Agribusiness and underdevelopment in Kenya:A case study of B.A.T. Kenya Limited in South Nyanza
Okumu, Joshua A
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It is a historical fact that in most parts of the Third World, agricultural production, formerly in the hands of peasants or small farmers, is increasingly becoming dominated by big corporation named agribusiness. The latter term describes a broad range of large transnational companies which are involved in several aspects of food production, including the supply of agricultural inputs, farming, food processing, and transport and distribution of food.Vertically integrated and centrally organised, these companies take decisions based on their own criteria of economic rationality w i thout taking into consideration the developmental needs of the areas they invest in. Although they do cloth their investments with the rhetoric, such as development and social uplift, agribusiness transnational are largely concerned with finding profitable means of involvement in food and agricultural production but not with the transformation of the peasantry in the Third World.Hence,. the central objective of this study has been to investigate the developmental impact of one such corporation namely B.A.T in South Nyanza, in respect to poverty, inequality and unemployment, with a view to demonstrating how such corporations underdevelop rural parts of Kenya. We used avariety of data inc,luding: survey data, public records or documents and observations. The survey was conducted in Tobacco producing divisions of South Nyanza District namely Migori, Kehancha, Rongo, Oyugis, Ndhiwa, and Rangwe. Those interviewed were: B.A.T contracted Tobacco farmers, B.A.T leaf technicians, the divisional leaf managers for Oyani, Taranganya, and Subkuria. We also interviewed B.A.T leaf director and the company's public relations manager. The questionnaire used in interviewing the farmers was designed to tap information on their socio-economic character istics while Lnterv i ew schedule with B.A. T staff sought information on the history and development of Tobacco production, the corporation's investments and employees remuneration. The study also utilised secondary data such as annual reports and evaluations as well as publications and records kept by B.A.T. The DDC annual report and development plans and District Agricultural officers reports. Reference was also made to previous researches on Agribusiness by other scholars.In this study therefore, we have argued that B.A.T has exacerbated. poverty by emphasizing on the production of tobacco at the expense of food crops, thereby encouraging famine in the district. We have also argued that BAT through its heavy investment in advertisement has promoted the consumption of tobacco and other cigarettes which are luxurious at the expense of nutritious products, thereby exacerbating poverty. That because of mass felling of trees for curing tobacco and construction of tobacco burns, BAT encourages ecological degradation in the district.In relation to unemployment we have argued that BAT has monopolized the tobacco industry since its inception in Kenyain 1930. This monopolization has led to displacement of local capi tal and entrepreneurship thus stif ling the creation of more jobs that may come with the establishment of another company in this industry.That BAT repatriates its profits abroad rather than using it to further local accumulation. This limits its long term employment contribution. Also because of excessive importation of inputs, the corporation has limited the secondary employment through the backward linkages. We have also argued that BAT has promoted the growth of inequality in South Nyanza by first putting very stringent conditions on its contracted farmers so that only' a few peasants would qualify to participate in its operations. Not only has the high salaries for its employees caused inequality but also BAT tends to concentrate its activities in the rich agricultural land to the exclusion of the marginal parts of the district bordering Lake Victoria, and thereby causes regional inequality.Lastly taking all the above into consideration, we have argued that BAT investment in South Nyanza has promoted development of underdevelopment as postulated by the dependency approach namely groo/th in income per capita accompanied with increase in poverty, inequality and unemployment. However, despite of their negative impact, Agribusiness corporations have become necessary evils in the developing economies and indeed many countries have imposed performance requirement on them thereby making their benefits accrue to those economies. In the case of B.A. T investment in South Nyanza, this study recommends that the Government should restrict the growing of Tobacco to small acres of arable land to arrest the competition for fertile land between Tobacco and food crops. That as a matter of policy, Tobacco industry should be liberalised to do away with the negative effects of B.A.T monopolistic position.Further research be done on ~he environmental impact of Acephate and Anilazine on Tobacco growing areas. More research be done on the Tobacco curing wood fuel consumption with the objective of reducing the amount of wood used in this exercise. That B.A. T. should be made to sign an agreement committing the latter to purchase its goods and services from the local market so as to promote backward linkages and save the economy from constant loss of foreign exchange through excessive importation.