Debt, dependency and dicey economics

South Africa is the only country in Africa growing GE crops commercially. To our knowledge, it is the first place in the world where small-scale farmers have been introduced to GE crops.

The lack of food security in Africa is being played off against the success of Bt cotton farmers in Makhathini and is being used to put pressure on countries such as Uganda, Zambia, Zimbabwe to adopt GE crops. Much has been written about the benefits and risks of GE crops. It is widely agreed that a mere technology cannot be the solution to food security. In spite of this it is still the main argument that the agrochemical companies and the US are using to promote the technology.

Monsanto and the US use the case of Bt cotton in Makhathini in the following ways:
• To push the moral argument that by being cautious about GE crops, European consumers are depriving Africans of this new opportunity to feed themselves. To this end, one of the farmers was taken to the UK to promote their experience in Makhathini.
• The US trade representative, Robert Zoellick, had a ‘chance’ meeting with a farmer (TJ Buthelezi) to hear of the success of Bt. cotton with small-scale farmers.
• Farmers and journalists from African countries, such as Uganda, Zambia, Zimbabwe are taken to visit Mr Buthelezi’s fields and hear his success story.
• The US is taking the EU to the World Trade Organisation, saying that the EU’s labeling restrictions on GE form an illegal trade barrier, and contribute to hunger by discouraging Africans from importing and growing GE.
• USAID has taken Zambian and SADC policy makers and scientist on a tour of Makhathini to persuade them to soften their stance on GE food aid.
• The results from Makhathini are widely published, even though these are highly questionable and even researchers that have found positive results, acknowledge that the situation still has to unfold for the full impact to be realised.

Geography and environment
The region has six interlocking ecological zones that run from north to south parallel to the coastline. At the foot of the Lebombo mountain range, lying to the east is the Pongola Zone, which encompasses the floodplain and extensive pan system of the Pongola River. As it meanders towards the sea, it has given birth to a series of oxbow lakes and pans that are teeming with fish and bird life. Each year the spreading waters of the Pongola River replenish these pans as it floods its banks after the summer rains.

The floodplain tract is about 70km long and between half and one km wide. It plays a major role in the economic life of the people of the region. The alluvial soils have considerable agricultural potential. In general it is on these rich alluvial soils that the small-scale farmers undertake cotton production.

The ecology of the Pongola floodplain is finely tuned but is being increasingly disturbed, by the damming of the Pongola River at Jozini, and the increasing population and agricultural pressure on the floodplain. The Pongolapoort Dam was constructed in the 1960s for the growing of sugar cane under irrigation on the Makhathini Flats and with the construction of the dam the natural flood cyclce has been disturbed.

It is now necessary to artificially flood the system to ensure the fish spawning and plant growth continues as naturally as possible. The advantages of a major late summer release are threefold: Firstly fish spawn in summer and they need flooding in order to stimulate spawning; this will ensure a steady supply of fish in the winter and following early summer months. Secondly the pans will be filled and this will sustain them and so prevent them from drying out during the winter months. At the same time regular flooding will improve the quality of grasses and grazing throughout the whole year. Thirdly, annual summer floods will allow the people to plan their cropping strategies better and so avoid crop destruction through flooding.

The Ubombo Farmers Association, who are the farmers planting the most Bt cotton in the area, is a very strong organized group. They need the water from the Pongolapoort Dam to be released a few weeks earlier than the agreed time in order to start planting the cotton early. According to Mr Buthelezi the maturation period for Bollgard is on average two to four weeks shorter than that of other hybrid cottons in that area and provided that the flooding occurs earlier in the year, they can plant earlier and have more than one harvest period, increasing their yield substantially.

The normal flooding period had been established over the years through Department of Water Affairs and Forestry (DWAF) in consultation with the Floodplain farmers in order to best suit their normal subsistence crops, mainly maize and beans. The Ubombo Farmers Association lobbied DWAF for the earlier release of the water in 2000 and has been successful. People have raised the early release of water as an issue, as those farmers who are planting vegetables on the floodplains loose their crops on a regular basis.

Bt cotton in Makhathini
Cotton has been produced for over 15 years in the Ingwavuma/Ubombo region. The reasons why farmers continue to grow it are two-fold: 1.) It is a resilient crop that can withstand the harsh climate experienced in the region, and 2.) the farmers are assured of a market for this cash crop. It is important to note that the harsh climate of the region precludes the cultivation of most crops under dry land conditions. Cotton is one crop that can be cultivated under these harsh conditions. In initial years cotton production was done exclusively by dry land farmers on approximately 3ha land units.

Many people working on the floodplain believe that cotton growing is inappropriate with the flood plain management system due to its growing season, the amount of pesticides used, and because it is a very important and sensitive ecosystem.

Planting of Bt. cotton on the Makhathini Plains started in 1997 when it was introduced by Monsanto and Delta Pine with the support of the Department of Agriculture and the Landbank. Four Makhathini farmers participated in the first trials and soon farmers were purchasing and planting the seeds. During the 1997/8-planting season the Bt. cotton plant, sold as Bollgard, was introduced to the small-scale farmers of the Makhathini area. This crop was attractive to the farmers because they were told that it would reduce the amount of insecticide spraying needed. At the same time the Department of Agriculture’s Makhathini Research Station started planting trials of Bollgard to establish the yield potential. This was done under the auspices of the Agriculture Research Commission (ARC). Generally new cultivars are planted in trials for at least two to three years and must show that it has proven itself before it is released to be planted by farmers.

The total size of plots that the farmers have access to, varies from 2ha to 30 ha. None of the farmers interviewed kept any record of purchases, yields, or amounts of insecticides sprayed. It can be safely assumed that hardly any small-scale farmer on the Makhathini keeps farming records or financial spending records. Much of their financial lay-out for seeds, fertilizer, insecticides or herbicides, ploughing and agricultural tools is done through Vunisa, where records are kept for those farmers who are receiving loans from Vunisa or the Land Bank. These records are confidential and not available.

Monsanto has donated US$10 000 to the Ubombo Farmers Association for the purchase of planters for the 20012. T.J. Buthelezi, who has rented out some of his hectares of land to Delta Pine and Monsanto for the planting of Bt. cotton field trials, chairs this farmers association. The message being sent out to farmers is that should you use Bollgard, you will be rewarded in multiple ways: better yields and funding to purchase farming equipment.

Each farmer purchasing Bollgard seed must sign a Monsanto Technology Agreement before they can receive the seed. The grower agrees to the following:
• To use the seed for planting a commercial crop for only one season
• To plant a refuge as part of the insect resistance management strategy
• To not supply any seed containing Bollgard to any third party
• To not use or provide seed containing Bollgard to anyone for crop breeding, research or seed production
• To not ratoon any Bollgard cotton
• To allow Monsanto agents to inspect the grower’s fields in order to ensure that the correct refuge areas have been planted.

It is clear that the farmers do not understand what they are signing. During a survey in 2001, only one of twelve farmers planting Bollgard had been thoroughly informed of the contents of the contract signed. Only five farmers of the twelve farmers planting Bollgard were aware of the need to plant refuges. Of these only three were planting refuges.

Insecticide spraying brings challenges to communities such as those living on the Makhathini Floodplains. They can only afford the cheapest insecticide, which is often the most poisonous and from the older varieties on the market. Often they are unable to read instructions and although many farmers know how to apply the insecticide, it is not clear whether they train their labourers thoroughly. Water for dilution of the insecticide is taken from the same source as that used for collection of water for human and household consumption, resulting in the potential pollution of drinking water.

Since 1997, farmers in the Makhathini floodplains of northern Kwa-Zulu Natal have been growing Bt cotton, reportedly with high levels of success and adoption. This is now Monsanto’s flagship project and no time has been lost in generating propaganda to convince the rest of the world of the alleged benefits of genetic engineering for small farmers and food security. But this project might also be Monsanto’s Trojan horse, in the words of one researcher.3 There are many reasons why it would be a fundamental mistake for the rest of Africa to accept the apparent success of this project as a reason for adopting other GE crops. The circumstances under which Bt cotton was introduced cannot easily be replicated.

High dependency
The success of the Makhathini farmers has only been possible with high levels of support and infrastructure which is makes for exceptional circumstances compared to the vast majority of African farming conditions. Combined efforts of the South African Department of Agriculture, Monsanto, Vunisa (a private company) and the Land Bank (a government bank) have guaranteed farmers easy access to markets for their crops and credit to purchase inputs. Farmers have thus become highly dependent on outside actors – and highly vulnerable to the vagaries of the private sector.
Because cotton is a cash crop, farmers get loans to buy inputs. When they harvest, the input cost is immediately deducted from their payout. There are now two ginneries on the Flats, so they do not have a problem with transport or markets. While many farmers farm dryland cotton, the most successful Bt cotton farmers farm either on the floodplain or is part of the irrigation scheme. The companies owning the technology and selling seed, provide extension services and support to the farmers.

Unequal access
The marketing hype around Makhathini fails to reveal that it is not the most marginalized producers that are benefiting from Bt cotton, but rather the larger cotton producers that have access to land and – most importantly – to credit to enable purchase of the very costly Bt cotton seeds. The Landbank provides credit, Vunisa assess farmers and screen them. Credit worthiness plays a major role in the adoption of Bt cotton. The average loan recovery is 40 – 60%.4

Researchers from Reading University confirm that there is a potential that socio-economic problems could develop between farmers who can afford to take up the technology and those who cannot and so widen the poverty gap within the community. In selecting farmers, Vunisa targeted larger producers, the group that is more prone to take risks.5 Cotton farming forms only a small part of the local economy and the Bt cotton growers form less than 5% of the local population.

Debt trap
Those farmers able to access credit are locked in a debt-cycle. This has to be seen in the context of cotton being a cash crop in Makhathini for the past 20 years. Farmers have been dependent on inputs from government and companies before the arrival of Bt cotton. The new seed is at least twice as expensive at non-GE seed, leading to higher debt than would otherwise be the case.

The Land Bank provides loans to cotton farmers because they get cash in hand as soon as they deliver to the ginneries. In other words there is a ready market for their cotton. This puts the farmers in a very precarious position and a failed crop will mean that they will not be able to buy seed the next season. During the 2002 – 2003 season, the area experienced a drought and it was reported6 that many farmers have lost their entire crop, GE or non-GE. The difference being that those who planted GE crops had higher input costs and subsequent debt that they now have to pay off.

Short-lived benefits
Reduced insecticide use is seen as one of the advantages of Bt cotton at Makhathini, and initially farmers have said that they use less insectcides. However, it seems that spraying for bollworms has continued even among farmers that have adopted the technology.

While Bt cotton may have initial management benefits, experiences from around the world suggest these to be short-lived. No variety can remain resistant to all pests and diseases and in the province of Mpumalanga, commercial farmers planting Bt cotton are already returning to normal spraying patterns because of outbreaks of secondary insects such as aphids, leafhoppers and stinkbugs.

There have also been cases of farmers losing their entire crop because they did not spray. Commercial farmers in South Africa can take this risk, but for small-scale farmers, the loss of one harvest can be catastrophic.

Monsanto has already applied for a permit for the commercial release of Bollgard II, which contains two Bt genes. The reason for putting Bollgard II on the market is because insect resistance develops and Bt cotton with the “stacked” Bt genes is now needed to be effective. This has come six years after Bt cotton has been released in South Africa and five years after Makhathini farmers started converting to Bt cotton.

Planting GE cotton without information
Farmers planting Bt cotton do so with no understanding of the technology, or of their obligations under the licensing contracts they sign with Monsanto. Biowatch research has revealed that farmers understand their contracts to mean that in the case of a crop failure, the seed will be replaced.

They are not aware that they should plant a refuge, that the insects will develop resistance over time, or that during some seasons they will have to spray for unexpected insect outbreaks. Although Monsanto is happy to spend millions of dollars in promoting this case and ‘educating’ the global public, it is not at all bothered to ensure that the most basic information of all is conveyed to its peasant clients. Even the Provincial agricultural officers in the district had no idea that GE crops are being planted or even what it is.

Access to resources under threat
Thousands of people depend for their livelihood on the water cycle of the Makhathini floodplains, fed by the Pongola River. Since the Jozini Dam has been built, the water is released annually to imitate this natural cycle and ensure that the cycles of nature and farming can continue as before. Because of the introduction of the input from outside agencies such as Monsanto, the Bt cotton farmers have become a strong enough lobby group to lobby for the premature release of water from the Jozini Dam to suit their needs.

This however, has an impact on the rest of the community growing food crops and other crops on the floodplain as the premature flooding destroys their crops and thus food security. The timing also does not correspond with the natural flooding time of the floodplain and will have an impact on the breeding cycle of the fish, affecting another food source and so starting a cycle of scarcity.

More questions than answers
The first data coming out of Makhathini in 1998 and widely quoted by Monsanto and some prominent SA scientists actively promoting GE crops, were stating that there was a 20% increase in yield, and sometimes in a more enthusiastic mood, figures of up to 30% have been quoted. The truth is that in 1998, four farmers were handpicked, Bt cotton was planted on their fields and their results have been used ever since. It has not been taken into account that the farmers probably used inferior seeds before and that any improved variety, Bt or not, would have given an increase in yield. The next year Monsanto spent R1million on a failed socio-economic study, the main reason being given that the researchers did not take into account that small scale farmers do not keep written records. Subsequently several researchers have published results, seemingly based on those records. Overall, the data presented by different researcher and the industry varies enormously making it difficult to come to any clear conclusion.

Farmers in Makhathini have been fairly positive about Bt Cotton, but the benefits may have been overrated by many in their eagerness to sell the product. Clearly the situation still needs time to unfold and a proper socio-economic and environmental study still needs to be done that takes into account the real cost of growing cotton and GE cotton. There has not been a single environmental impact study done on GE crops in South African and Makhathini is no exception and this is a cause for much concern.

Reduced choice is tied integrally to increased dependency and once a farmer decides to plant GE crops, it becomes very difficult to rethink this choice.

• This analysis is a result of three years of monitoring and research on Bt Cotton in South Africa and internationally. It included interviews with small-scale farmers in Makhathini, commercial Bt cotton farmers, the industry and other roleplayers.

1 Email:
2 Farmers Weekly, 17 November 2000.
3 Kuyek,Devlin. 2002. Genetically engineered crops in Africa: The implications for small farmers. Draft research paper for the African Network.
4 Thirtle C, Beyers L, Ismael Y and Piesse J (2003). Can Gm-Technologies Help the Poor? The Impact of Bt Cotton in Makhathini Flats, KwaZulu-Natal. World Development Vol. 31, No. 4 pp. 717-732
5 Ibid.
6 Sunday Times, 14 April 2003