Examining the evidence
The LACA (Land and Agricultural Commercialisation in Africa) project, begun last year, looks at some of those impacts in more detail. This three-year project studies the socio-economic impacts of commercial agricultural developments, including types of development that have been vigorously opposed in the land-grab debate.
It asks the following questions. Can contemporary investments can play a role in reducing poverty and inequality? If so, what influences the outcomes in a positive way? The research team is gathering field-level data on three farming models – contract farming, plantations and commercial farming areas – in Ghana, Kenya and Zambia.
The first stage of the project is to review the existing evidence on these three models. This literature review takes in historical experiences of plantations, contract farming schemes and areas of large- and medium-scale commercial farming throughout sub-Saharan Africa. We also analysed reports from other regions where lessons can be learned, such as South-East Asia (home to the oil-palm boom), and Latin America. The resulting paper, Plantations, Contract Farming and Commercial Farming Areas in Africa: A Comparative Review (pdf), provides a guide to the areas in which commercial agricultural developments have led to particularly significant or contested outcomes.
We were especially interested in how land developments affected social and economic inequality in rural communities. The literature review additionally provides working definitions of the three farming models for the LACA field teams to use as a benchmark in their work, as the project progresses.
The mass of historical literature is a reminder that land grabbing and large-scale commercial agriculture are not new in Africa. But it also provides a basis for comparison with new developments occurring today.
Testing a new model: commercial farming areas
An area of discussion for the LACA team has been our third farming model, which we are calling ‘commercial farming areas’. We came across several cases involving blocks or groups of private, medium or large commercial farms that represent new patterns of investment and land use in a particular area. Some are state-planned farming blocks, others more bottom-up developments.
The literature on commercial farming areas provides insights into farm labour: like plantations, commercial farms have served as sites of employment and exploitation for the rural poor. It also highlights how agricultural technology has been adopted and how entrepreneurship is changing.
There is some evidence to suggest that mixed commercial farms have offered more opportunity for rural economic linkages and technology transfer than many contract farming schemes, whose potential benefits can be stifled by the monopoly position of contracting firms. In the months ahead, the LACA team will investigate the socio-economic impacts of contemporary commercial farming areas in different settings and test whether ‘commercial farming areas’ is valid as a discrete farming model.
Caution on contracts
It tends to be assumed in the land-grab debate that contract farming, in which farmers grow produce for a buyer through a contract, works well for Sub-Saharan Africa. In their well-known policy brief on large-scale land acquisition, Joachim von Braun and Ruth Meinzen-Dick of IFPRI recommend contract farming as a preferable model of investment. A similar message appears in statements from African policymakers, such as the Nairobi Action Plan and a statement from the African Development Forum (pdf) that advocated “contract farming, out-grower schemes and similar public–private partnerships that form the basis for win–win models”.
Our review of the literature, though, suggests the need for caution. Contract farming is associated with some well-documented negative impacts: indebtedness, loss of land access and women seeing their livelihood domains being taken over by men once contracts are offered. There is also only limited evidence that contract farming leads to broader take-up of agricultural innovations in the rural community, despite claims to the contrary by contract farming cheerleaders. Small-scale contracted farmers who employ workers often pay lower wages and provide worse working conditions than foreign plantations – a factor that should be borne in mind when contract farming is proposed as a way of reducing rural poverty.
Determining factors
Still, when favourable conditions are aligned, contract farming can deliver benefits to participating farmers without bringing serious harm to local businesses, other resource users in the area or members within the farming household.
What we found is that the outcomes of contract farming schemes are highly variable. In total, the paper suggests six key factors that strongly affect the impacts of all three farming models. These include the prosaic matter of which crops or livestock products are involved, as well as intangible factors such as the political economy of the area where the plantation, commercial farming or contract farming scheme is located, and the accompanying legal and policy institutions.
The findings could form the beginnings of a framework for considering how commercial developments might be designed and supported by policies in order to achieve the best possible outcomes for rural people. But they also highlight the complexity of rural change and, perhaps, the limited usefulness of predicting simple ‘cause and effect’ outcomes from the introduction of certain agricultural developments, be it a prediction of negative impacts from a plantation or positive impacts from contract farming. In some cases there may be no good argument to introduce a particular scheme if it is to be done in the name of rural development or poverty reduction.
Historically, government officials have played a major role in encouraging and supporting private agricultural developments through, for example, tax breaks and allocation of cheap land. There have been tensions and contradictions between the imperatives of public welfare and private profit, and between the conflicting interests of large- and small-scale farmers.
The current mainstream discourse on African agriculture would have us believe that these interests can be married through public–private partnerships and well-designed investments that will bring smallholders into the commercial sphere. One objective of the LACA project will be to investigate who is indeed gaining, and who is losing, from the particular forms that contemporary commercial agricultural development in Africa is taking.
- Smalley, R. (2013) Plantations, Contract Farming and Commercial Farming Areas in Africa: A Comparative Review, Future Agricultures Working Paper 55
Photo: Woman with her passion fruit crop by usaidkenya on Flickr (cc-by-nc)