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Model Development? Zambia Sugar and the Uneven Terrain of Social Benefit Laura German and Lowery Parker University of Georgia Annual World Bank Conference.

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Presentation on theme: "Model Development? Zambia Sugar and the Uneven Terrain of Social Benefit Laura German and Lowery Parker University of Georgia Annual World Bank Conference."— Presentation transcript:

1 Model Development? Zambia Sugar and the Uneven Terrain of Social Benefit Laura German and Lowery Parker University of Georgia Annual World Bank Conference on Land and Poverty, March 23-27, 2015

2 Overview I.Positioning  Within wider academic debates  Case study: Importance, uniqueness II.Methodology III.Findings: Uneven Outcomes IV.Questions for Discussion

3 I. Positioning: Academic Debates Recurrent debate in academic circles:  Whether, and under what circumstances, the logic of capital accumulation driving farmland acquisition / investment can engender broad-based economic development (skepticism)

4 I. Positioning: Academic Debates Recurrent debate in academic circles:  Whether, and under what circumstances, the logic of capital accumulation driving farmland acquisition / investment can engender broad-based economic development (skepticism) Argument:  Can find evidence for and against different social outcomes … employment, smallholder inclusion, livelihood costs & benefits  Ongoing search for the ideal set of conditions under which “shared growth” is maximized  Yet there is unevenness in every situation (mixed results, even in best case scenarios)  “Success” is subjective (what is valued, how that is measured)

5 I. Positioning: Academic Debates Recurrent debate in academic circles:  Whether, and under what circumstances, the logic of capital accumulation driving farmland acquisition / investment can engender broad-based economic development (skepticism) Argument:  Can find evidence for and against different social outcomes … employment, smallholder inclusion, livelihood costs & benefits  Ongoing search for the ideal set of conditions under which “shared growth” is maximized  Yet there is unevenness in every situation (mixed results, even in best case scenarios)  “Success” is subjective (what is valued, how that is measured)...  Who should determine what constitutes “shared growth”?

6 I. Positioning: Case Study (Zambia Sugar’s Expansion) In Zambia:  Zambia Sugar viewed as a model of inclusive growth, a model for national Farm Block Scheme  Expansion of Nakambala Estate “the largest single investment in Zambian agriculture to date” (UNCTAD 2008): −Planned 5,945-ha cane expansion (purchased/leased, outgrowers) −Factory expansion −Ethanol refinery (80,000 liters/day)

7 I. Positioning: Case Study (Zambia Sugar’s Expansion) In Zambia Globally:  Southern Africa the “hottest spot in the sugar industry” outside Brazil (Wall Street Journal 2007), $3 billion in recent investment  Emblematic for its promise: flex crop, nucleus estate-outgrower business model, most environmentally sustainable ethanol feedstock

8 I. Positioning: Case Study (Zambia Sugar’s Expansion) In Zambia Globally Relative to Other Similar Investments:  Best case scenario: −Limited displacement given history of land occupation (benefits without costs?) −Hybrid business model (nucleus estate-outgrower) −Labor-intensive crop that is not fully mechanized −Smallholder incorporation heavily subsidized with public $$ …. widely viewed as a model to be emulated

9 II. Methodology Research Site: Zambia Sugar’s Nakambala Estate  Plantation and mill established in 1966 by Northern Rhodesia Sugar Refinery  Initial investment and damming of Kafue River displaced livelihoods of “hundreds of thousands” (Richardson 2010)  Bulk of recent expansion occurred on industrial-scale farms (land lease & outgrower contracts)  minimal displacement

10 II. Methodology Research Site: Zambia Sugar’s Nakambala Estate  Plantation and mill established in 1966 by Northern Rhodesia Sugar Refinery  Initial investment and damming of Kafue River displaced livelihoods of “hundreds of thousands” (Richardson 2010)  Bulk of recent expansion occurred on industrial-scale farms (land lease & outgrower contracts)  minimal displacement  Smallholder schemes: SchemeInception (year) Area (ha) Households (number) Kaleya19801, Maggobo

11 II. Methodology Data Collection: 1.Semi-structured interviews with key informants and focus groups to identify salient themes from diverse perspectives: −Company officials and managers (6) −Local chiefs (2) −Commercial outgrowers (3) −Government representatives (2) −Zambia Sugar employees (cane cutters) −Small-scale outgrowers from Maggobo & KASCOL schemes 2.Household surveys with cane cutters and Maggobo scheme participants (within constraints) 3.Archival research for wider economic, social and ecological spillovers

12 III. Findings: Social Benefits Land Losing Households:  Impacts limited in terms of number of households affected  Negative outcomes in select cases, driven by land speculation (household members making non-transparent deals, leaving other household members destitute)

13 III. Findings: Social Benefits Smallholders:  Evidence of social benefits / shared growth: i.80 new small-scale growers brought on board ii.Kascol: on-scheme income twice that of farmers off-scheme iii.Initial spike in Maggobo household incomes

14 III. Findings: Social Benefits Smallholders:  Evidence of social benefits / shared growth  Unevenness of benefits: i.Cane expansion dominated by commercial (out)growers: CategoryHa Expansion% Expansion ZS owned/operated2, Commercial-scale outgrowers 6, Small-scale outgrowers 598 (of which 164 ha KASCOL expansion to core estate) 6.1 (4.4)

15 III. Findings: Social Benefits Smallholders:  Evidence of social benefits / shared growth  Unevenness of benefits: i.Cane expansion dominated by commercial (out)growers ii.No evidence that (minimal) smallholder incorporation is part of core investment logic: Smallholders schemes brought on board with third party finance No progressive incorporation in 30-year interval (neither ZS-led nor smallholder initiative) SchemeYearTotal CostPublic FundingPrivate Funding KASCOL1980ZMK 17 M*(CDC, GoZ)-2 Bank loans* Maggobo2011US$ 5 MEU: 60%-Bank loan: 27% -Maggobo CGT: 13%

16 III. Findings: Social Benefits Smallholders:  Evidence of social benefits / shared growth  Unevenness of benefits: i.Cane expansion dominated by commercial (out)growers ii.No evidence that (minimal) smallholder incorporation is part of core investment logic iii.Shift in landholdings during establishment of contiguous area of cane (on avg: 8.5 ha rainfed  1.1 ha rainfed + cane): Evidence for widespread hardships during transition Shift from broad-spectrum to specialized livelihood portfolio Uncertain long-term consequences (gendered control over production/income, food security), in light of KASCOL evaluation

17 III. Findings: Social Benefits Smallholders:  Evidence of social benefits / shared growth  Unevenness of benefits: i.Cane expansion dominated by commercial (out)growers ii.No evidence that (minimal) smallholder incorporation is part of core investment logic iii.Shift in landholdings during establishment of contiguous area of cane iv.Are small-scale outgrowers “farmers”? Many KASCOL participants were retired public servants Agronomics heavily controlled by Zambia Sugar

18 III. Findings: Social Benefits Smallholders:  Evidence of social benefits / shared growth  Unevenness of benefits: i.Cane expansion dominated by commercial (out)growers ii.No evidence that (minimal) smallholder incorporation is part of core investment logic iii.Shift in landholdings during establishment of contiguous area of cane iv.Are small-scale outgrowers “farmers”? v.Progressive shift to smallholder control? Despite initial intention, KASCOL shareholding structure never led to smallholder ownership or control

19 III. Findings: Social Benefits Employees:  Evidence of social benefits / shared growth: i.ZS expansion created 1,000 seasonal/temporary jobs + “less than 50” permanent positions ii.Many cane cutters reported an ability to better provide for the dietary, health and educational needs of their families

20 III. Findings: Social Benefits Employees:  Evidence of social benefits / shared growth  Unevenness of benefits (cane cutters): i.Poor job quality Poor living conditions; families prohibited Seasonality a challenge to many (getting by during off-season)

21 III. Findings: Social Benefits Employees:  Evidence of social benefits / shared growth  Unevenness of benefits (cane cutters): i.Poor job quality ii.Life histories: livelihood consequences of employment are geographically uneven Preferential hiring of cane cutters from Western Province (perceived strength/work ethic) Challenges in leveraging wages for livelihood improvements (directly or via other investments) greatest for migrant workers HIV/AIDS

22 III. Findings: Social Benefits Wider spillovers:  Evidence of social benefits / shared growth: i.Road expansion and improvement ii.Clinic built by Zambia Sugar

23 III. Findings: Social Benefits Wider spillovers:  Evidence of social benefits / shared growth  Unevenness of benefits: i.Infrastructure investments driven by business needs more than social investment: Road network serves production needs in core estate Road improvement (molasses) needed for waste management Clinic built to serve employees; access for others rests on ability to pay

24 III. Findings: Social Benefits Wider spillovers:  Evidence of social benefits / shared growth  Unevenness of benefits: i.Infrastructure investments driven by business needs more than social investment ii.Economic spillovers disproportionately small relative to 50- year investment history iii.Environmental consequences of expansion (water availability and rights in Lower Kafue Basin, waste treatment)

25 IV. Discussion Points 1.Uneven terrain of social benefit (and cost): Who gets to decide when an investment represents “shared growth”? And shared by whom? By what metrics? 2.What matters for specific groups is strongly shaped by context & experience (e.g. land tenure vs. control over land and business decisions; employment vs. health risks): Is it possible to identify “ideal conditions” for shared growth? 3.Shared growth in Zambia Sugar case is driven by 3 rd party (largely public) investments: Does this constitute “socially inclusive” private investment, public-private partnership or public subsidy? 4.The material effects of “shared growth” discourse: Is the idea of “shared growth” more a driver than an outcome?


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