Wednesday, April 16, 2014

OF SEAFOOD AND THE FALLACY OF POVERTY ALLEVIATION



My suspicion of seafood grows the further away from the ocean it is served to me. My suspicions were allayed a week ago when I was invited to lunch at the Sheraton’s new SevenSeas restaurant, I wasn’t dragged kicking and screaming into the meal but I was determined to play safe with my order.

I am glad to say that the Tuna main course was finger licking good but went down a bit too fast for my liking. At the risk of being seen as ill-mannered, I peeked at the bill and it set my host back sh65,000 for the meal.

I am sure there is great skill involved in catching tuna, a skill passed on down the generations and yet the fisherman gets a fraction of what Sheraton is bringing in, on serving a fraction of the same fish.

The difference between the two entities is the value addition involved.

Best case scenario the fishermen who caught my Tuna has some weather beaten dhow and some less-than-minimum wage assistants who help him pull in the nets. The owners of the Sheraton however have invested in building a brand, creating an ambiance at their restaurant, hiring a great tuna chef and all the other intangible things that enhance the experience of eating that piece of Tuna.

So what does the fisherman have to do to capture more of this value?

That is the million dollar question that will lead to raised incomes and lifting more people out of poverty.

The value chain is a real thing not some abstract concept economists trot out to impress us mere mortals. That is all very nice but there seems to be little talk about the producer – farmer, fisherman or whoever.

So we will pave his roads, improve his communications, keep inflation low and keep the shilling at reasonable rate that they can get good value for their labour, but this can be all done for the farmer and no increase in welfare is experienced.

There are a combination of factors including blood sucking middle men but at risk of blaming the victim when all is said and done it’s the producers’ mind that has to be worked on.

In addition many anti-poverty initiatives don’t seem to be clear about how improved in comes reduce poverty levels. Having a higher income does not mean you are less poor, a higher income may very well impoverish you further.

US celebrity couple Joe and Theresa Giudice, whose multi-million dollar lifestyle has been the subject of a reality show, it was found last week could only manage $7,500 towards clearing their $17m debt. They lived in a $1.7m home, drove the most expensive cars and holidayed in the Hamptons but it turned out to be all smoke and mirrors.

So even for our producers raising their incomes will not guarantee the escape the poverty trap, something the planners don’t seem to appreciate, they seem happy to help raise incomes and they think their job is done.

But without a doubt improve incomes are imperative in the fight against poverty, but improved incomes are not synonymous with poverty alleviation.

In recent weeks this newspaper’s Harvest Money section has been profiling the country’s most progressive farmers in a build up to the selection of Uganda’s best farmer. They have come in all shapes and sizes but the one denominator that seems to determine their claim to fame is the size of their enterprises.

Bigger size allows not only for higher income but for leveraging economies of scale.

My thinking is that to alleviate poverty our farmers need to start thinking big and this need not trigger a scramble for land. Farmers can form groups, which buy inputs wholesale, bulk their harvests to get better prices and use their power of their numbers to invest in farm machinery, storage facilities and hire expertise.

Making the leap out of poverty would involve for example thinking of these arrangements in a business manner, so that their farms be the gift that keeps giving.

A poor man is a person who cannot meet his own needs and is reliant on others for his upkeep. A financially independent person earns and income but for lack of savings and assets is often one pay check away from regressing into poverty. A financially secure person probably has in addition to his income, businesses or assets that have are throwing off income independently of his effort. And finally the rich man is he or she for whom the overwhelming majority of shillings he racks in are from these independent sources.

Our poverty alleviation programmes often stop at – if they get there at all, making our poor get to financial independence.

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