Institutional arrangements of outgrower sugarcane production in Southern Africa

ABSTRACT

Management models are needed that empower local communities to produce biofuel feedstock in a manner that drives rural development. Much can be learnt through the accumulated experiences of sugarcane outgrower schemes in southern Africa. Early schemes provided limited empowerment, but protected outgrowers from the risks of volatile sugar value chains. In later schemes, processing plants were responsible for all operations and simply paid dividends to participating farmers. More recent schemes offer full ownership, which comes with greater rewards and empowerment, but also exposure to risks. The underlying institutional structures of outgrower schemes largely dictate their performance, and thus the factors that affect their viability or collapse. To understand the different institutional arrangements of sugarcane outgrower schemes we undertake a comparative analysis of 13 schemes in southern Africa employing a political economy framework that uses the three key questions: ‘who owns what’, ‘who does what’, and ‘who gets what’.     

Basic needs,agropolitan development,and planning from below

Current treatment of ‘basic needs’ programmes as mere adjuncts to main-stream growth strategies leads to but another version of the well-known strategy of redistribution with growth. The result is emphasis on short-run improvements in consumption levels of target groups below the ‘poverty line’ while primary allocations and effort are devoted to growth in GNP. Distinct from this main-line approach, a normative theory is proposed in which production and distribution would be encompassed within the context of face-to-face political decision-making in appropriately sized ‘agropolitan’ districts. Decision on economic activities would thus be subordinated to a territorial will in an act of reciprocal entitlement between individual and community.     

Convergence crisis: economic crisis and convergence in the European Union

The success of the integration process of the new EU Member States is reflected by the convergence performance. Sustainable convergence assumes that potential growth rates of the less developed countries continuously exceed the dynamics of the potential output of the developed countries. However, the financial and economic crisis of 2008 has resulted in a fundamentally new situation as regards these issues. This paper considers real convergence, catch-up processes and in terms of these the main economic growth trends. The study focuses mainly on the potential growth trends. The recession has, however, affected the individual countries to different degrees. The study classified the Member States into four groups based on the initial circumstances and the vulnerability originating from them; these are ‘Developed’ countries and ‘Convergence’ countries, three groups of the latter are ‘Mediterranean’ countries, ‘Catch-up’ countries and ‘Vulnerable’ countries. Potential growth and the contribution of the individual growth factors might follow significantly different paths in these country groups. The convergence countries might face especially great challenges. Potential growth rate of the ‘Convergence’ countries—according to simulations—is expected to recover less in the mid-term, than that of the ‘Developed’ countries, i.e. convergence slows down, it might come to a halt or even divergence might occur in certain countries. It might result in a ‘Convergence Crisis’ particularly in certain ‘Mediterranean’ and ‘Vulnerable’ new Member States. Also, longer term simulations indicate that the European convergence processes might slow down and stop in certain countries. These trends may have significant effects on economic policies facilitating potential growth. We apply extensive quantitative analysis, production function and growth accounting approaches in the study.     

Irrigation development and its socioeconomic impact on rural communities in Malawi

The ‘green revolution’ of the 1950s advocated irrigation schemes as one way of achieving food security globally. Evidence from the Likangala and Domasi irrigation schemes in Malawi suggests, however, that irrigation schemes that were developed after the pattern of the ‘green revolution’ had adverse effects on the socioeconomic status of Malawi's rural communities, disrupting local economies, exposing local farmers to water related diseases, and relocating communities away from their ancestral land without due compensation. The production of rice, expansion of rural sources of income, and growth of towns associated with irrigation schemes were limited in quality and quantity and benefited only a few privileged farmers on the schemes. This paper strongly recommends the recognition of local structures and systems, and minimal dependency on donor support, if irrigation farming is to improve the welfare of rural communities in Malawi.     

Inequality of opportunity in earnings in rural China

This paper explores the role of ‘inequality of opportunity’ in individual earnings in rural China, which is attributed to ‘circumstantial’ factors over which individuals have no control, including family background, gender, ethnic minority status and region of birth. These circumstances are contrasted with ‘efforts’ or choices that individuals make, which also impact on their individual earnings. Utilising the China Labour-force Dynamics Survey (CLDS) 2014, I measure the share of inequality of opportunity in the overall inequality of individual annual earnings for the entire sample and for each of four ten-year birth cohorts in rural China. The empirical results revealed that the share of inequality of opportunity in individual earnings for the full sample is 20.4% of the GE(0) coefficient. The adoption of machine learning methods provides a wide range of estimates between 16.4% (regression tress) and 25.4% (forests). Across all birth cohorts, gender is consistently the largest single contributor to inequality of opportunity, while family background is relatively more important for younger cohorts. A closer investigation indicates that those who find themselves in the worst circumstances are likely to exert lower level of effort, not because they don’t want to try harder, but because their circumstances prevent them from doing so.     

The impact of relocation on social relationships in a ‘betterment’ area in Transkei∗

Agricultural ‘betterment’ schemes affecting Blacks in rural Southern Africa have frequently involved residential relocation and the reorganization of patterns of land use on the one hand, and negative social and economic effects on the other. In this paper the documented social effects of ‘betterment’ in Ciskei and Transkei are reviewed, with a view to predicting the consequences of the current implementation of such a scheme in part of the Willowvale district, Transkei. In both respects an attempt is made to relate the social consequences of betterment to (a) the impact of residential relocation and changing patterns of land use on forms of community organization and co‐operation, and (b) the way in which it is experienced by those affected.     

Talking to the ancestors: national heritage,the Freedom Charter and nation-building in South Africa in 2005

The Freedom Charter has a significant place in South African liberation history. This paper is a re-reading of the document in 21st century conditions and locates its ideas within contexts that have not previously been brought into debate. In particular, it argues that the Freedom Charter is part of national heritage, but of a special kind relating to its being part of a ‘democratic stream’. This is because of its mass democratic mode of creation and resultant product. It also interrogates the notion of ‘The People’ and what ‘The People’ think, bringing into focus unacknowledged knowledge, especially the questions of orality and communication with ancestors. The notion of ‘brotherhood’ as used in the Charter is examined as connoting more than a gender-related concept–a specific way of human beings relating to one another, akin to that of siblings, signifying cooperation rather than individual isolation or competitiveness. This and questions of gender are addressed in the context of nation-building.     

Stochastic Generational Accounting Applied to Reforms of Dutch Occupational Pensions

This paper examines stochastic or ‘value based’ generational accounting as a method to assess the intergenerational redistributive impact of pension reform. The analysis is applied to three policy changes to the regulation of Dutch occupational pensions during the years 2012 and 2013 that mark the transition from defined benefit pensions to ‘defined ambition’ pension schemes.     

Coping with climate change in Africa: an analysis of local interpretations in Eastern Cape,SA

The emissions of greenhouse gases together with other anthropogenic activities has caused a change in global climatic conditions with corresponding negative effects on agricultural productivity, biodiversity and other socio-economic indices. Studies reveal that the impacts of climate change are felt most severely by the vulnerable, who have fewer adaptive capacities. In Africa, for example, little is known about local narratives on the ‘causes’ of climate change, and how such narratives influence climate change coping and adaptation strategies in specific local settings. Where do the ‘local’ and the ‘global’ intersect in the search for effective coping measures – and do they? Using a qualitative approach, this paper reveals how local conceptions of climate change appear to be rooted in ‘politics’ and spiritual forces. The paper highlights not only the major points of divergence between local interpretations and ‘Western’ conceptions about climate change, but also important areas of convergence between the two ideational domains.     

Sources of stagnation in sub-Saharan Africa

This paper investigates the sources of economic stagnation in sub-Saharan Africa during the 1970s. Several policy variables are considered, as well as a set of ‘environmental’ variables which include climate, violence, export prices and other exogenous factors. The paper uses statistical analysis in an attempt to identify the relative importance of the policy variables and the ‘environmental’ variables, taken as groups. It also seeks to identify particular policy variables which seem to have been most significant in determining growth outcomes.The technique employed for investigation is reduced-form econometric estimation. In a preliminary analysis, the impact of the international trade environment on average economic performance in Africa during the period since independence is investigated. The results suggest an extremely close relationship between movements in export prices and average performance throughout the 20-year period.A second econometric exercise investigates the joint impacts of environmental and policy variables on growth in a cross-section of African states since 1970. The spirit of the approach is exploratory, and a relatively large number of variables are constructed and tested through multivariate analysis. A primary finding is that the environmental variables seem to have had more impact on growth as a group than the policy variables. This finding must be qualified, however, by the continuing lack of some important policy variables. Agricultural price data have not yet become available in sufficient quantity for cross-section analysis, nor have several important human resource variables and indices of the use of resources in the public domain.Among the policy variables which have been used for the analysis, those identified with retrenchment during periods of declining commodity prices seem most significant. Primary among these are the real effective exchange rate and some measures of effectiveness in foreign exchange reallocation during periods when imports must contract severely.In the final section of the paper, the cross-section results are used for a counterfactual analysis of the growth experiences of individual African states. Measures of growth opportunity cost are constructed which suggest the degree to which errors in management and uncontrollable circumstances have held states below their potential growth paths. The results suggest that some ‘success stories’ may owe much to good luck, while some ‘failures’ may well be due less to bad management than to adverse circumstances.     

A detailed decomposition analysis of the public-private sector wage gap in South Africa

The present study examines the public-private sector wage gap in South Africa using individual cross-sectional data for 2000–14. Results from unconditional quantile regressions and generalised Oaxaca–Blinder type decompositions show that the wage gap is an inverted-U shape across the wage distribution. The ‘composition effect’ is more important than the ‘price effect’ at the bottom of the distribution while the opposite applies at the top. Key factors underpinning the ‘composition effect’ are unionisation, industry of employment and education, while those associated with the ‘price effect’ are education, race and occupation.     

Recent declines in fertility in less developed countries,and what ‘population planners’ may learn from them

Significant and rapid fertility declines have occurred in many countries in the poor world over the past decade; many of these were unanticipated by demographers. Despite advances in statistical technique and demographic theory, little is yet known about the demographic rhythms of life in poor countries, or of the social forces behind them. Fertility decline, however, appears to have much to do with changes, economic and otherwise, within the family structure. The impact of ‘family planning’ programmes on fertility decline appears to have been exaggerated. ‘Population planners’ should be sensitive to the fact that a decline in fertility does not necessarily mean that an improvement in the standard of living has occurred, and they should not assume that reducing fertility automatically increases either the quality of life or the prospects for ‘development’.     

Non-financial Determinants of Retirement: A Literature Review

Retirement is often concentrated at specific ages—in particular the ‘normal retirement age’ and an ‘early retirement age’. Financial incentives cannot fully explain this. Moreover, the participation effect of a higher normal retirement age importantly exceeds the encompassing income effect. Based on a literature survey, we conclude that social norms, default options, and reference-dependent utility are likely explanations for the individual propensity to retire at specific retirement ages. Further empirical research on non-financial determinants of retirement is needed to fully understand individual retirement behavior.     

Urban Land Policies in Ghana: A Case of the Emperor’s New Clothes?

The paper examines evidence on the reasons for inefficient land management in Ghana. It argues that the perceived custodians of land have consistently acted in their individual interest while successfully using a discourse of ‘communal’ to secure the backing of the colonial and post colonial state. Overall, the state has substantially promoted the interest of private capital. In turn, the ‘public good’ outcomes the current land policies ostensibly seek to achieve have only been modestly achieved. Instead, land policies have had perverse implications for weaker groups such as women and impacted cities negatively.     

A strategic development management orientation for local authorities 1

One of the direct consequences of political transformation in South Africa is an increasing emphasis on development. An important element of this is the often‐expressed wish that local authorities become more development orientated. For the purposes of this article, being ‘developed’ is defined as having the capacity and power to resist threats from the dynamic environment and to utilise its opportunities in a responsible and sustainable manner. Development is not a condition that can be bestowed on people by a local authority or any other development agent. But a local authority is part of the multidimensional environment, and a development‐orientated local authority contributes to the process of development by purposefully eliminating threats from this environment and providing access to opportunities in matters it is mandated to deal with. A development‐orientated local authority should therefore have a strategic (or mission‐driven) development management approach. This article proposes an arrangement to incorporate such an approach into the organisational structure.     

What do subsistence farmers know about indigenous crops and organic farming? Preliminary experience in KwaZulu-Natal

The lack of published information on indigenous agricultural knowledge in South Africa frustrates the efforts of scientists who seek to enhance the creativity of subsistence farmers, and thus help their delivery from the cycle of poverty to commercialised farming. The term ‘indigenous crop’ is not clearly defined in the literature, and confusion about what is a traditional or an indigenous crop often arises even in conversations with local people. Perhaps the confusion stems from the generally accepted norm that a crop is associated with conventional production practices and commercialisation. Indigenous crop production and use of indigenous plants for food are generally not associated with conventional agriculture. Many subsistence farmers in South Africa have known only organic farming until recently, when they were introduced to ‘new seeds’ and agricultural chemicals. On-farm opinion surveys and physical farm appraisals were undertaken at the Msinga and Embo tribal areas in KwaZulu-Natal, in an attempt to assess the knowledge of subsistence and small-scale farmers about indigenous crops and organic farming. Results showed that the traditional definition of the term ‘indigenous crop’ may be broader than ‘African only’, at least in the context of indigenous South Africans. The findings also showed that subsistence farmers take organic farming to be a peasant's approach to food production, but its health and economic merits are recognised.     

Technical change and the ‘technology’ myth

Abstract

In recent years, historians and other English-speaking commentators on technical change and technical functions have often chosen to discuss these matters under the heading ‘technology’. Thus, there have been discussions about such matters as ‘echnological innovation’, ‘technological invention’, and even ‘the imperatives of technology’, ‘the technostructure’ and ‘technological drivenness’.¹ One economist with a special interest in historical matters, Kuznets, has virtually defined a separable condition of ‘modernity’ as the era of ‘technology’ — ‘The epochal innovation that distinguishes the modern economic epoch is the extended application of science to problems of economic production’ alternatively, it is ‘the utilization of a potential provided by modern technology’. An economic historian (Musson) has it that ‘applied science is … the major force behind modern economic growth’. And a prominent historian of the so-called ‘technology’, Forbes, has argued that in ‘our modern world both technology and engineering are branches of applied science’.²     

China’s macroeconomic trends in downward pressures: the ‘micro stimulus’ effects and steady growth

This study reports China’s macroeconomic trends in downward pressures and discusses the effects of the ‘micro stimulus’ on the growth performance of Chinese economy. It appears that economic growth rebounds significantly in the short term every time ‘micro stimulus’ is applied, but the economy slows down again once the stimulus dwindles. China’s economic growth thus exhibits a pattern of significant ‘stimulus-dependence’. When facing economic downturn, China has only resorted to stimulus policy to sustain growth. Not surprisingly, our findings indicate that ‘micro stimulus’ cannot realize the strategic intent of growth stabilization and structural adjustment, and may even lead to more structural chaos. One problem that can be attributed to the near-sighted strategy is the worsening productivity performance since the financial crisis of 2008. Therefore both improvement in social security systems and social programs designed for maintaining long run growth are needed in order to improve productivity performance on the one hand and to facilitate structural adjustments on the other.     

Rethinking Industrial Policy for Low Income Countries

Abstract: The governments of low income countries should be giving more attention to ‘industrial policy’ than they and the aid donors have given in the past quarter century. (‘Industrial policy’ means any sectorally or activity‐targeted interventions, including in agriculture and services.) The first step is to discard the common assumption that industrial policy is about ‘picking winners’. The second step is to realize that industrial policy can be done ‘big’ or ‘small’, and by ‘leading the market’ or by ‘following the market’. It can be tailored to the available resources and state capacity. The third step is to see that the key issues of industrial policy are less to do with ‘what activities should be encouraged?’, or ‘what sorts of policy instruments are best?’, and more to do with, ‘how do we organize a process of discovery of sensible objectives and policies?’, and ‘how do we organize a constant nudging of producers to upgrade, diversify, link up with foreign firms?’ (where the nudging effort has to be targeted at some activities and sectors more than others). The paper illustrates with East Asian examples. One of the good effects of the current global crisis is that it has shaken confidence in the virtues of lightly regulated markets and free capital movements, and opened the way to a less ideologically charged debate about the role of the state in development—in which thinking is not precluded by easy jeers like ‘governments can't pick winners’ or ‘maybe the East Asians can do it but you can’t, so you have nothing to learn about industrial policy from them’.     

Contemporary protectionism and exports of developing countries

This paper is an investigation of recent changes in trade protection in developed countries and the implications for developing countries. Special attention is paid to the question of why flexible exchange rates have not removed the demands for commercial policy for balance-of-payments purposes, and why adjustment assistance schemes do not eliminate claims for protection from industry disruption. It is argued that there is a ‘hardening’ of protectionist measures with an increasing reliance on price controls, quantity controls and domestic subsidies. While an effort is made to avoid raising false alarms, particularly in recessionary times, the general conclusion that emerges is that the sources and nature of contemporary protection are such that the developing countries have reason for considerable concern about the state of commercial policy.