In 2000 Gisbert Dreyer founded the Dreyer Stiftung that is is active in Burkina Faso. Since 2011 he is the honaray consul for the Free States of Bavaria and Saxonia in Burkina Faso.
The rural regions of sub-Saharan Africa are home to between 600 and 800 million people who live far below the absolute poverty line. The living and working conditions of these millions of smallholder families make them part of what economists term the subsistence economy. In other words, the economic activities of these families are insufficient to secure their livelihood at even the most basic level.
The consequences are well known: on the one hand hunger, high child mortality rates, wretched living conditions and low life expectancy, and on the other conflict over land and resources, rural exodus and overpopulation. The madness of this situation is that the persisting causes and their consequences are resulting in a constantly accelerating downward spiral of the situation in sub-Saharan Africa.
Another frequently used term is ‘poverty trap’, which is all too often misunderstood as a moral description of people’s life situation. It is in fact a handy name for an economic law to which people in the agricultural subsistence economy are subject. Without substantial external investment, these people have no opportunity to escape from extreme poverty, because the conditions under which they work (which include unviably small plots of land, lack of capital for the purchase of fertiliser, seed and other inputs, and limited expertise) are so poor that they are never able to produce a surplus that would enable them to embark on the process of agricultural development under their own steam. They are caught in a trap!
(c) Dreyer Stiftung
Experts have long been aware of these linkages and principles, and yet economists have not yet come up with a general theory of how hundreds of millions of people who live outside any form of economically describable market can be empowered to participate in markets. If African smallholder agriculture is actually to develop, it must be on the basis of a comprehensive economic and political strategy that considers, classifies and then implements all the relevant development factors and measures simultaneously.
The simultaneity factor is crucial here, because a piecemeal approach – no matter how much is spent on it – is pointless; it cannot yield the necessary synergies and ultimately fizzles out, disappointing everyone. What then are these factors that are relevant to successful agricultural development in sub-Saharan Africa? They are listed in every good agricultural textbook:
Investment capital to spend on preparation of fields and purchase of equipment
Working capital for seed, fertiliser and other inputs
Trained labour
Functioning sales markets
Transport infrastructure
Functioning regional procurement markets for agricultural materials
An appropriate banking system for microloans
Ideally a complete value chain for suitable products within the region
The African continent has many very different regions, each with its distinctive climate, topography, fauna and flora, political systems and ethnic mix. For each of these regions it is possible to draw up a customised strategy for sustainable agricultural development based on the above principles.
The crucial problem is of course the financing of the essential basic investment, which only the affluent countries can treat as an unamortisable grant. Experience has shown that investment of this sort can only benefit smallholders effectively if the state apparatus of the African nations, with their sometimes corrupt systems, is unable to influence it. This means that a new system of investment protection agreements between donor and recipient countries must be set up. Such a system ensures that donor institutions retain long-term control over the capital they have deployed. Of course this involves a departure from entrenched principles of development cooperation with incompetent and corrupt state bureaucracies – principles that have been a major reason for the persistently unsatisfactory outcomes of development assistance over the last 50 years and more. It is not a denial of the African states’ sovereignty, but instead a move that emphasises the sovereignty and responsibility of both sides.
But overcoming the primitive subsistence economy requires more than substantial financial resources that are appropriately and astutely deployed. Education and training on a large scale is also needed. The transition to an advanced, market-oriented agricultural system requires these people to make an enormous cultural shift. The training offensive must encompass everything from the schooling of the farmers’ children and the simultaneous promotion of adult literacy to the ongoing agricultural training of active farmers. Provision of these training measures must be guaranteed for at least twenty years, with concomitant financing and organisation. In the school sector the state and investors must work together to ensure that the measures are integrated into the national education system.
In many parts of Africa, land is allocated to individual farmers on the basis of ancient traditional rules, with the apportionment being overseen by the tribe, the village community or other traditional authorities. Private ownership rights do not feature in this system. Over against these traditional usage rights is the state with an all-embracing right of ownership. In the event of conflict between the state and the village, the farmer is usually stripped of all his rights and becomes landless. This ownership issue is one of the biggest obstacles to agricultural development in Africa, because it means that there is no legal certainty for private investment, which therefore does not take place.
Another adverse and very difficult issue is the fact that the vast majority of smallholders have only a very small plot of land – an area which as it stands is too small for intensification, the installation of irrigation systems or market access. In short, this is the root cause of the poverty trap that on an individual level is insurmountable.
In view of this, is there any way in which the causes of hunger, poverty and unemployment in rural Africa can be tackled?
Yes, there is – and it lies in a model that is well-established in Europe and in particular in Germany: the farmers’ cooperative alliance.
In the 19th and 20th centuries, different versions of this model enabled millions of poor farmers in Europe to establish a livelihood and become relatively affluent. And this model can be transferred to Africa!
The fundamental problems described above can be overcome by organising farmers into a tiered system of cooperatives and superordinate associations, with resulting economic benefits. Cooperatives that receive long-term support and protection from donor institutions can unleash development potential in Africa, with secondary and tertiary effects that then create millions of sustainable new jobs in agriculture and other sectors.
Economic history shows that a productive agricultural system that is integrated into a market economy provides the basis for jobs and also lays the foundation for possible industrialisation.
If this route is to be followed, it requires a major restructuring of the German and European development industry in terms of both policy and organisation.
Short-term, isolated single measures must give way to coherent long-term strategies. Target projects need to be defined with a binding financial framework of at least ten to 15 years. Without this long-term approach to planning and financing, development assistance to rural areas will fail to have a lasting impact and Africans will continue to migrate towards Europe. But we can change this with jobs for the poorest in rural areas.
In 2000 Gisbert Dreyer founded the Dreyer Stiftung that is is active in Burkina Faso. Since 2011 he is the honaray consul for the Free States of Bavaria and Saxonia in Burkina Faso.
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