The University Of Sheffield

Anti-poverty Imperative

Clearly, therefore, the colonial system favored specialisation in the crudest form of economic activities, which required land as a production factor. Domestic political systems at the time of independence were grounded in these economic activities, controlled by the government through a marketing board used to tax peasants. These crude agricultural activities were problematic not only due to their negative link with development and structural change. Even more importantly, agricultural production has a structural ceiling, as land is a factor. Even when a nation has no development or diversification plan, diversification naturally occurs to prevent poverty due to the relationship between factors and output. The reduction of land fertility due to constant production, for example, is likely to decrease output relative to input. Increasing input cannot be adjusted for in price changes because agriculture (unlike manufacturing) is a price-taking activity. This can be explicated with the concept of diminishing returns.

The concept of diminishing output, properly understood as diminishing returns to scale, has been used to explain poverty throughout history (Reinert, 1996, 2). Thomas Malthus proposed the “Malthusian trap,” whereby an increasing population presses against the fixed production factor of land (in the absence of land-augmenting technology), causing a continuous decrease in per-capita farming output (Mosk, 2011, 37). J. S. Mill argued that the question of diminishing returns “is more important and fundamental than any other,” on the grounds that “it involves the whole subject of the causes of poverty” (Mill, 1848, 176). Usually, the problem of diminishing returns can be solved at the micro level. Individual farmers who encounter a loss of soil fertility naturally either migrate to more fertile land or diversify (Reinert, 1996, 2). However, the colonial peasant system was centralised which gives control of the sector to ruling elites.

The centralisation of peasant production/marketing systems in West Africa allows ruling elites to influence peasants’ decisions in the event of diminishing returns. Under the post-1945 colonial system, taxes were obtained through a centralised marketing board, and micro-diversification was considered a threat to government revenue. In the event of diminishing returns, the centralisation of a peasant production system shifts the responsibility for diversification from individual farmers to ruling elites. However, ruling elites are influenced by additional factors such as the need to preserve their power, and are somewhat distanced from the direct effect of diminishing returns. They are also influenced by the trade advantages and price support offered to cocoa export sectors by the EU. Ruling elites are thus likely to manipulate kinship associations to force peasants to continue producing a main export crop, even in the event of diminishing returns and intensification.

Cocoa was the main colonial product promoted in both Ghana and Côte d’Ivoire by the British and the French, and thus offers a useful case study in chapter six. The production of cocoa is structurally determined by the availability of forestland, as forestland is a production factor in cocoa production (Ruf, 1996, 1; Clay, 2003, 129; Babin, 2004, 269; Robertson, 1987, 59). This means that once forest has been massively cleared – that is, the structural production limit has been reached – production becomes difficult and continuation can only occur intensively hence diminishing returns and increased poverty (Clay, 2003, 129).

Critics of the concept of diminishing returns in peasant agricultural systems stress the advent of changes (providing increased resilience) in the social relations of production and production techniques to accommodate the effects of resource exhaustion. This school of thought is based on the work of Ester Boserup, especially her landmark publication The Conditions of Agricultural Growth: The Economics of Agrarian Change Under Population Pressure (1964). Boserup argues that peasant agriculture never reaches its carrying capacity, as every time it comes close to doing so—that is, every time soil-fertility loss approaches a structural limit (which Boserup defines in terms of a population increase relative to a fixed land resource)—an invention or development causes output to increase. In her theoretical language, therefore, diminishing returns are the main driver of innovation and change in social relations. Such innovation and change prevents the devastating effect of diminishing return. Boserup explains the endogenous origin of innovation or change in the social relations accompanying diminishing returns. Her thesis is substantiated in a historical account entitled Population and Technological Change: A Study of Long-Term Trends, published in 1983.

Accordingly, Boserup is correctly regarded as discrediting the gloomy picture of the “Malthusian trap”. Her analysis has profoundly influenced social-science research, such that theories of static diminishing returns propounded here are often dismissed with reference to changing social relations (in the form of process innovation, for example) (Turchin and Nefedov, 2009, 6-7). The main types of innovation/social change discussed by Boserup are social, political and economic. In a complete analysis, property rights, work ethics, the division of labor, diversification, diet, transport infrastructure, etc. can all be altered to prevent diminishing returns (Roumasset, 2007, 7). However, in her original 1964 publication, she uses the concept of agricultural intensification to explain the continuation of food supply after diminishing returns (Boserup, 1964, Chapter 4). Intensification can take different forms: multi-cropping, multi-season harvesting, etc. Boserup argues that regardless of the form it takes, agricultural intensification requires farmers to work for longer hours to produce the same output due to a reduction in soil fertility. Therefore, workload tends to rise while efficiency drops; however, output does not necessarily decrease, due to the increased workload. Boserup thus defines agricultural intensification as the practice of increasing production at the cost of longer working hours, greater factor input and lower efficiency. This practice, a form of innovation in itself, is at the core of her theory.

But here, too, lies the problem with Boserup’s thesis. She is invested in showing that agricultural intensification can prevent a shortage in food supply (unlike Malthus, who theorises that mass hunger arises from a reduction in the static factor of land), but rural agriculture is not always structured for domestic food consumption. Some rural agricultural systems have zero domestic use value. In such cases, agricultural intensification in terms of increased labour input must be measured against output prices rather than food supply.

In the context of cocoa cultivation, which is the focus here (see Chapter Six), the cocoa beans produced in Ghana and Côte d’Ivoire are not part of the local diet. This output instead constitutes a raw material for the production of chocolate, a typically sweet, brown snack bought predominantly by Western middle-class consumers. Meanwhile, as we shall see in Chapter Six, forestland is a production factor in cocoa cultivation, which means that the point of diminishing returns is reached when forestland is exhausted (Ruf, 1996, 1). In the words of the owner of a smallholder organisation, “you have one hectare of cocoa after grassland and two hectares after forest” (quoted in Ruf and Lançon, 2004, 195). When diminishing returns are approached in the cocoa sector, which in this case occurs less frequently through population increase than through the exhaustion of forestland in a given region, intensive cultivation in the Boserupian sense of the term has to be measured not in terms of the continuous supply of a food crop but relative to the price of cocoa output. Agricultural intensification in the Boserupian sense has occurred in the cocoa sectors of both Ghana and Côte d’Ivoire (but not in Nigeria). This is due to the centralised nature of the sector (which gives ruling elites an advantage to direct the level of cocoa cultivation) and EU trade advantages (which creates an incentive to promote continued cocoa production), and has led, as shown in Chapter Six, to mass poverty (due to increasing factor costs).

Intensive production inevitably leads to poverty, due to increased input and decreased output (Whitefield et al., 2015, 39). Although Boserup’s core assumption that diminishing returns lead to intensification is robust, the mere fact that some cash crops have no domestic use value qualifies her optimism. In the case of cocoa, intensification is structured to fulfill the demand for raw materials from the Western world, not (as suggested by Boserup) to meet the need for food in the developing world. The most appropriate theory to understand intensification in cash crops is in fact Clifford Greetz’s thesis on agricultural involution and shared poverty.

Greetz studied the responses of Javanese rice paddy farmers in Indonesia to diminishing returns and population increase. He coined the term “agricultural involution” to describe a situation in which an increase in population and diminishing production resources cause intensification rather than change or diversification. That is, more labour or more fertilisers are used to mitigate the effects of diminishing returns. This is similar to Boserup but Greetz was mainly discussing cash crop. The Javanese farmers according to him reacted to diminishing returns by increasing labour (and other factors) to prevent a decrease in output. The outcome was a general increase (or a mitigation of decrease) in output. However, involution may reduce quality, cause a continuous decrease in yield, and, most importantly, reduce per-capita output, thus decreasing the rate of remuneration. Boserup hold all the above assumption in her theory but the outcome was increase in food production, which was achieved.

Geertz coined the term “shared poverty” to describe the outcome of diminishing returns and increased input in cash crops. He wrote that “[u]nder the pressure of increasing numbers (population) and limited resources (diminishing returns), Javanese village society […divided] the economic pie into a steadily increasing number of minute pieces, a process to which I have referred elsewhere as ‘shared poverty’” (Geertz, 1963: 97). Shared poverty is the continuous decrease in remuneration and profit due to the extra labour (or other input) that has to be used to deflect the effect of diminishing resources. This theory accurately describes a system in which output remains unchanged after the crucial production factor has been exhausted. In the context of classic diminishing returns, output is expected to reduce after the exhaustion of the static production factor. Geertz’s theory concerns the use of more labour to prevent the reduction of output. If extra labour is required to attain the previous output of a piece of land (due to diminishing returns), profits are reduced by the additional labour costs incurred. As agricultural producers have no control over prices, the extra cost cannot be balanced by an increase in prices. An increase in cost without a corresponding increase in price will decrease profit and remuneration; thence shared poverty.

Again, a change to food crop will alter Geertz’s formulation back to Boserupian because if survival or supply of food is the goal then the extra factor cost is hardly calculated as long as food demand are meant. The theory of agricultural involution must be adapted for certain applications. For example, although a population increase in the face of diminishing returns intensified labour in Javanese rice production, different labour outcomes or arrangements may occur in other contexts. Salaried employees may be replaced by slave labour or other non-conventional forms of labour (family labor, for example). In the cocoa sector, the theory of agricultural involution offers insights into a production system in which output remains unchanged after forestland has been exhausted. In a classic diminishing-returns scenario, output decreases after the depletion of the static production factor. Geertz’s theory of involution, however, aids understanding of continued production in a system in which the point of diminishing returns has been reached. It is thus helpful to examine the conditions of production in terms of increased input or input-output ratio.

There is abundant evidence to suggest that the West African cocoa industry has reached the point of diminishing returns, and that the increasing poverty of cocoa planters and the advent of practices such as child slavery are some outcomes of continued production (Odijie, 2015). One scholar estimated that the entire labour investment in first replanting in Côte d’Ivoire amounts to 260 days per hectare, compared with 74 days per hectare in forestland (Ruf and Schroth, 2004, 112). This extra cost of replanting cannot be mitigated by a price increase; as a result, production costs increase and profit decreases. A case study of cocoa makes up part of Chapter Six.