Why competition is unsustainable

Large farms now dominate crop production in the United States. Although most cropland was operated by farms with less than 600 crop acres in the early 1980s, today most cropland is on farms with at least 1,100 acres, and many farms are 5 and 10 times that size. Meanwhile In 1987, the midpoint dairy herd size was 80 cows; by 2007, it was 570 cows. The change in hogs was even more striking, from 1,200 hogs removed in a year to 30,000. This long-term shifts in farm size have been accompanied by greater specialization—beginning with a separation of livestock farming from crop farming in the latter half of the 20th century. For instance in 1900, there were dairy cows and hogs on three-fourth of the farms, while in 2005 only one farm in twenty had either hogs or dairy cows. This allowed crop farmers could devote more time to crop production, invest in crop production and gradually increase yields and acreages[i].

Larger crop farms perform better financially, on average, than smaller farms. The difference is mainly in the cost of production. The larger farms don’t have higher revenue or yields per acre, but they simply have lower costs or as expressed by a report from USDA: “larger farms appear to be able to realize more production per unit of labor and capital. These financial advantages have persisted over time, which suggests that shifts of production to larger crop farms will likely continue in the future.” Their research shows that farms with more than 2,000 acres spend 2.7 hours of work per acre of corn and have cost for equipment of $432, while a farmer with 100-249 acres will spend more than four times as much labour and double the amount for equipment[ii].

At he same time, the number of production and marketing contracts to govern the sale of products has increased, which also acts as a driver for increased size of farms. Contracts covered 32 percent of United States crop production in 2011, compared with 23 percent in the mid-1990s. Larger operations are more likely to use contracts, which can reduce the price and marketing risks faced by farmers[iii]. The same report, Farm Size and the Organization of U.S. Crop Farming, also explains that it is cost saving that is the main driver for the use of GM crops. By and large, similar developments are seen in other parts of the world, e.g. in Sweden 1927 there were 350,000 farms having an average of 4 hogs, while 2010 there were only 1,700 farms having hogs and they had an average of 1,900 hogs[iv].


Agriculture suffers from a paradox which many outside of the sector is not aware of and even fewer understand. The secretary of agriculture of the United States wrote in his annual report 1910 that “year after year it has been my privilege to record ‘another prosperous year in agriculture’”. What has been called a golden age for American agriculture, the period between 1900 and 1914, was a period of almost no growth in the sector. Output per worker increased with only 1 percent between 1900 and 1910. And total farm output only 8 percent. Meanwhile the population increased by a whopping 21 percent. The result of this was better prices for farmers and thus the prosperous years.

Conversely in the 1950s, agriculture output increased in a rapid pace, and all of it as a result of increased agriculture productivity. However, the decade is remembered as a time of hardship for most farm families. Input prices went up and farm product prices fell. A million and a half farm families ultimately gave up farming in this decade as they couldn’t make ends meet. Those that survived were of course the more advanced and commercially successful farmers, which could buy up the land from those that lost out. A similar period came in the 1980s when productivity grew with 3 percent annually, while product prices fell, input prices and interest rates soared. “in term of agricultural development for the national economy the decade of 1980s was a huge success; in terms of the financial well-being of most farmers it was an economic nightmare” writes Willard W. Cochrane[v].

By and large farmers are stuck in a treadmill. They are forced by competition to increase productivity, and the increased productivity leads to lower prices. Product development and innovation which allows industrial companies to stay out of a similar treadmill is taking place in the subsequent chains in the food chains, among food processors and retailers. And even there, there are much less elasticity in food consumption than for most other products. The fact that “people will always need food” is a small comfort for the farmer who can’t compete. This treadmill is the reason for the enormous pace in increase in size and productivity in farming. The vanguard farmers will constantly develop and improve and mostly increase in size, at the expense of their less successful colleagues.

For farmers who can’t participate in this stiff competition there is no way out – or rather there is only the way out – get out! This is the fact for a group of farmer with similar conditions. But ultimately it works in the same way globally, where all farmers compete with each other. Some production disappear all together. In some parts of the world the available nature resources are clearly limiting the possibilities for large scale farming. Compare for instance the conditions for a farmer growing grain in a traditional agriculture areas in Europe. The landscape is varied and roads, rivulets, hills and not the least buildings make fields small. Because of scarcity of land, land prices are also high and not determined primarily by agricultural productivity. The farmer will end up with a small farm and the size of machinery can never be the same as on the Great Plains. Those farmers can never produce grain for the same costs as their competitors in United States, Russia or Argentina, even if they can intensify production and get higher yields per hectare.

Of course, for economic development at large, this constant productivity increase in farming sets free resources that are used in other sectors. It is quite clear that reducing the proportion of workers in the farm sector from eighty percent to, say, twenty percent was a precondition for a lot of modern developments, including both good and bad developments. But one might wonder if there are advantages to continue this process in an endless treadmill? But “enough” is a word that doesn’t really exist in the language of economist, or politicians for that matter.

The treadmill is both driven by specialization and drives further specialization, filling each area with just one or two crops or huge livestock operations. The economic and social implications are huge, but the environmental implications are even bigger. The large scale landscapes are stripped of variation and bio-diversity, it doesn’t produce the eco system services we need and we will have to produce them elsewhere at high costs. The systems also cost direct and indirect damages on nature which have to be compensated for.

This model has replaced most local reproductive systems and energy with a linear model, an industrial model of production. This model is part and parcel of the success and therefore the agriculture treadmill och unlimited competition will never be sustainable. It leads us further astray.

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[i] Farm Size and the Organization of U.S. Crop Farming, ERR-152, Economic Research Service/USDA
[ii] Farm Size and the Organization of U.S. Crop Farming, ERR-152, Economic Research Service/USDA
[iii] Farm Size and the Organization of U.S. Crop Farming, ERR-152, Economic Research Service/USDA
[iv] Hållbarhet i svenskt jordbruk 2012, SCB 2012
[v] The Development of American Agriculture, Willard W. Cochrane, University of Minnesota Press 1993

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A mosaic of regenerative agriculture systems

"The world needs a paradigm shift in agricultural development: from a “green revolution” to an “ecological intensification” approach. This implies a rapid and significant shift from conventional, monoculture-based and high- external-input-dependent industrial production towards mosaics of sustainable, regenerative production systems that also considerably improve the productivity of small-scale farmers. We need to recognize that a farmer is not only a producer of agricultural goods, but also a manager of an agro-ecological system that provides quite a number of public goods and services (e.g. water, soil, landscape, energy, biodiversity, and recreation)".

This is one of the key messages of a new report from United Nations Conference of Trade and Development, UNCTAD. The Trade and Environment Report 2013, subtitled Wake up before it is too late: Make agriculture truly sustainable now for food security in a changing climate, warns that continuing rural poverty, persistent hunger around the world, growing populations, and mounting environmental concerns must be treated as a collective crisis. It says that urgent and far-reaching action is needed before climate change begins to cause major disruptions to agriculture, especially in developing countries.

Agricultural development, the report underlines, is at a true crossroads. Food prices in the period 2011 to mid-2013 were almost 80% higher than for the period 2003-2008. Global fertilizer use increased by 8 times in the past 40 years, although global cereal production has scarcely doubled at the same time. The growth rates of agricultural productivity have recently declined from 2% to below 1% per annum. The two global environmental limits that have already been crossed (nitrogen contamination of soils and waters and biodiversity loss) were caused by agriculture. GHG emissions from agriculture are not only the single biggest source of global warming in the South, besides the transport sector, they are also the most dynamic. The scale of foreign land acquisitions (often also termed land grabbing) dwarfs the level of Official Development Assistance, the former being 5-10 times higher in value than the latter in recent years.

But most important of all are the persistent problems with hunger, malnutrition, and access to food. Almost 1 billion people currently suffer from hunger, and another 1 billion are malnourished, the report notes, even though current global agricultural production already provides sufficient calories to feed a population of 12 to 14 billion. Some 70 per cent of the hungry or malnourished are themselves small-scale farmers or agricultural labourers, indicating that poverty and access to food are the most critical challenges.

The report recommends adjusting trade rules to encourage “as much regionalized/localized food production as possible; as much traded food as necessary.” The past strategy of relying on international markets to meet staple food demand, while specializing in the production and export of “lucrative” cash crops, has recently failed to deliver its desired results, because it has relied on low staple food prices and no shortage of supply in international markets, conditions that have drastically changed since the turn of the century, the report notes.

TER13 highlights that the required transformation is much more profound than simply tweaking the existing industrial agricultural system. However, the sheer scale at which modified production methods would have to be adopted, the significant governance issues, the power asymmetries' problems in food input and output markets as well as the current trade rules for agriculture pose considerable challenges.

More than 60 international experts contributed to the report’s analysis of the topic. It is incredibly comprehensive with a lot of interesting discussion, some of which I will comment on later on this blog. The full report is available at http://unctad.org/en/pages/PublicationWebflyer.aspx?publicationid=666. I have written one of the chapters in the report on Agriculture, Food and Energy.

A new book is emerging

From Extraction to Regeneration: Food and Farming for the 21^st Century

 

Industrial food and farming have been very successful in producing more food, and cheaper food. But it has come at a very high price. The practices have wrecked havoc in important biological systems, in particular in bio-diversity and the nitrogen and carbon cycles. It also squanders its own resource base and the most precious resource on the planet, the soil. Animals are treated in a disgraceful way. While food is abundant, the distribution system, the market, fails to reach 1 billion people which are hungry. More and more people are opposing the modern food system, a few have the energy to build a new system.

From extraction to regeneration: Food and Farming for the 21st century explains how our food and farm system developed into the system we have today, and how interdependent our food system and society are. Gunnar Rundgren demonstrates how farming and food processing technologies have transformed our lives and our relationship not only with nature, the plants we grow and the animals we raise, but also the relationships among ourselves.

The last few hundred years, and in an sharply increasing pace, width and depth, the global market revolution fueled by oil and coal, and shaped by endless competition and rent-seeking has been the factor that has determined the whole food system, from the prairies to the supermarket shelf, from the production of margarine to the emergence of fast food chains. It even transformed the act of eating from an act of confirmation of social relations to individual satisfaction of real or imaginary dietary needs.

But it left us, the animals and the planet unhappy. Most people feel a profound discomfort over how their food is produced and how this affects both the quality of the food and the world we live in. As a response to this organic farming, fair trade and alike has developed. However, these systems are by and large still subject to the market imperatives of competition, profit and constant labor productivity increase, and increasingly so the more successful they are. This limits their transformational power.

Real change of our farm and food system must be linked also to changes in social institutions, in particular the market. This has already started with efforts such as community supported agriculture, local food movements, participatory guarantee systems and urban farming. A truly regenerative food and farm system will close loops of flow of energy, nutrients and most importantly meaning and culture. It will also have to reflect the role of our agriculture system for management of the planet at large.

From extraction to regeneration: Food and Farming for the 21st century shows a path forward. A path of regeneration and co-production of resources, innovation, knowledge and meaning embedded in new social and economic relationships. 

This is a presentation of my present book project. I am deep into research now, plan to have manuscript ready by end of the year.  The title is tentative. Any interesting leads related to the themes is appreciated, in particular those that link food processing to either farming technologies or food habits, or society change. Most literature on food processing is simply about the technologies and not what the technologies mean upstream or downstream, or even in the food processing itself. 

Ethics for sale?

Benjamin Lundy, a Quaker, opened a store in Baltimore 1836 which sold only goods obtained by labor from free people. This is an early example of ethical marketing which continued up to the end of slavery in the United States in 1865.

Ethical marketing based on voluntary standards and certification has spread in a rapid pace the last decades, as a result of converging - and interacting – trends. Most notably,
- a trend towards emphasizing the market and consumer choice as important tools to accomplish ethical, economic, environmental or social goals;
- a trend of government de-regulation, which leaves more self-regulation to the industries; and
- stiff global competition which makes differentiation in the market place an essential survival strategy to escape ‘commodity hell’;

When you buy a cup of coffee for €2 the farmer gets 3-4 cents for the coffee in that cup. If you buy a cup of organic and fair trade coffee you are likely to have to cough-up €2.50 - and the farmer will get 4-5 cents. The farmer’s income will increase, perhaps with impressive 20-25 percent. Looking from another perspective, however, you spend 50 cents to increase the farmer’s income with 1 or 2 cents. This example begs the question if the market mechanism is efficient in transforming consumers’ willingness to pay for direct or indirect benefits of a product to an increase in income for producers.

We don’t have voluntary standards for social conditions for labor in Scandinavia – but there is a Food Justice Certified scheme developed in the United States now. Why? Because it is needed in the United States but not in Scandinavia. These systems mainly emerge in the space between what is well regulated by markets and by governments respectively. Whether they are results of “policy failures” or “market failures” or if they should be seen as permanent institutions is a topic for debate – a debate that is kept here.

Some sector wide commodity schemes, such as the Roundtables on sustainable Palm oil, soya and biofuels have the ambition of being “floor standards”, that is de facto a license to make business. The impact of such standards on trade is substantial. And if they are de facto compulsory, one can of course ask if they should not be subject of regulation and thereby follow the same lines of accountability both nationally and internationally. Many, in particular developing countries, see these voluntary standards as barriers to trade.

In most cases they are dictated by the strong actors in the market place. The most notable example of that is the GLOBAL GAP standard, where supermarkets dictate standards which effectively exclude millions of smallholders from the market place. The same supermarkets which market fair trade products intended to help smallholders.

In Sweden, like in most countries, governments say that it is consumer choice that will determine if farms will farm organically or not. But governments could prohibit, or impose prohibitive fees, on chemical pesticides if they so wished. They could ban factory farming, it they so wished, and if we demand that as citizens.

There are some 100,000 chemicals in use. Certainly, I didn’t make any conscious choice if my computer should be soaked in this or that flame retardant or which chemicals are in my new sofa. To have to select “environmentally friendly” products means that the government authorizes the sale of products that are harmful for the environment. I don’t think it should be a matter of consumer choice if there is Bisphenol A or not in our food.

My conclusion after working with this for some thirty years is that the market mechanism is not efficient in dealing with problems that are rooted in fundamental structures of society, the market itself and the economy. Which is why the buying of fair trade coffee never will end poverty. This was also realized by those fighting against slavery in the United States. The market for products from free labor didn’t abolish slavery. It was political action, and even a Civil War, that led to the abolition of slavery.

Our acts as consumers and our acts as citizens can be linked, and one can bear the seeds for the other one. For instance:
-For a while ethical consumers boycotted eggs from layers in cages, until there was a public ban.
-For a while environmental activists refused to buy refrigerators with CFC, or Freon, as it was called. Then governments agreed to phase it out with the Montreal protocol 1 January 1989.
-There were massive consumer and academic boycotts of South Africa for the apartheid policy. These lasted twenty years until most Western countries agreed to international sanctions.

Clearly this is not an either-or discussion. Most people, including myself, don’t want a nanny state where the government tells us in detail what to do, what to buy or not buy. It is also not a question about the market or the state only. There are many more, non market and non-state, ways of organizing our life and our food. The most apparent is of course to produce the food yourself. But new initiatives such as community supported agriculture are also based on non-market relations, even if they use some of the tools of the market, such as money.

In my view, it is a good thing to make educated and ethical consumer choices. It is not only a good thing - it is our responsibility. But in many cases it makes more sense to have those choices made politically. It is mainly the not so important things and matters for which there is a lot of disagreement that are best left to the market.

Telling consumers that they will change the world or eradicate poverty by shopping is to deceive them.

(notes for my introductory talk at the panel Ethics for sale which was part of the 11th EURsafe conference, The Ethics of Consumption: The Citizen, The Market, and The Law)

Yakuniku - The Emperor's new dish

If you eaten in a Japanese restaurant, chances are big that you devoured Yakiniku, grilled meat. You probably believe it is developed from a long tradition of street vendors selling barbecue. Nothing could be further from reality. At the age of twenty, Emperor Meiji staged a remarkable new year’s party in Tokyo January 1873. As part of efforts to modernize Japan into the direction of the model of an enlightened Nation state –Meiji means “enlightened rule” - , guests were dressed in western style cloths and on the plates French style food was served. Most remarkably, there was beef and the Emperor himself ate beef in public. By this he broke a more than thousand year old taboo. The first decree against eating meat was issued on 675 in Japan and was repeated several times over the almost eleven hundred years before that remarkable party.[i]

What we eat and how we eat it is to a very large extent shaped by many other forces than consumer demand. Many of the shifts in diet are consequences of power politics, capitalism and technology of modern imperialism. For example, by introducing, among other things, rice, cattle, coffee and sugar-cane to the Americas, Europeans, in turn, not only altered the local foodways, but also made the economies of American societies part of global markets[ii].

When I grew up in Sweden all our bread was sweetened, and I thought that was normal. But recently I came to realise that this was a result of public policy forty years before I was born. During World War I there was a shortage of grain in Sweden, but a surplus of sugar. Therefore the authorities commanded bakeries to mix sugar with the flour to keep people sated and happy. Once eating the sweet bread we got used to it – it became something we chose.

“War is probably the single most powerful instrument of dietary change in human experience” writes Sydney Mintz in Tasting Food, Tasting Freedom: Excursions into Eating, Culture, and the Past. Under conditions of war, old habits may be surrendered more easily and new ones established with less resistance than would be the case in peaceful circumstances. Katarzyna J. Cwiertka studied the food in Japanese canteens and observed that the menues in modern day Tokyo are made up of dishes that are luxury versions of those served in the Imperial Japanese Army and Navy half a century earlier.

World War II reshaped food preferences of American citizens, both those who were drafted into the armed forces and civilians at home. This transformation of diet was also on close cooperation with the food industry. The President of Coca Cola, Robert Woodruff, ordered that every man in uniform should get a bottle of Coca-Cola for 5 cents, wherever he is, and whatever it costs the Company. In 1943, General Dwight D. Eisenhower sent an urgent cablegram to Coca-Cola, requesting shipment of materials for 10 bottling plants. “During the war, many people enjoyed their first taste of the beverage, and when peace finally came, the foundations were laid for Coca-Cola to do business overseas.” is how Coca Cola company describes the effect on its web site[iii].

As for many other industries, orders from the military have been a major driver of technology change. It is not only penicilin, aircrafts and the internet that are results of military demand but also canning. In 1795, a Parisian chef and confectioner, Nicolas Appert experimented in new ways of preserving foods by putting soups, vegetables, juices, dairy products, jellies, jams, and syrups in glass jars, sealing them and placing them in boiling water. In 1800 Napoleon, who is widely quoted, accurately or not, as saying, "An army marches on its stomach," offered an award of 12,000 francs to anyone who could devise a practical method for food preservation for the armies. The award went to Appert. Since the method was considered to be of strategic importance, Appert was not allowed to publish it until 1810[iv].

In a similar way as for Coca Cola, the Norman Camembert-makers were very successful in selling their cheese to the French military in World War I in sharp competition with Gruyere. Camembert won the war, and became itself part of the myth of the Great War, demanded by the million surviving conscripts[v].

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[i] The politics of food, Marianne Elisabeth Lien & Brigitte Nerlich,  

[ii] Popularizing a Military Diet in Wartime and Postwar Japan, Katarzyna J. CWIERTKA

[iii] http://heritage.coca-cola.com/timeline.swf

[iv] Hook & Norman, The Haskell F. Norman Library of Science and Medicine (1991) No. 59.

[v] Camembert, a national Myth, Pierre Boisard

Groundbreaking innovations: the shopping cart and the container

Forget the mobile phone and the computer. Forget television and the Green revolution. The two major game-changers of the 20th century were the shopping cart and the container.

The capacity for human shopping is determined by the size of your wallet, but also by the physical ability to carry the stuff. Sylvan Goldman, owner of a food store in Oklahoma City noticed that customers usually quit shopping when the baskets became too heavy, shopping fatigue. In 1937, he invented the shopping cart which largely expanded the customer’s ability to hold and purchase more goods at the same time.

© Vladimir Tonic

In 2013 Maersk’s Mc-Kinney Møller made its maiden voyage from the Daewoo shipyard in South Korea. For a while it will be the biggest ship in the world. It carries 18,000 containers, each of them 20ft long, 8ft wide and 8ft high. That’s enough space for 36,000 cars or 111 million pairs of trainers. Over the next two years, Maersk is overseeing the construction of another 19 similar vessels, forming a class of ship it calls “Triple-E” dedicated to the Asia-Europe route.
This ship is a powerful, albeit often neglected symbol of globalization.

Containerization greatly reduced the expense of international trade and increased its speed, especially of consumer goods and commodities. It also dramatically changed the character of port cities worldwide. Prior to highly mechanized container transfers, crews of longshoremen would pack individual cargoes into the hold of a ship. Loading took a lot of time, there was high risk of damage to the goods by bad weather or theft. A common joke at the New York piers was that the dockers’ wages were “twenty dollars a day and all the Scotch you could carry home” From factory to end customer up to twelve handlings are eliminated by the containerization[i].

Malcolm McLean, a trucking entrepreneur from North Carolina wanted to integrate trucking on land and shipping, which so far had been separate business. He let convert a World War II tanker into the Ideal- X, with a reinforced deck to sustain the load of 58 modified lorry trailers. The world's first purpose-built container crane started to operate in 1959 and loaded one 40,000-pound box every three minutes. The productivity gains from using this container crane were staggering, as it could handle 400 tons per hours, more than 40 times the average of a longshore gang.

Three researchers, Daniel M. Bernhofen, Zouheir El-Sahli and Richard Kneller concludes in a recent study that:

"Regarding North-North trade, the cumulative average treatment effects of containerization over a 20 year time period amount to about 700%, can be interpreted as causal, and are much larger than the effects of free trade agreements or the GATT." 

Containers are generally constructed of aluminum or steel with each container size and type built according to the same ISO specifications, regardless of where the container is manufactured. There are more than 17 million container units and every container has its own unique unit number, who owns the container, who is using the container to ship goods and even track the container's whereabouts anywhere in the world[i]

What would Wal-Mart or IKEA be without shopping carts and containers?

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[i] http://www.worldshipping.org/about-the-industry/containers, accessed 6 September 2013

 

[i] Estimating the Effects of the Container Revolution on World Trade  Daniel M. Bernhofen

Zouheir El-Sahli, Richard Kneller, February 2013

How wet is your cucumber?

There are many arguments about the effects of our food consumption. In particular, the consumption of meat is often portrayed as harmful, be it for the climate, for food supply or for our health. What we eat and how we process it effects water consumption, here the concept of water footprint is the most used. Treehugger says that if you really want to reduce your water foot print you should cut back on meat. The Guardian calls for water foot print labelling. 

While a human being needs a few litres of water to drink, at least 1000 times as much water is used for production of food. The water needed for foods varies tremendously and varies for the same product under different conditions. Often the figures mix  ‘blue’ water—water in rivers and lakes, ‘green’ water—water in rainfall and in the soil, and ‘grey’ water—the water needed to absorb or purify the waste. The water footprint - per kg - of beef is big, ten times as big as for grain and fifty times bigger than for vegetables, if water sources are counted.

	Water use (l/kg)
	Green	Blue	Grey	Total
Beef	14414	550	451	15415
Nuts	7106	1367	680	9153
Lamb	8253	457	53	8763
Ckicken	3545	313	467	4325
Egg	2592	244	429	3265
Oil crops	2023	220	121	2364
Grains	1232	228	184	1644
Milk	863	86	72	1021
Root crops	327	16	43	386
Vegetables	194	43	85	322
Sugar crops	130	52	15	197

But statistics can be presented in many ways. Green water as rainfall is not the same as the water in lakes or wells, the blue water. In many places where cattle graze it would still be too dry to grow any crop. Also, water foot print per kg is a dubious measurement. We eat very different quantities of food, and their concentration of useful nutrients differ widely. If we look at use of blue and green water per calorie, nuts has the lowest efficiency in water use and root crops are the best. Vegetables and meat are quite similar.  Looking at blue and grey water use per protein, oil crops are best followed by milk, lamb root crops and grain. Nuts and vegetables are the least efficient.  

In general many people jump to conclusions when it comes to food. Mostly, they jump in the direction of a choice they already made.  

Development - of what? for what?

A proud farmer with plantains, Samoa

A few years ago, I spent a few weeks in Samoa, a paradise Pacific island country. I was part of a World Bank team assisting the government in the development of a program for increasing the competitiveness of the agriculture sector. My role was to look into opportunities for commercial organic production.

Some things strike you in Samoa. One are the traditional villages with their special building style, the open fales , houses without walls. The village and the extended family (still) have strong positions in Samoa, land is mostly still communal (some 90 percent) and leaders of the extended families, the mathai, assign land to the members of the family. Soils are mostly rich. In these soils Samoans have been growing coconuts, breadfruit, taro and bananas as well as a number of fruits. Traditionally, pigs played a big role. Later cattle, cocoa and coffee were introduced. Many products are not sold in the market but are distributed within then families and villages, the meat in particular is mostly consumed at big parties. So farming is still not so integrated in the market economy.

There are a number of “obstacles” for a commercialization of farming. In essence this means bringing more farmers into a mainly cash-based and market based economy, both on the input and output side. It means that farmers shall sell products in a market situation, but it also means that farmers use more inputs, both hard and soft inputs, ranging from credits, fertilizers. irrigation to advisory service, business planning. In this way they can increase productivity and their incomes. But the price is increased risk. But not only that. When traditional farming systems are brought into the market economy, the change is not only technical or economic and the effects are not only for the household, but the whole village social context is disrupted, reducing the role of the village, and the extended family, as economic institutions. This was certainly the case for when farming was brought into the market economy in Europe and the same pattern is seen everywhere.

When visiting some dozen farms in Samoa, I realized that many of the farm families seem to be happy with their life. Even on direct question of what they would like for their business, they come up with nothing related to increased production, higher income etc. Combine this with the effect of the foreign remittances: lot of money coming in with little efforts from the locals and a certain shortage of labor. Add the effect of the village structure and land ownership: low incentives to invest in higher production as it will be shared by so many and low incentive to invest in the soil as it is not private. Yes, then there are simply not very big reasons for farmers to increase productivity. In particular there is little reason for why they would like to specialize and increase risk in their production, something that is often a basis for modernization of farming.

A cocoa tree growing in the lava rock, Samoa

Some claim that small holders never voluntarily change into the market economy but must be coerced into it through many different pathways. Sometimes by brutal means such as the British enclosures; trading monopolies or outright colonization. But more often through more subtle means: credit programs that makes them dependent; compulsory schooling that means they need to pay school fees, uniforms, books as well as they loose labor force and the children get other values; land titling, i.e. the transformation of land from communities to individuals etc.

Other ways to force people into commercial farming was the introduction of taxes that had to be paid in cash, a system that turned subsistence farmers into commercial farmers – or laborers. As the Kenyan environmentalist and winner of the Nobel Peace Prize Wangari Maathai (coincidentally the same name as the Samoan chiefs!) describes in her book Unbowed:

When the British decided to collect revenue and finance local development, they did not want to be paid in goats. They wanted cash. They also wanted to create a labor force, but they did not want to force people to work. So they introduced an income tax for men in most parts of the country that could be paid only in the form of money. This created a cash-based rather than a livestock-based economy. 

 It is called "development".