184
8 Bioeconomy Lessons from Biofuel Policies …
having to choose between remaining marginalized or embracing the industrial plantation model that governments and private industry promote. While such plantation
jobs might alleviate poverty, inequality structures remain, not only in terms of income
but also of land ownership, power, decisions, and production control.
Similar structural limitations are present in the contract farming schemes
promoted with alternative feedstock crops such as castor and jatropha. Although such
schemes may provide smallholders with an income, they do not address equity issues.
The contracting industries systematically retain most or all value-added processes
and leave smallholders perpetually as mere raw material suppliers. Moreover, these
are often monopsony conditions (i.e., only one buyer available in an area). Smallholders thus find themselves with minimal bargaining power and usually have to
bend to the conditions, prices, and terms determined by the company.
In practice, that has meant the proletarianization of the rural poor. In other words,
people have been forced or persuaded out of their livelihoods to either migrate or
become agroindustry employees (see Kay 2006; Ariza-Montobbio et al. 2010). This
process is problematic for at least three reasons. First, inequality structures persist or
even expand. Despite its framing as “participation” and “social inclusion,” it is clear
that actual participation is quite limited and rarely includes participation in decisionmaking, as some more comprehensive definitions of the term would have it (see
Cornwall and Brock 2005). The strategy promotes some economic empowerment
by providing income to the rural poor, but at the cost of aggravating their political
disempowerment, i.e., their ability to self-organize, advocate for their views of development policy, and to have such views represented in upper levels of governance.
Indeed, such effects are in tune with the dominant coalitions’ interest in undermining
or co-opting potential competition.
Second, despite some income creation, such contracted jobs are generally insecure. They do away with fundamental labor rights acquired over time, such as the
right to collective organization. Companies can easily lay off contracted farmers
after a period—or even unilaterally terminate contracts, as seen. However, returning
to mixed farming after such a material and livelihood transition may prove challenging, if not impossible. Third, there are heightened pitfalls and risks associated
with contract farming on non-edible feedstock crops often used for the bioeconomy.
Such risks are especially relevant when crops take years to mature and have limited
market absorption, as in the cases of jatropha and castor.
The fact that, in all three countries, smallholders contracted to plant those crops
were abandoned and left to bear the consequences should not be overlooked. Those
have arguably been cases of “adverse incorporation,” i.e., instances of inclusion
under disadvantageous conditions (Hickey and Du Toit 2007; McCarthy and Zen
2010). Such early bioeconomy experiences reinforce the point that rural development
policies, when misconceived, may easily leave the rural poor worse off. Contracts
were established with little knowledge or transparency about those crops’ actual
performance under suboptimal growing conditions. Government agencies and private
companies persuaded smallholders to participate in something primarily based on
hype. Moreover, the strategies’ design left smallholders even more vulnerable from
the beginning—to market fluctuations on a single cash-crop without food or fodder
8 Bioeconomy Lessons from Biofuel Policies …
having to choose between remaining marginalized or embracing the industrial plantation model that governments and private industry promote. While such plantation
jobs might alleviate poverty, inequality structures remain, not only in terms of income
but also of land ownership, power, decisions, and production control.
Similar structural limitations are present in the contract farming schemes
promoted with alternative feedstock crops such as castor and jatropha. Although such
schemes may provide smallholders with an income, they do not address equity issues.
The contracting industries systematically retain most or all value-added processes
and leave smallholders perpetually as mere raw material suppliers. Moreover, these
are often monopsony conditions (i.e., only one buyer available in an area). Smallholders thus find themselves with minimal bargaining power and usually have to
bend to the conditions, prices, and terms determined by the company.
In practice, that has meant the proletarianization of the rural poor. In other words,
people have been forced or persuaded out of their livelihoods to either migrate or
become agroindustry employees (see Kay 2006; Ariza-Montobbio et al. 2010). This
process is problematic for at least three reasons. First, inequality structures persist or
even expand. Despite its framing as “participation” and “social inclusion,” it is clear
that actual participation is quite limited and rarely includes participation in decisionmaking, as some more comprehensive definitions of the term would have it (see
Cornwall and Brock 2005). The strategy promotes some economic empowerment
by providing income to the rural poor, but at the cost of aggravating their political
disempowerment, i.e., their ability to self-organize, advocate for their views of development policy, and to have such views represented in upper levels of governance.
Indeed, such effects are in tune with the dominant coalitions’ interest in undermining
or co-opting potential competition.
Second, despite some income creation, such contracted jobs are generally insecure. They do away with fundamental labor rights acquired over time, such as the
right to collective organization. Companies can easily lay off contracted farmers
after a period—or even unilaterally terminate contracts, as seen. However, returning
to mixed farming after such a material and livelihood transition may prove challenging, if not impossible. Third, there are heightened pitfalls and risks associated
with contract farming on non-edible feedstock crops often used for the bioeconomy.
Such risks are especially relevant when crops take years to mature and have limited
market absorption, as in the cases of jatropha and castor.
The fact that, in all three countries, smallholders contracted to plant those crops
were abandoned and left to bear the consequences should not be overlooked. Those
have arguably been cases of “adverse incorporation,” i.e., instances of inclusion
under disadvantageous conditions (Hickey and Du Toit 2007; McCarthy and Zen
2010). Such early bioeconomy experiences reinforce the point that rural development
policies, when misconceived, may easily leave the rural poor worse off. Contracts
were established with little knowledge or transparency about those crops’ actual
performance under suboptimal growing conditions. Government agencies and private
companies persuaded smallholders to participate in something primarily based on
hype. Moreover, the strategies’ design left smallholders even more vulnerable from
the beginning—to market fluctuations on a single cash-crop without food or fodder