Can we mend the global food chain?

Written by Akeefah Lal Mahomed

Illustration by @georgiabrownillustration

Before globalisation, farming was mostly for subsistence. Families lived in small, rural communities and crops were cultivated using resources and knowledge in local environments. Technological advancements during the 17–19th centuries spurred an agricultural ‘green revolution’, which increased productivity and laid the groundwork for the industrialisation of the sector. 

The internationalisation of trade in the 19th century formed economy-focused organisations that promoted connectivity and interdependence, and wove together travel, business and communities. 

Multi/transnational corporations (TNCs) took advantage of the integration of markets to monopolise a diverse range of sectors into private enterprise. These corporations can lessen the cost of labour and increase variety by expanding supply chains. Production is standardised and land is concentrated to enable a globalised industrial process. Contractualisation ties farmers to wholesalers and retailers, increasing their potential income but decreasing their autonomy. In short: agricultural production is now heavily influenced by global demand, external shocks and access to new technologies. 

“The UN’s Food and Agriculture Organisation predicts that by 2025, food production will need to increase by 60% to meet the needs of an estimated global population of 9.3 billion. ”

However, growth in agricultural yields have stalled in the last decade, water has become a greater constraint and most land is already farmed. Development has been uneven, and key regions can’t keep up. As pressure rises, key nations within South America and Sub-Saharan Africa, many of which have a great, but yet unrealised, agricultural potential, could become vital markets to help feed the world. 

Agricultural production is a critical part of Ethiopia’s economy, accounting for 40% of its GDP, 80% of exports and an estimated 75% of the country's workforce. Foreign investment is encouraged with incentives such as duty-free capital goods and construction materials, low land rental charges and with shockingly long leases, of up to 99 years. As a result, many local farms have been confiscated, and the fertile land has been awarded to foreign investors from India, Saudi Arabia, Israel and the USA. 

The use of improved seeds, fertilisers and modern practices have risen significantly. TNCs can offer development support in finance, mechanisation, marketing and the digital economy. As poverty can limit people’s access to education, resources, trading markets and essential information, local farmers can struggle to make an impact on the international market. In this way, foreign investors provide the resources and knowledge to advance economic development.

Despite its potential, Ethiopia is still a net importer of agricultural goods. The current system is not capable of stimulating broad-based economic transformation. Restrictive foreign investments deny Ethiopians the true benefits of globalisation by trapping them in poverty cycles that limit autonomy.

“Poor socio-economic development is emphasised by low rates of urbanisation, poor infrastructure and high transaction costs. ”

Although foreign investment is coming in, internal markets are being stripped. A focus on commodity crops and export-driven policies have created food insecurity for Ethiopians. Cash crops like coffee dominate agricultural production and offer little nutritional value. Affordability, availability, quality, sustainability and adaptation of food resources are major concerns. Ethiopia faces severe challenges as the population struggles to meet basic nutritional needs: 24.9% of the population is malnourished, 35.3% of children stunted and 21.1% of children are underweight. The system is not providing healthy diets for a growing population. 

It should be noted that foreign investment isn't inherently harmful, but development strategies that neglect local interests have often led to social crises. Poorly regulated development has depoliticised a fundamentally social issue. Aside from the benefits from economic growth, agriculture feeds populations and provides security and enables rural-urban development. Additionally, regional governments are discouraged from managing large-scale land transactions, meaning that little restrictions protection is offered for the local area. This push for foreign land acquisition and goods-production has fractured communities and dispersed populations. 

Land holds significant social and cultural value. Its loss has been detrimental to the dignity of locals. Large-scale agricultural projects have culled swatches of land for cash crops and the local populations see little investment back into their communities. The Ethiopian government has faced internal criticism for using intimidation tactics to relocate thousands. Allegations of intimidation include violent evictions, political coercion, imprisonment, rapes, beatings and disappearances.

These measures have made Ethiopia vulnerable to global shocks and recessions. The COVID-19 pandemic severely impacted key sectors like flowers, textiles, coffee and oilseeds, contributing to a national debt increase to 55%. During the pandemic, inflation rose by 10% within 2 years and food insecurity affected 30 million people. As supply chains face mobility restrictions and loss of demand, capital is redistributed, budgets are cut and the worst effects are felt by farmers further down the chain. Climate change can exacerbate this further; in 2023, prolonged dry seasons heightened starvation risks.

Overall, Ethiopia does not have the tools to sufficiently address its own internal sociopolitical issues, or effectively withstand the impact of transnational threats such as pandemic, war or environmental disaster.

Brazil is an example of strategic partnership, scientific innovation and investment. The country has transformed its agricultural market into a major global producer. Achieved through the development of the innately difficult Cerrado region and long-term strategic economic reform, it provides a template for development that struggling nations can follow.

The Cerrado is a large tropical savanna in central Brazil with poor soil fertility and irregular rainfall. In the 1970s, the state-owned agricultural research group Embrapa developed methods to improve nutrient levels that would allow large-scale agriculture production. Genetic advancements in soybean, corn and cotton meant that crops could adapt to harsher conditions. This has been upheld by sustainable agriculture practices. Brazil’s farmers have taken considerable steps such as crop rotation, forest preservation efforts, and an integrated crop-livestock-forestry system to reduce environmental impacts and ensure continued agricultural production.

Alongside this were economic reforms that allowed Brazil to make the most of trade liberalisation. Market-orientated reforms reduced tax and encouraged foreign investment. Inclusion in the World Trade Organization expanded and strengthened opportunities. Currency stabilisation in the 1990s reduced inflation and allowed farmers to invest in new technology. Throughout this, Brazilian agri-businesses have been supported by government policy and private sector investment. Brazil has become one of the largest exporters of soybeans, coffee and poultry. Progress allowed for further diversification which has stabilised the market against global fluctuations and changing demands.

“A key driver behind Brazil’s success was its self-sufficiency, enabled by local research institutions such as Embrapa. ”

In bettering agricultural research, domestic institutions could focus on developing crop varieties suited to the local climate and conditions, as well as improving productivity for key crops and soil fertility. These ideas can be bolstered by farmer training programmes to teach sustainable practices, crop management and soil conservation. 

In places with limited resources, collaborating with international research organisations or other countries with similar environments can help push forward progress. In addition, local communities have been supported through training, resources and better access to markets. Over 5 years, the Tuungane Project has trained over 18 500 farmers, with 75% now adopting the techniques. This approach has empowered local communities, and increased agricultural sustainability and resilience to climate change.

Another key factor has been Brazil’s ability to find the right balance between state protectionism and TNC involvement. Brazil’s phased approach to agricultural globalisation demonstrates the importance of having initial protectionist policies to ensure that the sector remains robust, before allowing gradual market liberalisation to attract international investment. Though TNCs are already deeply embedded in countries like Ethiopia, there are still valuable lessons to be learned, and opportunities to improve and reshape these relationships.

Market liberalisation opens agricultural markets to global trade. Countries benefit from favourable trade agreements, reduced tariffs and subsidies that encourage investment and productivity. Partnerships with private enterprises can increase investments to strengthen value chains, improve infrastructure and logistics, and lead market access. Cooperative models are also essential for supporting small farmers. They help reduce costs, improve resource pooling and enhance access to international markets. These models foster collaboration, making it easier for farmers to compete in global trade. 

“At the same time, a certain level of state protectionism should be maintained. ”

Policy interventions are needed to support clear land tenure, reduce barriers and provide investment incentives to empower farmers and support local agri-business. These measures create a stable environment for local agri-business. Developing long-term agricultural policies is essential for creating an environment that encourages agricultural development and promotes inclusive growth for farmers. To benefit from both economic and social development, policies should also prioritise sustainable development alongside economic growth.

The relationship between agricultural productivity and the global environment is far from straightforward. Across the world, different approaches are engaged to manage trade-offs between the economic, social and environmental sectors. The globalised economic market tied with liberalisation and international trade can be a great stimulus for economic growth, but economic transformation and social development requires more attention. The subject of agriculture must not be depoliticised into the hands of private enterprises who have no social obligation to local communities. Governments must step up and use their authority to ensure that agricultural practices serve both the population and the environment through policy regulations. As climate change and technological advances present new challenges, the equitable sharing of agricultural innovations will be critical in addressing global food security. With public-private partnerships becoming key to overcoming these obstacles, it is important to re-evaluate the nature of relationships with international organisations, and understand how nations can ensure sustainable development for their people.