Marketing, distribution, and agricultural extension

It is in the area of marketing and distribution that Marxist economic thought has had the most pervasive, and arguably the most damaging effects on the economies of Angola and Mozambique.

First, it is important to bear in mind that as discussed above, the pre-independence marketing system almost completely disappeared with the departure of the Portuguese settlers who had virtually monopolized these activities (Azzam and Faucher, 1988; Hilmarsson, 1995; Strachan, 1997; Arndt et al., 2000). This was particularly important in rural areas where small stores provided a broad spectrum of services including informal rural credit. Lack of capital together with the widespread destruction and chaos of civil war prevented reactivation of these rural markets and many remain not served by marketers to this day.

The problem is that wholesalers and traders were regarded as profiting from the “honest” work of peasants by selling their produce for a far higher price than they paid. The real services they provided — liquidity to peasants, willingness to bear market risk if prices changed, storage and most important, transportation services — were ignored or discounted in this view of the world. All that mattered was that these traders were earning what appeared to be a healthy profit, though even huge margins could be illusory in a highly inflationary economy (Pitcher, 2002).

Some districts in Angola, for example, went five years or more without once seeing a trader willing to purchase output from farmers. Any attempt to service these markets had first to overcome physical constraints of poor roads, land mines, destroyed bridges, etc.

Indeed, this antipathy to traders extended to urban areas as well, leading to a situation where officially sanctioned retail outlets in the old city centers were virtually deserted, with no stock on their shelves, while bustling, open-air markets thrived on the outskirts of town. The well known “Roque Santeiro” market outside Luanda was one of the largest and most diverse markets on the continent, and though it has now been shut down with the reactivation of retail activity in more permanent facilities it was for many years the go-to place for a wide variety of products from food to consumer durables and even weapons.

This repression of the marketing system helped produce a disconnection between the producers in the countryside and the urban demand centers on the coast. Here, however, there were two big differences between Angola and Mozambique. In Angola, the pre-existing market links between city and hinterland were ruptured by the independence-associated evacuation of Portuguese and further stifled by war and banditry. Official repression prevented any real economic incentive from arising, and this was exacerbated by exchange rate overvaluation which made competing food imports cheap on the coast. Indeed, this situation persists to the present day, with command economy adherents in the government reactivating entities such as MECANAGRO, a state-run agricultural machinery service provider which is very similar to machinery brigades in the old USSR, but which in the Angolan context serves mainly large and well-connected plantations rather than small farmers.

In Mozambique there is domestic capacity to meet urban demand on the coast, principally in Maputo. However, these market links, unlike the Angolan case, were NOT pre-existing.

Rather, the southern part of the country imported food from abroad and paid for it by exporting labor to South African mines.

Finally, we must address whether the repression of marketing is truly a “marker” for Marxist economic thought and management. Clearly, it is a characteristic common to many (virtually all) Marxist economies. However, it is not exclusive to these countries — distrust of middlemen runs deep in rural areas and is a routine feature of the rural worldview in many different countries — not just those with Marxist governments. Indeed, the antipathy to profiteering middlemen owes as much to the fact that they were Portuguese colonists in the pre-independence era as it does to any governing economic philosophy.

Agricultural extension services played an important role in promoting the state view of marketing and were also a mechanism for controlling information and political participation in rural areas. Clearly inspired by political goals, rural extension meetings were in some cases run by political appointees with little agricultural knowledge. Suspicion of the motives and/or expertise of such personnel grew to be a problem in some areas, though general under-funding of extension limited the role it could actually play in many areas (Gemo and Rivera, 2001; Eicher, 2002).