Energy, rural livelihoods, natural resources
As I did in my previous post, here is a list of keywords with their definitions and additional links if you want to nerd out!
Value-chain: Defined as “the full range of activities which are required to bring a product or service from conception, through the intermediary phases of production, involving a combination of physical transformation and the impact of various producer services, delivery to final consumers and final disposal after us”. There are similar concepts and definitions, such as ‘commodity chain’, but the term ‘value chain’ is widely adopted because it is perceived as the most inclusive concept to describe and analyse the full range of possible activities, processes, trade routes and products.
Middlemen: A person who plays an intermediate role between producers, retailers and consumers.
Gap-filling activity: When related to non-timber forest products (NTFPs), gap-filling activities are “carried out regularly, often during the non-agricultural season. They play a key role in income-spreading and generally make poverty more bearable through improved nutrition or higher income but do not make people less poor”
Stepping-stone activity: These activities “help to make people less poor”.
If you want to read more into this, then I would suggest having a look at this article: Ruiz-Perez et al., 2004. Their paper suggests that some NTFPs can be used as stepping stone activities, but only in areas that are well integrated into the cash economy. In some cases, NTFPs contribute more than 50% of household income and producers tend to be better off than non-producers.
I’m continuing this ‘myth-busting’ series by taking a look at the charcoal sector, specifically the people responsible for moving the charcoal from the production area to the market.
This next myth buster entry is:
THE CHARCOAL INDUSTRY IS CONTROLLED BY A RICH POLITICAL ELITE
During my long, endless days and nights reading about NTFPs, it has become apparent that middlemen are the most criticised group of people in most value chains. They are described as a powerful group of people, who are able to exploit other people involved in the trade.
The problem is, that in charcoal-related studies these middlemen aren’t particularly well researched. When people write about charcoal middlemen, they often draw on one particular case study by a man call Jesse Ribot. Ribot’s work was incredibly important, but it doesn’t make much sense to me to continue with a perception based on one study, from the late 1990s.
In brief, this is what a lot of people base their negative perception of charcoal middlemen on:
Ribot’s work focussed on the charcoal sector in Senegal. At the time of the study, 90% of charcoal was consumed in the capital city, Dakar (big capital city). The charcoal trade in Senegal was legal, regulated through the use of quotas and permits, and to use Ribot’s own words, had a “well-defined charcoal commodity chain organized around cutting and carbonizing wood in Senegal’s forests, and ushering it to Dakar for distribution and use”.
Ribot’s study identified two main types of middlemen: Merchants and Wholesalers. These middlemen were an elite, urban-based minority who were able to earn higher revenues than others. Merchants generated the highest individual profits. Ribot explains that to obtain the charcoal production quotas, “it is essential to maintain relationships with ministers Forest Service officials, [forestry] union leaders, powerful Islamic religious leaders and/or political figures”.
The merchants were politically powerful and were socially and economically better equipped than others. They used their powerful social connections to put pressure on the Forest Service to give extra quotes to the merchants.
Wholesalers were powerful in a different way. They were able to make large profits because their “control of information, finance capital and access to retail outlets […] gives them an effective monopoly on urban storage”. The wholesalers controlled the urban distribution through social ties to vendors.
I do not deny that under certain circumstances a powerful elite will emerge and monopolise the trade. But I do not think its fair, or simply factually correct to persevere with such an unrepresentative perception.
In my first entry, I said that there has been very little charcoal-based literature in small urban areas. Because the focus has predominantly been on large charcoal markets, very little is known about the middlemen in small urban areas. This is a huge gap in the literature, as there is no evidence to suggest that small city middlemen’s access to power is anything like those found in large capital cities.
Well, I can tell you that they’re not.
I have recently finished the first chapter of my PhD thesis, which examines the middlemen of Zomba’s charcoal trade. I have found that Zomba’s middlemen are entirely different creatures to the urban-elites commonly reported in the literature.
Zomba’s middlemen and women bought directly from producers and sold directly to consumers and market sellers. They generated a subsistence income from transporting charcoal, were poor (but not the poorest as they owned bicycles and telephones) and rural. You didn’t need much money to start transporting, just the initial cost of a bag of charcoal, which was about £1.50. Transporting charcoal was not seen as a long-term activity. Instead, it was used as a ‘gap-filling’ activity between seasonal work (usually subsistence farming), or a ‘stepping-stone’ activity, used to earn capital for a less risky business with better long-term prospects, such as buying and selling fish.
I interviewed 201 transporters in total, and no one had ever heard of any collective organised group or powerful individual transporter. These middlemen and women worked alone and business transactions and price settings were carried out on an individual basis.
Zomba’s charcoal resources are relatively close, and transporting charcoal to the market was a morning’s activity for many of the middlemen and women. The cost of transporting the charcoal was minimal as some people walked to the market, carrying a bag of charcoal on their head. Additionally, because Zomba is a small city, the demand for charcoal is also comparatively small.
Based on all this, my theory is that the low transportation costs, closeness to the charcoal resources and the small urban populations all contribute to a low cost of charcoal in Zomba. At the time I was in Zomba, the same bag of charcoal could sell for more than double the price in Blantyre- a city with a population of over 1 million, about a 30minutes drive South of Zomba.
I think that whilst these conditions exist in Zomba, an urban-based motorised monopoly of Zomba’s charcoal trade would struggle to compete with their abundant rural counterparts. The organised motorised transported charcoal that does exist in the region merely passes through the city and continues south to Blantyre.
So there you have it. Middlemen are not always a rich, political elite.
Unlike the cases where powerful urban-elites with long-term vested interests block reform of the charcoal trade, their absence in Zomba suggests that there may be a real opportunity to take a different approach to the charcoal trade of small urban areas, and provide more equitable, and sustainable outcomes in the trade.
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