2.1 - The strategies of the agents, the organization and regulation of supply networks
2.2 - Supply channels
2.3 -The town and the intersection of the circuits
2.4 - Conclusion: what are the prospects and what actions are needed?
An internal understanding of African circuits is obviously complementary to, and probably more important than the external interpretation of it.
Account should be taken of the strategies adopted by the agents faced with the instabilities giving rise to risk and uncertainty, and the way they are organized in an institutional environment (Hugon, Pourcet & Quiers-Valette, 1994). On the one hand, the markets are poorly integrated and trading relations are only one form of coordination amongst many others. On the other hand, the public circuits supervised by governments have failed. The towns are supplied through networks in which there are domestic, trading, public and industrial rationales at work (Hugon, 1985). These are implemented in the form of regulatory frameworks and in institutional contexts. The municipal and central government public decision makers have resources of varying magnitudes at their disposal to regulate these circuits.
The operators who actually supply and distribute commodities act in an unstable universe, fraught with risks or uncertainties. This is why the vagaries cannot be probabilized and the arbitrage between risk (probabilizable)/profitability gives way to the arbitrage between uncertainty (non-probabilizable) and liquidity. The preference for liquidity, combined with the precarious nature of different situations (the thirst for money) and the search for reversible processes, leads to a high level of flexibility and short-termism on the part of the operators (a more rapid rate of return on advanced capital investment) (Hugon, 1993). Technical efficiency and the fact of taking account of the long term are guaranteed by networked organizations, making the operation permanent and reducing uncertainties. These networks can be organized on family, religious or ethnic bases. They cut transaction costs, and make spatial, time and social proximity possible, and work of the basis of relationships of trust and reliability.
Conversely the imported foodstuff supply circuits reduce costs thanks to economies of scale for standardized products. But they do not provide accessibility unless they are dovetailed with the circuits which create divisibility to cater for customers with a very low purchasing power, and only if they adapt to very unstable markets, and hence by creating flexibility. The industrial rationale is articulated with more or less informal networks.
One therefore finds combinations between modes of organization which seek to reconcile flexibility and reversibility which are necessary to manage the factors of instability, and the permanency and irreversibility of the techniques needed to ensure efficiency (Hugon, 1977).
Table 9 - The organization of the supply circuits
| Efficiency |
Flexibility | Weak |
Strong |
|
Traditional domestic organization | |||
|
Channels of industrial organization (economies of scale, capitalist
process) | |||
|
Small trading production (informal) | |||
| Networks | |||
The result is an organization of the supply circuits that may be analysed from various points of view:
2.2.1 - Transport
2.2.2 - Storage
2.2.3 - Marketing
We feel that the food supply system can be understood by analysing it in terms of several circuits, networks or specialized channels viewed as ideal types. We will draw a distinction between four “channels”. Their siting presupposes that there exists a relationship between the levels of organization, the techniques used, the scales and the benchmark spaces (local, regional, national, international); in this way we can differentiate the space of the channel, defined in terms of the siting of different operations and the geographical space (for example, the urban space), the place where the channels intersect, or in terms of segments of channels.
The meso-system, or the intersections between different channels, in an intermediate place in order to understand - beyond the sequence of technical operations upstream and downstream, the dynamic of the subsystems within which force fields operate, trading and non-trading relations are established, modes of organization are implemented together with the strategies of the agents whose objectives and means used to achieve them have different levels of compatibility or incompatibility. Within these channels there are strategic segments defined by the places for establishing values, through the control of technology or the control of accumulation possibilities (De Bandt & Hugon, 1988; Hugon in Benoit Cattin, Griffon & Guillaumont, 1994).
Adjusting the production systems to different modes of food consumption is carried out by operations which take on board the changes in the raw material (processing), in space (transport), in time (storage), and in allocation (distribution). The forms of production, trading and consumption are based on techniques that are more or less capitalist: they are effected by units varying in size and are organized using different forms of coordination.
Transport from the farm to the urban market generally takes place in at least four stages:
The towns, particularly those on the seaboard, are better linked to the external circuits (South-East Asia for rice, North America and Europe for cereals, Latin America or South Africa for meat, etc.) than to the national areas of production. This lack of a local linkage is even greater when the international transport costs are lower, while the national transport costs increase to keep pace with the cost of energy.
The decline in international transport costs and improvements made to domestic overland transport have done a great deal to change the supply circuits and have hastened the urbanization process. Thus the city of Kinshasa (three million inhabitants) is supplied by the large international hauliers of wheat, rice and imported meat. It is also supplied by peri-urban agriculture and by suppliers walking or travelling by taxis. But it is above all supplied by small transporters coming from all over Lower Zaïre and a large area of Bandundu, which covers an area of 50 000 km2.
By shifting the supply in terms of time, storage plays a seasonal price stabilization role or is able to help guarantee food supplies from one year to the next; it can also be used to speculate on deliberately-created shortages. The question of buffer stocks managed by the public authorities (local) whether national or regional, or by private operators is a central issue.
2.2.3.1 - Domestic circuits
2.2.3.2 - The trading circuits organized on an artisanal basis
2.2.3.3 - The public circuits
2.2.3.4 - The international capitalist circuits
Marketing operations depend on the distance between the producers and consumers in terms of their timing and complexity:
The authorities have often tried, with limited success, to control the private marketing circuits or to replace them with public marketing agencies, out of a desire to protect urban consumers and producers against irregular practices by intermediaries, or to acquire rural surpluses at source. Today, under the influence of the international fund donors, the public monopolies have been dismantled to give way to private trade.
We shall draw a distinction between four main channels, circuits or networks, in terms of their technology, organization, mode of regulation and spatial dimension:
Table 10 - Types of food supply circuits in Africa
|
Dominant mode for regulating the channel | ||
|
| Domestic | |
| |
| Trading artisanal
or informal |
| |
Government | |
|
| |
Imported industrial technology. Wage or semi-wage earners. Administrative supervision.
Capitalist technology. |
|
| Capitalist and industrial
(agribusiness). | |
|
| |
Technological revolution. Agro-industrial complexes. Wage-earner relations.
Bank supervision. Technical innovation and apprenticeship. Capitalist techniques. |
The domestic circuits are characterized by family, ethnic or religious proximity. They can be specified in terms of the modes of production, transport, distribution or use of the food products, which establish trust through personal bonds and through obligations.
Modes of production are characterized by the technical and social division of labour (for example, the division between older and younger brothers, men and women, masters and servants) corresponding to the techniques used and to the arbitration of the allocation of household working times. Rules for conserving, sharing and distributing food are laid down according to existing rules. Uses of food are codified (forbidden, the symbolic value of goods, non-convertibility between these goods).
The town is not necessarily a place where domestic circuits and inter-family flows are suppressed or even reduced. In a period of urban crisis there is a tendency to strengthen these non-trading relations; they make the urban agrifood system highly flexible.
Many supply circuits are operated directly by peri-urban town/country movements. About three-quarters of the residents in Dakar came from Khombole and returned there in 1983 during the dry season, in the cropping season (Bricas, 1996). These temporary migrations are one of the main forms of food supply. The crisis is leading to new arbitration between domestic consumption and non-home consumption. The rehabilitation of the streets, and the travelling sellers constitute between one-third and one-half of the rice sales in Ouagadougou (in 1989 it is estimated that domestic consumption in the urban environment of Benin or Mali was about one-fifth of all monetary incomes).
The vitality of the domestic social networks has done a great deal to cushion the urban and food crisis. Incorporation into the town is supervised by groups and associations set up on family, cultural and religious bases. The ruralization of the towns is shown in terms of the localized proximity cultures, by the existence of town dwellers-country dwellers, by the development of agro-urban and intra-urban intensive agriculture systems. The boundaries of the urban lands are increasing peri-urban movement. If a counter-urbanization movement is not evident, the time spent by the urban dwellers in the rural zone increases (Dubresson, 1996).
Within the trading circuits organized on an artisanal basis, the agents relate through the market. These are small-scale activities, organized according to non-wage earner relations, where techniques are simple and advanced capital is weak, but where there is monetary circulation and the interplay of prices. Food is a merchandise.
These decentralized circuits, often networked, adapt to the high level of instability and are based upon personal bonds. These merchant circuits or channels are characterized by a division of labour in which the direct producers, processors, transporters, storage operators, retailers and wholesalers, distributors and cooks preparing food in the street are all involved, making it possible to channel through the products, to create storage services and make it possible to divide supplies and provide access to the end-users.
These trading circuits are tending to standardize and stabilize specific eating patterns; they are changing the places where products are processed and are broadening the area of circulation of the merchandise at the following levels:
These circuits operate on regional, infranational and inter-African, both localized and segmented, markets, which explains the wide degree of heterogeneity and instability of prices and the absence of the rule of a single price due to market integration. The intermediation function between the producers of unprocessed goods and the final consumer is strategic.
Surveys have shown that there is also a transfer of peasant processing activities towards the urban craftsman (of cassava that used to be marketed in the form of chikwangue, and today in the form of foufou in the Congo, for example) and at the same time a transfer of domestic food preparation activities towards the market. In Côte d’Ivoire, the production of attiéké requires a division of labour between the husband who produces the roots, the wife who takes responsibility for most of the preparatory work, the artisan who mills the product and a parallel circuit supplying leaves. Likewise in Nigeria, the preparation of gari, according to an FAO survey, mobilizes one million women who work 40 hours on it; three-quarters of Nigeria’s cassava production (nine million tonnes) is therefore processed into gari, providing two million tonnes which are then consumed (Requier-Desjardins, 1989).
Except for certain specific products (bread, beer, preserved food) the international circuits generally seem to be incapable of meeting the otherwise meetable demands of the majority, of creating divisibility and showing the flexibility which the small trading activities are able to guarantee. The town, and the market which can be catered for, are an essential factor in stimulating this small trading production, not only for market gardening produce and small-scale livestock production, but also for the foodstuffs needed to meet urban demand.
The private food marketing circuits to serve the urban centres incorporate a variety of different operations (purchasing from the producer, storage, transport, wholesaling, semi-wholesaling and retailing on the urban markets, etc.) involving a large number of different agents. The organization of these circuits varies depending upon the country, the products being marketed and the distance between the places of production and the places where products are marketed.
The private micro-retail trade virtually has a monopoly in most African towns on supplying local foodstuffs (“Market mamies” in Ghana, “Bayam Selam” in Cameroon, etc.) and has withstood many measures to nationalize trade; in quantitative terms, it represents the most important “informal” activity.
Long distance trading is segmented: a large number of operators in different places work in this channel linking producers to consumers. In Sahelian Africa several categories of traders are involved in the “long haul” circuits of cereal products:
Running parallel to this tree-like structure, the “casual traders” use the opportunity for travelling to take cereals with them and to sell them on urban markets.
The large number of different agents involved in the food distribution channels cannot be used to gauge the level of competition on these networks. The absence or the weakness of the distribution or transport, storage and packaging circuits, the fact that the production zones are cut off and the weakness in the urban grid all help to ensure that these networks are structured in the forms of monopsonies or oligopsonies.
According to a survey carried out by Franqueville in 1973 of the markets in Yaoundé, 80 per cent of the sellers came from a radius of less than 50 km. The “Bayam Selam” play an essential role in supplying the two main urban centres. In the small towns close to Douala, like Muea, 2 000 traders work on the days of both weekday markets in order to take on supplies of foodstuffs from the peri-urban zones and they re-export them to such urban centres such as Douala, or to Nigeria. The large straggling villages are places in which goods are collected and redistributed in the direction of the large towns according to Parrot’s survey in 1996. Even though urban growth has increased the density of occupation, and even though land speculation has often caused agriculture intra muros to disappear altogether, the areas of peri-urban production which supply the “silent markets” remain key areas in the supply of large African towns. According to some surveys, 72 per cent of the supplies to the capital city in 1962 came from the Pool region (the hinterland of Brazzaville) and more particularly from the areas situated along the main road RN1 (Brazzaville-Pointe Noire) between 20 and 70 km from the town centre. These figures were confirmed 30 years later.
There are about ten categories of operators on the Nigerian cereals market; the number of intermediaries depends above all on:
African central government and local authority intervention in the food marketing circuits has often been justified in the past because of a desire to make up for the consequences of imperfect competition in the private distribution circuits (Malthusianism, monopsony pricing, poor or under-utilization of production areas). The government may be content with merely regulating (particularly on the delivery prices). But it may also act as a fully fledged economic agent, setting up substitution circuits (public marketing boards).
The public or parastatal supply circuits have been created as a result of a non-coercive creative process by the local authorities or the state. They are defined in terms of certain objectives:
The circuits are designed at the national level and comprise the following operations:
The authorities have laid down medium and long-term plans designed to reduce unpredictable factors or monopoly incomes from the domestic trading circuits and the international circuits. They are based both on foreign firms (by providing various kinds of incentives) and on domestic private operators, and more often on state-owned corporations or jointly state/private-owned companies. Regulation is guaranteed by all the state measures adopted (public investment, administered prices, protection).
Taken as a whole, the public and parastatal circuits are not very efficient. The main agricultural production operations in the rice industry (SAED in Senegal, MOPTI in Mali, SEMRI in Cameroon, SOMALAC in Madagascar) have been comparative failures; in some cases, as in Senegal, they even reached the limit of subsidizing rice three or four times more costly than on the international market and to see the peasants consuming it themselves. The state farms in the Congo and in Madagascar have failed similarly.
There is also a low level of efficiency in the cooperative and state marketing structures. The OCV in the Congo, OPAM in Mali, ONCAD in Senegal, SINPA in Madagascar or MIDEVIV in Cameroon were designed to bring about the recovery of food product marketing and to cash in on the commercial margins, but they made late payments, purchase from the small farmers at lower prices and sold the products at the same and even higher prices to the urban consumers. These organizations financed a very costly techno-structure which was very inflexible, even though they were public services and managed to prevent speculation.
The public structures play an essential role in Senegal in the rice industry (Benz, 1996). It is estimated that 35 000 tonnes of the 160 tonnes produced in 1988/89 were marketed through the public circuits, 30-50 000 tonnes through private circuits and 75-95 000 tonnes were processed on an artisanal basis and consumed by the producers. The farmers choose partly between the official SAED circuit and the private circuit, but often they pay SAED in kind in order to refund or pay taxes or royalties, or to repay CNCAS loans. In the Senegal River valley, the public sector which was responsible for all the functions relating to collection, processing and distribution, is gradually giving way to the private sector. Senegalese rice is not very competitive with Asian rice. The centralized organization is creating high costs both in terms of production and marketing.
These public supply circuits have not been as efficient in the past as they were expected to be. They have been seriously challenged by liberalization and privatization policies that have been implemented since the early ‘80s.
The international circuits for supplying towns have three main sources:
Agriculture, negotiation, processing, distribution and rehabilitation are all links in the same chain and are characterized by a technological revolution which affects agriculture upstream (biotechnology) and downstream of distribution (packaging, containerization, conservation). Agriculture becomes a mere secondary link within the chain. The large multinationals form the centre of inflows which dynamize the whole system. It is estimated that between 85 and 90 per cent of the wheat and maize trade and 70 per cent of the rice trade are controlled by the multinationals. By intervening on international oligopolistic markets, the multinationals rely on relations with the government in order to dispose of their surpluses and to penetrate the exterior markets. By establishing a certain standardization of eating patterns, the agribusiness is creating progress in terms of productivity, and helping to lower merchandise prices.
The penetration of the external markets takes place in the framework of the oligopolistic competition between large firms, but also by relying on international cooperation and aid relations (export subsidies, food aid). By controlling the main unpredictable features by controlling information and by effectively managing them, which makes it possible to affect the process of differentiation between the different national areas, the large corporations have medium and long-term strategies which enable them to control the strategic links within the various chains.
The role of the multinationals in Africa is comparatively small, however. Direct investment is small. The markets that can be catered for are weak. Standardized products find it difficult to penetrate markets characterized by a high level of heterogeneity of feeding patterns. The low level of development of agricultural or industrial capitalist units is creating few outlets for equipment, machines or inputs supplied by the agribusiness. Only a few links in the transnational chain have penetrated into African societies: upstream of agriculture (fertilizer, equipment), IAA.
The town is the largest area of integration into international circuits, for setting up a cold chain, for locating foreign branches or providing access to international goods (it is still necessary to examine their geographical location). However it is also a place where different internal intermediation operations are set up. In the town there is certainly a dissemination of imported consumption models, but the effects differ from one town and one type of feeding pattern to another. The town is generally more a place in which new feeding patterns are recomposed than places where there is a split with the rural world.
The breakdown by type that we have just described makes it possible to avoid a breakdown by branches or by commodity of little significance, because the “same commodities” have neither the same values in terms of use, nor the same social values, and because the circuits are highly segmented. However, this leads to an amplification of the organizational differences when the practices lead to complex combinations.
There are a large number of supply systems, which overlap. The operators combine different forms of domestic, artisanal, industrial and administrative organization in the form of networks, or they develop interlocking strategies making up a meso-system.
The specific reality of African societies is characterized by intersections and interconnections between the circuits or the segments of the different channels. Certainly each one has its own dynamics, operating on different scales and within different time frames. There is not necessarily any absorption or dominance on the part of large-scale organizations with advanced technologies in respect of other organizations. The operation of the town supply modes nevertheless needs to competition or complementarity between the segments of different circuits.
In the present crisis from which Africa is suffering at the present time, the observer can therefore study the re-emergence of domestic circuits (demonetization of the economies, the reduction in trading relations) or the dynamics of the trading networks. Conversely the government channels are directly suffering from the supply and financing crises even though the integration of the African economies into the international market is taking place meanwhile downstream (imports of food products at the expense of capital equipment) and through inputs.
These relations of competition or complementarity also stem from the central governments’ overall policies. The non-coercive measures to set up central government circuits through external protectionism and internal subsidies (administrative pricing, real negative interest rates) are creating distortions between the production structures and the structures of food consumption, while the latter are creating national or international parallel circuits which are boosting the trading networks. Conversely the liberalization policies are leading to exclusions because of a lack of demand that might stimulate the domestic units.
The urban networks are characterized by an interweaving of different supply circuits whose respective importance differs according to the society, the regulation policies and the macroeconomic context.
Two main combinations are developing: the one between the capitalist industrial organizations and the trading networks, in order to combine effectiveness and flexibility, and one between the domestic units and the trading networks in order to ensure food security for households.
2.4.1 - What are the prospects for the towns?
2.4.2 - What are the prospects for agriculture?
2.4.3 - Which supply circuits?
2.4.4 - How to manage food supplies to the towns?
Past developments have shown that Africa’s food crop farming and supply circuits have, as a whole, responded to the urban challenge. The agricultural system marketed by the small farmers has increased at the same rate as the non-farm population to the farming population. Between 1930 and 2030 the urban world will have absorbed 70 per cent of the population increase.
Linkage to the market has been gradually established through the traded foodstuffs, which has played an increasing share in the traded GDP and in the agricultural GDP, at the expense of export crops and food produced for household consumption. By having given priority to ensuring low prices in the towns, the foodstuff supply practices have certainly not encouraged the domestic market to become more dynamic. Even so, the food production sold on the market has risen from 56 per cent of the GDP from agriculture monetized in 1970 to 73 per cent in 1990 for West Africa (WALTPS, 1994). Taken as a whole, the rural population density trend has kept pace with the development of the urban markets.
Incentives to production have increased in terms of proximity to the towns, but construction constraints have increased. The result of these adverse factors has meant that the productivity per surface unit and per farmer is inversely proportional to the distance from the towns.
The question now arises as to whether this past trend is going to continue, and whether it will be possible to supply the towns without too many difficulties and crises.
The fall in the migration balance from two to one per cent per year, coupled with the decline in natural growth rate from 3 to 2.5% per year suggests that the urban population growth will fall from 5 to 3.5% by the year 2020. Between 1990 and 2020 the urban population will grow at an average of 4.2% in West Africa, compared with 6.3% between 1960 and 1990. The urban population will increase 3.5-fold. It may be reckoned that the rural population will grow by 1% per year, making an increase of 40%. At a constant urbanization rate, the average growth rate of the towns is likely to be around 2.69%, compared with 3.35% for the period 1960/1980. In absolute terms, this will cause the urban population to double in less than 20 years.
Cash food crop agriculture must meet these growing needs. The result is likely to be an increasing differentiation within the peasant communities. According to WALTPS forecasts, by 2020 agriculture will provide 14% of gross regional product, 25 million farmers (15% of the total) will produce the amount necessary to supply 40% of the consumers, namely 100 million people; their productivity will be five times the self-subsistence level while the average productivity of the 150 million farmers will remain around twice the subsistence level. One may reckon that the calorie requirements will increase sharply. This is put at 250% between 1995 and 2050. Most of the energy will be of plant origin.
Intra-regional trade by the trading circuits will play an increasing role in supplying the towns. Regional trade will account for 22% of imports compared with 9% in 1990. The imported portion of the food demand will rise from 11% to 15%. Intra-regional trade will provide more than one-half, compared with 14% in 1990 (WALTPS forecasts).
Everything suggests that there will be a great instability in international prices and a tendency for food product prices to rise as a result of the reduced subsidies and protection afforded to agriculture in the industrialized countries following the WTO agreements. Africa’s food bill is likely to rise sharply if import substitution is not practised to a significant degree.
A variety of supply circuits will be maintained. Intensive agriculture will be sited more in terms of the land tenure conditions than proximity to the market. Intensified agriculture in areas lying far away from the towns will nevertheless make it necessary for intermediation to become more highly professional. It will reduce the importance of domestic and short circuits. If public circuits have little chance of being revived, the domestic circuits will continue to exist but will play a secondary role in terms of the trading circuits. Wholesalers will play a major role there. The trading circuits will be dovetailed with industrial organizations.
It will be necessary to manage spatial disparities through physical planning and a dense infrastructure network. In francophone West Africa, Abidjan and Dakar will be the locomotive markets. If urban networks are to be developed more densely and supplies intensified medium-haul means of transport must be considerably improved. Most of the links will be with the hinterland of the coastal areas in West Africa.
We have seen the complexity of the supply circuits which presuppose a “piloting” on different scales and levels.
Quite clearly, account has to be taken of the main gross trends which are taking place on both the international market and demographic factors, and accordingly put into place forecasting units. Great flexibility will also be necessary in policies in order to respond to the instabilities and risks and to have emergency units to respond immediately to disasters (drought, war, and epidemics).
It will be equally important to implement actions at the level of the decentralized authorities and municipalities. These will only be effective if they make it possible for the different public and private agents to act on a concerted basis within the supply channels. Contractual relations are generally more effective when faced with the ineffectiveness of the bureaucratic structures and the risk of market speculation.
Lastly, action must be taken at the microeconomic level, both in districts, domestic units and at the level of individuals. The most vulnerable and exposed groups and individuals are those who are excluded both from the market (because of a lack of demand that can be met), the public circuits (because of a lack of access to subsidized or donated products) and family and social networks which distribute food. This presupposes a mobilization of the authorities, the neighbourhood associations and charitable organizations, both secular and religious, working jointly with and supported by the international donors.
