive farming by foreign agro-business has a history of ravaging the land and turning fertile soil into depleted soil in a short period of time. Other parts of the globe where this has been practiced testifies to the inevitability of environmental destruction. In a land that is potentially the breadbasket of Ethiopia, if not the whole Horn of Africa, such degradation is a real loss for future generations and therefore presents a moral challenge for us today.
Employment offered by these farms is purported to be a benefit for local communities. Never mind that the main reason why locals seek this work is primarily because the agro-businesses have forced them to abandon their old pastoralist way of life.
Take away this option of survival and people are left with no other choice but to accept slave wages working on foreign farms. In a way the agri-business creates the labour surplus for itself and manages to keep wages extremely low. The wage paid to workers, on average about $1.50 (25 Birr) for a day's work, is nowhere near enough to survive without additional food aid. According to a recent documentary, some farm workers in southern Ethiopia complained they were getting paid seven birr per day, instead of the 25 birr initially promised. That is about 50 cents a day in dollar terms. By these estimates the lives of these workers were considerably better before the introduction of foreign agri-business. Instead of food security, food insecurity is created, perhaps even serious malnutrition.
To add insult to injury none of the produce from these farms will be available to local markets. However, there is talk of selling some of the produce to aid agencies. The World Food Program intends to buy some of this grain in order to assist hungry people. Ironically, this group of intended food aid recipients will include those working to produce it in the first place. Ethiopia's government is calling this sustainable development.
In an effort to rush through this controversial issue unimpeded, the government has sought to bypass all transparency. It is fully aware that an open discussion on the issue would expose the absurdities of its claim. Deals with foreign investors were approved backhandedly for this reason.
The government expects a few scattered utterances here and there by its officials to be accepted as a national discussion on the matter. The government also knows it has no chance of convincing people because further evaluation of the agreements reveals gaping holes. The people of Ethiopia are being asked to believe absurdities such as 'we export food in order to import food' as a viable economic option to guarantee national food security. However, the most basic comprehension of economics tells us this is nearly impossible. Given Ethiopia's dwindling currency exchange, what sense is there in purchasing grain from the international market, while exporting domestic grain? Can exported grain used as a cash-crop generate enough capital to be able to import food affordably and sustainably? Muddying the waters and diverting the issue under the guise of food security is certainly a cruel way of hoodwinking a hungry population. It is not clear what the benefit will be to Ethiopia. In most instances the harm done is much greater than the gain.
Perhaps the EPRDF government views these deals as solidifiers of its international connections, especially with emerging markets. Gifting land can guarantee political support. As a beleaguered party, EPRDF knows its survival depends on bringing some particularly heavy hitters into the fold. What better way to bring them on board than to give them what they most require and what Ethiopia has to offer, namely land and water?
It is important to point out that some of these excited shoppers include states with dreadful human rights records. One of these, among several, is Saudi Arabia. Surely if the going gets tough for Ethiopia's ruling party, the Saudi's can be counted upon to prop up their friend in need, no matter how badly democracy and human rights are trampled. It seems these two are a match made in heaven. Generally, although the loss is great for Ethiopia, the gain has been significant for the ruling party. Is the EPRDF trying to garner vested interest in the country for its own political existence and at the cost of the nation?
Politics aside, there are other alternatives for agricultural development in Ethiopia. If the government was truly interested, Ethiopia's agricultural output can be developed in a way that is much more sustainable and equitable. For instance, although small, there is a significant amount of capital within the country to boost farming capacity in hitherto unexplored areas of the country.
Perhaps a genuinely interested government can enhance and facilitate the efforts of investors within Ethiopia's borders to import technology and to train domestically run agro-business interests. The aim here is not to blow the bank, but to increase investment in a sustainable way. After all, isn't this how major agri-businesses got their start in their country of birth? Another option to boost domestic farm output would have been to invite wealthy Ethiopians living abroad, especially those with interest and knowledge, to invest in the area.
Even though these later approaches were never discussed, for political reasons, there is a strong argument for their viability. Certainly they are much more likely to produce the intended result than the mostly unaccountable foreign companies ever will.
The scale of farming that is based on domestic investment would be smaller and thus friendlier to the local environment and local communities, while simultaneously allowing for a significant increase in domestic farm output. Most importantly, this option would have placed domestic interests in control of national food production, a much more viable and positive proposition for Ethiopia's prospects. If Indian, Saudi, and Chinese companies are extending their reach beyond their borders to secure national food security for their domestic economy, why can't Ethiopia do this within her own borders?
In terms of food availability, it seems like we are in a much more dire situation than they are. Moreover, the involvement of global agribusiness in Ethiopia would have been more acceptable if Ethiopia's own farm industry was given priority. This is not xenophobia; it is how the most food secure nations in the world came into being. However, the guise that the local farm industry will develop alongside major foreign agricultural companies does not make economic sense. It is only a matter of time until they are eaten up. A developmental state does not endorse such an unfair take over of key national assets in this way. It is simply not developmental policy. It is a give away.