The Christian Science Monitor
By Jean-Marc Gorelick
April 13, 2009
They don’t need bailouts. But they do need help to avoid ruthless middle men.
Washington – I was sitting in a small village with a group of fellow students in a rural area of Uganda. Our graduate work had brought us to this village, to speak with a sesame farmer about efforts to improve the international marketing of his crop. I had been interviewing for eight straight days in the heat and was exhausted when the farmer said, "The middle men, they are ruining us. Can you help?"
At that point, I put down my note pad. I wanted to know more.
"Who are these middle men?" I asked. And this is when I got a taste of what it’s like for these farmers to live through an international economic meltdown in a place where terms like "subprime" and "toxic assets" mean nothing.
In Uganda, as in many sub-Saharan African countries, agriculture makes up a significant part of the GDP. In 2007, the agriculture sector comprised 29 percent of GDP, while employing over 80 percent of the workforce. This isn’t an exotic niche. It is peoples’ wages, livelihoods, and basic food-security needs.
As global leaders were meeting this month in London to put the global financial system on sound footing, the poorest of the world were sliding deeper into poverty. What stuns me, though, are the voracious middle men who have surfaced to profit from that pain.
The farmers told me that the cost of food to feed a family has been rising steeply.
I knew something was up when I heard Ugandan radio reminding parents not to forget to feed their children in the morning. Imagine that: radio announcements reminding parents to feed their children.
But it gets worse. The cost of seeds and farming tools is rising much faster than income. One farmer with whom I spoke was all ready to go to work. But he couldn’t afford the functioning hoes and rakes needed to produce a high yield.
Even if he had the hoe and rake, the international demand for his crop is collapsing. According to a report issued by the central bank of Uganda in March 2009, the current account balance dropped from $225.8 million in December 2007 to $151 million in December 2008. This was largely due to a decline in exports, including agricultural ones.
So he sells the goods locally for low prices and is unable to bulk the sesame together for large-scale exporting.
This is when the predatory middle men conveniently show up to "help out" the farmer. They produce nothing themselves, and have no problem feeding their families. They are essentially currency speculators trading on the pain of others.
Because the farmers are desperate, they sell their crops to middle men for low prices. The buyers have enough liquidity to store the crops and sell them when the price goes up. One person’s desperation becomes another person’s profit. Uganda and other sub-Saharan African countries are packed with these predators according to news reports from the BBC, as well as several aid organizations, including the Food and Agriculture Organization.
The farmers I met knew almost nothing about the G-20 summit, but they are paying a painful price for global financial machinations they do not understand. They are hidden from the headlines, they are struggling to feed a continent, and they are unable to provide the employment that has traditionally been such a backbone of African economies.
They don’t need bailouts. They don’t need anyone to buy their toxic assets. They need secure storage areas where they can safely store their crops when quick sale would be financially devastating. They need transparently governed marketing associations that can help them act aggressively to identify buyers for sesame and other crops.
The governance of these marketing associations could be further strengthened by holding regular elections, drafting constitutions and bylaws, and engaging in constituency outreach services to the farmers whom marketing leaders are supposed to represent. Farmers need timely information on commodity prices that they can use to decide when to sell. In some cases, notably in Senegal, farmers have made innovative use of cellphones to determine world commodity prices. This kind of activity should be expanded.
In order for all of this to occur, a high commitment is needed on the part of the international community to encourage responsive and accountable institutions in developing nations that are charged with developing the agriculture sector. When it comes to food security and agriculture concerns, there has been too little attention paid to agriculture policy planning at the national level.
All too often, corruption hampers the effectiveness of these governing institutions. Indeed, corruption threatens the entire agriculture enterprise. Without the right climate to engage in agriculture activities, these initial steps, conducted at the micro level, may come to naught.
The farmers like the ones I spoke with don’t expect bonuses. The word "handout" would insult them. They only want a fair shot in the global marketplace, a chance to grow food, eat food, and sell food. How do we tell them that the same world that knew how to rescue enormous financial institutions wasn’t able to save the very source of life itself?
Jean-Marc Gorelick works in international development in Washington D.C.