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BT cotton and small-scale farmers in South Africa
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The case of the Makhathini farmers
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The Makhathini floodplains in northern KwaZulu Natal have become synonymous with the promotion of genetic engineering (GE) as a solution to Africa's poverty and hunger. These farmers, eking out an existence in adverse conditions, have become ambassadors to the biotechnology industry without understanding themselves exactly what their story is promoting in the halls of power. This presentation summarises the results of five years of research undertaken by Biowatch South Africa on the socio-economic impact of Bt cotton on small-scale farmers in South Africa. It forms part of a comprehensive research paper on the topic that will be published later this year. Makhathini: selling genetic engineering to Africa Bt cotton farmers in Makhathini first became big news in November 1999 when the Sunday Times reported on their astounding yield increases. Their media exposure reached its pinnacle in 2003, when Mr. TJ Buthelezi, chairman of the Ubongwa Farmers Union, stood next to the United States (US) trade representative, Mr. Robert Zoellick to announce that the US would take the European Union (EU) to the World Trade Organisation (WTO) to challenge its stand on GE. The clear message to both the EU and Africa was that the US was standing by the African farmer by giving it access to GE technologies, whereas the EU was not. The US Agency for International Development (USAID) has also used Makhathini as a political showcase to promote GE in Africa, as part of their agenda to find markets for surplus US agricultural produce. USAID has brought numerous delegations of African scientists, policy makers, farmer representatives and journalists, to meet with selected farmers in Makhathini, with the aim to convince these countries to accept GE crops. Aiding political pressure are studies and data on the success of Bt cotton in Makhathini. None of these studies convincingly supports the hypothesis that GE crops will feed Africa and benefit the poor. They are based on data collected in one season, which happened to be a good season. South African small-scale farmers in context South African small-scale farmers need to be seen in context and cannot be directly compared with those in the rest of Africa. In South Africa there are about 45 000 commercial farmers farming on 80% of the arable land and 1,1 million small-scale farmers farming on the rest, most of this land situated in the former apartheid homelands. Small-scale farming continues to receive very limited support from government. Compared to farmers elsewhere in Africa where farming is the main source of income and small-scale farmers are acknowledged as the backbone of rural society, in South Africa, farming is often one of a number of livelihood strategies for poor rural households, have a low status, and is not given the government support it needs.
This paper has been written by Elfrieda Pschorn-Strauss,
a researcher with Biowatch South Africa. The research has been done
with the assistance of Lawrence Mkhaliphi, Charles Louw, Wendy Forse
and Gwendolyn Wellmann.
The Biowatch study The small-scale cotton and maize farmers of South Africa and specifically the Makhathini farmers have been the target of multinational companies wanting to find acceptance for their GE crops. Monsanto introduced Bt cotton to the farmers on the Makhathini Flats in 1998. Biowatch researched and monitored the socio-economic impact of adopting Bt cotton on these farmers since 2000, interviewing farmers, industry, government and researchers. In 2003, Biowatch also appointed an outreach person/fieldworker to establish a permanent presence in the area. The outcome and analysis of this involvement is therefore spanning over five years and focused on the long term impact as well as the wider issues affecting the community. The community The community of Maputoland is extremely poor. There is a 60% unemployment rate in the Jozini Municipality, compared to a 30% national average and there are few employment opportunities. The dependency ratio is very high with an average household size of 11 people per household with 9 dependants per household. Fifty per cent of households in this district earn less than US$ 80 per month. The area has a high rate of HIV infection, with estimations varying between 17 and 36%. The community is very reliant on government grants. Even though subsistence agriculture and access to natural resources is important for the survival of rural families, few rely on agriculture as their only means of survival and use it to complement other forms of income, differing widely from many small-scale farmers in the rest of Africa. Cotton farming, along with sugar cane, is a source of cash income. Since the apartheid years, this area has been a repository of quick fix, high profile development plans to gather political support and showcase government concern for local economic development. None of these projects have managed to address the underlying causes of poverty and underdevelopment in the area. Institutional Framework for the adoption of Bt cotton Bt cotton was introduced in the area with government support and is seen as an example of a successful public-private partnership. The Land Bank (a government bank) provided credit to farmers to finance their farming operations. Monsanto undertook the marketing of Bt cotton, and local companies already operating in the area provided the infrastructure. Vunisa Cotton, a private company, sold seed and chemicals and bought the cotton from farmers, transporting it to Clark Cotton's ginnery at Pongola. Delta and Pineland has an exclusive agreement with Monsanto to use its Bt gene in its own varieties and became the main supplier of seed in the area. In 2002, in the middle of this study period, the institutional framework changed radically when a new company, Makhathini Cotton appeared on the scene. At the same time, the Land Bank, Vunisa and Clark Cotton withdrew from the area, the first two because of unpaid debts. Makhathini Cotton is a private company that obtained finance from Danish donors and financial support from the government through the Land Bank to build a ginnery and expand the irrigation scheme. Makhathini Cotton is implementing the government policy of mechanisation and has put in place a one-channel marketing system that is in control of ginning, credit and irrigation Marketing and Information To market its new products, Monsanto has embarked on an advertising campaign in South Africa that targets government and small and large-scale farmers. Once government was convinced and a community identified, four of the best farmers in this community were selected to plant Bt cotton, using their success to market Bt cotton. This was in 1997, the same year that the Department of Agriculture approved Bt cotton for commercial release and that the field trials started at the agriculture research station in Makhathini. The farmers thus did not have the benefit of trials. Bt cottonseed or Bollgard is more expensive than other cotton because
of the license fee payable to Monsanto. Each farmer purchasing Bollgard
seed must sign a Monsanto Technology Agreement before they can receive
the seed. Every grower must sign this document, called a "certificate"
by the small-scale farmers. The grower agrees to the following:
It is clear that most of the farmers do not understand what they are signing. During the 2001 survey, only one farmer understood the contents of the contract. Of the 36 farmers surveyed in 2003, only 6 indicated that they understood the contracts or knew about refuges. Farmers interviewed The study area for this research focused on the Makhathini Flats and Pongola Floodplain. Both irrigation and dry-land farmers were interviewed. Farm sizes can vary considerably with farms from anything between 0.5 ha and 43 ha with cotton usually grown on 1.5 - 10ha plots. Almost all farmers practice mixed-cropping with maize, vegetables, beans, cowpeas and some sugarcane as an additional cash crop. None of the farmers interviewed kept any record of purchases, yields, amounts of insecticides sprayed. It can be safely assumed that hardly any small-scale farmer in Makhathini keep farming records or financial spending records.
1. Farmers adopt Bt cotton as a result of political pressure and lack of choice. The high initial rate (90%) of adoption can be attributed to a number of factors. Monsanto engaged in aggressive promotion, including adverts on local taxi's, donating money (US$ 10 000) and holding farmers' days, promising farmers an easier life and great riches. There clearly has been political pressure through the farmer's associations and also through the media hype, with reporters and scientists from around the world descending on Makhathini and farmer leaders taken on trips abroad to promote Bt cotton. Another factor that played a role in farmers' adoption of Bt cotton
is simply that their choices have been limited down. The seed distributers,
including Clark Cotton and D&PL in 2001 countrywide offered 12 varieties
and in 2003, only 4 varieties were on sale to farmers. Farmers have
few choices to generate cash and cotton is perceived as one option.
Originally a number of companies operated in the area, but Makhathini
Cotton that has now taken over on the irrigation scheme, controls the
entire cash-cropping system. 2. Adoption rates were high in the first three years and then dropped dramatically. The total ha planted by the interviewed farmers declined from 276ha in 2000/01 to 193ha in 2001/02 and 180ha in 2002/03. In total 66% of the farmers decreased or stopped planting Bt cotton. At the end of 2003, very few farmers planted cotton, with most farmers gave the successive drought and lack of credit as the reason for not replanting Bt cotton. The price of cotton also plays a big role in farmers' decision with the price recently dropping to 50 US cents. In 2004, only 700 farmers delivered cotton at the Makhathini ginnery - from a total of 3000 in 2001, an 80% drop in adoption rate. At a follow-up meeting with the farmers in September 2004, research results were fed back to them, and all the farmers present agreed that their cotton crops had cost them money and that they were downsizing their fields or stopping cotton production altogether. 3. Farmers have accumulated massive debts and the community and government is subsidising Bt cotton production During the first interviews held in 2001, farmers were generally positive about the income derived from Bt cotton, even though most of them lost their crops in the 2000 floods, they felt that during the previous years there were good incomes from Bt cotton. During the second set of interviews in 2003, farmers were asked more detailed questions about cost and income from cotton but also about other sources of as well as what the situation was with their loan repayments to their creditors. Debts Cotton production in the area is dependent on a system of credit and the area has a long history of soft loans and loans being written off. Until the mid-1990's a strong welfare development approach prevailed in the area and the legacy of this is a high incidence of non-repayment of loans. Vunisa Cotton was acting as an agent for the Land Bank and introduced different systems for dealing with the repayment of loans and the approval of new applications. A clear result from the study is the massive debt accumulated by most of the farmers. In a 2004 interview a Land Bank official said that the debt figure was US$ 3.16 million spread over 2390 farmers, giving an average of about US$ 1322 per farmer. It means that about 80% of farmers have defaulted on their loans. Some of these debts have been outstanding for a while. This is a major long-term impact of cotton growing in the area, but the introduction of Bt cotton has multiplied the debt because of higher cost, to the point that credit agencies have now withdrawn support Income from cotton
Low cotton prices have had a devastating effect in all of Africa. Farmers in Makhathini started planting Bt cotton when the prices had been better. One farmer said: "When the prices drop you can't leave the crop at home, you can't eat it, you can't feed it to the chickens. You are forced to sell it for whatever small price you can get. Farmers do not have the power to influence markets." Another farmer commented: "Four years ago we were told we would make lots of money but we work harder and make nothing." Non-farm income
Non-farm income also included child grants, disability grants, pensions. In other words, welfare grants from the State that is aimed at supporting the community and alleviating poverty, as well as family income is used to subsidise cotton growing in the area. If farmers substitute credit with non-farm income and the burden of debt thus shifts to the community, it must have major implications for their socio-economic status, in terms of access to health care, schooling, and nutrition for example. 4. Farmers planting Bt cotton still use pesticides. Small-scale farmers in South Africa have to deal with a range of pests and they use broad range pesticides to control this. All the farmers still have to spray for secondary pests such as aphids and jassids which would otherwise have a very negative impact on yields. Initially there were a number of reports of farmers losing their entire crop because they were told by Monsanto they do not have to spray at all. Since the introduction of Bt cotton, new insect pests appeared and especially stink bugs have caused extensive damage. This correlates with reports from the US and China , where the stinkbug has also emerged as a major new pest. As these farmers do not plant refuges, it is expected that insect resistance will build up quickly, forcing them to go back to the old spraying patterns, erasing any environmental benefit gained. 5. Bt cotton does not address farmers needs and constraints Underlying the persistent poverty in this region is a history of dispossession and discrimination. Farmers' key constraints are erratic weather patterns resulting in either droughts or floods, lack of markets and infrastructure and access to credit, which make high input investments at the beginning of the season, such as GE seeds, an enormous financial risk. The first adopters of Bt cotton were then also farmers that were most able to weather such a risk: older farmers with additional non-farm income, more livestock and larger farms, in other words, the better-off farmers with access to credit. 6. Bt cotton is as vulnerable to climatic stresses as non-Bt cotton Astounding yield increases (up to 40%) have been reported in Makhathini. Later studies report that there has been no statistically significant yield increase. Over the long-term, droughts and floods wiped out any benefit that Bt cotton might have presented for farmers. Because Bt seed is more expensive up front, this makes it a more risky option for resource-poor farmers who have fewer resources to insure, offset or hedge their risks. Farmers are struggling to make money out of cotton and given the high cost, the high risks and depressed world prices, it is clearly that successful cotton production will in future be the preserve of those with management ability and financial backing. In presenting our analysis to the farmers, they were astonished to realise what financial losses they incurred. 7. Bt cotton has benefited better-off farmers and businessmen at the expense of the poor. It is no surprise that there has been political tension in this area over the years, with such a history of displacement, political favouritism and resource disputes. Bt cotton has contributed to the conflict in the area by favouring better-off farmers and in particular giving political power to the Ubongwa Farmer's Association. This power was for example used to lobby for the earlier release of the water in the Pongolapoort Dam, to favour cotton farmers, a practice that is not in the interest of mostly women food crop farmers. A further concentration of power took place with the introduction of the Makhathini Cotton project. This project is in line with government's policy of agricultural reform that favours better-off, 'entrepreneurial' farmers and mechanisation. Government funding is now directed at one big company leasing land from the farmers to plant GE cotton on large scale. This GE cotton project perpetuates the enormous injustices of the past and ignores the fact that poverty will only deepen if the inequities in land access and ownership are not sorted out. 8. There is little support for farmers and no implementation of biosafety practices. There is an utter lack of awareness among Makhathini farmers of GE
cotton and its implications. They do not understand the license agreements
or the concept of refuges. Farmers in the area get little support, and
rely on seed and chemical salesmen for information. There is no monitoring
of insect resistance nor has any environmental impact assessment been
done in the area. Bt cotton has not been the answer to the problems of the Makhathini farmers and has proved to be highly unsustainable. Their problems are highly complex, rooted in the local political, social, economic, and ecological environment, and they can not be resolved by quick techno-fixes. In the specific context of Makhathini, we find that GE technologies had some initial success, but in the long run proved to be too risky for small farmers, leaving them demoralised; them and their families with huge debts; and ultimately leaving them poorer with less options. It has led to a concentration of power in the hands of fewer companies, contributing to greater control by corporations, It is also leading to a concentration of farms and taking farmers off the land - eventually leading to farmers losing the skills they used to have. Risky new technologies such as GE should not be introduced before there has been a serious assessment of the needs of small farmers in South Africa, with an in-depth look at the country's agricultural, food, and rural development policies and how they benefit the poor. Ironically, both government and industry promotes this technology which has been developed for large-scale industrial farming systems, as the fix for poor farmers. Nothing can be further from the truth and this kind of economic and political opportunism is a cynical application of development. South Africa and in particular Makhathini farmers are being used to introduce GE crops to Africa, but Africa should take an in-depth look at how the scenario played itself out in Makhathini and elsewhere, and not accept the PR of companies like Monsanto. In Africa, small-scale farmers should be able to make choices that empower them and provide them with opportunities that will ensure food security and sustainable livelihoods.
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