Back to the old ways for better profits

Najma Sadeque
22-10-07

The elections may bring democracy - at any rate, partially at least, in yet another version of it. After all there are so many different stated varieties and manifestations of it around the world. But what will it do for commerce and industry? -- And for mass employment and standards of living? -- since these two areas are directly linked.
Does change of government spell change of business climate? Well it should, especially if the changeover is from a military-controlled democracy to a civilian one. "People"-oriented parties promise rights and benefits to the masses and if they mean what they say, would not be able to indulge in a strategy biased purely in favour of commerce and instead hope for the best from 'trickle-down' which seldom lives up to the claim.
The timing is ripe for change in the business world that in whole or part sources agriculture for its raw materials or produce. Suddenly, being indifferent to the masses and the environment is being found to be bad for business and profits. The more far-sighted in other parts of the world have already begun to cash in on the new needs which they are turning into new opportunities. Many of these new opportunities would be perfect for developing countries because they are dependent on the natural world - that is to say, agriculture, which is possible in the year-round sunshine of the South.
And yet, apart from Latin America, the South countries have most lagged behind in cashing in on the organic movement which has the unique ability to make big money not only for the businessmen but also bring full employment and a better life for the masses. At the same time it will repair and regenerate our damaged soils and environment and make them even more productive. At least Latin America has learned from Fidel Castro whose organic farming strategy saved his country from hunger and destruction cruelly engineered by the US through blockade.
Seven years after the organic food products trend took off, global trade in this sector has soared from $5 billion to cross $30 billion last year, and is expected to reach $35 billion worth by the end of 2007. Unfortunately, Asian countries do not figure among the top beneficiaries, and certainly not Pakistan.
Ever since Latin America went whole-hog for organic food both for domestic consumption and exports there has been no looking back. While overall GDP growth has been 5%, in organic production the growth has been 20 percent or more. Last year there were 300 national and international organic food fairs all over Latin America and most were attended by Europeans and North Americans - in their capacity as importers. Not that Asian countries need to go to those fairs, if only to discover the potential; they should be producing instead.
So far Latin America's focus on organics has been for the main export products such as coffee, cocoa, sugarcane, soya and fruit, 70 percent of which is exported. But they are not doing it for export alone. Brazil, for example, is introducing compulsory organic food for all school canteens in the interests of the health of their growing children. Sooner rather than later, it will be the same in all factories and offices, and by choice in homes.
Switching back to organic production - also known as natural farming or traditional agriculture - which was once the norm for 10,000 years all over the world before poisonous chemical monoculture reared its ugly head - has turned out to be the sole universal enterprise that brings top benefits for all socio-economic levels of society. - Much as the vested interests in governments and corporations stubbornly try to prove otherwise.
So will Pakistani businessmen make the effort to inform themselves better as well as find merit in the principle that the good of all society will profit them too, instead of thinking that charity, or rather a little redistribution of wealth, has no place in economics ? The present signs are not encouraging. The typical impressions about most Pakistani businessmen and industrialists are as follows
One, the typical businessman, trader and industrialist are overwhelmingly selfish and are concerned only about their own interests, not society or the country at large. They forget that society constitutes their market as well as labour without who profits and production would not be possible. On the other hand, the Pakistani businessman tends to scrupulously avoid taking political sides, and will conveniently adapt to whichever government comes to power, whether it is a dictatorship or a democracy. Far from stating the principles they stand for, they sit quiet and wait to see who comes into power and then come to an understanding with them.
(Incidentally, world history has documented how big business has often colluded with fascist and capitalist-friendly governments. The worst that come to mind are those that supported Hitler, and the monopolies that had control over entire sectors and entire states in colonial and early post-colonial US.)
Two, businessmen, particularly in manufacturing and large service industries, are all for high output and profits but not for just wages of workers. They will pay the highest to white-collar management who can deliver maximum 'efficiency' and production but not to the workers who actually exude the sweat to produce the goods and services. For management there are 'incentives" but with workers there is always bargaining to arrive at a 'minimum' wage which does not cover all basic needs let alone a decent standard of living. There is little or no insurance or security for old age.
Three, businessmen assume the world owes them for their living because they 'create' jobs. The historical truth is that businessmen, with the backing of whichever current government, have taken away traditional self-reliant jobs so as to monopolise resources used in production and reshaped the production system to put control into the hands of owners and shareholders and make labour totally dependent on owner-employers. While it is true that high-tech goods require high capitalisation and large-scale modes to be profitable and worthwhile, it is not true of most agro-based occupations.
Even businessmen forget that many major "industries", for example, foodgrains, edible oils, fisheries, and totally dependent on agriculture and intensive manual labour. And milk for 'milk products' comes from collecting from thousands of individual peasant families, while carpets don't need a huge establishment either, coming similarly from thousands of home-based looms and small outsourced 'contractor factories' using child labour. While creating fortunes for investors, exporters and top management, benefits have not accrued to workers whose earnings and standard of living simply continue to drop.
And four, and the most troublesome of all, is that the business community is overwhelmingly environmentally ignorant and are clueless about the agricultural foundation to economics. It harbours a widespread belief that there is no alternative to industrialised agriculture, and poverty is an inevitable side-effect.
Finally, those in power or are aspiring to come to power are aware they need to let the economy to function to peak from which to raise revenue to maintain their government and their personal perks. So they are able to come to an understanding with them. In the same vein, government also wants to make maximum money from exports and tend to see only the manufacturers' and traders' points of view, not so much the consumers' and general public, if at all.
The business community would do well to look up the latest study by BIOFACH titled "The World of Organic Agriculture" to familiarise themselves.
The corporate, industrialised agriculturists used to be contemptuous of organics and looked down their noses at peasants. But it turns out that the unlettered not-so-ignorant peasants with incredible encyclopaedic memories for nature's technologies, were right after all. The struggling organic movement is no longer struggling, at least not in Latin America and is rapidly picking up in Europe, the US and Australia.
According to the study, there are now 31 million hectares worldwide now following various organic methods and standards. The highest acreage is surprisingly in Australia with 11.8 million hectares. It is followed by Argentina with just over a quarter as much (3.1 million hectares) and China with less than one-fifth as much (2.3 million hectares). Against all odds given the heavy subsidies given to America's chemical farmers, the US has managed to reach 1.6 million organic hectares. In Europe, Italy alone has 110,000 hectares followed by 85,000 hectares in Poland. In fact, in terms of global organic surface area, Europe leads with 23 percent, more than even Latin America with 19 percent. But the latter is expected to catch up and cross Europe since it had a later start and has much more land area.
Of these, 400,000 hectares are certified by the stringent standards of the International Federation of Organi Agricultural Movements (IFOAM), the Research Institute for Organic Agriculture (RiOA), and the Foundation for Ecology and Farming (SOL). Not included in these figures is the 6.2 million hectares worldwide for collection of wild produce - which is of course naturally organic - and is still prevalent in many countries including in Africa.
The challenge is: will the next government, whichever, have the strength of character to face up to the reality of a much-altered world and act on it? -- Because the organic approach will not just require the understanding and backing of the business world, it will depend on land reform and restoring most farmland to the peasant, mainly landless peasants who were deprived by debt. -- Because organics by its inherent nature is small-scale and labour-intensive.
It will impossible to get rid of the feudal structure through legislation - it didn't work before either. But it can be defeated by interest-free (Islamic) credit, special incentives and special schemes for the peasants so that ultimately the feudal system dies a natural death.
That remains to be seen.