Outgrower schemes and sugar value-chains in Zambia: Rethinking determinants of rural inclusion and exclusion

Highlights

• We explore structural (prodution) and non-structural (non-production) determinants of inclusion and exclusion.

• Terms and conditions underpin divergent outcomes for smallholders included in sugar value-chains.

• Micro-processes in outgrower schemes produce diverse but interdependent hierarchies of inclusion and exclusion.

• Reactions to changes in land-use and land control is important in exposing competing interests in outgrower schemes.

• Polices, institutions and investments should be strenghthened for improved value-chain impacts across social groups.

Abstract

Integration of smallholders in outgrower schemes has been advanced as a strategy for poverty reduction in the global south, but how terms and conditions of inclusion and exclusion shape divergent outcomes, and processes underpinning these local dynamics remain an under-researched area. This study, set in Zambia’s southern ‘sugarbelt’ region of Mazabuka, draws on two contrasting outgrower schemes to examine determinants of smallholder inclusion in sugar value-chains, and consider how various terms and conditions underpining inclusion shape various interests, reactions and pathways for value capture among different local groups. Our study reaveals terms and conditions are important in shaping divergent outcomes for smallholders included in sugar value-chains. It shows determinants of inclusion and exclusion are complex and go beyond market imperatives that are production related (structural) to include social-cultural dynamics (non-structural). The centrality of the paper points to lived realities and experiences for different groups and political reactions from below, underlining how socially contested intersection of global–local value-chain produces diverse but interdependent hierarchies of inclusion and exclusion. For an early stage in planning of outgrower schemes by state and non-state actors, recognition of the various social groups and their complex engagement and reactions to changes in land-use and land control will not only expose competing interests but should inform polices, institutions and investments to improve value-chain impacts. This paper hopes to contribute towards a more nuanced understanding of the complex engagement of smallholders in changes in land use and land control in developing countries in the era of land-grabbing.

Introduction

In the past two decades, the sugar industry has expanded rapidly in Southern Africa (Dubb et al., 2016, Dubb, 2016, Richardson, 2010, Hess et al., 2016). Buttressed by short-run access to the European Union’s internal markets (Dubb et al., 2016, Dubb, 2016, Richardson-Ngwenya and Richardson, 2014), the industry has found its place in the contemporary development landscape as presenting opportunities for smallholder value-chain inclusion and prospects for rural development (Dubb, 2016, Dubb et al., 2016, Richardson, 2010, World Bank, 2009a). Dubbed ‘big-sugar’ on scale and political influence, investment in the industry have raised controversies around ‘land-grabbing,’ and the role of smallholder farmers (Richardson, 2010, Smalley, 2013, World Bank, 2011). Yet, local interests and responses based on smallholder positioning within value-chains, political reactions to land-use and land control change remain peripheral to the contemporary land-grab debate (World Bank, 2011, Braun, von, and Meinzen-Dick, 2009) except for recent efforts (Xu, 2019).

Although sugarcane production in southern Africa has been described as both commercial and developmental, enclosures on land, water and other natural resources have ignited debate about the relative merits of LaSAIs, agribusiness concentration and coordination arrangements shaping smallholder participation in value-chains (World Bank, 2008, Collier and Dercon, 2013, Baglioni and Gibbon, 2013). Critical agrarian studies have increasingly promoted contract farming and outgrower schemes as alternatives to outright land purchases and as inclusive business models in which local smallholder farmers can participate – stereotyped as ‘win-win’ arrangements (Cotula et al., 2009, Borras et al., 2011). They emphasise capital investments in different settings and their related logics, state policies and politics (Dubb et al., 2016, Dubb, 2016), livelihoods and implications for labour and social differentiation (Manda, Dougill, & Tallontire, 2018a).

Previous studies have shown terms of outgrowing contracts are diverse, generating different pathways for the distribution of risks and gains which re-organises class relations in rural geographies (Oya, 2012, Smalley, 2013). For instance, outgrowers are generally smallholders using their own land and labour for production within a commercial relationship for output marketing and input supply but recent developments in southern Africa show smallholders can cede their land for a dividend as land owners – dubbed ‘shareholder outgrowing’ (Hall et al., 2017, Matenga and Hichaambwa, 2017). A different set of literature has focused on smallholder agency and their related forms of, and political dynamics of resistance, highlighting how struggles around land deals go beyond resistance and expulsion (Hall et al., 2015, Xu, 2019). The argument is that ‘political reactions from below’, highlight how local people negotiate dynamics of inclusion and exclusion in value-chains and implications for prospects of local accumulation (Hall et al., 2015). With exceptions, little research and analysis is available on how activation of value-chains in different settings including terms and conditions for value-chain inclusion and/or exclusion shape diverse outcomes, and processes that underpin these dynamics in local communities. There is a gap in understanding interactions between processes and forms of inclusion in value-chains and commercial agriculture on the one hand and land and labour relations and dynamics in the local economies on the other (Hall, Scoones, & Tsikata, 2017).

The problem with existing agrarian political economy literature is that it misses essential contours and trajectories of political reactions from below. With rapidly changing agrarian contexts across sub-Saharan Africa (Collier and Dercon, 2013, World Bank, 2009a, Wiggins et al., 2010), this literature misses important inclusionary and exclusionary dynamics and diverse factors that shape local outcomes. Some of these relate to an overly focus on local resistance against corporations or state, ignoring intra-or inter community conflicts/divergencies even among the poor themselves. The centrality of land and struggles of access by local people has tended to ignore other triggers of political reactions from below. Ignored also are struggles of smallholders included in value-chains, focusing instead on the struggles of the excluded. Yet, smallholders are not a homogenous category (Borras and Franco, 2012, Hall et al., 2015). As Xu (2019) notes: [t]hey have distinct resource endowments (e.g. land control, labour conditions, financial resources and social resources) and are embedded in certain political-economic environments” (p.3). Smallholders thus face different circumstances and that their responses to value-chains expansion differ. How and why socially differentiated groups respond differently to expanding value-chains within the same industry and local setting remains an interesting area of research and is central to this researcher (Bolwig et al., 2010, Tobin et al., 2016).

This paper addresses two principal objectives. The first explores terms and conditions for sugar value-chain inclusion in differently structured outgrower schemes and how these shape outcomes in southern Zambia. The second focuses on processes shaping inclusion and/or non-inclusion in sugar value-chains – structural and non-structural – and how local reactions differ. By doing so, the paper highlights complex layers of inclusion and exclusion for smallholders variously linked to sugar value-chains, important for rethinking rural politics, the nature and character of value-chain participation and/or non-participation (Xu, 2019). These elements can be addressed by unpacking social-economic and political processes that underpin inclusion and exclusion in local spaces, and then linking these to interests of, and reactions from local groups. This paper is structured into five main sections. In the next section, the paper introduces framings of inclusion and exclusion in value-chains and political reactions from below. Section three is the methodology. Research findings are presented in section four, and based on these results, the paper reflects on understanding of key trajectories of investment options for smallholders and political reactions from below in section five.