Have you ever thought, “Why can’t farmers in African nations study the richer countries and imitate what they did to become wealthier”? Phrased another way the question is “Couldn’t Africa do today what the developed economies like the United States, France and the United Kingdom did to create wealth?” The answer is no and yes, but for various reasons most of us would not expect. To answer this question, we will do a case study on the agricultural sector and look at developments that enabled an environment for wealth creation through agriculture.
A variety of factors contributed to securing favourable demand for agricultural producers in developed economies, before investment flowed into the agricultural sector. The pre-determining factors were not necessarily competitive advantage, being the cheapest producer or being highest quality producer. It would be almost impossible to produce those conditions peacefully: it would be difficult to secure a protected customer base of international wholesale buyers of agricultural products and difficult to use secure factors of production in the manner rich countries secured them.
There is a little-known fact that 80% of the top eight richest countries in the world (Canada, France, Germany, Italy, Japan, Russia, the United Kingdom, and the United States of America) are former colonial empires: France, Germany, Italy, Japan, Russia and the United Kingdom. Only the United States was a colony, long ago. Other wealthy countries such as the Netherlands, Portugal and Spain also had empires. It is even more unpopular or rude to point out the financial dividends of state-directed violence. Still, let’s examine the facts.
Case Study: Story of Cargill
Cargill is a privately held multinational agribusiness which was founded in 1865 (over 150 years ago) by William Wallace Cargill in Iowa. The story of starting a business usually looks at the attributes of the founder, whether experience or skill, the investors that backed the visionary, the competition the entrepreneur had to face, and the team and resources the entrepreneur poured into making the business survive its early years. This global business started with the founder buying just one grain flat house; followed by his brother Sam Cargill joining the business.
At this point it is very easy to completely overlook that forces of history that opened up Iowa to private land purchases and to entrepreneurs. What we are interested in here is not what happened after William Cargill and Sam Cargill started their business, but what factors made it possible for them to build a multinational business in the first place.
Iowa derives its name from the Ioway people, the original inhabitants of the area before the Discovery of the New World by Spain, England, France and the Netherlands. Native Americans had lived in the Americas for 15,000 years before the discovery of the Americas by Christopher Columbus.
The displacement of the Native Americans had many contributing factors: disease, uncontrolled immigration by European to the Americans, a twisting of the bible under a concept called Manifest Destiny, and presenting Native Americans with the option to sell their lands or face violence. The first Europeans to annex Iowa were the French.
It started in the 16th century when the French started to build forts and settlements throughout the middle of North America. In Canada, they built Montreal and Quebec; in the region of the modern United States they established Baton Rouge, Biloxi, Cape Girardeau, Detroit, Green Bay, Mobile, New Orleans and St. Louis; in Haiti they seized and built up Port-au-Prince and Cap-Haitien; in Brazil, São Luís; and other settlements.
At the end of the Seven Years’ War, in 1762 Spain (under the rule of Charles III of Spain cousin of the French King Louis XV) acquired Louisiana from France, through the Treaty of Fontainebleau and the Treaty of Paris. France ceded all the land east of the Mississippi (including Canada) to Britain and Spain ceded all the land east of the Mississippi to Britain. Spain governed Louisiana from 1763 to 1800 during which period the dominant language remained French.
Locator map of the competing sides of the Seven Years War before outset of the war (mid-1750s). Blue: Great Britain, Portugal with more. Green: France, Spain with more. Great Britain, Prussia, Portugal, with allies France, Spain, Austria, Russia, Sweden with allies
Map of North America (1750) – France (blue), Britain (pink, purple), and Spain (orange). Source: Wikipedia Commons CC BY-SA 3.0
On the east coast, the English also built forts and settlements with its new possessions from the Seven Years’ War. The English founded the 13 colonies of America, and prior to this had created a legal framework to control the market for plantation exports from English colonies. These legal frameworks were the Navigation Acts, also known as The Acts of Trade and Navigation enacted between 1651 and 1660. These were a sequence of laws resulting from the Anglo-Dutch war that required all trade between other countries and the American colonies of Britain to be conducted in English or colonial vessels. It promoted English trade, shipping, and commerce but ensured that profits accrued to England. The colonies sent raw materials and taxes to England, but imported finished goods, indentured servants, convicts (debtors and criminals) and slaves from England.
The land on the East Coast of North America was not enough. Settlers from Europe continued to come: lured by pull factors such as the attraction of escaping the class system of Europe; push factors such as Wars in Europe and Penal laws against Catholics in England and Ireland, or persecution of Protestants in Catholic countries; having an opportunity to pursue prosperity and occupy a social hierarchy above the bottom (slaves). The population grew due to immigration and spilled over into Iowa.
In 1791, a slave revolt occurred on the island of San Domingo (in Spanish), called Saint Domingue in French or Haiti in English, one of the few successful ones in the history of mankind. It was a prolonged brutal war lasting until 1804. The revolt was sparked by conditions so horrific that the risk of failure and tortuous death seemed more bearable than life under chattel slavery. The cost to France of losing this colony (the most valuable sugar producing estate in the whole of the Americas, 200,000 slaves and close to 100,000 French men) was so disastrous, France decided to sell Louisianna – the North America possession of the French empire – to the 13 colonies of the United States adding 828, 000 square miles (2,144, 520 square kilometres) for $15 million.
But Spain owned Louisiana; how could France sell it? Three weeks prior to the sale of Louisiana, Spain traded Louisiana away under a new treaty with France in exchange for Tuscany in Italy. We can debate the legality of Western Europe countries trading away land taken by force in North America on another planet where 15,000 year-old property rights and international rule of law exist.
Battle at San Domingo, a painting by January Suchodolski, depicting a struggle between Polish troops in French service and the slave rebels and freed revolutionary soldiers
Around 1807, An Ioway leader called White Cloud got drawn into a gun battle with “traders” on Native American lands; today, we would call this “foreign soil” or another jurisdiction. Outnumbered, White Cloud was arrested and taken to St. Louis for trial and convicted of murder. Based on an appeal argument that the alleged crime happened on his own territory, the judge presiding Judge John B C decided that a new trial would be needed, a delay which White Cloud used as an opportunity to escape. By 1810, the Ioway people were outnumbered by European settlers on their own land.
Calling the settlers merely European is an oversimplification. By 1810, the 13 former colonies of Britain had ceded through the successful American Revolutionary war of 1773 to 1776. These colonies were Delaware, Pennsylvania, New Jersey, Georgia, Connecticut, Massachusetts Bay, Maryland, South Carolina, New Hampshire, Virginia, New York, North Carolina, and Rhode Island and Providence Plantations. The population of the 13 colonies numbered 2.4 million in 1775 and was growing. The settlers migrating into Iowa were Americans expanding out of the 13 colonies into Native American lands.
The United States added the remaining territories that we are familiar with today through wars, geopolitics, lending re-possessions, and purchases: first, by Americans settling in Florida (before gaining critical population size and ceding from Spain); by lending to Texas, supplying arms to Americans living in Texas and annexing the Republic of Texas when it failed to pay; the US gained Washington, Idaho and Oregon by signing a treaty with Great Britain in 1846; the 1846-8 Mexican War which Mexico lost badly resulted in the loss of California, parts of Colorado, New Mexico, Arizona, Nevada and Utah to the United States; the US gained Alaska from Russia by buying it; and Puerto Rico and other territories through barter, purchases, political manoeuvres and wars.
These land grabs many decades earlier by France, Spain, Britain and the newly independent United States of America laid the foundation for private individuals to acquire land for agriculture. Europe didn’t solve population growth by staying in its own continent. Would such a move be feasible or considered legal in modern times if Africans did the same?
Role of state-directed violence in securing Europe’s agricultural land
Spain conquered the Mayans, Aztecs, Olmecs and Incas to gain possession for the mines that supplied the annual Spanish treasury from 1492-1890 with gold and silver, mined with forced labour.
The Anglo-French war over the Hudson Bay settled the trade claims over the Hudson Bay and the lucrative fur trade which supplied Europe’s baller hats.
Spain invaded the location of modern-day Jamaica before using it for agriculture and turning the local population to slave labour for their Colony of Santiago. (1509-1655). The Spanish were forcibly evicted by the English at Ocho Rios in St. Ann. In the 1655 Invasion of Jamaica, the English (led by Sir William Penn and General Robert Venables) took over the last Spanish fort on the island. (1655-1969)
The Nine Years War transferred possession of Tortuga and Saint-Domingue (Haiti) to France from the Spanish. (1659-1804) This preceded creating sugar plantations in Haiti.
The Seven Years War (in which Spain lost Cuba and the North American area east of the Mississippi to Britain) preceded the importation of slaves, the creation of sugar plantations in Cuba and the creation of plantations in Delaware, Pennsylvania, New Jersey, Georgia, Connecticut, Massachusetts Bay, Maryland, South Carolina, New Hampshire, Virginia, New York, North Carolina, Rhode Island and Providence.
During the American Revolutionary War, the United States raised money on the Dutch stock exchange to fund the war. Britain was opposed by France, the Dutch and Spain. This preceded the capitalists of the United States becoming the ruling class of America.
The financial losses from the Haitian revolution forced France to sell Louisiana (previously called New France) to the 13 states of the United States. Without the sale of this land to the Unites States government and the Indian Removal Act, a company such as Cargill, the producer of 25% of grains in the United States could not have existed.
The Fourth Anglo-Dutch war which the Dutch lost handed over trade rights to the British in the region of the Dutch East Indies (the Cape Colony in South Africa, India, and Sri Lanka).
King Leopold invaded the Democratic Republic of Congo before using the entire country as a personal rubber plantation.
After independence, European land owners sold their plantations and repatriated wealth to Europe without paying any capital gains tax or withholding taxes.
Clearly, no African country or African in their right mind, with an African financial budget, with a concept of de-colonialised Christian morality, or with a concept of international rule of law, would consider stealing land from somewhere else in the world at gun point and enslaving its local population to copy the model used by the first world to make agriculture profitable.
Current global factors
Next, there are the current global factors, for instance: (1) certain developed economies (Britain when it was the British empire, the Netherlands when it was the Dutch republic, France during 1600-1945, Portugal during 1400-1500, and Spain during 1490-1600) through war created an international system first of rights over trade links, imports and exports, before trading within that international system (2) the global prices of commodities including likely crops to be grown in Africa (3) global competition to supply buyers (4) access to finance which is controlled by rich nations (5) equipment prices (6) fertiliser prices.
Also there are the internal factors, including: geography, for instance much of Algeria is the Sahara desert; internal stability (for instance DRC would not make a good location to run a farm business); power supply (for instance Nigeria’s power supply is expensive, unreliable and controlled by generator distributors); road, processing, storage & warehouse infrastructure; agricultural know-how; and government support in ensuring best practices are made available to farmers
In an October 2012 publication, the United Nations Food Programme (UNFP) stated the following relating to the loss of food in the supply chain between farmer and consumer: “In developing countries, the major cause of food loss is the lack of infrastructure for processing, transportation, storage, and cooling of food. According to the World Resources Institute, up to 40% of food harvested in developing countries might be lost because of this gap in infrastructure”.
Although Africa will need to be innovative and have great fortitude to tackle poverty within the different countries of the continent, in this article we demonstrate that geopolitics is involved in securing resources first before competitive advantages are created in the global market. There is a limit to what African countries can imitate from the rich countries.