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". 

Growing out of poverty or grow poverty?

The poorest farmers in the world are unlikely to farm themselves out of poverty. They simply lack resources to invest in agriculture, and paradoxically they often even lack the labor needed as they are busy earning money with other trades than farming. To try to ease their predicament by introduction of GMOs or chemical fertilizers is a counterproductive strategy. 

A recent doctoral thesis, From Betterment to Bt Maize: Agricultural Development and the Introduction of Genetically Modified Maize to South African Smallholders by Klara Jacobson, Uppsala reinforce this understanding through a study of the Massive Food Production Programme (MFPP), an agricultural development program aiming to reduce poverty by raising agricultural production in Eastern Cape Province, South Africa. Introduction of Bt maize (a GM crop) was a main component in this program. The Bt maize variety introduced was not adapted to smallholders' farming environments. It was input-demanding and sensitive to environmental dynamics, and it was promoted for planting in monoculture.

The results also reveal that the program was not properly designed to support the improvement of smallholders' livelihoods through agriculture. The program disregarded the long-term marginalisation of smallholders, and the associated need for substantial advisory, infrastructure and credit support to increase agricultural productivity.

The program also, like so many similar programs, failed to recognize the heterogeneity of poverty, resulting in a bias towards the better-off smallholders. Many may believe that poor farmers would have ample access to labor, from themselves and their families, but the study show that the poorer were more labor constrained than those better off. For example they had to do manual hand-hoeing of their fields instead of using oxen and they had to offer their labor to others for money or food. The wealthier, in contrast could use the labor of the poorer to increase their productivity. 

I have written a number of posts on this, and associated topics earlier, e.g.
The road to food security: What works and what doesn’t?
The hunger, the people and the land
If you don't have cash you don't get to eat
Rich people are not starving – can markets help?
Millennium Villages: the Great Experiment

Ultimately, this analysis can be drawn much further. There are similar issues to consider if we want to understand why commercialization of small holder farming may not work out as well as many believe.
Most farmers will simply not survive in this process. If they did, there would be enormous over-production of agriculture commodities. After the introduction of cross-Atlantic steamships, European farms had difficulties to cope with competition from North America. The response was to introduce protectionist measures. Still the pressure of competition was a lot lower for them than it is for poor farmers in developing countries today. To believe that they could compete with their manual labor, their muscles, with tractors driven by fossil fuel is simply not at all realistic, and the result of this is seen everywhere.

In addition, because of the productivity gains in developed countries, agricultural prices dropped with some 60 percent in the period 1960 to 2000 (Dorward et al 2002). As the productivity, and energy use, of the poorest farmers remained much the same, it is obvious that they lose out. At current prices, it would require one life of labor for a manual farmer to acquire a pair of oxen and small animal drawn equipment, and ten generations of labor to buy a small tractor (Mazoyer and Roudart 2006). The productivity gap has widened over the last decades, both relatively and in absolute numbers (see table below). 

Agricultural labour productivity, dollar per man-year

	1990-1992	2001-2003	Agriculture as share of GDP
Low income countries	315	363	20%
Middle income countries	530	708	9%
High income countries	14,997	24,438	2%
France	22,234	39,220	2%
United Kingdom	22,506	25,876	1%
USA	20,797	36,216	1%
Brazil	1,507	2,790	5%
India	332	381	4%
China	254	368	12%
Malawi	72	130	36%

Source: World Bank 2007

You can read more on this here: Agriculture: How cheap energy (and capitalism) increased the gaps between rich and poor

Millennium Villages: the Great Experiment

The Millennium Villages is one of the most prestigious humanitarian aid projects that have been launched in Africa in the past years, and a lot has actually happened. Yet, the project’s central question remains unanswered – how do you eradicate extreme poverty?

By Ann-Helen Meyer von Bremen & Gunnar Rundgren

-          I have learned a lot through this project, and I have become much more self-confident. I have a plan for the future that I am already working towards, says Mama Sarah, while showing us her well-kept fields. 

            We are in Inonelwa, one of the fifteen villages of Mbola, outside Tabora, in Tanzania. Mbola is one of Africa’s Millennium Villages*, a high-status, ten-year humanitarian aid project that was launched by Jeffrey Sachs, in order to show that it is possible to reach the UN’s Millennium Development Goals. 

            Seven years into the project, Mama Sarah is undoubtedly one of the winners. She emanates strength, energy and stability. A brand-new brick-house has been built next to her old, much simpler home, and a new storage shed for harvested corn and peanuts has also been set up in the courtyard, which enables her to sell her products when prices are at the highest. Mama Sarah earns an income from her farming practices, which is not a given in Tabora, or in Tanzania, for that matter. A brand-new bicycle is also leaning against the wall. It was given to Mama Sarah by Tanzania’s president when he came to visit.

            According to Eliezer Kigaya, who is responsible for agriculture in the Millennium Villages’ local office in Tabora, the secret behind the project’s success resides in its focus on financing chemical fertilizers and seeds, which increases the amount of corn harvested. This is one way to look at it. Another explanation is that Mama Sarah is not any farmer, but one of 67 agriculturists who have been chosen as good examples, to inspire the remaining approximately 6,000 households living in the villages. Prior to the implementation of this project in this particular village, she already belonged to a leading group of farmers. 

            Ruth Kirunda picked the shorter end of the stick.  We met her in the neighbouring village, carrying her young boy on her shoulder. Here, the harvest has been poor, and there are large gaps between the corn plants. She is one of many farmers who have not had the means to pay back her part of the financed package of chemical fertilizers and modern hybrid seeds.

-          We entered the project when it started in 2006, but in 2011, we were unable to pay back the loan. My brother, who I manage the farm with, and I had to leave to care for our aunt who got sick. We therefore could not properly care for the weeds, the harvest was poor, and we were unable to pay back the loan, says Ruth Kirunda.

            When the project was launched, all farmers were included. The reason was simple – for the first two years, chemical fertilizers and seeds were given out for free. After that, farmers were meant to pay for parts of the cost themselves, an investment that they could take out a loan for. Only one per cent of the farmers paid their loan back. Yet, the project persisted and farmers were still asked to pay a certain portion of the invested money back, and today, more farmers are able to do so. However, the majority still cannot pay back, and around two thirds of the farmers are thus not receiving the subsidies.

           

As opposed to many other humanitarian aid projects that tend to focus solely on one particular area, the idea behind the Millennium Villages is to implement solutions in various different fields, such as health, schools and income-generating activities (more specifically, agriculture). According to the Millennium Villages’ coloured publications, poverty is decreasing, as is hunger and the number of illiterates, while health, food production and economic welfare are increasing. The closer we come to reality in Mbola, the more nuanced this picture becomes. The reports claim that corn production has increased three to four times, but during our visit, the Tanzanian government is distributing food to the villages of Mbola. 

           

When we visited one of the cooperatives that process corn and peanuts, we discovered a tragic, and all too common, scene in the humanitarian aid world – the machines have been broken for about a month, and all activities have been put on hold. We did not see any signs of the remaining market investments that were mentioned in the reports. The school meals have not worked out as planned.

-          The idea was that each parent should contribute with two bags of corn (about 440 Pounds) per year, but this has never been the case, says Katherine Mbando, director of Madaha Primary School.

            At the same time, a lot has actually happened. Prior to the project launch, there was barely any clean water in Mbola, whereas today, 64% of the inhabitants have access to it. Three health centres have been built, and as many have been renovated. Sixty health workers have been employed, schools have been restored, mosquito nets that prevent malaria have been distributed, toilets have been built, and electricity has been installed in schools and in health centres. Amongst the positive results, fatality rates have decreased, and so has the rate of undernourished children and the cases of malaria. Moreover, the number of children including girls, attending school has dramatically increased. Maternity care has been expanded, but the rate of mothers dying from childbirth is still high. 

Girl cycling to school in Tabora

            And yet, the two most important questions remain unanswered – are the poorest being reached, and is the agriculture intervention successful? Since the idea is that monetary gains obtained from agriculture should enable households to invest money into public or community services, without a striving agriculture, development will never be sustainable. 

            It is highly likely that the Millennium Villages will not meet the expected Millennium Development Goals, at least Mbola will not. Jeffrey Sachs, founder of the Millennium Villages, and heading the work of establishing the Millennium Development Goals, observes from New York that so far – seven years into the project – not all efforts have reached out to the poorest.

-          You chose to focus on rather expensive investments in agriculture, such as chemical fertilizers and seeds. Was that the right path to take?

-          In order to increase production, you need costlier means of investment. Mbola was also shockingly poor; it was one of the poorest areas that we chose. When we started the project, there was no market, people were hungry during the months leading up to harvest, and there was barely any real housing. This has become better, but it is not the case for everybody, not for the small farmers, and not for those who do not own land.

Tobacco is grown without any subsidies and provides most of the income in Mbola

 

On our way back from Tabora to Mwansa, we saw a group of women and children of different ages sitting crushing stones by hand with sledge-hammers, while the youngest children were playing in the piles of stones. Later, we drove past a gravel pit where a stone-breaker was used for the construction of a new road. The question is whether this new road will be the beginning of economic development, and the end of a market for labour-intensive hand-crushed stone? Or is the new road going to be as meaningless as the more than a hundred-year-old railway? Will it mostly be used to transport the young people of Tabora into cities, where they will sell telephone cards, bananas and lighters? – Third World Network Features.

*The Millennium Villages

The Millennium Villages is a ten-year-project that will last until 2015, and its aim is to reach the Millennium Development Goals. The villages that have been selected exist in ten countries: Ethiopia, Ghana, Kenya, Malawi, Mali, Nigeria, Rwanda, Senegal, Tanzania and Uganda. According to project data, it reaches out to half a million people. The initiative was launched by Jeffrey Sachs at Earth Institute, Colombia University, and he is also heading the project. 

Published as a TWN Feature in July 2013

The Rise of Africa - a fairy tale?

During my recent trip in East Africa, I saw a frenzied building activity in Dar es Salaam, Nairobi and Kampala. I saw an industrial park outside Kampala, and even between Mwanza and remote Tabora in Tanzania a new road was built. Oil drilling is set to commence in Uganda and gas pipelines are built from gas fields off the coast of Kenya and Tanzania. It seems like a lot of money is spent and investments are high. So far you could say that I witnessed the Rise of Africa – an increasingly popular narrative. 

Africa is now sometimes referred to as the New China. Africa’s booming economic growth fuelled by a rigorous focus on government and citizen accountability will boost poverty reduction and prosperity, according to the World Bank’s latest Africa’s Pulse, the twice-yearly analysis of the economic trends and latest data on the continent.

“The broad picture emerging from the data is that Africa’s economies have been expanding robustly and that poverty is coming down,” says Shanta Devarajan, the World Bank’s Chief Economist for Africa, and lead author of Africa’s Pulse. Throughout Sub-Saharan Africa, the report found, economic growth remained strong at an estimated 4.7 percent. Excluding South Africa, the region’s largest economy, the remaining economies grew at a powerful 5.8 percent—higher than the developing country average of 4.9 percent.”

This "Africa Rising" narrative has been recently also been taken up by cover stories in Time Magazine and The Economist.

And as I said, there is building going on. But....

To compare Africa’s current development with China’s is nonsense in my view. China was always an industrial powerhouse – its GDP was much bigger than the whole of Europe before European imperialism. It has just undergone a temporary slump. In contrast Africa was never industrialized and it has been plundered for centuries, most importantly of its biggest resource – its people. Colonization certainly didn’t help.

For how long have you seen “made in China” on products you buy in the shop? And how often do you see “made in Nigeria/Kenya/Uganda/Zambia” on anything you buy? Even in African countries themselves, most industrial goods are imported from China, Thailand, India, USA or Europe. South African supermarkets are increasingly dominating the shopping scene in East Africa, and in their shelves most stuff is imported. And all those wonderful East African textiles – made in Bangladesh.

The industrial park I saw outside of Kampala seems to house mainly import/export companies. And looking in my own field of expertise, agriculture, it is still mainly dependent on manual labour with very low productivity.

Africa attracts a lot of investments  now. Part of it is from the African diaspora. Foreign remittances are said (of course data here is extremely fuzzy) to be bigger than total aid. Of course, all this money pouring in will have to be spent. Of course it will trigger economic growth, but there is no guarantee for a lasting development.

 “The idea of development as industrialization has been completely abandoned in the last few decades. Free market economics has come to advise poor countries to stick with their current primary agriculture and extractives industries and "integrate" into the global economy as they are. Today, for many champions of free markets, the mere presence of GDP growth and an increase in trade volumes are euphemisms for successful economic development. But increased growth and trade are not development”.

writes Dick Rowden in Foreign Policy.

The data behind the Rise of Africa narrative is also questioned. Morten Jerven’s research, Poor Numbers, in various Anglo-phone African nations suggests that the data supplied by national records and statistical offices are highly unreliable, with figures that substantially misstate the actual state of affairs.

Also, an economic growth rate of 5% per year is not so impressive when it is put in relation to the growth of the population. After all it is the growth per capita that counts when it comes to poverty reduction. Again, compare China with a 8% economic growth with almost no population growth with Sub-Saharan Africa with a population growth that is almost as big as economic growth. Between 1980 and 2010 GDP per capita in 2005 International dollars increased only from 1,800 per person to just above 2,000, albeit with a drop down below 1,500 in the early nineties (source).

Some are terrified by the growth of population in Africa, but by and large Africa is not much populated compared to Europe and Asia. Perhaps, this population growth also holds a promise for the future. The biggest shift in Africa’s demography resulting from the population boom is the increase of the working age population. In 2010, 34 per cent of Africans were aged between 25 and 59. They represent 34 per cent of the population or 353 million people. By 2050 this number is expected to reach 892 million people, representing 45 per cent of the population. This would represent a dramatic shift in the world’s labor force, with Africa likely to replace China as the biggest contributor to the global workforce.

Historically, a big work force has been one of the major drivers for economic development. But historical relations might no longer hold: in an industrial development with increasing automation the importance of the size of the workforce will perhaps be less pronounced. We already see that industries are to some extent coming back to the USA and Europe. In general, it seems like industries are going the same way as farming, a constant over-production as a result of that increase in productivity is quicker than growth of demand. This means that the industrialization path for development will be increasingly narrow and hard to go for newcomers.

Of course, there will be spots and pockets than can thrive without either industrial development or agriculture productivity growth; living on tourism or mining for instance. And there are countries which can – and have already – developed industries. After all Africa has 54 countries with varying conditions. But for a large scale development of Africa it needs both agriculture growth and industrialization. And both seem hard to get.

Is commercialized farming the cure for smallholders' ills?

In the period 1996 to 2011 I worked a lot with various efforts to link smallholder farmers to markets, mainly organic, in developed countries. The biggest engagement was in EPOPA:


"By 2008, 80,000 farmers contracted by EPOPA have sold organic products to exporters for approximately US$ 15 million per year. All farmers received higher prices due to the organic premium, which ranges from 10-25% over the conventional price. Taking into account the size of households, 600,000 people have benefited from the programme."
This is how the Export Promotion of Organic Products from Africa is presented as one of a limited number of case studies of "Evidence of Impact" on the joint donor web site. 

The cost of the programme for the Swedish taxpayers is one cup of coffee per taxpayer. You can read a whole book about this successful project here.

Overall EPOPA was a success. Today, linking farmers to markets is an overarching policy for almost all development agencies as well as governments. It also fits very well with a development model that assumes that more markets and more capitalism is the best path to development. Considering that small-scale farming is a main component of the livelihood of something like a third of the worlds population, and most of the worlds very poor it is only natural that there is a huge interest in how to improve livelihood of them. While I do think it works quite well, it has, unfortunately, been oversold.

A recent report from Hivos, Small Producer Agency in the Globalized Market, looks deeper into if and how smallholders can benefit from globalized markets. In short the answer is that a few of them will - and they will soon not be smallholders as the recipe for success is to grow, mechanize and buy up your neighbours farms. This should be no surprise, this is how the farm sector developed in other parts of the world. The report estimates that linking farmers into modern value chains (be they organic, fair trade or normal) may benefit only about 2-10 percent of the farms - and it will be those with the greatest assets.

The reality is that commercialization of farming is good for the economy and for a few so called progressive farms, but that most of the farms will not benefit from it. Some will become farm labourers at the farms of the more successful, or in huge agri-business plantations, other will only get a better life if there is some place for them to go. 

The report does a good job in demonstrating how diverse the group of small farmers is and therefore also their coping strategies:

"multifaceted livelihoods that use diversity of economic activities to hedge risks and make the most of scarce land, cash and other resources. Farmers may rent various plots and grow multiple crops; move in and out of different informal (and sometimes formal) markets; and combine farm income with off-farm jobs and remittances from migrant family members. With more rural people, especially youth, moving back and forth from farm to city, there are fluid frontiers between urban and rural markets, boosting the vibrancy of local economies."

The report recognise that the informal economy may actually be very important for most farmers and that the army of middlemen, often considered parasites, can play a positive role in markets for small-holders by offering easy market access and intensive competition for supply, rather than tying farmers into integrated value-chains. Those trade links are also the ones that supply the hordes of urban poor. In many parts of the world the informal economy is on the rise according to OECD reports.

The authors, Bill Vorley, Ethel del Pozo-Vergnes and Anna Barnett, concludes that

"we should not continue to expect multiple wins — on poverty reduction, food security, security of supply, ecosystem services and rural development — from the single-minded approach of including farmers and their organisations in value chains and ‘empowering’ them in markets as beneficiaries of external initiatives. to get the future right for the majority of small-scale producers who cannot readily participate in modern value chains, or for the many youth with aspirations out of farming, we must recognise other layers of the picture."

See a video from the launch of  Small Producer Agency in the Globalized Market


Other posts of relevance:
The road to food security: What works and what doesn’t?
Don't buy organic instead of changing the world - do it as part of changing the world
Traditions, Western Union, Churches and Taro
Will there be farmers?

Technology is rarely neutral

This is a sad hoax, for industrial man no longer eats potatoes made from solar energy; now he eats potatoes partly made of oil. 

(Howard T. Odum, Environment, Power, and Society, 1971)

The Greeks knew the power of steam and built the first steam engine as a plaything; they even knew the principle behind electricity. Water toilets were developed in Egypt some 5000 years ago and were used by the Romans, but it took thousands of years before they came into common use. The wheel was known in Latin America, but was not used productively before Columbus. The first faxes were developed in the nineteenth century but it took another 100 years for them to become common.[1] Fuel cells, which are seen as technology for the future, have been around for more than 150 years, but never reached the stage of a technological breakthrough. The first steam engines in Sweden stood idle, collecting dust, mainly because they were not profitable and partly because there were no competent operators (Hård and Jamison 2005), a situation similar to that of a lot of technologies that are, mistakenly, introduced in developing countries today. All these examples show clearly that the existence or the knowledge of a technology doesn’t mean it will be used. 

Many reasons exist for why a technology is or is not used. The word technology comes from Greek techne, meaning ‘art’, and we know that a lot of technology was (and still is) used for pleasure, for the demonstration of power or for religion. Realms with a large population and a small elite whose wealth is based on extortion of the masses most likely developed very few productive innovations, the majority being developed to amuse and entertain the rulers. Therefore, technological development was very slow in the big agrarian empires.

War and conflict have been forceful drivers of innovation, comprising examples of the importance of government-supported innovation. The Egyptians knew of the wheel, yet their slaves used sledges to pull boulders for the pyramids. But the use of the wheel rapidly spread in its military application in the form of the chariot. One can also compare the spread of the saddle and the spur with the spread of the harness. The saddle and the spur were of critical military importance and gave a marked advantage to the armies using them, so they spread rapidly. The harness was mainly used for draught animals in farming and spread across the world very slowly (Lönnroth 1977). Modern examples of innovations with a military origin are pasteurization, the Internet and antibiotics. Communications is another area in which innovation was (and still is) very strong. Innovations in shipbuilding or navigation played a major role in determining which people would rule. The supple Viking ships could reach into narrow fjords and rivers and were key to the Viking expansion; later the cogs of the Hanseatic League took over, owing to greater capacity (Lönnroth 1977). Thus, societies that developed quicker or safer means of communication or those of higher capacity had a marked advantage over others. 

The Chinese emperors were sceptical to technological development as it threatened stability. The Japanese are another example. Japan first came in contact with guns in the sixteenth century. In the early seventeenth century, it produced more and better guns than any other country in the world. However, the samurai, the military nobility, felt threatened by this foreign invention and gradually managed to curb production and licensing. Ultimately production ceased altogether, and resumed only when the first American warships appeared in Japanese waters in 1853 (Diamond 1997). In France, the scythe was not allowed to replace the sickle for a long time because there were communal rights to graze cattle on stubble, the value of which would be lost if a scythe were used (Boserup 2005). 

Technology is not neutral. It serves the interest of the social group that develops it. With its symbolic power it supports the legitimizing ideology of society and the worldview it represents. Think of the steam engine or the space ship not to speak of the atomic bomb. Schiermeier et al. write that nuclear energy has ‘benefited from decades of expensive research, development and purchases subsidized by governments; without that boost it is hard to imagine that nuclear power would currently be in use’ (2008: 18). Technology has also enabled development of the modern city and the relative independence of its hinterland. The early cities were, with a few exceptions, built on the relationship with the surrounding agrarian landscape. A lot of production occurred in the farms and the economy of the city and its hinterland was interwoven. With the Industrial Revolution, the transport revolution and capitalism, cities could free themselves from ties to their hinterland for raw materials, labour and markets. Thus, workers in Manchester spun cotton from the United States, picked by African slaves, and sold the fabrics in India.  

Technology also creates or cements power relationships and patterns of exploitation in various ways. Mostly, technological developments lead to suppliers of raw materials getting a rough deal compared to those who use the products of a certain technology. This is the basis for accumulation of capital, for profit, in industrial processes where ‘raw materials + work + cost of production’ has a lower value than the product resulting from these inputs. The same holds true in international trade or in the international division of labour. Alf Hornborg (2009) goes as far as stating that technology in a fundamental way is about such price relationships and a tool for exploitation; there is no technological rationality separate from issues of distribution.

---

[1]            To soon be forgotten again. Young readers will probably have to look up ‘fax’ in Wikipedia to check what it is.

Is there space for development?

Many economists and apologetics of capitalism don't think we can speak of “development space”. They frown at the idea of zero-sum games when applied to economics. They believe growth is good and that one can't assume or infer that someone's wealth is built on the exploitation of others. On the contrary, growth and profit will lead to that we all will get a better life: “a rising tide lifts all boats ” or “trickle-down ” are popular slogans. This perspective might have some justification for a shorter period in a certain context, but as we noted above, economic growth with low income equality is less beneficial than growth with a good distribution of income.

We have already in part two looked into the big difference in resource consumption and emissions between rich and poor. People in high income countries consume up to 10 times more natural resources than those in the poorest countries. On average, an inhabitant of North America consumes around 90 kilograms (kg) of resources each day. In Europe, consumption is around 45 kg per day, while in Africa people consume only around 10 kg per day (SERI 2009). Global estimates suggest that 884 million people lack access to clean drinking water and 2.6 billion people do not have access to improved sanitation facilities such as running water and toilets etc. (UNEP 2011). At the end of the last century the 1.1 billion "consumers" in the rich countries represented 19% of the world's population. They had 83% of the world's GDP, 83% of the world trade, 95% of the commercial lending, 92% of all cars, 80% of all iron and steel and 81% of all paper (Carley and Spapens 1998). As we can see, there is an incredible difference in the access people have to the resources of the world.
The American's footprint is ten times as big as Indian's
Another way to express our use of nature resource that has gained considerable currency in recent years is the “ecological footprint ”. The ecological foot print of humanity is assessed to be at least 30% more than the total capacity of the earth and if we continue in the same tracks we will use two planets by year 2030 (WWF 2008). The average inhabitant on the planet has some 2.6 global hectares (the measurement use in the footprint system) as a footprint (mind you this is already too much) which corresponds to the footprints of Costa Rica, Turkey, Iran and Albania. Americans use 9 global hectares, the Brits 6.1 and the Chinese 1.8 and Indians 0.8 respectively.
We thus have four big challenges regarding our use of nature resources, well perhaps challenges is an understatement, system errors is perhaps a more suitable term; First humankind uses already too much of the planets resources; we are eating the capital and it is not a question if we will go bankrupt but when we will do it. Second, the distribution of these resources is extremely inequitable, between countries and within countries; rich countries and rich people use a totally disproportionate share of the resources (and rich people in rich countries are apparently the worst). Third, economic growth is continuing and seems to be hard-wired into our societies, which means that resource use will also continue to grow . Fourth, the world's population is primed to grow for at least forty more years, perhaps longer. We can't negotiate with nature and no less can we expect that the poor will, or should, accept that we waste our common assets.

The resource issues also have to be seen in the context of the very unequal world, where high prices might not be such an issue for rich economies but devastating for poor ones. Björn Lomborg, Julian L. Simons and Johan Norberg and others try to show that discussions about scarcity of resources or environmental space are flawed. Julian L. Simons says: “Raw materials - all of them - have become less scarce rather than more. The air in the US and in other high income countries is irrefutably safer to breathe. Water cleanliness has improved. The environment is increasingly healthy, with every prospect that this trend will continue.”(Wired 1997). Norberg shows that the price of electricity in Sweden has dropped to a fifth compared to what it was year 1900. Since 1920, the time a worker in Sweden had to work for 1kWh of energy in gasoline has fallen ten times (Günther 2011). Since wages have increased faster than the price of gasoline, by 2010 an unskilled worker in the USA spends less than two-thirds as much, as a percent of wage, for a gallon of gasoline than the 1949 worker (Measuring Worth 2011). For a production worker it is only half . We can easily be lulled into the perspective that there is no worry. The average income of a US worker was some US$ 400-500 at the turn of last century compared to some US$ 40,000 hundred years later. Using the perspective of developing country farmers whose income has perhaps not even doubled in hundred years we get a very different perspective, and it easy to understand why they still can't afford electric light or fossil fuel. That there are real conflicts in interest of the rich and the poor in the discussion of resource use, and that the discussion about environmental space is “real” was shown clearly in the failure of the Copenhagen Climate summit 2009 to reach an agreement about which countries that should shoulder the “burden” of reducing its emissions.
Hundred years ago, a lot of the minerals, coal and the oil came from the industrial countries (mind you that England and the USA were the two biggest fossil fuel producers hundred years ago), and the favourable fall in relative prices of those resources are not only a result of higher labour productivity. It is probably as much a result of terms of trade where resource extraction has moved to poorer countries with less bargaining power. A similar discussion also applies for future generations. If we continue large scale mining of some minerals that will run out, we deprive future generations of the same mineral.

Creativity: not in my town and not in my time...

 It seems like people admire creativity that happened before, but mostly believe that people that are creative today are nuts. "we cannot assume that organizations, institutions or even scientific endeavors will desire and recognize creative ideas even when they explicitly state they want them" say Jennifer S. Mueller, Shimul Melwani, and Jack A. Goncalo in the paper "The bias against creativity: Why people desire but reject creative ideas" recently published by Cornell Universty. The also say that:  

"Our results show that regardless of how open minded people are, when they feel motivated to reduce uncertainty either because they have an immediate goal of reducing uncertainty, or feel uncertain generally, this may bring negative associations with creativity to mind which result in lower evaluations of a creative idea. Our findings imply a deep irony. Prior research shows that uncertainty spurs the search for and generation of creative ideas, yet our findings reveal that uncertainty also makes us less able to recognize creativity, perhaps when we need it most."

Well, I am not surprised.  Jesus supposedly said: "A prophet is honored everywhere except in his own hometown and among his relatives and his own family." I would add also "in his own time", a statement Jesus himself is a proof of. He wasn't particularly popular during his lifetime...Whether you believe in him as God or not is beside the point here, he certainly was a most creative person.

It is a bit depressing though...
We need creativity more then ever, and here I speak about great creativity, not innovation of a new electric household appliance or yet another media for playing music (the number of music platforms my generation has had to endure are mindboggling, in such a short time we gone from live music all the way...er, er, ------back to live music!). We need paradigm shifting creativity. But as Donella Meadows* says in the excellent paper Leverage Points Places to intervene in a System, people who question paradigm often end up being locked up -either as lunatics or as rebels. 

A later update: I came across this story in another blog post: 

An amusing story about Thomas Edison.  Apparently, early on in his career, Edison was trying to raise money for his light bulb project from late Nineteenth Century versions of what we now call venture capitalists. After one dog-and-pony show, a VC came over to Edison, put his arm around him and said something like: “Tom, that light bulb is an amazing piece of technology.  But for it to be successful, wires would have to be run to every house in the country, and that is clearly never going to happen.”

*Donella H. Meadows (1941 - 2001), American environmental scientist, teacher and writer. Lead author of groundbreaking, and criticized, book of the Club of Rome The Limits to Growth

Agriculture: How cheap energy (and capitalism) increased the gaps between rich and poor

And how increasing energy prices will shift things to the better....

The simple agriculture equation has always been that one has to get substantially more energy out of the food than one has put into the production of it. As long as in-energy is human labour it is an iron law that can only be skipped for shorter periods. The agriculture worker should not only feed herself or himself but also other family members who are too young, too old or too sick to work, as well as some few others that supply services. Finally, in almost all society there have been rulers that have taken a great share of the production. In pure agrarian societies, around 80 percent of the population is engaged in farming.

250 billion energy slaves

One can contrast the energy embedded in human labour with the external energy sources we have conquered, to give us an idea how important the deployment of external energy sources are. If we make a back-of-the-envelope-calculation we see that the 7.71 tons of oil equivalents (toes)[1] of energy the American uses (the average Senegalese 0.25), corresponds to the food consumption of 400 people. They are the “energy slaves” (in the form of fossil fuel) working for him or her. Another way of looking at it, and also to put in an economic perspective, is that a barrel of oil represents the energy of 25,000 hours of human toil, i.e. 14 persons working a year with normal labour standards. Even with an oil price of many hundred dollars per barrel, it is very cheap compared to human labour (Rundgren 2011). 

According to FAO, 6,000 MJ of fossil energy (corresponding to a barrel of oil) is used to produce one ton of maize in industrial farming, while for the production of maize with traditional methods in Mexico only 180 MJ (corresponding to 4.8 litre of oil) is used. This calculation includes energy for synthetic fertilizers, irrigation and machinery, but not "shadow energy", i.e. energy used for making machinery, transporting products to and from the farm, and for construction of farm buildings. The energy return on energy input is below 1 (i.e. there is more energy consumed than produced) for modern rice farming and just above 1 for modern maize farming, while traditional production of rice and maize give a return of 60 to 70 times on energy used (FAO 2000).

The total energy harvested per hectare can increase substantially with increased use of ancillary energy. This energy can come in the form of better (and timelier) soil preparation, irrigation, (chemical) fertilizers etc. The ratio between energy return and energy input, i.e. efficiency in use of energy, seems to be fairly constant to a certain level after which it rapidly deteriorates. In industrial farming systems we have since long passed this level. Harvested energy per labour unit increases dramatically with increased input of energy with a factor of between ten and hundred, allowing the most advanced agriculture systems to have one farmer per hundred persons. Here we see no similar threshold or limit as for energy efficiency per hectare (Bayliss-Smith 1982).

Why the oil price and the grain price will follow each other

Farming uses energy in many different forms: diesel for tractors and pumps; electricity for pumps; fans and in-door machinery such as milking machines. Fertilizers represent a big energy use. Energy represents 90 percent of the production costs for nitrogen fertilizers, 30 percent for phosphorus fertilizers and 15 percent for potassium fertilizers. For production in the USA energy costs represented between 22% and 27% of the production costs for wheat, maize and cotton and 14% of the production costs for soy beans[2] (US CRS 2004). These figures do not include embedded costs in buildings, machinery etc. so the actual share of the costs is substantially higher. In Argentina, energy costs were calculated to account for 43% of production costs in 2006 (Baltzer et al 2008). In a situation with rising energy prices, agriculture prices will follow suit. This could also be seen in the food price – and oil price hike 2007-2008[3]. Increased energy prices influence food prices in four different ways:

-       by making the production more expensive

-       by making biofuel more interesting to produce and therefore reduce the production of food, leading to higher prices

-       increased transport costs which directly reflect on food prices

-       reduced competition in the food sector, i.e. increased transport costs means that the pressure of global competition is reduced (Rundgren 2011).

Many people are still totally dependent on firewood for their supplies of energy, Solomon Island 2010.

It takes more energy to eat than to farm

The increase of energy use in agriculture was particularly rapid in the period between the Second World War and the first oil price chock 1973; while labour force was reduced to half between 1952 and 1972 in England, energy use tripled (Bayliss-Smith 1982). In the USA energy use decreased from mid 1970s to mid 1980s as a response to increased oil prices, thereafter it has stabilized (Hendricksson 1994).

Looking at the whole food chain however, energy use has constantly increased. Use of energy along the food chain for food purchases by or for U.S. households increased between 1997 and 2002 at more than six times the rate of increase in total domestic energy use. As a share of the national energy budget, food-related energy use grew from 12.2 percent in 1997 to 14.4 percent in 2002. (US CRS 2004). In pre-industrial and semi-industrial agriculture systems, most of the food is sold, eaten and prepared close to where it is produced, but the modern food chains are highly centralized and globalized. And it is just getting worse and worse. In industrial countries between 10 and 15 times more energy is used in the food system than what is contained in the food we end up eating (Hendricksson 1994).  

A big part of the energy consumption is caused by the consumers buying, storing and preparing food. In Sweden 1997, agriculture production represented 15-19 percent, processing 17-20 percent; distribution and retail 20-29 percent and consumption 38-45 percent of the total energy use in the food chain. 7-11 percent of the total energy is consumed by the much discussed transports, and here it is in particular the final stretch that counts. A person driving a car 5 kilometres for shopping uses a lot more energy per food unit than a ship with meat or soy from another continent. Also in some developing countries, consumption takes the lion's share of energy use; in this case, it is mainly cooking over an open fire that takes energy. 1,500 kWh (corresponding to a bit more than a cubic meter of firewood) is used per capita for cooking[4], which is somewhere between half and one third of what is used per capita for cooking in Sweden or the USA (Uhlin 1997). Cooking represents more than a fifth of the total energy consumption in Africa and Asia[5] and in some countries, cooking represent up to over 90% of household energy consumption (IEA 2006). The use of energy for cooking is more than the total energy in the food. So while farming in developing countries and traditional systems is energy efficient, cooking is not.

Increasing energy prices will revert some of the developments that were made possible by cheap fossil fuel. It poses a challenge for society, but also an opportunity to steer into a path of true sustainability. It will lead us towards more sustainable agriculture methods, such as organic farming and more localised food production webs. In general, in a world with rapidly increasing human population and a simultaneous depletion of natural resources, the obsession with replacing human labour with oil and other nature resources makes little sense. That those changes also will serve to mitigate climate change is just another argument in favour of such a shift in our societies' metabolism.  Notably, to abolish the use of external energy and rely solely on manual labour is not the desired situation, it is rather about finding a new balance that works on a global scale and is sustainable. Renewable energy, such as bio-energy, windmills and watermills have since thousands of years already been used in farming. They can be enhanced and solar energy and biogas can be added to the mix. But it is not likely that renewable energy will allow such wasteful systems that we have today. For example,  with very cheap energy it pays to use that energy to bind atmospheric nitrogen instead of using natural nitrogen fixation. With electricity prices of solar energy, or by they use of biogas it is cheaper to use natural nitrogen fixation than using chemical fertilizers. 

Unequal energy access and the unequal terms of trade

Commercialisation is promoted as the recipe for development for the almost half a billion smallholders in the world. Peasant farming is built on a rather high degree of autonomy and it regenerates most of its needed resources, such as labour, capital, soil fertility and pest control, within the farming system. By nature, peasants resist commercialisation because they want to minimize risk and dependency (v.d. Ploeg 2009). If all the forces of coercion are brought to play and farmers try to commercialise their production, most farmers will simply not survive in this struggle for modernisation. If they did, there would be enormous over-production. European farms had difficulties to cope with competition from North America especially after the introduction of steamship transport. The response was to introduce protectionist measures. Still the pressure of competition was a lot lower for them than it is for poor farmers in developing countries today. In addition, because of the productivity gains in developed countries, agricultural prices dropped with some 60 percent in the period 1960 to 2000 (Dorward et al 2002). As the productivity, and energy use, of the poorest farmers remained much the same, it is obvious that they lose out. At current prices, it would require one life of labour for a manual farmer to acquire a pair of oxen and small animal drawn equipment, and ten generations of labour to buy a small tractor (Mazoyer and Roudart 2006). The productivity gap has widened over the last decades, both relatively and in absolute numbers. 

Table 1 Agricultural labour productivity, dollar per man-year

	1990-1992	2001-2003	Agriculture as share of GDP
Low income countries	315	363	20%
Middle income countries	530	708	9%
High income countries	14,997	24,438	2%
France	22,234	39,220	2%
United Kingdom	22,506	25,876	1%
USA	20,797	36,216	1%
Brazil	1,507	2,790	5%
India	332	381	4%
China	254	368	12%
Malawi	72	130	36%

Source: World Bank 2007

To believe that low resourced smallholder farmers would be able to compete on staple food in free world markets - with energy access being the main factor of competitive advantage - is simply very far from reality. In reality, we instead see how country after country become net food importers. Cheap energy could be seen as their way out of the situation, but the reality is quite different: it is cheap energy that has pressed down the prices of agriculture products - and thereby the market value of their labour to a dollar per day; it is cheap energy that has allowed the gaps to increase to unprecedented heights because the rich could always use more cheap energy than the poor, and the gap between those relying on their own labour and those relying on use on fossil fuel has just increased. Energy scarcity, higher energy prices will result in less global competition and higher food prices. While being painful for many societies and for net food buyers in the short run, is still better for the smallholder farmers in developing countries than the opposite. Policy-makers should better grab this opportunity for a turn of agriculture development, instead of promoting continued or increased external input dependency (fertilizers, GMOs, credits) and continued global competition in a market where the big players are all on steroids in the form of cheap oil.

References

Baltzer, Kenneth; Hansen, Henrik; Lind, Kim Martin 2008, A Note on the Causes and Consequences of the Rapidly Increasing International Food Prices, Institute of Food and Resource Economics, University of Copenhagen

Bayliss-Smith, T. P. 1982, The Ecology of Agricultural Systems, Cambridge University Press

Dorward, Andrew, Jonathon Kydd, Jamie Morrison and Ian Urey, A Policy Agenda for Pro-Poor Agriculteal Growth, Imperial College at Wye, accessed at http://www.sarpn.org.za/wssd/agriculture/policy_agenda/Policy_Agenda_long.pdf

FAO 2000, The Energy and Agriculture Nexus

FAO 2007, The State of Food and Agriculture

Hendrickson, John 1994, Energy Use in the U.S. Food System: A Summary of Existing Research and Analysis, Center for Integrated Agricultural Systems

Hoffmann, Ulrich, 2011, Assuring food security in developing countries under the challenges of climate change: key trade and development issues of a fundamental transformation of agriculture, UNCTAD discussion paper 201, February 2011

IEA 2006, World Energy Outlook, OECD/IEA

IEA 2008, Key Energy Statistics 2008, International Energy Agency

Mazoyer, Marcel & Roudart, Laurance 2006, A History of World Agriculture: From the Neolithic Age to Current Crisis, transl. James H. Membrez, Monthly Review Press

McDonald's 2008, Vårt Miljöengagemang

Ploeg, Jan Douwe van der, 2009, The New Peasantries: struggles for autonomy and sustainability in the era of empire and globalization.

Rundgren, Gunnar, 2011, Garden Earth - From hunter and gatherer to capitalism - and thereafter, forthcoming

Uhlin, Hans Erik 1997, Energiflöden i livsmedelskedjan, Naturvårdsverket

US CRS 2004, Energy Use in Agriculture: Background and Issues, 19 november 2004, US Congressional Research Services

USA Today 2008, http://www.usatoday.com/news/nation/2008–03–10-drugs-tap-water_N.htm, 16 March 2009

WHO 2006, Fuel for Life: Household Energy and Health, World Health Organisation

World Bank 2007, World Development Report 2008

(article written for the UNCTAD Trade and Environment review-forthcoming)

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[1]       a toe is a common unit for energy and express the amount of energy released when a ton of oil is burnt. 1 toe = 42 GJ = 11 MWh = 10 Gcal.

[2]       Who can be grown without nitrogen fertilizers as they have natural nitrogen fixation.

[3]       There were also other factors driving this, such as biofuels, increased meat consumption and speculation. Increased oil price was doubtless one main driver.

[4]       As an interesting comparison, McDonald's Sweden states that they use 1 kWh per meal (McDonald's 2008).

[5]       The introduction of energy-saving stoves or the use of other fuels that are easier to regulate should be a prioritized measure. It is not only about conservation of forest and saving energy; soot and smoke indoors is a health hazard and one of the bigger killers. Between 1.5 million (WHO 2006) and 4 million (Pimentel et al 1998) people are killed by this every year.