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What Value are Value Chains for Small-Scale Farmers?

In Mozambique and many other African countries, the Great Land Grab has produced little but headlines and local opposition. In part because of that fierce resistance, mega-deal after mega-deal has collapsed (see an earlier report here).

With many African governments still feeding illusions instead of their people, and with land giveaways to big investors, local farmers are becoming more food insecure as their land rights erode. As a new report—and a compelling video documentary—on Mozambique and Zambia shows, even smaller, less egregious land acquisitions are undermining food security in some of the world’s hungriest countries.

The Soybean Boom

In the southern African country of Mozambique, a few foreign investors have sunk roots to supply soybeans to Mozambique’s rapidly growing poultry industry, which now produces the vast majority of its own chicken. Three large-scale commercial farms now operate in Gurue, in the central province of Zambezia, with government land concessions of 7,500 to 23,000 acres. That is a far cry from the hundreds of thousands of acres threatened by investors in the failing ProSavana project, which was supposed to blanket this region with Brazilian-style soybean plantations. (See earlier articles on this here and here.)

The local impact of this smaller project has been direct and wide-ranging. On the plus side, some small and medium-scale commercial farmers have been able to integrate into the soy-poultry value chain, which also created demand for corn, the other key component in commercial chicken feed. These farmers have seen growing markets and decent prices, and with technical and financial support from international organizations they’ve bought machinery, expanded their farms, hired labor, and subcontracted other farmers to grow soybeans.

It looks a lot like the long, slow process of agricultural development, with so-called “emerging farmers” driving rural transformation, a process Teresa Smart and Joseph Hanlon captured well in their 2014 book, Chickens and Beer: A Recipe for Agricultural Growth in Mozambique.

For the recent report, researchers from the Institute for Poverty, Land, and Agrarian Studies (PLAAS) at the University of Western Cape in South Africa wanted to go deeper to assess the wider impacts on the area’s “agro-food systems” and on community food security. Teaming with local researchers from Maputo-based ADECRU, they carried out focus-group interviews and other research across Gurue.

Their findings acknowledge the economic gains from the growing soybean economy, which mostly ships feed to poultry plants outside the area. With extensive support from international aid organizations, emerging farmers, now grouped in their own association, have upgraded production, mechanized, and even established a seed production facility. In addition, many small-scale farmers now grow soybeans on more than 27,000 acres of land, with yields comparable to the more industrialized producers. Cash incomes have risen for some with this new demand for one of their crops.

Losses Amid the Gains

The report highlights some of the downsides to such agricultural development, as well. Not surprisingly, one of the most problematic was displacement, as the three larger concessions took land from local farmers. PLAAS estimates that hundreds, if not thousands, of farmers lost at least some of their land to the new large-scale operations. Only some were resettled, many on poor-quality land.

One estimate suggested negative impacts on 15,000 people when family members and others in the community are counted. In the process, some potential emerging farmers lost some of their potential, what PLAAS researchers called “re-peasantization.”

“I used to produce on eight hectares of land,” Elias Ernesto, a local farmer, told the researchers, “After the displacement by the company I now have only two hectares of poor land.”

Added land pressure will now come from successful emerging farmers as they scale up their operations and seek more land. If local land rights are not respected in that process, the mini-boom could quickly turn to bust, at least for some, as smaller-scale soybean farmers who have benefited from the new markets are reduced to laborers on their neighbors’ farms. Or they are just cast aside.

Studies have shown that large-scale agricultural projects often displace far more jobs or livelihoods than they create. This seemed true in the case of these three large farms. The largest, Hoyo Hoyo, employs just 156 workers year-round and another 400 seasonally.

Other impacts were more subtle, but no less concerning. PLAAS found that many farmers were now growing less of their own food, leaving them more reliant on cash income, without necessarily having reliable access to income-generating opportunities. Some who went all-in on soybeans and adopted new commercial seeds found that they performed poorly in the recent drought, leaving the farmers with little income and less food production from other crops.

Displacement itself had far-reaching impacts. Communities lost not only land but access to streams and other water sources, crucial in drought conditions, and to common areas the communities relied on for fruits and medicinal plants. The dispersion of communities, either to resettlement areas or informally, led to the collapse of some farmer organizations, which should be the engine for agricultural development.

PLAAS found unexpected upsides as well. Women had developed new informal markets for high-protein soybean products, from soy milk to baked goods, and locals short on affordable sources of protein were eager buyers. Few eat meat more than 2-4 times per week. Outside the immediate area, small-scale poultry production has grown to give farmers both new markets and more regular access to protein for family diets.

Land Rights, Public Investment Key to Success

The PLAAS report, which also includes a detailed study on agricultural investments in Zambia, highlights the pitfalls inherent in the new development mantras of “value chain integration” led by the private sector with subservient government support in so-called “public-private partnerships.”

To have broader impacts, such projects need to engage with farmer organizations to socialize the benefits from such economic activities. They also need to ensure that land rights are secure and respected, not only to minimize displacement but to allow local farmers to negotiate fair terms for contract production.

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