By Getachew Mequanent
An observation of the analyses by experts suggests
that current global increases in food prices are attributed to complex factors.
First, there has been widespread policy neglect. Since the 1990s, many countries have focused their attention on
export diversification, which is a strategy to avoid over-dependency of exports
on a few sectors of the economy (for example, if country X was exporting cash
crops, it has been diversifying by producing and exporting matches, toys,
furniture, shoes, textiles, spare parts, etc.). Without sufficient support,
farmers (producers of food crops) would become unable to keep up productivity.
And over burdened with the rising cost of agricultural inputs, many farmers might
have also shifted to traditional low-cost farming, lowering production
levels. Second, structural factors are
important. Among other things, soil degradation and land shortages have not
helped to increase production at levels required to feed growing populations
with better purchasing powers (this area of problem adversely affects
Ethiopia). Third, there has been a reduction in the size of land cultivated for
food production, as farmers shifted to producing
valuable cash crops, such as bio-fuel crops. Other factors include
droughts in some parts of the world which have affected the volume of food
production; skyrocketing oil prices which increase the cost of processing and
transportation of food stuff; unfavourable terms of global trade which do not
give developing country producers enough incentives; and governance problems
which contribute to market failures or, in the case of conflict affected
countries, disruption of agricultural production.
Governments around the globe will be compelled to
renew their efforts for better food security including formulating policies
that address issues ranging from sustainable support for food producing sectors
to preservation of the integrity of farm ecosystems (soil and water
conservation, for example).
In developing countries like Ethiopia, investment in
state farms can also be considered as an additional option, since they
supplement smallholder food production. This can be a touchy subject,
considering the historical failure of state farms in both socialist and non-socialist
countries. The fact of the matter is that, in most cases, the failure of state
farms was attributed to a lack of management capacity or management failure and
this, in my view, should not imply that countries must stop investing in state
farms that could mass-produce food and commercial crops. Public ownership of enterprises can be a
necessary measure to protect collective societal interests. One web site lists
39 crown (publicly owned) corporations in Canada including the Canadian
Broadcasting Corporation, which is one of the best television networks in the
world. The Canadian experience can be a good example for those who are quick to
jump on the “free market economy” rhetoric to argue against strategic state
intervention in the process of development.
The history of state farms is actually interesting.
Although they are often associated with socialism and nationalism (e.g.
nationalization of plantations owned by foreigners), in reality the origin of
state farms could be traced to the development of the West. It all started
during the enclosure movement in the 17th century England where
powerful rural landlords began enclosing large tracts of common land for cattle
grazing and cultivation. Next came massive rural out-migration as a result of immigration
to the colonies (particularly to Australia and North America) and urban
industrialization, both of which had offered better economic opportunities. The
result was that, due to massive rural-urban migration, there were less and less
people competing for land or that those who remained behind (in the
countryside) came to acquire more and more land. Immigrants to the colonies
also took advantage of abundant land to create large farms, mainly plantations.
Aided with modern science and technology, these farms would gradually be
transformed into large mechanized farms producing abundant food and cash crops
for domestic consumption and world markets.
They would be replicated across the world including developing countries
that saw large-scale farming as a means to mass-produce food and commercial
crops. But, since developing country farmers lacked know-how and capital
(tractors, supplies, facilities, etc), governments created state agencies that
enclosed and cultivated large tracts of land (state farms). Unfortunately,
these state-managed farms performed poorly and they became referred to as an
example of state inefficiency. By the 1980s, the World Bank and IMF were making
the dismantlement of state farms as one of the preconditions for financial
lending to developing countries. Yet, as mentioned above, all this does not
contradict the purpose of investment in state farms, which is to produce crops
for mass consumption.
In Ethiopia, Derge nationalized, in 1975, commercial
farms and also hastily launched the arenguadie zemecha, green revolution
campaign, to promote state farming as a national strategy to achieve food
security. In the following years, Derge
would create more state farms across the country. But, the effects of civil war
combined with poor management led to their ultimate failure. Correct me if I am
wrong, the EPRDF government has privatized most of those state farms along with
other state owned enterprises. Nonetheless, we still have publicly owned
enterprises, such as 1) the Ethiopian television whose reporters could be found
hanging around hotels and conference corridors (because they have nothing else
to do); 2) Ethiopian telecommuncation commission where people get rich quick by
stealing from the corporation; and 3) Ethiopian Airlines which is a successful
enterprise. The experience of the Ethiopian Airlines precisely shows that
publicly owned enterprises can be profitable if managed properly. It shows
that, if managed effectively, sate farms can be viable and profitable
enterprises, and more importantly, they can help to overcome historical food
deficiencies in the country. Therefore, the Ethiopian government should explore
the possibility of creating mechanized farms, especially in the lowland areas
along the Humera-Gambella corridor where state farms do not compete with
smallholder production. Nor do state farms in these lowland areas compete with
private sector investors who are interested in producing and selling high-value
cash crops such as sesame and cotton. True, lowland areas may not produce teff, which is used to make injera. It doesn’t matter. Ethiopians in
the Diaspora have got used to eating injera
made of rice, sorghum or anything. The responsibility of the Ethiopian
government is ensuring that people have something enough to eat.
Getachew Mequanent
Ottawa, Canada
April 2008