Monday, 4 June 2012

The Story of Peanut Farmers, Worlds Apart[i]

The people around the village of Jalab, in Senegal, West Africa, and many rural towns of Georgia in the United States depend upon the same essential crop: peanuts. West Africa and United States are two of the biggest commercial producers of peanuts in the world. However, the story of their cultivation and marketing of peanuts is the story of two very different worlds.

Slave ships carried peanuts to the American South because colonists needed a high-protein, high-caloric staple to feed their captives. Growing conditions proved ideal, especially in Georgia, where cultivation thrived, and where today nearly half the American crop is harvested. In the 80s, peanuts were the eleventh most valuable crop grown in the United States, worth half a billion dollars a year.
John Johnston, a thirty-four-year-old Georgia peanut farmer, cultivates 540 acres of peanuts and another 650 acres of corn. His ground is prepared for planting by tractor. Government-sponsored research has discovered improved combinations of seed and fertilizer and the extension service ensures that farmers know how to use them. Pesticides are sprayed on Johnston’s crop from airplanes. Combine harvesters pick the ripe plant and separate the peanuts for drying. Johnston sells his crop to a broker in nearby Blakely, where the peanuts are stored in modern warehouses. The broker sells them to processors through larger brokers in Atlanta, New York, or Chicago. The price received by Johnston is maintained above the world-market price by a U.S. government support program that restricts imports, limits domestic acreage, and protects the farmer from price fluctuations. Research, mechanization, efficient marketing, government price supports, and hard work enable Johnston to net as much as $100,000 from his peanuts in a good year. At this income, the Johnston family lives in comfort, enjoying the wide variety of goods – basics and luxuries – available to affluent Americans.

In Senegal, Cherno Diof grows peanuts on his small farm near Jalab. Like Johnston, Diof inherited his land, which is the sole support for his family of five plus three relatives. Like Johnston, Diof cultivates relatively good land for peanuts and he has begun to mechanize what was until recently a handpicked harvest. But his plows are not as productive as Johnston’s combined harvesters, while fertilize and insecticides are either unavailable or too expensive. Diof’s yields are about a fifth of Johnston’s. And his output must be sold to a government corporation that pays the farmer well below the world-market price in order to extract tax revenue for the government. Storage facilities are rudimentary and much of the harvested crop may be lost to blight, insects, or bad weather. The small size of their farm, poor yields, low prices, and storage losses keep the Diof family very poor. Eight people must live on only $400 of cash income in a good year, much less than john Johnston’s field workers, who earn $ 100 a week when they work and are extremely poor by American standards. Even though the Diofs grow much of their own food, their diet is inadequate, consisting mostly of millet made into a gruel. Jalab has no electricity, no school, no clinic, and no shops. Cherno’s wife draws water from a village well a few kilometers from their hut, much closer than for most farm families in Senegal. For every hundred children born in his village, twenty will probably never see their first birthday.
Not all Senegalese are as poor as Cherno Diof. In Dakar, the modern capital, officials of the government peanut marketing corporation work in air-conditioned offices, own cars, and live in substantial houses, enjoying some of the same of the same comforts as the Johnston’s in Georgia. Their children attend the best schools in the country and, if necessary, can be treated in a nearby modern hospital. Of course these officials are part of a minority group in Senegal, a group favored by birth, education, urban benefits, and income over the vast majority of poor, small farmers. The resulting governments revenues help pay the salaries of government workers, who are much better off than Cherno Diof; the foreign exchange help to pay for imports that are consumed largely by people in the cities.

In each country the political process reinforces disparities. John Johnston is represented in Washington by a congressman who is responsive to his needs. Congressmen representing farm states remain powerful enough, even in a predominantly urban country, to perpetuate the government’s price supports, agricultural research, and extension system that have been so beneficial to farmers like john Johnston. Cherno Diof has little or no political influence. Although farm families like his make up most of Senegal’s population, it is the minority urban dwellers who command most of the government’s attention and resources. Diof is virtually helpless to influence the price the groundnut marketing corporation pays for his crop or what services the government provides him and his family.
Currently, there is no effective international mechanism to reduce the vast disparities between people like the Johnston’s who live in North America, Europe, and Africa, Asia and Latin America. Although national fiscal policy can transfer income from rich to poor within a country, no international fiscal mechanism exits. Foreign aid has been conceived as a method of transfer from rich to poor nations, but it is voluntary and grossly inadequate for the task. Discussions have taken place about international price support, such as those that exist within many countries that would raise the incomes poor countries earn from their commodity exports. But differing national interests make agreement on such schemes unlikely. U.S. restriction of peanut imports, which discriminate against the Diofs and help Johnston, are only one of hundreds of trade restrictions that slow international development.

Why do disparities like these exist? Why are Senegalese farmers – and three billion like them in other countries –so poor while Americans and Europeans are rich? What could be down about it, by Sengalese or Americans? And what is likely to happen?

[i] This narrative is sourced from the second edition of Economics of Development. It is adapted from a television film by Otto C. Honegger, The Nguba Connection, jointly produced by WGBH Boston, Swiss TV Zurich and Swedish TV (SK2). Names have been fictionalised.

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