The nature of modern imperialism
"Manufacturing A Food Crisis" By Walden Bello (academic and member of the Philippines House of Representatives"
17 May, 2008
The Nation
http://www.countercurrents.org/bello170508.htm
the World Bank’s encouragement of several economies to focus on the same export crops often led to overproduction, triggering price collapses in international markets. For instance, the very success of Ghana’s expansion of cocoa production triggered a 48 percent drop in the international price between 1986 and 1989. In 2002-03 a collapse in coffee prices contributed to another food emergency in Ethiopia.
I do not think that companies should simply pay higher prices for philanthropy, (paying higher prices has been talked about because the low prices for cocoa, for example, causes a great deal of harm in many African countries). In the short term this would be the right thing to do. However Africans are often paid below market prices which is horrible, but even at market prices it is too low so the African farmer resorts to brutal methods to produce cocoa at the lowest price possible. However simply offering higher prices is equivalent to a prisoner in someone else's home having a compromise with his captor that he can eat whatever he wants out of the refrigerator at any time he wants. For the person being held prisoner this is a good thing except that he is still a prisoner.
How did many west African countries prisoners to Hershey and other chocolate corporations? The price of other potential crops are lower, the price of cocoa is higher, so the farmers grow cocoa. Africans benefit from the cocoa industry but they import food, which is fine as long as the cocoa income keeps coming in. Many African countries were encouraged to grow cocoa, and many African countries are dependent on cocoa for income, but they are too dependent on it. Over production leads to a drop in the price of cocoa but cocoa is different from other crops. There is a similar theme in what happens with this kind of price manipulation, lower price leads to poverty and even hunger. But with cocoa when the price falls the children will not have access to an education because the parents can't afford an education, but children are also used as forced labor but the brutally primitive methods used are not ones that can lead to more development.
The reason I have talked so much about exports is that cocoa does seem to have done a lot of good, people were able to finance more development and it employed people and could improve trade. There are tariffs on processed cocoa and African countries could benefit if they could process the raw product. Obviously exporting cocoa would allow for the development of infrastructure and the ability to build chocolate factories. If cocoa was not overproduced and if African countries could process cocoa chocolate corporations would not be in a position to exploit Africans. Much of the cocoa production worldwide is grown from small holders which mean an increase in price would help the common people. These people do get the earnings from cocoa exports as cocoa is a big part of the economy; the problem is the low price. If farmers could grow other crops there would cease to be cocoa overproduction but cocoa would still be a boost to the economy.
Exports give something that money can’t buy, since exports employ people and encourage development in poor countries people will have a steady income. This would be good for Americans because it would be bad for greedy corporations. A few corporations can buy cheap cocoa but if Africans could hold out for the highest bidder corporate monopolies would not be sustainable. Everyone knows that Wal-Mart depends on cheap goods from poor countries but these countries will not offer cheap labor if they have other means of income
How do we help African farmers increase production? The very anticipation of higher prices is enough to increase production; the sale of their commodities is what is needed for more development. Even if Europe has changed its sugar policies now in year 2010 the price of sugar is still depressed. Jim Rogers says sugar is 70% below it’s all time high and that agricultural commodities as a whole are depressed, he recommends sugar as an investment. Many Africans have said that if the price of sugar was higher they would have "If the price was better, you'd see more cars, electricity and running water around here," said Enos Nene, the development officer of the local growers association”.
It is extremely important to point out that even if the European Union did not export sugar the fact that they were not importing sugar hurt African farmers who could produce sugar a lot cheaper. If these Africans have a comparative advantage in growing food, as they certainly do, they should be able to use crop rotation to grow a variety of crops and instead of using export earnings to pay for food imports they should import things that other countries have a comparative advantage in. As we have seen good crop prices clearly aid in the development of communities, education, infrastructure and incomes. Africans need more trade within Africa but exports can push everything further, employ people with good wages, and encourage all kinds of industry.
This is not simply the classic imperialism in which one country exports raw materials and the other imports finished product, since a good part of exports in many African countries are used to import food! This sort of system is not even in the best interests of developed countries since Europeans are competing with people who can grow sugar at cheaper prices. If Europeans are driving out farmers who can produce the product cheaper, then one must come to the conclusion that that if it were not for the government cheque in the mail Europeans would have been importing sugar.
The agriculture system of the United States and Europe is not at all a sane system. Even if there was no dumping of cheap sugar on the world market why would you spend 21 cents to produce one pound of sugar when you can buy it for 7 cents? This alone is insanity, to protect high cost sugar producers and this alone is cruel as it hurts development for developing countries. If protecting home industries in this way is insanity, dumping products on world markets at prices so low that it drives out competitors that can produce the same product 3 times cheaper is even beyond insanity. It costs 22 cents for Africans to produce cotton, it costs 68 cents for the United States to produce cotton.
In the case of cocoa, sugar and cotton the expectation of higher prices boosted the production of all three. In all three cases the people who grow the crop do get paid for it, even though it might be low because of low world prices. Even when it is low they still depend on it as income
“In Depth Valentine's The dark side of chocolate Q&A with Carol Off, author of Bitter Chocolate”
Last Updated February 2007
by John Bowman, CBC News
http://www.cbc.ca/news/background/valentines/qa-off.html
What's life like for people who grow cocoa beans?
It used to be not bad. During the times when Ivory Coast and West Africa had an economic miracle, it was very good.
There was a lot of labour for itinerant workers and there was enough profit from the cocoa to fund a lot of farms and farmers. But in the past 10 or 15 years, it's been increasingly bad for farmers, as the price of the beans is not only volatile, but usually extremely low. They have been unable to properly finance their farms or to pay for labour. They've resorted to all sorts of abusive labour practices that were not part of West Africa before then…..
…..
What kind of labour practices are the farmers resorting to to deal with this?
The first thing that happened was that they were unable to pay the itinerant labour that has been for generations coming to Ivory Coast from very poor countries like Mali and Burkina Faso. So, they looked for cheaper labour sources.
First of all, they employed their own families and their own children, taking them out of school, often. And then, when that wasn't enough, they began to look for even cheaper sources of labour. To an alarming degree, they began to turn toward child labour, where the children have no ability to negotiate their wages.
"Chocolate and Slavery"
http://www.chocolatework.com/chocolate-slavery.htm
The Causes
According to the Cote d’Ivoire Prime Minister, multinational chocolate manufacturers have encouraged more and more developing nations to grow cocoa, forcing down the price and driving cocoa farmers to take desperate measures just to save their land. He told chocolate manufacturers that they would have to pay about 10 times as much for cocoa as they currently do if they want to end the use of forced labor in cocoa production.West Africa produces over 67% of the world’s crop of cocoa beans. The Cote d’Ivoire grows 43% of the total world cocoa crop, where there are over 600,000 cocoa farms. Two-thirds of cocoa produced worldwide is thought to be grown by small holders. The economies of the West African governments depend on cocoa. Nearly 40% of the population of the Cote d’Ivoire is involved in cocoa farming, and 40% of the total earnings exported from the Cote d’Ivoire come from cocoa.
"High duties keep food imports from poor countries out of Europe"
http://www.dw-world.de/dw/article/0,,5127705,00.html
One particular problem is tariff escalation: Import tariffs increase the more processed a product becomes. This measure ensures that most imports to the EU are raw products like coffee, cocoa or pineapples which cannot be cultivated in Europe.
While the import duties for unprocessed cocoa beans is rather small, the EU charges 30 percent for processed cocoa products like chocolate bars or cocoa powder, and 60 percent for some other refined products containing cocoa.
"How an Addiction To Sugar Subsidies Hurts Development" Posted on January 26, 2005
http://www.globalenvision.org/library/15/722
"It's no good building up roads, clinics and infrastructure in poor areas if you don't give them access to markets and an engine of growth," says Mark Malloch Brown, the head of the U.N. Development Program….
…In South Africa, by contrast, Roy Sharma is ruing the day he decided to bet heavily on sugar -cane farming. Until a few years ago, he grew a bit of cane on his 25-acre plot on the Indian Ocean coast, but mainly he tended vegetables. Then sugar mills began selling some of their acreage in a program to promote midsize growers, a great attraction to nonwhite farmers who had largely been denied landownership by the old apartheid government. Mr. Sharma, 47, jumped at the chance and snapped up 180 acres.
"I immediately saw it was a mistake," he says. The world price was on its way down, and then the South African currency, the rand, plummeted, sending the cost of his fertilizer, herbicides and gasoline -- all imported -- soaring. His cane harvest brings in about $70,000; in France, subsidies alone on a plot his size would amount to more than $100,000. After all his costs are paid, Mr. Sharma says he barely has enough left to meet the payments on the loan for the land he bought.
"This program was supposed to uplift farmers, but we've been pushed into a corner that we can't get out of," Mr. Sharma says…..
…At the sugar mill in Entumeni on a recent day, the air was thick with the sweet smell of molasses. But the atmosphere was sour. "If the price was better, you'd see more cars, electricity and running water around here," said Enos Nene, the development officer of the local growers association, as he drove through the fields and past the farmers' huts. The area's 3,700 small-scale growers, typically with fewer than 10 acres of cane, are being pushed to plant more land, even though it makes no economic sense given the price they receive. But it is a matter of survival, for the mill is barely profitable and could use about 50,000 tons of cane more to remain in long-term operation.
Jim Rogers: Buy Silver- CNN Money 6-21-2010 On sugar watch 1:25-2:35 he says that the price of sugar is still very depressed
http://www.youtube.com/watch?v=oCeuwnkmL3s
"Mounting opposition to Northern farm subsidies African cotton farmers battling to survive" By Gumisai Mutume
http://www.un.org/ecosocdev/geninfo/afrec/vol17no1/171agri4.htm
Countries such as Mozambique, struggling to revive its sugar exports following the end of a civil war, do not stand a chance. More than 23,000 people are employed in Mozambique's sugar sector, making it the single largest source of employment. The country's major economic goal is to rehabilitate its mills and increase the number of those employed in the sector to 40,000. But it has to contend with poor world prices and the inability to out-compete the EU, even in African markets. The EU exported 770,000 tonnes of sugar to Algeria and 150,000 tonnes to Nigeria last year….
….While raw sugar prices in the US averaged 21.17 cents per pound during the first quarter of 2002, on the world market they averaged 7.12 cents. And despite the lower production costs of foreign sugar, the US requires the price of imported sugar to match domestically produced sugar.
"US AND EU COTTON PRODUCTION AND EXPORT POLICIES AND THEIR IMPACT ON WEST AND CENTRAL AFRICA:" from the ethical global association May 2004
http://www.3dthree.org/pdf_3D/1404-EGICottonBrief_FINAL.pdf
Electronic page 5
West and Central African (WCA) cotton producers are among the lowest cost producers in the world. According to figures from 2001, in Benin and Mali it costs 21 US cents per kilogram to produce one hectare of cotton. In Burkina Faso the cost is 22 cents per kilogram, in contrast to the US where it costs 68 cents per kilogram….
… '…cotton here is everything. It built our schools and our health clinics. We all depend on cotton. But if prices stay low we have no hope for the future.'
Farmer from Logokourani Village,
cited in Oxfam, 2002…
…To prevent a collapse of their cotton sectors, WCA governments have been forced to divert limited financial resources away from other critical areas such as education, delivery of health services and development of rural infrastructure. Access to food is also threatened by low cotton prices because many WCA countries rely on export revenue from cotton to purchase food imports. This is particularly important for countries such as Togo, Benin, Chad, Burkina Faso and Mali where the export revenue of cotton accounts for more than 10% of total national export revenue.
17 May, 2008
The Nation
http://www.countercurrents.org/bello170508.htm
the World Bank’s encouragement of several economies to focus on the same export crops often led to overproduction, triggering price collapses in international markets. For instance, the very success of Ghana’s expansion of cocoa production triggered a 48 percent drop in the international price between 1986 and 1989. In 2002-03 a collapse in coffee prices contributed to another food emergency in Ethiopia.
I do not think that companies should simply pay higher prices for philanthropy, (paying higher prices has been talked about because the low prices for cocoa, for example, causes a great deal of harm in many African countries). In the short term this would be the right thing to do. However Africans are often paid below market prices which is horrible, but even at market prices it is too low so the African farmer resorts to brutal methods to produce cocoa at the lowest price possible. However simply offering higher prices is equivalent to a prisoner in someone else's home having a compromise with his captor that he can eat whatever he wants out of the refrigerator at any time he wants. For the person being held prisoner this is a good thing except that he is still a prisoner.
How did many west African countries prisoners to Hershey and other chocolate corporations? The price of other potential crops are lower, the price of cocoa is higher, so the farmers grow cocoa. Africans benefit from the cocoa industry but they import food, which is fine as long as the cocoa income keeps coming in. Many African countries were encouraged to grow cocoa, and many African countries are dependent on cocoa for income, but they are too dependent on it. Over production leads to a drop in the price of cocoa but cocoa is different from other crops. There is a similar theme in what happens with this kind of price manipulation, lower price leads to poverty and even hunger. But with cocoa when the price falls the children will not have access to an education because the parents can't afford an education, but children are also used as forced labor but the brutally primitive methods used are not ones that can lead to more development.
The reason I have talked so much about exports is that cocoa does seem to have done a lot of good, people were able to finance more development and it employed people and could improve trade. There are tariffs on processed cocoa and African countries could benefit if they could process the raw product. Obviously exporting cocoa would allow for the development of infrastructure and the ability to build chocolate factories. If cocoa was not overproduced and if African countries could process cocoa chocolate corporations would not be in a position to exploit Africans. Much of the cocoa production worldwide is grown from small holders which mean an increase in price would help the common people. These people do get the earnings from cocoa exports as cocoa is a big part of the economy; the problem is the low price. If farmers could grow other crops there would cease to be cocoa overproduction but cocoa would still be a boost to the economy.
Exports give something that money can’t buy, since exports employ people and encourage development in poor countries people will have a steady income. This would be good for Americans because it would be bad for greedy corporations. A few corporations can buy cheap cocoa but if Africans could hold out for the highest bidder corporate monopolies would not be sustainable. Everyone knows that Wal-Mart depends on cheap goods from poor countries but these countries will not offer cheap labor if they have other means of income
How do we help African farmers increase production? The very anticipation of higher prices is enough to increase production; the sale of their commodities is what is needed for more development. Even if Europe has changed its sugar policies now in year 2010 the price of sugar is still depressed. Jim Rogers says sugar is 70% below it’s all time high and that agricultural commodities as a whole are depressed, he recommends sugar as an investment. Many Africans have said that if the price of sugar was higher they would have "If the price was better, you'd see more cars, electricity and running water around here," said Enos Nene, the development officer of the local growers association”.
It is extremely important to point out that even if the European Union did not export sugar the fact that they were not importing sugar hurt African farmers who could produce sugar a lot cheaper. If these Africans have a comparative advantage in growing food, as they certainly do, they should be able to use crop rotation to grow a variety of crops and instead of using export earnings to pay for food imports they should import things that other countries have a comparative advantage in. As we have seen good crop prices clearly aid in the development of communities, education, infrastructure and incomes. Africans need more trade within Africa but exports can push everything further, employ people with good wages, and encourage all kinds of industry.
This is not simply the classic imperialism in which one country exports raw materials and the other imports finished product, since a good part of exports in many African countries are used to import food! This sort of system is not even in the best interests of developed countries since Europeans are competing with people who can grow sugar at cheaper prices. If Europeans are driving out farmers who can produce the product cheaper, then one must come to the conclusion that that if it were not for the government cheque in the mail Europeans would have been importing sugar.
The agriculture system of the United States and Europe is not at all a sane system. Even if there was no dumping of cheap sugar on the world market why would you spend 21 cents to produce one pound of sugar when you can buy it for 7 cents? This alone is insanity, to protect high cost sugar producers and this alone is cruel as it hurts development for developing countries. If protecting home industries in this way is insanity, dumping products on world markets at prices so low that it drives out competitors that can produce the same product 3 times cheaper is even beyond insanity. It costs 22 cents for Africans to produce cotton, it costs 68 cents for the United States to produce cotton.
In the case of cocoa, sugar and cotton the expectation of higher prices boosted the production of all three. In all three cases the people who grow the crop do get paid for it, even though it might be low because of low world prices. Even when it is low they still depend on it as income
“In Depth Valentine's The dark side of chocolate Q&A with Carol Off, author of Bitter Chocolate”
Last Updated February 2007
by John Bowman, CBC News
http://www.cbc.ca/news/background/valentines/qa-off.html
What's life like for people who grow cocoa beans?
It used to be not bad. During the times when Ivory Coast and West Africa had an economic miracle, it was very good.
There was a lot of labour for itinerant workers and there was enough profit from the cocoa to fund a lot of farms and farmers. But in the past 10 or 15 years, it's been increasingly bad for farmers, as the price of the beans is not only volatile, but usually extremely low. They have been unable to properly finance their farms or to pay for labour. They've resorted to all sorts of abusive labour practices that were not part of West Africa before then…..
…..
What kind of labour practices are the farmers resorting to to deal with this?
The first thing that happened was that they were unable to pay the itinerant labour that has been for generations coming to Ivory Coast from very poor countries like Mali and Burkina Faso. So, they looked for cheaper labour sources.
First of all, they employed their own families and their own children, taking them out of school, often. And then, when that wasn't enough, they began to look for even cheaper sources of labour. To an alarming degree, they began to turn toward child labour, where the children have no ability to negotiate their wages.
"Chocolate and Slavery"
http://www.chocolatework.com/chocolate-slavery.htm
The Causes
According to the Cote d’Ivoire Prime Minister, multinational chocolate manufacturers have encouraged more and more developing nations to grow cocoa, forcing down the price and driving cocoa farmers to take desperate measures just to save their land. He told chocolate manufacturers that they would have to pay about 10 times as much for cocoa as they currently do if they want to end the use of forced labor in cocoa production.West Africa produces over 67% of the world’s crop of cocoa beans. The Cote d’Ivoire grows 43% of the total world cocoa crop, where there are over 600,000 cocoa farms. Two-thirds of cocoa produced worldwide is thought to be grown by small holders. The economies of the West African governments depend on cocoa. Nearly 40% of the population of the Cote d’Ivoire is involved in cocoa farming, and 40% of the total earnings exported from the Cote d’Ivoire come from cocoa.
"High duties keep food imports from poor countries out of Europe"
http://www.dw-world.de/dw/article/0,,5127705,00.html
One particular problem is tariff escalation: Import tariffs increase the more processed a product becomes. This measure ensures that most imports to the EU are raw products like coffee, cocoa or pineapples which cannot be cultivated in Europe.
While the import duties for unprocessed cocoa beans is rather small, the EU charges 30 percent for processed cocoa products like chocolate bars or cocoa powder, and 60 percent for some other refined products containing cocoa.
"How an Addiction To Sugar Subsidies Hurts Development" Posted on January 26, 2005
http://www.globalenvision.org/library/15/722
"It's no good building up roads, clinics and infrastructure in poor areas if you don't give them access to markets and an engine of growth," says Mark Malloch Brown, the head of the U.N. Development Program….
…In South Africa, by contrast, Roy Sharma is ruing the day he decided to bet heavily on sugar -cane farming. Until a few years ago, he grew a bit of cane on his 25-acre plot on the Indian Ocean coast, but mainly he tended vegetables. Then sugar mills began selling some of their acreage in a program to promote midsize growers, a great attraction to nonwhite farmers who had largely been denied landownership by the old apartheid government. Mr. Sharma, 47, jumped at the chance and snapped up 180 acres.
"I immediately saw it was a mistake," he says. The world price was on its way down, and then the South African currency, the rand, plummeted, sending the cost of his fertilizer, herbicides and gasoline -- all imported -- soaring. His cane harvest brings in about $70,000; in France, subsidies alone on a plot his size would amount to more than $100,000. After all his costs are paid, Mr. Sharma says he barely has enough left to meet the payments on the loan for the land he bought.
"This program was supposed to uplift farmers, but we've been pushed into a corner that we can't get out of," Mr. Sharma says…..
…At the sugar mill in Entumeni on a recent day, the air was thick with the sweet smell of molasses. But the atmosphere was sour. "If the price was better, you'd see more cars, electricity and running water around here," said Enos Nene, the development officer of the local growers association, as he drove through the fields and past the farmers' huts. The area's 3,700 small-scale growers, typically with fewer than 10 acres of cane, are being pushed to plant more land, even though it makes no economic sense given the price they receive. But it is a matter of survival, for the mill is barely profitable and could use about 50,000 tons of cane more to remain in long-term operation.
Jim Rogers: Buy Silver- CNN Money 6-21-2010 On sugar watch 1:25-2:35 he says that the price of sugar is still very depressed
http://www.youtube.com/watch?v=oCeuwnkmL3s
"Mounting opposition to Northern farm subsidies African cotton farmers battling to survive" By Gumisai Mutume
http://www.un.org/ecosocdev/geninfo/afrec/vol17no1/171agri4.htm
Countries such as Mozambique, struggling to revive its sugar exports following the end of a civil war, do not stand a chance. More than 23,000 people are employed in Mozambique's sugar sector, making it the single largest source of employment. The country's major economic goal is to rehabilitate its mills and increase the number of those employed in the sector to 40,000. But it has to contend with poor world prices and the inability to out-compete the EU, even in African markets. The EU exported 770,000 tonnes of sugar to Algeria and 150,000 tonnes to Nigeria last year….
….While raw sugar prices in the US averaged 21.17 cents per pound during the first quarter of 2002, on the world market they averaged 7.12 cents. And despite the lower production costs of foreign sugar, the US requires the price of imported sugar to match domestically produced sugar.
"US AND EU COTTON PRODUCTION AND EXPORT POLICIES AND THEIR IMPACT ON WEST AND CENTRAL AFRICA:" from the ethical global association May 2004
http://www.3dthree.org/pdf_3D/1404-EGICottonBrief_FINAL.pdf
Electronic page 5
West and Central African (WCA) cotton producers are among the lowest cost producers in the world. According to figures from 2001, in Benin and Mali it costs 21 US cents per kilogram to produce one hectare of cotton. In Burkina Faso the cost is 22 cents per kilogram, in contrast to the US where it costs 68 cents per kilogram….
… '…cotton here is everything. It built our schools and our health clinics. We all depend on cotton. But if prices stay low we have no hope for the future.'
Farmer from Logokourani Village,
cited in Oxfam, 2002…
…To prevent a collapse of their cotton sectors, WCA governments have been forced to divert limited financial resources away from other critical areas such as education, delivery of health services and development of rural infrastructure. Access to food is also threatened by low cotton prices because many WCA countries rely on export revenue from cotton to purchase food imports. This is particularly important for countries such as Togo, Benin, Chad, Burkina Faso and Mali where the export revenue of cotton accounts for more than 10% of total national export revenue.
