The impact of multinational corporations, global trade and extreme weather in West Africa

From VCSEwiki
Jump to: navigation, search

Introduction

Agriculture is the most common source of income in the developing countries and especially in West Africa. Sadly it's also very fragile system. It's the most weather-dependent of all human activities and in this region it's highly threatened by climate change (major droughts) and destruction and degradation of the natural resource base (desertification, decreasing soil fertility and water availability). Unfortunately these are not the only problems for west african farmers. The prices of their crops cannot compete with the highly subsidized european prices which means they can't access foreign markets but on the other hand the local governments are forced to open their markets to the cheap foreign goods which is preventing the local economies from growing. And for the multinational corporation farmers from these regions serve as a source of cheap labor where they can keep low wages.

Environmental problems

In this region over last few years we could witness a lot of extreme weather events. Especially major droughts causing huge famines and deaths Climate has a strong influence on agricultural production.The impact is particularly strong in developing countries in the tropics that in many cases are exposed to high variability in climate, and where poverty increases the risk and the impact of natural disasters. In Sahel and other West African regions double so because the rain-fed crop production is the main source of food and income. The artisanal farmers lack the resources to influence the crop environment(no irrigation, mechanization or fertilizers). [1] In 2009 irregular rains in Sahel region have led to lack of pasture, water and poor harvest. In some areas there was no harvest at all. This and high food prices has let to the most recent famine that endangered almost 10 million people. There was another food crisis in 2008 caused by similar factors. [2] One of the biggest problems of west african agriculture is the degradation of natural resource base. The agricultural land fertility is decreasing because of the land overuse, inapropriate use of pesticides, erosion and lack of water. The Sahara desert is threatening the Sahel region with desertification. The farmers are pushed on the new land destroying the trees and bushes which serve as a natural barrier to the sand. Without this green-belt the land is slowly being overrun by the desert.

Multinational corporations

The main goal of the MNCs is to maximize their profit. Many of them are participating in various development programs and are investing big amounts of money into them. But this doesn't match with their main goal- the profit. They have to keep this because they have the responsibility towards their shareholders. Their shareholders are expecting their share to grow as much as possible so they have better income. And if some MNC invests so much in development aid the cost of its production is growing and it looses profit. The MNCs are not motivated in foreign aid because it contradicts to their main goal. In reality this means that the farmers receive just a minimal wage or buying price for their crops. The MNCs also tend to enter in short term contracts with farmers so they have no future possibility to improve their income because the MNC would not enter the contract again if they would ask for more money.[3] As an example we can take the cocoa production in west Africa. The Ivory coast and Ghana are the biggest exporters of cocoa in the world(especially Ivory Coast). This cocoa is exported into the developed countries for very low prices and then turned into expensive chocolate confection or industrial chocolate. The west african farmers have a minimal share on the profit. In 2001 Nestlé corporation was even accused of buying cocoa harvested by enslaved children. The children were taken from their families and forced to work in terrible conditions. Nestlé expressed its concerns but sad that they have no evidence that the cocoa is derived from slave labor. [4]Of course MNCs also provide development aid. The can subscribe to the Corporate social responsibility (CSR) which is a from of corporate self-regulation aimed at better working conditions. Or they can join forces with various NGOs and development organizations. For example Microsoft and Google help to boost employment rates among young people in 12 west african countries. The only problem is that this aid programs will never be in the center of MNCs interests.

Global trade

The international trade generates an incredible wealth. In economic theory this trade is beneficial for both sides, but this only works when the rules are the same for everybody. Sadly this is not true because the rules controlling trade heavily favor the rich nations that set the rules. Make Trade Fair movement states that, „developed countries limit and control share of the world market by charging high taxes on imported goods. As a result, many developing countries can only afford to export raw materials, which give far lower returns than finished products“[5].For example, the developed world buys cheap cocoa from west africa and produces chocolate which is much more expensive. And simultaneously the developed world is forcing the third world countries to open their markets to their exports.[6] Developed countries subsidize their agricultural production, driving down the price, this protects their farmers but the farmers from developing world can't compete with the subsidized prices .This has made many poor farmers even poorer. The developed countries tell the poor world to stop subsidizing their farmers, but they continue to spend billions of dollars subsidizing its own farmers[7]. Thanks to all these factors the developing countries serve as reservoirs of cheap labor and raw materials.

As an example of the impacts of global trade we can take fishing in West Africa. Fishing was alway crucial source of livelihood for the people from the west-african coast. But since 1979, the Eu has been brokering the rights for fishing along this coast. This means that large foreign vessels are depleting the local fish stocks causing unemployment, migration and hunger, especially in Senegal which also suffers from illegal chinese fishing. This behavior contradicts the UN Treaty on the Seas which states that „government fishing agreements with foreign companies should be targeted at surplus stocks only“.[8]

Priorities in future development

The most important point is to renew the soil fertility. According to WEHABs Framework for action on agriculture this can be achieved by simple use of natural resources.“ Mainly nitrogen from the air with leguminous tree fallows and phosphorus from small indigenous rock phosphate deposits in artisanal ways“[9]. One of the benefits is that there are just minimal economical costs. No transportation is needed because the trees grow in the same fields as crops but in the dry season. Farmers in Malawi where not threatened by drought (causing hunger) because the tree fallows have increased the water holding capacity of the soil. To scale up this strategy across the while region remains the main chalange. „ The main responses needed are transmission of knowledge, supply systems for tree seeds and political will.This will provide the food security for the local people which is the base for the future development, which after this point will be much more easier.“ [10]

The next steps:

  • Improvement of the crop varieties and improvement of water management, which will reduce the threat of harvest destruction by the climate change.
  • Diversification toward high value products. This will ensure better profits to the farmers Investments to the rural infrastructure, marketing, and information to enable better management and higher efficiency (by enabling farmers to take up improved technologies).
  • "Build capacity in planning and implementation of interventions at national, community and local levels".[11]
  • Reduction of the impact of negative MNCs behavior on the farmers through the government regulation and various NGOs activities (like fair trade label, which ensures that the producer received appropriate wage)
  • Ensure the fair rules in global trade that do not favor the stronger players but are the same for everybody.

References

  1. westafricaninsight.org
  2. oxfam.org
  3. oxfam.org
  4. thecorporatewatch.org
  5. oxfam.org
  6. oxfam.org
  7. oxfam.org
  8. en.wikipedia.org/wiki/Neocolonialism
  9. Framework for Action on Agriculture (p.9)fckLRhttp://www.un.org/jsummit/html/documents/wehab_papers.html
  10. Framework for Action on Agriculture (p.9)fckLRhttp://www.un.org/jsummit/html/documents/wehab_papers.html
  11. Framework for Action on Agriculture