Cash-cropping and Economic Growth in Africa

For many African states, cash cropping is a major livelihood and prime source of income. Despite this importance, the industry has not achieved long term growth in a number of African economies. Many cash cropping contexts have succeeded and grown rapidly in the past, but a multitude of these, such as starch exports, have since slowed down or completely died out.

In examining why many African economies did not achieve long term growth in the cash cropping sector, first we need to determine what constitutes long term growth, and why cash cropping did not achieve it. This will be determined in the first section. Subsequently, the essay will determine that a lack of capital and capital accumulation is a stumbling block for growth in the cash-cropping sector and in African economies; this essay will then argue that much of the colonial era’s crop demand and success was transient due to demands by colonial states and world events. Finally, this essay will argue that African states have not properly developed the sector, due to a lack of will and a lack of capacity.

This essay will ultimately find that cash-cropping failed to achieve long term growth in African economies due to the transient nature of crop export success. A particular crop typically requires dedication to perfect but its success is short-lived and reliant on world market demand.

Economic growth is seen as a general expansion of the goods and services that a nation produces, with long-term growth being a sustained rise in this quantity.[1] To achieve long-term growth, African economies need to raise their output of goods and services over a long period of time. While cash-cropping succeeded in some contexts within a short length of time, this was subsequently followed by stagnation or a destruction of the industry. Chien (2015) argues that technology is a prime driver of economic growth.[2] While there is an effort to modernise in many African states, studies have shown that spending on agricultural development (in particular) is still too low.[3] Many of these studies suggest that to become globally competitive and productive, African states need to shift to a capital-intensive approach in the form of fertilisers, equipment and irrigation technology.[4] This is easier said than done. As the next section will argue, there is insufficient public or private capital to invest in the sector.

African cash-cropping needs to become capital intensive, but there simply isn’t enough capital. This also affects the rest of the economy, as a lack of capital results in a lack of local investment, that then holds back economic growth. Palm oil production in Nigeria has always been, and continues to be, highly labour intensive, with little attempts to shift towards capital intensification.[5] A lack of cash income, Martin argues, resulted in a lack of innovation in technology.[6] Money that was made was used for other reasons, as physical assets such as machinery were an inconvenience in matters of inheritance.[7] As a result, innovation was seen in the division of labour and not in capital. Investment was primarily in increasing the labour force, through marriage or through employment.[8] Capital was not used or accumulated due to a lack of it and the need to spend what was made on imports or politics. Nigeria, even today, faces a problem, as capital is needed to invest in the crop sector but there isn’t enough capital.[9]

In the case of cassava in the same region, machinery was invested in to increase productivity.[10] The inflexibility of capital innovation did, however, raise the level of distrust towards the system, as cassava production was ended by imperial decree due to its infringement on palm oil production.[11] While some capital was used to invest in these industries, the transient nature of crops did not endear producers to the idea of heavily investing in one crop. The problem with this sentiment, however, is that capital intensity is needed to increase production so that extra capital can be attained to invest in the next crop trend.

Trade in particular crops and the success of their growth never lasts forever. Crops continue to have relative demand over long periods, but market fluctuations due to varying demand has a major effect on the success of African producers. While schemes such as the 1947 Tanganyika Groundnut scheme failed as a result of sheer incompetence on the part of the organisers, many other cases of cash-cropping failures can be blamed on the transient nature of the industry.[12] Agriculture is a harsh industry. Even if the crop doesn’t fail, there is no guarantee that a producer will be able to sell their goods at a reasonable price or even at all. Due to this, farmers are often terrified of new crops or uncertainty. Risk is something they cannot afford. Shifts to new crops in Africa during colonialism can be seen as a result of coercion or major incentive, eliminating stagnation from uncertainty.

Cotton in Portuguese Mozambique and Angola are examples of the use of coercion to encourage a new crop. State intervention saw the encouraging of cotton production through force.[13] Prohibition on peasants selling non-cotton produce, designation of labour and forced use of land was not enough to make cotton successful, however.[14] Pitcher (1991) argues that legislation from the 1800s to 1900s, in fact, had nothing to do with the rising success of cotton production in the region.[15] The industry owes all its temporary success to the American Civil War, that resulted in a global cotton shortage, creating an opportunity for Portuguese colonial cotton.[16] When the Civil War ended, cotton sunk into a slump once again. Only the drastically draconian system of Estada Novo worked, to a degree, by guaranteeing prices and forcing peasant production.[17] The system itself, however, can be argued to have contributed to the violent upheaval that ended colonialism in Mozambique. Without mass coercion and without global opportunity, Mozambique was not able to outcompete global competitors.

The global demand for rubber during the World Wars was supplied by many African regions.[18] The end of the wars and the invention of rubber substitutes put an end to much of this demand. Those who had invested in the industry would have begun to make less income than they had predicted, highlighting further why African producers didn’t invest in technology. Machinery is suited for a singular crop. If that crop is no longer popular, then it becomes a wasted investment. With capital as scarce as it is, African producers would rather invest in crop diversification or extra labour. Even prior to the end of both World Wars, rubber production in the Congo was ended, due to unprofitability as labour costs became too much.[19] Capital investment could have changed this, lowering the need for and cost of labour. But as has been dealt with, capital was not available to invest in this industry, especially with fear of its transience.

Some trends in cash crops are artificially generated and stopped. An example of this is the case of cassava starch production in Nigeria. The need for starch during World War 2 saw the imperial government encourage starch production in Nigeria.[20] London was clear that the trade in starch would be transient.[21] After some initial failures, Nigeria eventually became a reliable source of starch.[22] Many producers shifted to growing cassava and producing starch, especially if they had become disillusioned by cocoa or palm oil production.[23] In April 1943, however, the Nigerian colonial government abolished the export of starch, despite its heavy inclusion in the economy.[24] The imperial government needed palm products, and starch had become too profitable, and had shifted too much labour from the palm industry.[25] In this way, the global demand for starch was generated by government demand with little private demand, and then ended through state decree despite local production and any existing private demand. Cassava trade was transient, and relying on it would have caused many producers to become impoverished after its export ban.[26]

Despite these few examples of cash-crop failures, there are some success stories. In contemporary Rwanda, bananas have become a major export with good resale value. They do not detract from food crops and complement other growing industries such as banana wine production. Cotton income in Mali and Burkina Faso has been reinvested in other crops, diversifying and avoiding risk.[27] Cocoa in Ghana is also a relative success story, with production growing from 450 000 tonnes in 2000 to 900 000 in 2010.[28] These examples show that there is room for success for cash-cropping in Africa, despite challenges. One just needs to produce and invest wisely in crops that can complement and grow local industries.

Many African states lack the necessary capacity to grow their crop sector. Even during the colonial era, transport was a crucial aspect to cultivation.[29] Today, only areas which exist alongside natural transport arteries or pre-existing infrastructure do well.[30] Land becoming scarcer alongside these arteries and infrastructure has resulted in a myriad of producers being in inopportune regions.[31] A lack of arable land and a lack of labour has also put the industry under strain.[32] Population growth would help the labour shortage, but a need for abodes continues to eliminate available land.[33] The traditional system of shifting cultivation has been put under strain due to labour shortages and a lack of arable land.[34] Fertilisers would solve this issue, but there is often not enough capital to invest. By and large, the African agricultural sector is underfunded.[35] This is caused by and exacerbates a lack of private and public agrarian capital, leading to a lack of much needed assets such as infrastructure, equipment, irrigation and fertiliser.[36] Many states cannot invest in agriculture due to a shortage of funds, such as in Zambia, Mali and Zimbabwe.[37] Overall, the incapacity of African cash-cropping links to the earlier section of a lack of capital.

In addition to this incapacity, there is also a relative lack of willingness among African governments to invest in technology or agriculture. Kinyanjui (1993) argues that many African leaders, especially among the more authoritarian states, care more about spending on security to maintain their regime than investing in food security or the cash-crop industry.[38] In many states with harder commodities, this is to be expected. Rent-seekers can more easily make money out of unsustainable commodities such as oil or mining than slower and less capital intensive industries such as cash-cropping.

This essay has shown that cash cropping in Africa and its lack of long-term growth is a problem of transience and lack of capital. Long-term economic growth requires capital investment and a sustainable growth of production. This is not possible in a sector in which demand constantly changes, disallowing reliable investment in any one export. In contemporary consumerist society, global demand is steady enough for most cash-crops, but an incapacity due to initial capital holds back African producers’ ability to become globally competitive. In the past, market fluctuations and the transient nature of crop demand led to a boom and bust in many African contexts. There are some contemporary success stories, however, which have succeeded due to reinvestment in diversification (to mitigate risk) and growth of complementary industries.[39] Post-colonial African contexts suffer from a lack of private and public capital, preventing them from moving towards capital intensive strategies. In addition to this fiscal incapacity to develop, many African leaders do not care enough to invest in agriculture, due to apathy or a need to invest in security spending to maintain their regime.

Overall, success in African cash-cropping needs to be achieved through sound investment. Capital, public and private, will appear from somewhere. Like Mali and Burkina Faso, that capital needs to be invested in diversification, but also in fertiliser (to alleviate concerns of arable land scarcity) and other assets. While still tumultuous, global demand of cash crops is steady enough to warrant some specialisation. What is also clear, however, is that the day of the peasant farmer is long gone. Only large commercial conglomerates can absorb the risk and potential losses of such a risky export market, and in going forward, Africa will need to develop along this path.

References

  • Austin, Gareth. “Cash Crops and Freedom: Export Agriculture and the Decline of Slavery in Colonial West Africa.” International Review of Social History 54, 1 (2009): 1-37.
  • Cavendish, Richard. Britain Abandons the Groundnuts Scheme. Accessed August 17, 2016. http://www.historytoday.com/richard-cavendish/britain-abandons-groundnuts-scheme.
  • Chien, YiLi. What Drives Long-Run Economic Growth?, Federal Reserve Bank of St Louis. Accessed August 20, 2016. https://www.stlouisfed.org/on-the-economy/2015/june/what-drives-long-run-economic-growth.
  • Curtis, Mark. Improving African Agriculture Spending: Budget Analysis of Burundi, Ghana, Zambia, Kenya and Sierra Leone. http://www.africa-adapt.net/media/resources/888/improving-african-agriculture-spending-2.pdf.
  • Determinants of Long-Run Growth. Boundless.com. Accessed August 20, 2016. https://www.boundless.com/economics/textbooks/boundless-economics-textbook/economic-growth-20/long-run-growth-99/determinants-of-long-run-growth-371-12468.
  • Eke, I.C. and Effiong J.A.L. “The Effects of Capital Accumulation on Crop Production Output in Nigeria.” International Journal of Agriculture and Earth Science 2, no. 3 (2016): 62-81. http://iiardpub.org/ijaes/get/THE%20EFFECTS.pdf. Accessed August 16, 2016.
  • Falola, Toyin. “Cassava Starch for Export in Nigeria during the Second World War,” African Economic History, no. 18 (1989): 73-98.
  • Kinyanjui, Kabiru. “Culture, Technology and Sustainable Development in Africa.” Asian Perspective 17, no. 2 (1993): 269-295.
  • Martin, Susan. “Gender and Innovation: Farming, Cooking and Palm Processing in the Ngwa Region, South-Eastern Nigeria, 1900-1930.” The Journal of African History 25, no. 4 (1984): 411-427.
  • Neuemark, S.D. “Some Economic Development Problems of African Agriculture,” Journal of Farm Economics 41, no 1 (1959): 43-50.
  • Reardon, Thomas, Christopger B. Barrett, and Valerie Kelly. Sustainable Versus Unsustainable Agricultural Intensification in Africa: Focus on Policy Reforms and Market Conditions. Paper invited for presentation at the AAEA International Preconference on “Agricultural Intensification, Economic Development and the Environment,”July 31-August 1, 1998, Salt Lake City, Utah.
  • The sad story of Ghana’s cocoa industry and the way forward. Ghana Business News. Accessed August 20, 2016. https://www.ghanabusinessnews.com/2015/06/22/the-sad-story-of-ghanas-cocoa-industry-and-the-way-forward/.
  • Tosh, John. “The Cash-Crop Revolution in Tropical Africa: An Agricultural Reappraisal,” African Affairs 79, no. 314 (1980): 79-94.

Footnotes

[1] Determinants of Long-Run Growth, Boundless.com, accessed August 20, 2016, https://www.boundless.com/economics/textbooks/boundless-economics-textbook/economic-growth-20/long-run-growth-99/determinants-of-long-run-growth-371-12468.

[2] YiLi Chien, What Drives Long-Run Economic Growth?, Federal Reserve Bank of St Louis, accessed August 20, 2016, https://www.stlouisfed.org/on-the-economy/2015/june/what-drives-long-run-economic-growth.

[3] Mark Curtis, Improving African Agriculture Spending: Budget Analysis of Burundi, Ghana, Zambia, Kenya and Sierra Leone, http://www.africa-adapt.net/media/resources/888/improving-african-agriculture-spending-2.pdf, 3.

[4] Thomas Reardon et al., Sustainable Versus Unsustainable Agricultural Intensification in Africa: Focus on Policy Reforms and Market Conditions, 1998: 24.

[5] Susan Martin, “Gender and Innovation: Farming, Cooking and Palm Processing in the Ngwa Region, South-Eastern Nigeria, 1900-1930,” The Journal of African History 25, no. 4 (1984): 424.

[6] Ibid., 425.

[7] Ibid., 426.

[8] Ibid., 426.

[9] I.C. Eke and Effiong J.A.L., “The Effects of Capital Accumulation on Crop Production Output in Nigeria,” International Journal of Agriculture and Earth Science 2, no. 3 (2016): 79, http://iiardpub.org/ijaes/get/THE%20EFFECTS.pdf, accessed August 16, 2016.

[10] Toyin Falola, “Cassava Starch for Export in Nigeria during the Second World War,” African Economic History, no. 18 (1989): 75.

[11] Ibid., 92.

[12] Richard Cavendish, Britain Abandons the Groundnuts Scheme, HistoryToday, accessed August 17, 2016, http://www.historytoday.com/richard-cavendish/britain-abandons-groundnuts-scheme.

[13] M. Anne Pitcher, “Sowing the Seeds of Failure: Early Portuguese Cotton Cultivation in Angola and Mozambique,” Journal of Southern African Studies 17, no. 1 (1991): 58.

[14] Ibid., 59.

[15] Ibid., 66.

[16] Ibid., 60.

[17] Ibid., 66. African peasants didn’t want to grow cotton as they saw it as unsustainable and dangerous, in that if it wasn’t sold, the loss couldn’t be recouped through eating it.

[18] Gareth Austin, “Cash Crops and Freedom: Export Agriculture and the Decline of Slavery in Colonial West Africa,” International Review of Social History 54, 1 (2009): 2-3.

[19]  Ibid., 20.

[20] Falola, “Cassava Starch for Export in Nigeria during the Second World War,” 75.

[21] Ibid., 76.

[22] Ibid., 82.

[23] Ibid., 78.

[24] Ibid., 92.

[25] Ibid., 92.

[26] Reardon et al., Sustainable Versus Unsustainable Agricultural Intensification in Africa: Focus on Policy Reforms and Market Conditions, 19.

[27] Ibid., 20.

[28] The sad story of Ghana’s cocoa industry and the way forward, Ghana Business News, accessed August 20, 2016, https://www.ghanabusinessnews.com/2015/06/22/the-sad-story-of-ghanas-cocoa-industry-and-the-way-forward/.

[29] Austin, “Cash Crops and Freedom: Export Agriculture and the Decline of Slavery in Colonial West Africa,” 3.

[30] S.D. Neuemark, “Some Economic Development Problems of African Agriculture,” Journal of Farm Economics 41, no 1 (1959): 46.

[31] Reardon et al., Sustainable Versus Unsustainable Agricultural Intensification in Africa: Focus on Policy Reforms and Market Conditions, 2.

[32] John Tosh, “The Cash-Crop Revolution in Tropical Africa: An Agricultural Reappraisal,” African Affairs 79, no. 314 (1980): 89.

[33] I.C. Eke and Effiong J.A.L., “The Effects of Capital Accumulation on Crop Production Output in Nigeria,” 64.

[34] Neuemark, “Some Economic Development Problems of African Agriculture,” 44.

[35] Ibid., 63.

[36] Reardon et al., Sustainable Versus Unsustainable Agricultural Intensification in Africa: Focus on Policy Reforms and Market Conditions, 20.

[37] Ibid., 20-22.

[38] Kabiru Kinyanjui, “Culture, Technology and Sustainable Development in Africa,” Asian Perspective 17, no. 2 (1993): 277.

[39] Economic growth must be achieved in more than one sector. Bananas as an export may collapse, but creating demand through local industry brings in more capital and ensures that local banana producers have a source of income.