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January 2001, Volume 7, Number 1

Agriculture, Land and Trade

Leather has become a mass commodity product, largely because there are so many pigs in China. As Chinese incomes rise, people eat more meat, and the hides are turned into leather goods for export at relatively low prices. Chinese tanners have developed ways of turning each of the three layers of pig skin into usable leather, so that leather can cost as little as $0.30 a square foot. In this way, $10 worth of leather can make a man's jacket. The cost of leather was traditionally 70 percent of the value of leather goods.

Since 1996, anything made of animal hide can be labeled "genuine leather" in the US. Leather clothing imports from China have almost tripled since 1992, accounting for roughly two-thirds of imported leather.

So many Chinese are migrating away from China's agricultural heartlands such as Anhui province in central China that five to 15 percent of the cropland is not planted. China has surplus grain and is phasing out farm subsidies as it prepares to open its markets to global competition, and so tiny plots, often one acre, do not produce enough rice to repay farmers for their work and cover local taxes. Chinese controls over land rules prevent farm families from selling or giving their land away, and residency rules prevent them from moving permanently to cities to take up new jobs.

Farmers complain that, even if they do not plant their fields, they must pay local taxes, which forces them to migrate to earn wages. Some local officials are corrupt, but many tax farmers to pay for schools and other services that local governments provide from local taxes. One farmer who migrated to earn money showed his pink tax card for 1999: a general farm tax of $47; administration fee, $4.35; public works fund, $5.80; village school construction, $8.25; family planning fee, 50 cents; fees for the civil militia, the village welfare fund and other items, bringing his total obligation to $90.

In the late 1970s, communes were broken up into equally sized farms, and farm output and rural incomes jumped even though farm families did not receive ownership rights to land. The cost-price squeeze is severe throughout rural China, and experts say there are no simple solutions: "The situation cannot change without resolving broad, politically sensitive issues of revenue being shared by urban and rural governments, revising residency rules and altering the system of allocating cropland."

Chinese experts say that the key to preventing Latin American-type slums is to increase productivity and incomes in rural China by promoting crops such as fruit and vegetables, which have a higher cash value. However, land tenure is a very sensitive subject. To increase productivity, small plots-often less than one acre- must be consolidated to expedite mechanization, but the government does not want to permit farmers to own and thus be able to sell their land. Instead, the government wants to keep the land in some form of cooperative, with landowners having shares in cooperatives that produce with more mechanization.

Zimbabwe. Land reform is one of the most contentious issues in developing countries in which most of the labor force is employed in agriculture, but a relative handful of farmers account for most farm output. Zimbabwe, a country of 12 million, has been led since 1980 by Robert Mugabe, who helped to liberate Rhodesia from a white-minority government.

Whites, who comprise about two percent of the population, control about two-thirds of the best farm land in the country. Commercial farms had sales of $885 million in 1999, or 20 percent of GDP, and employed 25 percent of the labor force. Commercial farm sales peaked at $1.4 billion in 1996.

As Zimbabwe's economy began to deteriorate in 2000, Mugabe encouraged "independence fighters" to occupy white-owned farms and thus speed up a land redistribution that has been stalled by many issues, including allegations that land already redistributed wound up in hands of Mugabe supporters. In November 2000, Zimbabwe's Supreme Court declared that Mugabe exceeded his constitutional authority when he authorized seizures of 3,041 white-owned farms. The court ordered the government to evict the veterans occupying about 1,600 farms since February 2000. Instead, the government moved more landless Blacks onto white-owned farms.

According to opinion polls, many Zimbabwe residents believe that Mugabe is using the land invasion issue to cover up for the failing economy. One common opinion is that "Mugabe has become Africa's Slobodan Milosevic…. We cannot move forward as long as he is there."

Israel. On the West Bank, fighting between Israeli settlers and Palestinians in Fall 2000 led to the destruction of thousands of olive trees, which the Israelis said were used to shelter snipers. Most olives are harvested by hand between mid-October and mid-November, with tarps laid on the ground, and harvesters climbing trees to hit branches and cause the olives to fall on the tarps.

Multinationals. Sun World International, owned by Cadiz, Inc, is developing a 100,000 acre project in Egypt. In 2002, the Toshka project, expected to be the world's largest fruit operation, will draw water through a 40-mile canal from Lake Nassar, and employ 60,000 workers to grow Sun World grapes and tree fruits for the European market. The project was financed by Saudi Prince Alwaleed bin Talal.

Santa Monica-based Cadiz Inc owns Sun World International, which has 20,000 acres of farm land in California, including in the Coachella Valley, and ships 14 million packages of fruit a year. Sun World earned $22 million in 1999 before interest, taxes and depreciation and amortization on revenue of $115 million. Cadiz was formed in 1983 to develop land that drew water from an aquifer in the Mojave Desert; Cadiz is trying to find an urban buyer for this water.

Cadiz bought bankrupt Sun World in 1996. Sun World was launched in 1976 and has concentrated on producing fruits grown from patented varieties developed at its in-house research and development facility in Bakersfield, such as Superior Seedless grapes. CEO Timothy Shaheen says that Sun World has changed: "Historically, agriculture has been production-driven. You go into an area and plant all you can, then worry about developing the market. We want to develop the market first, and as it continues to develop, increase production."

In November 2000, Chiquita Brands received a certification from the Better Banana Project acknowledging farming practices that protect the environment and the health and safety of its workers. Chiquta, which sells about 25 percent of the world's bananas, has 127 banana operations in Latin America; Chiquita said it spent $20 million in the 1990s to upgrade its operations to receive BBP certification. Dole Food and Fresh Del Monte Produce said their farms were just as environmentally friendly, although they do not have BBP certification.

Erik Eckholm, "In China's Heartland, the Fertile Fields Lie Fallow," New York Times, December 24, 2000. Leslie Kaufman and Craig S. Smith, "Chinese Pigs Feed a Western Fashion Boom," New York Times, December 24, 2000. Jon Jeter, "Zimbabwe Turns Against Its Liberator," Washington Post, November 23, 2000.