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Newsletter AGTER. June 2018
Written by: Hubert Cochet
Type of document: Newsletter
Most of the large irrigation projects that are currently promoted by public authorities and funders (often in a public/private partnership mode) are meant to contribute to development of both enterprise-agriculture and family agriculture while they institutionalize de facto a kind of agricultural dualism.
While this dualism mainly expresses a power relationship it also carries multiple wrong meanings and it reveals a huge misunderstanding of real agricultural economy. Against all odds some people continue to oppose “commercial agriculture” and family agriculture as if family farmers had not been for very long time, part of the commercial trade and as is a significant part of their production were not intended for sale… And they continue to oppose private investors (meaning private as in “private sector”) and family farmers as if those were not private actors themselves and prone to invest.
Further more, those projects whose “private” component relies on large size holdings, often dedicated to one single production, heavily using synthetic inputs and exclusively run with employed manpower are built on two assumptions that are seldom questioned:
1/ Those large holdings are supposedly more performing economically … which still remains to be demonstrated on a case-by-case basis, …and by the way which are the criteria that would be used to measure this “performance”? Ability to conquer market shares abroad (the famous “competitiveness”)? Financial profitability of invested capital? Added value creation? Manpower productivity? Land productivity? Job creations?
2/ Those investors bring capital to the agriculture sector and this capital is highly needed. But is it really working capital? Which type of capital and how? When?
However, putting an end to those senseless oppositions –commercial versus familial, private sector v/s family agriculture – and questioning the two above assumptions enables to highlight the fundamental differences between those two types of agriculture:
A contractor – or a shareholder – who invests capital into agriculture rather than into another economy sector, first looks at financial profitability of his investment, that means the capacity of his investment to pay the shareholders. Therefore productivity of work has to be increased (especially thanks to motorization) and costs shall be reduced as much as possible knowing that in this type of farming relying exclusively on paid manpower, work is considered as a cost… It is then mandatory to reduce the wage bill: reduce the manpower, increasing flexibility and insecurity of workers, pressure for lowering salaries, and so on… Financial efficiency can then be achieved but more seldom economic efficiency, if you measure the later in terms of value added or land productivity (net value added per hectare). Regarding value distribution, it is always done at the expense of workers and employment.
On the other hand in family agriculture, agricultural income is contrariwise what counts most. This revenue (the share of the added-value that belongs to the producer, as well as the possible subsidies) is sustaining his family and enabling him to invest in order to increase his capital. Family farmers too will then look at increasing productivity of their works; but work is not a cost as such. What one tries to reduce is its drudgery not its monetary cost! Those farmers’ interest is then both to increase productivity of work and to ensure that the largest part of the added-value is used to pay family work and to improve the working tool, an objective that meets the interest of the community: more wealth creation, especially by surface unit, and a value distribution that fosters employment and investment.
The questions raised by Hubert Cochet in his editorial are central to the works in which numerous AGTER members are currently involved. In the previous newsletter we informed about the collective thinking exercise of the ”Land and Development” Technical Committee, that is co-animated by AGTER and SCAFR–Land of Europe and that addresses the evolution of agricultural structures worldwide as well as the setting of young farmers. The upcoming sessions shall take place in July and, based on case studies, they will enable a cross analysis of this topic according to the way the issue is raised in very contrasted contexts including irrigated areas.
On top of this work stream, we also find the recent (and still on-going) works regarding public-private partnerships for irrigation in Sahelian Africa and to the relations between family agriculture and agribusiness in Ivory Coast (re irrigated agriculture but also the plantation economy). Part of the results of those studies shall be presented soon during the “Rencontres des Etudes Africaines en France” (meeting of African studies in France) that shall take place in Marseille, July 9 to 12. AGTER will actually be part of the panel named “Entrepreneurial agricultures and family agricultures in sub-Saharan Africa: forms, links and development models”. Full composition of the panel is to be found here.
While waiting for the results of discussions that will appear out of all those sessions and that we will share with you, please enjoy the following selection of articles and videos.