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December 10, 2018

WYCLIFFE MUGA: Agriculture policy is never easy

Agriculture
Agriculture

In what must surely count as one of the most bizarre newspaper headlines in this region, The East African recently informed us that Tanzanian President John Magufuli had “deployed the army in cashew nut standoff”.

Tanzania People Defence Force (as it is officially known) was not sent to the south of Tanzania to confront armed invaders, as the term “deployed the army” would normally suggest. Rather the officers of this army – most famous as the force that crushed the troops of the demonic Ugandan dictator General Idi Amin back in the 1970s, and set Uganda back on the path to democracy – were sent there “to buy cashew nuts directly from farmers”.

As American commentators like to remark, “You cannot make up this stuff”.

But a close examination of the details reveals that whereas the Tanzanian President’s intervention may at first appear to be unbelievably eccentric, the fact is that he was grappling with a very real crisis of agriculture policy.

Cashew nuts are a primary export of Tanzania. And over the years 2016 to 2017, cashew nuts exports had doubled in value, obviously providing a nice boost the Tanzanian economy and also improving the lives of all those who grow this crop.

But this year, all that progress had been sent into reverse gear: The prices offered at auctions conducted by the Cashewnut Board of Tanzania had been so low that the farmers boycotted the auctions, demanding roughly double the price they had been offered.

There is an echo to this, in Kenya’s current “maize crisis” – elected leaders in the Upper Rift Valley have declared that maize farmers of the region must be paid for their crops at a price that covers the cost of production and leaves the farmers a profit “so that they can send their children to school.” They also insist the purchase of the most recent maize crop must be done immediately, even though — by some accounts — there is no storage capacity left in the government-owned silos.

But back to our neighbours to the south: For any Kenyan who might be tempted to laugh at this odd example of an army being used to intervene in the operations of the free market — as a purchaser of farm produce — I would remind them that we too have had our very odd developments within our agriculture sector.

In the last years of the Moi era — if I remember the period correctly — coffee farmers in Central Kenya took to conducting armed “takeovers” of coffee factories. In other words, a group or farmers armed with crude weapons would “invade” their local coffee processing plant, and evict the management and the workers they found there.

Supposedly, this was a coherent strategy for returning the coffee sub-sector to the glory days when just five acres of “brown gold” was enough to lift a family of six firmly into the middle class.

But in the end, of course, this proved to be totally ineffective and the angry farmers returned to their homes, still deeply puzzled as to who exactly was robbing them, and asking why this crop, which had previously guaranteed farmers such a magnificent income, was suddenly not worth growing at all.

My point here — and it is one I have made before — is that effective agriculture policy is incredibly difficult. And it is made even more difficult by the fact that in much of the developed world, agriculture in all its forms is comprehensively subsidised.

 So much so that farmers cooperatives (where they exist) or individual large-scale farmers, in the advanced economies of this world, know only too well that the true path to prosperity is not to try and make their land more productive. Not at all. The real road to riches is for them to effectively lobby for greater subsidies from their national government.

 Complicating the picture even further is the fact that once any group of African farmers have profited from growing a particular cash crop, it thereafter becomes very difficult to persuade them to stop growing it, even if the market demand for this crop has substantially changed.

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