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The Agrarian Question In The Neoliberal Era

The Agrarian Question In The Neoliberal Era

by Utsa Patnaik, Sam Moyo

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A compelling and critical destruction of both the English agricultural revolution and the theory of comparative advantage, upon which unequal trade has been justified for three centuries, this account argues that these ideas have been used to disguise the fact that the North—from the time of colonialism to the present day—has used the much greater


A compelling and critical destruction of both the English agricultural revolution and the theory of comparative advantage, upon which unequal trade has been justified for three centuries, this account argues that these ideas have been used to disguise the fact that the North—from the time of colonialism to the present day—has used the much greater agricultural productivity of the South to feed and improve the living standards of its own people while impoverishing the South. At the same time, the imposition of neoliberal “reforms” in the African continent has led to greater unemployment, spiraling debt, land and livestock losses, reduced per capita food production, and decreased nutrition. Arguing that political stability hangs in the balance, this book calls for labor-intensive small-scale production, new thinking about which agricultural commodities are produced, the redistribution of the means of food production, and increased investment in rural development. The combined effort of African and Indian scholarly work, this account demands policies that defend the land rights of small producers and allow people to live with dignity.

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The Agrarian Question in the Neoliberal Era

Primitive Accumulation and the Peasantry

By Utsa Patnaik, Sam Moyo, Issa G. Shivji


Copyright © 2011 Mwalimu Nyerere Chair in Pan-African Studies
All rights reserved.
ISBN: 978-0-85749-038-4



It is indeed a privilege to have been asked to share with you some thoughts on the agrarian question in this, the momentous 50th year of the achievement of effective self-governance. The leader of Tanzania's freedom struggle, Mwalimu Julius Nyerere, was a towering personality who left the imprint of his egalitarian and socialist ideas not only on Tanzania but on Africa and the developing world. I feel doubly privileged to be with you during the Julius Nyerere Intellectual Festival Week. The struggle that colonised people waged was not for political independence alone, but also for a more just and egalitarian society, without which sovereignty cannot be sustained in the long run and in a real sense. That sovereignty is once more under attack in the current era of neoliberalism, and a new phase of struggle is necessary to preserve and enhance the gains of freedom.

The ascendancy of finance capital since the 1980s means that financial interests have come to dominate policymaking in the present era, both at the global level and through international financial institutions directing pliant governments, in almost all developing countries as well. The major pillars of neoliberal policies are: first, the imposition of deflationary cut-backs in state spending in nation states; second, openness of developing countries in particular to trade and capital flows through dismantling trade barriers; third, the dismantling, in developing countries only, of all price support mechanisms which existed earlier for stabilising prices for peasant producers, who constitute a large or major segment of the population; and fourth, a sustained attack on peasant-owned or -occupied land in the name of 'development'.

These policies have been adversely affecting the livelihoods and access to basic needs of millions of poor people, who make up the majority of the population in the global South. The agrarian depression, which has turned into a crisis in many areas, is hardly mentioned in the critiques mounted of the neoliberal agenda, even by progressive writers. There is a deep theoretical failure in understanding the links between the agenda of finance capital, on the one hand, and the agrarian crisis in developing countries, on the other.

Yet history tells us that a deep financial and economic crisis has never occurred without a prior agrarian crisis, which tends to last even after the financial crisis abates. Consider the great depression of the inter-war period: it started not in 1929 as the conventional dating would have it, but years earlier from 1924 — 25 when global primary product prices started steadily falling. The reasons for this, in turn, were tied up with the dislocation of production in the belligerent countries during the war of inter-imperialist rivalry, the First World War of 1914 — 18. With the sharp decline in agricultural output in war-torn Europe there was expansion in agricultural output elsewhere which, with European recovery after the war, meant over-production relative to the lagging growth of mass incomes and of demand in the countries concerned. The downward pressure on global agricultural prices was so severe and prolonged that it led to the trade balances of major producing countries going into the red.

Then, as now, the wrong policy advice was given by the centre of financial power, the British Treasury, that the way to tackle external imbalance was to deflate the economy — to reduce the level of activity by strongly cutting back budgetary spending by governments (Kindleberger 1987). We know today, after the theoretical labours of Keynes and Kalecki, that if one country does this it might benefit, but if all countries do it then it simply reduces aggregate demand in each country, reduces each country's demand for other countries' exports, and creates a deflationary spiral in which unemployment rises and the level of activity measured by output, as well as the extent of trade, reduces. The deep crisis this caused in the capitalist system, particularly in the late-industrialising countries such as Germany, Italy and Japan, led to belligerent militarisation as a 'solution', in which the size of armies ballooned and resources of other countries were forcibly seized for industrial 'development', leading to atrocious massacres and genocide. 'Civilised' Europe descended to a level of barbarism on a scale that the world had never seen before.

In the current era, it seems that no lessons have been learnt from history. In the last 40 years, global primary product prices saw one episode of sharp decline in the first half of the 1980s, exactly at the time that many African as well as Latin American countries started on IMF -guided 'stabilisation' and debt-conditional 'structural adjustment' programmes. Once again, recalling the 1920s and the British Treasury, the modern centres of financial power, the US Federal Reserve, in close consultation with the Bretton Woods institutions, misguidedly advised developing countries to strongly follow expenditure-deflating macroeconomic policies combined with free trade. The results have been extensively documented: owing to public expenditure cuts, there was decline in growth rates of investment and social sector outlays; stagnation or even — as in many African countries — absolute decline in per capita GDP took place; there was a big setback to campaigns for improving health and literacy; and food security was severely affected (Cornia et al 1987, Baker et al 1998).

After a period of rising primary product prices from the end of the 1980s to 1995, the capitalist world saw a second episode of sharp, primary price declines, this time a few years after India embarked on the same neoliberal policy path from 1991, and a decade after Africa and Latin America had already done so. This period, from the mid-1990s to the present, marks the agrarian crisis in Asia, which continues to immiserise large segments of its population. In India alone police records show that in the decade up to December 2008, 198,000 farmers had committed suicide, well in excess of 'normal rates' and mainly driven by debt. This is merely the tip of the iceberg. The agrarian crisis has contributed to the global financial and economic crisis and, in turn, has been further aggravated by it; but the existence and importance of the current agrarian crisis is not conceptually recognised by even progressive analysts in the South leave alone by the mainstream literature, nor are the links to the global financial and economic crisis ever discussed.

The questions I will try to take up are related to the contours of the current agrarian question in the neoliberal era. In what ways are the expenditure-deflating policies of finance capital to which I have already alluded affecting material output as well as aggregate demand of the agriculture-dependent population? Is there necessary benefit to both countries specialising and entering into free trade as Ricardian theory argues? How does trade liberalisation affect the peasantry of the global South? What is the meaning and consequences of the new surge of primitive accumulation on the part of local and global capital, which is seeking to separate the peasantry from land? And what is the way forward for resistance as well as reconstruction?

The peasantry of the global South is under historically unprecedented pressures today from attacks by capital not merely on its livelihood but also on the very means of securing that livelihood, namely the land it possesses. Recalling the primitive accumulation of capital which marked the birth and adolescence of capitalist production in Europe during the 16th to 19th centuries, we see once more, albeit in different forms and under different circumstances, a concerted attempt by global capital to acquire control, on the one hand over the use of peasant lands to serve its own purposes, and on the other hand, to seize that agricultural land itself for its multifarious non-agricultural purposes. But the 21st century is not the 18th or 19th century: the peasantry of the global South has nowhere to go to if it is dispossessed, in contrast to the dispossessed peasantry of the North, which migrated in vast numbers to the New World.

The peasantry today is turning from passive forms of resistance such as suicide to active contestation of the exercise of hegemony by global capital. This transition of segments of the peasantry from passive objects to active subjects of history marks an important and exciting moment of the current economic and political conjuncture. The present, acute global food crisis is a direct outcome of the new phase of attacks on the peasantry, which has been going on for more than three decades, but has escaped scholarly attention until very recently.

I do not agree with the basic premise articulated in the view that we are seeing the end of the classical agrarian question in the global South, its last stronghold, because capitalist accumulation within nations is no longer dependent on extracting the agricultural surplus. This view has been most clearly articulated by Bernstein (1996); it holds that the constraint on capitalist transformation imposed by a stagnant peasant agriculture has become unimportant and has been by-passed in the era of globalisation, since access to global capital flows allows development in poor countries without transfers of surplus from the domestic agricultural sector. The unquestioned premise in this argument is that it was in fact domestic capitalist transformation in agriculture which historically marked the rise in productivity in this sector and that through increasing domestic transfers of surplus, the successful industrialisation of today's advanced countries was achieved. A similar trajectory, now considered redundant, was expected for developing countries,.

However, a study of agricultural production and trade in today's advanced countries during their period of transition shows that far from this being the case, capitalist agriculture could not cope with the wage good (the basic necessities, such as food and cloth, bought by workers with their wages) and raw material demands of industrial transition and these demands were actually increasingly met by transfers from the heavily taxed peasantry and from the plantation agriculture set up in subjugated colonies. Productivity did rise in metropolitan centres but to an insufficient extent, making the industrialising countries increasingly dependent on primary sector imports. This proposition is explored in the third section of this paper through a study of the so-called 'agricultural revolution' in 18th to 19th century Britain.

Nor is it the case that today capitalist accumulation is globally independent of reliance on peasant agriculture. On the contrary, an even more intensive international division of labour is promoted vigorously, more far-reaching than that which prevailed in the earlier era of political subjugation. The entire thrust for free trade in agriculture, as promoted by the Bretton Woods institutions and through the World Trade Organisation (WTO), has as its primary aim the re-opening of the lands of the global South to meet the increasing demands of the North, while direct acquisition of land in tropical areas is also sought. Modern air-freighting has greatly extended the list of northern demands on southern lands, to include a range of perishable products, while governments are urged to facilitate the entry and functioning of the food business transnational companies.

Let us begin with a brief overview of the reasons for the linking of advanced country consumption patterns with the lands of today's developing countries.


Advanced country living standards and developing country lands

There is a widespread misconception that today's advanced countries had successful internal 'agricultural revolutions' which preceded or went ahead simultaneously with their industrialisation, and which provided all the necessary food, raw materials and energy for fuelling that process. The misconception regarding successful 'agricultural revolution' has been assiduously promoted by historians in northern universities, ignoring the fact that there was very high import dependence for primary products on colonies and subjugated tropical lands from the very beginning of the transition in today's industrial Europe.

This was bound to be the case given the poverty of primary-sector production in northern countries, whose populations were in a miserable state before they acquired tropical colonies. The land was frozen or under snow for almost half the year. There was only one growing season and the need to grow fodder corps did not permit enough output of grains to maintain both human and animal populations, leading to slaughter of livestock at the onset of winter. B.H. Slicher van Bath, in his Agrarian History of Western Europe (1963), documents what he calls the 'extremely monotonous' and unhealthy diet of even the royal households of northern Europe in the 17th century — over 100kg of highly salted cattle and pig meat was consumed per head in the year, there were no produced sweeteners (natural honey was the main source), no fresh vegetables or fruit during the long winter months, while food was cooked using animal fats. The highly saline food — salt was a necessary preservative — produced 'an oceanic thirst' so that per capita beer consumption was 40 times higher then than today. Problems of hypertension, cardiac diseases and vitamin deficiency diseases plagued the population. Despite warm summers, ordinary people had to wear either woollen or leather clothing since body linen (linen is made from the fibres of the flax plant) was too expensive.

It was only after the North colonially subjugated today's third world regions, located in sub-tropical and tropical climes, and started slave -labour-based and later indentured-labour-based plantation systems, that the consumption basket of northern populations started to diversify and improve dramatically. Increasing imports made by the monopoly trading companies such as the East India Company, The Africa Company and the South Sea Company included cotton cloth, sugar, tea, coffee, tobacco, raw cotton, raw silk, vegetable dyestuffs, tropical cereals, natural fertiliser, tropical hardwoods and a host of other goods, none of which could be produced at all in northern Europe or, later, in North America. These are the crops mainly included in the B vector of crops in Table 1, which cannot be produced at all in cold lands. However, foodgrains, both wheat and rice, were also imported by European countries, including Britain, from their colonies.

Today, the list of demands made on southern countries by northern populations has become much longer, because while long sea journey times meant that only non-perishable goods could be imported, now modern air-freighting carries goods in a matter of hours to the other side of the globe. A very large range of perishable goods from fresh vegetables and fruits, vegetable oils, river and sea foods, to flowers and orchids are accessed from developing countries by the giant agribusiness corporations with their bases in advanced countries. They enter into contracts with local farmers or directly acquire land for production. The fresh vegetables and fruits today include not only tropical crops, which cannot be grown at all in cold lands, but also those crops that can be grown in cold countries but only in summer. Since they grow in winter in warmer developing countries, getting peasants there to grow these crops for export has virtually done away with the seasonal constraint on consumption for northern populations. Similarly, countries in the southern hemisphere which experience warm weather exactly when it is freezing in Europe are able to cater to seasonal demand.

Most people in the global South have very little idea how heavily dependent the standard of living in advanced countries actually is on imports from their own richer, botanically diverse lands. On the contrary, just as the customer in a shop pretends he does not require the goods he actually covets in order to drive down the price, advanced countries incessantly lecture developing countries, telling them that they are poor and advising them that they can only grow richer by exporting. In the economic literature the heavy, one-sided import dependence of advanced countries on developing nations is completely ignored. The reality is that if developing countries had actually been resource poor, they would not have attracted the acquisitive greed of the emerging merchant capitalists of today's advanced countries; the North would not have found it worthwhile to colonise the South. When traders became rulers, their home country reaped a bonanza by way of free imports, since the colonial goods were acquired by paying local producers out of the very same tax revenues they themselves paid in to the colonial state. The same acquisitive greed drives modern capitalism, which uses the ideology of free trade and seeks to subordinate the use of developing country lands to the maintenance and further enhancement of living standards in advanced countries. Without such access to developing country lands, the northern supermarket shelves would be denuded of many foods now considered as essential, and the standard of life would plunge back to near-medieval levels for northern populations.


Excerpted from The Agrarian Question in the Neoliberal Era by Utsa Patnaik, Sam Moyo, Issa G. Shivji. Copyright © 2011 Mwalimu Nyerere Chair in Pan-African Studies. Excerpted by permission of Fahamu.
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
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Meet the Author

Utsa Patnaik is a professor of economics at the Center for Economic Studies and Planning at Jawaharlal Nehru University in India and the author of several books, including The Republic of Hunger and Other Essays. Sam Moyo is a professor and the executive director of the African Institute for Agrarian Studies in Harare, Zimbabwe. Issa Shivji is a former professor of law and the Mwalimu Nyerere Research Chair in Pan-African Studies at the University of Dar es Salaam. He is the author of more than a dozen books, including Discourse: The Role and Future of NGOs in Africa.

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