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The basic needs strategy
The basic needs strategy is today well known. Studies made under the auspices of the World Bank, the ILO and many other agencies have widely publicized its content. We are not, therefore, going to fill a void at this level. In our section on the policy of developing agricultural smallholdings, we have attempted to raise a few practical problems that its implementation involves.
The strategy involves measures at the level of the rural areas and the urban areas, measures at the national and international level, economic and institutional measures.
We should like here simply to make a few comments on the problematic of the strategy as it relates to the rural areas, and its implications at the level of the whole capitalist system.
In the first place, the basis of the strategy is to seek to act on the situation of the poor with a view to improving it while at the same time preserving the underlying structures of society. But the poor do not live lives apart, but live within a society whose structures determine their conditions of existence. It is determinate relations of production that give rise to poverty and impoverishment and reproduce them at ever higher levels. Thus, without attacking these relations of production, one can only attack the effects and not the causes.
The strategy proceeds through the implementation of projects accompanied by a few proposals for reforms, which are usually quite vague. The projects are usually financed from abroad by big capital and are intended to relate to the sectors where the great disinherited masses live, that is, the vast traditional sector of the rural areas and the marginalized sectors of the urban areas. These sectors had previously been only indirectly or directly, but very loosely, integrated into the capitalist system. It is well known that wherever capital invests it tends to reproduce the relations of production that are typical of it and especially when the context is favourable, as it is in countries that are dominated and integrated into the system. It can thus be assumed that the implementation of these projects will lead to acceleration of the integration of these sectors into the economy governed by the rules of the system whose basic law is the quest for profit, and not help for the poor.
The financing of 'basic needs' projects does not undermine that of old type projects which incarnate the system of relations inherited from the colonial period. The extraverted general orientation of the economies thus remains intact, and it is to be feared that the food projects are simply means intended to sustain large-scale cash crop projects.
The capital invested is loans and as such these have to be repaid to those who set the original conditions. If the possibility of retrieving funds invested is not guaranteed, it is doubtful whether the investments would be made. But the sectors in which the impoverished masses live are sectors that are very little structured in terms either of institutions or infrastructure. This raises the likelihood of risks and leads the providers of funds to undertake detailed studies to select the lowest-risk situations. This inevitably leads to situations where cases of real impoverishment are left aside because they are not economically profitable.
If cases of failure multiply, it is to be feared that the strategy will be aborted. But the risks of failure are great given that the stress is put on the need for capital rather than on questioning the socio-economic structures of the countries concerned.
The reforms proposed to accompany the implementation of projects are very timid. But even with these minuscule reforms, how can there be any certainty that they will indeed be implemented and not taken over by the possessing classes. This leads one to wonder whether so-called projects for the poor would not profit the rich even more.
Development of the rural areas
It is in this regard that the literature on basic needs is most prolific, and it is indeed in this sector that the vast majority of the poorest people live, especially in Africa. We shall examine the overall goal proposed by the advocates of the strategy and then the means.
The goal: In his speech to the Board of Governors of the Bank, on 24 September 1973 in Nairobi, the President of the World Bank defined the goal thus: 'I suggest that the goal be to increase production on small farms so that by 1985 their output will be growing at the rate of 5% per year. If the goal is met, and smallholders maintain that momentum, they can double their annual output between 1985 and the end of the century.'
A preliminary remark, or rather a reminder, is that the estimates of the population affected by the basic needs strategy are inflated. In fact, these estimates relate to the population of the project area whereas a good proportion of this population does not participate in the project for various reasons (insufficient irrigated areas, credit inaccessible, etc.).
In so far as the farms affected by the project are concerned, is it logical to think that an annual 5% average growth rate can be attained between 1973 and 1985? There is no reason at all to think so. For many smallholders, their farms are generally not more than I ha. in size. Given the credit conditions - which we shall consider below - these farmers will find it difficult to have access to inputs. Not being in a position to use inputs making intensification possible, it will be impossible for them to sustain over a long period an annual growth rate of 5% of production on small farms whose fertility will rather be on a declining trend.
But even for the peasants who will effectively be able to reach 5% annual growth rate of production, how can one be sure that their standard of living will rise in consequence? In fact, it is known that most African states top up their budgets by creaming off the resources of the rural areas. The price systems, the tax systems, the credit system are all so many means that assure transfers of resources from the peasant producers to other social strata, not to mention the constant deterioration of the terms of trade between agricultural products and inputs. An annual production growth rate of 5% can perfectly well be accompanied by a deterioration of the conditions of existence of the peasants.
It is symptomatic to observe that the promoters of the strategy are only preoccupied with increasing production, without raising the problem of knowing who is to benefit from this increase.
The means: The means to be deployed are presented as follows:
Acceleration in the rate of land and tenancy reform.
Better access to credit.
Assured availability of water.
Expanded extension facilities backed by intensified agricultural research.
Greater access to public services.
And most critical of all: new forms of rural institutions and organizations that will give as much attention to promoting the inherent potential and productivity of the poor as is generally given to protecting the power of the privileged.1
But what does this catalogue of proposals, at first sight most appealing, cover? To find out, we shall look more closely at the details provided by other documents which analyse the proposals in depth.
In Redistribution with Growth, published under the auspices of the World Bank, it is stated: 'Where much potentially productive land in the hands of big landowners lies uncultivated, there may be widespread support for measures to turn it over to small farmers without a hint of an attack on rights to property.'
In Employment, Growth and Basic Needs, published under the auspices of the ILO, it is stated: 'Where large holdings are typically underutilised, agrarian reform may also be necessary to provide for the increase in food production required to meet basic needs.'
It will be noted that the proposals contained in these two publications, which did most to spread the word about the content of the strategy, conceive agrarian reform in the same way. First, the reform must relate to the unused lands of large estates. Next, it must be carried out with compensation for big landowners, as is spelled out in other passages. Finally, it must be carried out without challenging the right to property.
Given these conditions, it may be asked whether an agrarian reform subject to them is really applicable in practice and whether, in that case, there can legitimately be talk of true agrarian reform. In fact, in countries where the shortage of cultivable land is strongly felt, a redistribution of land which only related to the unused parts of large estates would be insignificant and could in no way ensure access to land to the mass of people needing it. On the other hand, getting round the measure would be easy for big landowners who wanted to, and they all want to. All they have to do is to act quickly to give the appearance of making use of unused land.
But even admitting that these lands can be recuperated, the 'fair compensation' mentioned poses problems. Who is going to pay the costs of compensation? If it is the poor landless peasants, it goes without saying that they lack the means, and what we risk seeing happening, as was the case at the time of the agrarian reform in Egypt in 1961, is that only rich peasants will be able to increase their holdings because only they have the means of meeting the expense of compensation. In this case, nothing will have changed in the living conditions of the poor and landless peasants.
If it is states that are responsible for compensating the big landowners, there is a strong likelihood that they will later pass on the costs incurred to the peasants. In this case, for the peasants who have secured plots of land, the running costs of farms will be such that they will continue to live in poverty.
In addition, is not the determination to respect existing property rights in contradiction to any real determination to carry out any agrarian reform? The response cannot be in doubt since wherever the problems of access to land are acute, it is the rich landowners who constitute the real obstacle. If their property rights are being respected, how could pieces of their property be taken away?
Those who advocate such reforms, however, think that 'almost all Third World countries have already adopted or at least promised to adopt legislation for this purpose.' They think that it is the implementation that is simply insufficient. This reveals clearly that an agrarian reform proclaimed by the dominant classes who control power, many of whom are big landowners, is only a charade with the political aim of fooling the people.
Advocates of the strategy declare their powerlessness to act on governments. They simply express the hope that the spectre of revolution will lead these governments to opt for the lesser evil. It is expressed in this way by the President of the Bank: 'But the real issue is not whether land reform is politically easy. The real issue is whether indefinite procrastination is politically prudent. An increasingly inequitable situation will pose a growing threat to political stability.'
Still with the aim of encouraging big landlords to make a few concessions to safeguard the system, other arguments are put forward in Redistribution with Growth. Thus, to counter the fear that an agrarian reform might lead to 'a sort of "landgrab" epidemic, accompanied by a good deal of dislocation and perhaps violence', the authors of this book explain that:
More importantly, there is the general thesis that once the peasantry's immediate demands for land are met, it becomes a conservative force, a bulwark of the [new] status quo. Provided the process is controlled, therefore, a land reform in a setting where land ownership is initially highly concentrated can do much to alleviate the lot of the poor without tearing apart the fabric of society.
All that is very clearly set out and shows clearly that it is the preservation of the system that is the main concern.
But to say that the World Bank and other financial agencies do not have the means to put pressure on governments does not seem to accord with reality. In fact, the great majority of these states finance their economic policy from loans obtained from the Bank or other similar financing bodies. How could they resist conditions fixed by these agencies? Does not this confer on these agencies the most powerful means of pressure if they were truly moved by social goals?
It is difficult not to believe that there is complicity between the Bank and the powers that be in these countries. It therefore seems illusory to expect them to promote a true agrarian reform that would give land to the peasants. Such a reform can only come from the struggles of the peasants themselves, organized in powerful structures capable of mounting a comprehensive challenge to the famous status quo.
More credit facilities
Here, too, we need to go into some detail. In what spirit is the increase in credit facilities conceived? We shall turn to the proposals in the same sources. In the ILO's Employment, Growth and Basic Needs, it is stated: 'Water charges should generally reflect the true cost of providing irrigation facilities, and interest rates the real scarcity of capital. The prices of farm machinery should not in general be subsidized, and those of fertilizers only when this is clearly necessary to promote their use in the early stages of their introduction.'
The speech by the President of the World Bank points in the same direction; 'The fact is that concern over the usurious rates the farmer pays the money lender has led to unrealistically low rates for institutional credit.'
Thus facilities for access to credit are conceived according to the cold rules and mechanisms of capitalism. The approach consists in showing capitalists, notably those in backward linkages from agriculture, that smallholdings constitute outlets for them that have hitherto been unexploited, or insufficiently exploited. Then, in organizing credit systems open to smallholders with the greatest profit for the lenders.
It might be thought that if the small farmers find advantage in it for them, that might constitute progress as compared to a situation of stagnation or regression. It therefore becomes a matter of knowing whether the various imperatives mentioned are compatible, and whether smallholdings can be modernized through access to these credits.
Nothing is less certain. In fact in The Design for Rural Development,2 another publication that appeared under the auspices of the Bank, Uma Lele reports the results of a number of surveys made in Kenya: 'The experience of the SRDP [Special Rural Development Program]'s Vihiga maize scheme emphasizes the importance of identifying the precise constraint to adoption before instituting a credit program.' 'Of the total of 600 farmers selected at random to participate in the Vihiga Maize Credit Program in 1971, only 54 qualified for credit under the Program's standards of creditworthiness. Adding another 22 eligible farmers from outside resulted in 76 potential borrowers. Only 63 farmers finally utilized loans.'
This example among many others shows that credit systems with their built-in demands are beyond the reach of peasants.
Our own experience of the study of a few projects has enabled us to observe very high interest rates (25% in Senegal). While on the agricultural projects in Mali the interest rate is relatively low, the state mops up peasant incomes through very high charges. In addition, the peasants are obliged to make compulsory sales of large quantities at very low prices to the state grain marketing office. When all is said and done, the Malian peasant working on irrigated land found himself short of food during the year (see the letter from the San rice-growers in the Appendix).
Thus, most of the time, credit systems are beyond the reach of the peasants. Those who have recourse to them often do so at the risk of food insecurity because of the debt repayment conditions.
In the last analysis, it can be said that the credit systems as they are proposed do not constitute a solution for modernizing smallholdings and improving the living conditions of peasants. On top of that there are the problems of dependence linked to the new techniques which these credits are intended to make it possible to acquire.
There will therefore be no choice but to turn to other alternatives.
Stress continues to be put on large-scale irrigation works, even if it is felt that this needs to be complemented by smaller works. This shows that the lessons of previous experiences are not being adequately learned. Indeed in the same speech by the President of the Bank, it is stated: 'There are too many cases - in our experience and that of others - in which it has taken ten years or more after the dam was completed for the water actually to reach the farmers.'
It seems hard to believe that a dam can be completed and remain unusable for ten years. It is tempting to think that during that period of ten years when the peasant was receiving no water, the dam was being used for other purposes which were in fact the prime targets of the investors: for example to provide energy for mining industries controlled by foreign capital.
The experiences anyway show that a spread of small irrigation works, often built by the peasants themselves with very limited technical support, corresponds much better to the needs and means of smallholder agriculture.
These remarks allow us to say that the basic needs strategy is not a new strategy. It is only the continuation of old strategies of domination with the fruitless quest for escape valves to deal with the serious crisis affecting the whole capitalist system and particularly its weak link, the agricultural countries.
Given the particular features of the crisis, it is worth examining more closely the goals which this strategy sought to attain.
The basic needs strategy in the current capitalist crisis
From an examination of its implementation in the rural areas, it is possible to attempt to sketch out the particular role of the basic needs strategy in the current crisis of the capitalist system.
The capitalist system has entered a long-term crisis, and there is no sign anywhere to suggest that it will soon end. The manifestations of this crisis in the central capitalist countries are clearly visible: factory closures, record unemployment, wild inflation and revived protectionist tendencies. In the underdeveloped countries, they are the balance of payments crisis, the swelling of the debt with a high service element representing a large proportion of export income, and a significant reduction in import capacities. In short, the capitalist countries are no longer able to sell and the underdeveloped countries lack the means to buy. Thus, the crisis brings together all the conditions for a worsening of the tendency of the rate of profit to fall.
Indeed, the various capitalist groups will tend to increase the organic composition of their capital in order to be able to increase their productivity and make themselves competitive on the international market. The many-sided struggle between capitalist groups which results from this, and which is currently manifested in more or less covert protectionism between capitalist countries, is simply the struggle for the redivision of a world capitalist profit whose rate is tending to fall.
Added to that there is the excessively high external debt of the underdeveloped countries and those of the East, whence their growing difficulty in coming forward as buyers on the world market, which would have enabled production in the developed capitalist countries as well as international trade to pick up.
Usually, the developed capitalist countries were able to ride their crisis by stepping up the super-profits made on the back of the exploited countries, notably through the development of unequal exchange and the international division of labour, but it seems that this process is being blocked, the dominated countries no longer having the means to participate in exchange. As a result, the international division of labour on which unequal exchange rested needed to be modified. The system showed signs of needing new solutions to restore its balance.
The whole of the underdeveloped world could no longer be allowed to remain in the situation of non-industrialized countries. This was particularly important as a mass of technology was accumulating and there was no clear idea who to sell it to, and as the underdeveloped countries represented such a vast labour market that the factories would operate in these countries without excessive expenditure on wages. The size of the reserve army would ensure that wages remained very low.
Because of the need to get the system as a whole going again economically, it was thought wise to transfer some labour-intensive industries to the underdeveloped countries, and this is what was done. This shift was of course very unequal between underdeveloped countries, depending on their potential and the level of development they had already attained. But the hope for a new increase in the global mass of capitalist profit lay in this: a degree of industrialization of the underdeveloped countries based on the intensive exploitation of cheap labour in those countries. This exploitation would pose all the fewer problems because it would involve working classes which were unorganized or little organized, with limited political and trade union consciousness. They would therefore be insufficiently prepared to wage powerful struggles comparable to those of the working classes in the developed countries which were successful in imposing a certain wage level. What was more, the numerous totalitarian dictatorships in the underdeveloped countries acted as guarantors of the interests of capital.
But an important problem still remained: that of the continual decline in the food supply in a considerable number of underdeveloped countries. Wages are a function of the costs of reproduction of the labour force. The cost of food is the essential element in underdeveloped countries, and the food crisis, which led to the import of foodstuffs to feed the working classes in these countries, could not but lead to a substantial rise in wages there.
These foodstuffs necessarily cost more because they had been produced within the capitalist mode of production. In order then to minimize the costs of maintaining the labour force, it was necessary to reduce the cost of its physiological reproduction. Thus, it became urgent to increase food production rapidly and significantly. Local foodstuffs which cost far less would then be available for workers who would then be offered lower wages. Capital would thus be able to go on quietly making money.
It is, therefore, no accident that the growing interest in the food sector on the part of international financial institutions is occurring just when the trend towards transferring some industries to the underdeveloped countries is gathering strength. We believe the two phenomena are linked. It is, moreover, symptomatic that in the agricultural section of the basic needs strategy the emphasis is put only on increasing production, with no concern about knowing whether an increase in production can be accompanied by a decrease in the peasant producers' level of food consumption. This makes one very sceptical about the humanitarian argument used - 'the fundamental case for development assistance is the moral one'3 - and one might wonder whether improving the standard of living of small peasants is the real objective aimed at. It may be, however, that this aspect is not being wholly ignored. But in that case, does not the apparent objective hide other, political designs? We shall return to this point.
What seems certain is that the general behaviour of national states and financial and credit agencies towards small producers in the framework of projects to develop food agriculture does not make it possible to say that the satisfaction of the basic needs of small peasants is the central concern. The example of Zaire where, in 1971, the state obliged the big mining and transport companies to invest in food crops (cereals and legumes) with the aim of supplying the workers in the cities, strengthens us in that belief. It is quite certain that, in this state decision, the interests of the peasant producers are a minor consideration. Even if there is more investment in this sector, they will enjoy little or nothing at all of the results of this investment which will be creamed off and directed elsewhere.
But the economic objectives are not the sole concern of agricultural policy in the framework of the basic needs strategy. There are also political concerns. They are sometimes quite clearly expressed in the official literature on basic needs. The repeated warnings against the spectre of revolution to governments hesitating to make even the tiniest changes in the socio-economic situation of their country, the repeated statements that famine and poverty constitute threats to the stability of the system are all so many indications of the political objectives which can be summed up as the defence and consolidation of the system. How can this be achieved? The attempt consists first in trying to forestall the upheavals that foment under the scourge of famine and prevent the revolt of the starving which might result. Next, by seeking to promote among the small peasants themselves a small well-off stratum attached to private property and able to act as a support for the development of capitalism in traditional agriculture.
It is true that the situation of poverty and famine which is developing in the dominated countries in the periphery is becoming a nightmare for the leaders of the system concerned about its overall stability. It is obvious that any revolutionary upheavals that supervened in the countries of the periphery would be bound to have serious repercussions on the capitalist countries of the centre. So the strategists of the system put forward one proposal after another for action to defuse the bomb of poverty. But in doing so, they run up against the contradictions inherent in the system itself. For in fact the political objectives of defending the system as a whole are often at odds with the immediate economic interests and objectives of those responsible for putting these proposals into effect, i.e., the dominant classes of the national states and the providers of funds. This contradiction takes the following form: how to fight against poverty and reduce suffering, while at the same time ensuring substantial profits for foreign investors and guaranteeing significant transfers to the benefit of these dominant classes and their bureaucracy, and all that through the implementation of development programmes based on the super-exploitation of these same poor people?
This is a fundamental contradiction. And despite the questions begged and the declarations of good intentions, the structures of the system end up imposing their laws, which have nothing to do with the 'moral' argument. The problem therefore remains one of knowing how to guarantee the stability of the system while reducing the threat to its periphery.
For the time being, since it is not possible to improve the lot of the poor, the attempt is being made rather to silence them by establishing or maintaining political dictatorships which at best manipulate the poor masses, and at worst purely and simply massacre them.
As for the other option which would consist in wanting to promote, within the mass of peasants, a well-off fraction capable of prospering within the system as it currently functions so as to be able later to defend it, that remains within the realm of the possible. We have, in fact, observed that a small minority of peasants who are rather better off before the implementation of projects sometimes succeeds in deriving substantial advantages from the execution of these projects. They can acquire means of production (a plough, carts, oxen, a seeder, etc.). They can enlarge their farms, or hire out services to peasants in difficulties. In this way they accumulate, which enables them gradually to separate themselves from the mass of the peasants through their income level and their conditions of production. They are naturally attached to private ownership of the means of production and there is no doubt at all that they will fight fiercely to preserve it. They constitute links in the system, and it is hoped that they will acquire sufficient political power to play the role of leading the great mass of peasants and involving them in the defence of the system.
But it seems more likely that things will turn out otherwise: a mass of peasants getting poorer by the year will surely end up openly fighting against a minority that gets richer by the year with the support of the leaders of the system. Only the ensuing class struggle will open up the hope of a radical reordering of the system.
To conclude, it could be said that the capitalist system has experienced regular periods of crisis of varying importance, followed by periods of a return to a certain equilibrium under the impact of measures that are often simply conjunctural. This system is currently experiencing a prolonged crisis which is manifested in various forms and is eating it away at various levels.
The basic needs strategy is part - even though in a very secondary manner - of the panoply of ways and means being tried out to rediscover this equilibrium which is never anything but an unstable equilibrium. These few comments from an examination of its agricultural section will perhaps have made it possible to bring out, to some extent, the insurmountable contradictions with which the system is confronted.
1. Speech by the President of the World Bank, Nairobi, 1973.
2. Uma Lele, The Design for Rural Development (Washington D.C., Johns Hopkins University Press for the World Bank, 1975).
3. Speech by the President of the World Bank, Nairobi, 1973.
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