Rethinking Disaster Risk Financing in the South African Agricultural Sector: An Ex-ante Approach

By Prof. Bibi Z. Chummun and Dr. Mpho Steve Mathithibane 

Disaster capitalism

South Africa faces increasing levels of disaster originating from natural risk. It is exposed to a wide range of climate hazards, including drought, flooding, hail, and severe storms that can trigger widespread hardship and devastation. However, even more shocking than the risks themselves is how public funds are misappropriated during various stages of disaster to exploit crises, how inefficiencies are disguised as workable solutions, and how little to no political will exists to find answers. These man-made ineptitudes, much like the contentious tendering system and questionable government procurement stem from inner workings of corrupt criminal elements, disaster opportunism, the dominance of white private capital and rise of black elitists benefiting from disasters. This reflects what Naomi Klein once called ‘disaster capitalism’. This concept is evident in the country’s blatant misuse of its R500 billion (USD 30 billion) COVID-19 relief funds summed up by hyperinflated face mask prices, and mysterious contracts with mushrooming newly registered companies.

State of disaster

In 2016, the Free State, North West, KwaZulu-Natal, Limpopo, and Mpumalanga Province were declared drought disaster areas in accordance with the Disaster Management Act No. 57 of 2002. An estimated 250 000 farmers were directly affected and over 6 million people were indirectly affected.

In March 2020, the Western Cape, Eastern Cape, and Northern Cape provinces were declared national state of disaster areas due to drought. Floods are also a pressing problem. On April 13, 2022, the government declared a national state of disaster in the province of KwaZulu Natal in southeastern South Africa, following a devastating flood whose damages lead to the displacement of more than 40 000 people and caused hundreds of recorded deaths. The importance of a state of disaster classifications is that it immediately triggers contingency plans and access to additional funding to bolster relief efforts. Many people in South Africa live in conditions of chronic disaster vulnerability, these are ecologically fragile areas exposed to recurrent natural disasters. The problem is further exacerbated by poor levels of basic service delivery in the form of water and sanitation, in addition to the lack of storm water infrastructure and poor road networks.

What is striking about South Africa is that, like every aspect of society and economy, climate change, too, is racist. Blacks disproportionately reside in ‘sacrifice zones’, be it townships or former homelands. Black owned businesses contribute low to carbon footprint that influences climate change but suffer the effects disproportionately without much financial resilience. These ecological inequalities shade into the structural economic inequalities that chain Blacks in South Africa to the gallows of disadvantage. Colonialism followed by the apartheid era laid the foundation and created structural opportunities for racist and classist hierarchies to be normalized. Post democratic reforms have been slow to change this status quo. Therefore, a state of wealth and want reflects the current political landscape and tells the story of wide inequality in Africa’s second largest economy.

Legislative response instruments

Legislative instruments such as the Disaster Management Act provide for persons, that have been affected by a disaster, to apply for social relief of distress. The Act provides for an integrated and co-ordinated disaster risk management policy that focuses on preventing or reducing the risk of disasters, mitigating the severity of disasters, preparedness, rapid and effective response to disasters. However, there is a growing public outcry on the adequacy and timeliness of support interventions. These rumblings of dissent are anecdotally a driving factor behind social unrest and violent protest, including the July 2021 spate of looting and destruction of property worth billions of Rands in Gauteng and KwaZulu-Natal province.

Disaster response strategies in South Africa like drought assistance have historically relied on post-event relief. However, these relief schemes face challenges due to poor coordination, and their reach to farmers is limited and untimely. These schemes result in underfunded responses, and they encourage underinvestment in risk reduction and preparedness, which increases the economic and human costs of catastrophes. There are complex bureaucratic hurdles within these structures that impede and continue to frustrate effective drought response efforts. The more generic hurdles include a lack of transparent processes over the selection criteria, an obscure and unscientific basis for allocation of funds to affected farmers, as well as poor governance and oversight with limited accountability that often leads to non-payment for farmers in the most remote areas. In South Africa a drought relief scheme was implemented in the North West province after two consecutive years of below-average rainfall. Ultimately, more than 60% of the affected farmers did not receive any assistance. Within local jurisdictions, vulnerable farmers often lack political capital and knowledge to organize, mobilize, and lobby effectively for timely government relief. In part this may due to poor unionization among farmers and farmworkers, and smallholders’ interests are often inadequately represented within civil society organizations.

The frequency and severity of extreme weather events, including drought, is set to intensify due to climate change. This entails changes in rainfall distribution, pests and plant disease proliferation, higher evaporation rates, increased temperatures, reduced crop yields, and spatial adjustments in optimal cropping areas, which all affect sustainable agricultural development. Therefore, there is a need for progressive economic and social policy instruments to prepare, respond, and proactively reduce the effects of natural risks on the agricultural sector. One of the main response instruments is disaster risk financing, which aims to increase the resilience of vulnerable countries to the financial impact of disasters as part of a comprehensive approach to disaster risk management, as suggested by the World Bank.

Social protection policymakers and practitioners cannot afford to ignore long-term impacts of disaster and persistent climate change any longer and need to integrate their planning and action plans. Managing the impacts of climate risk on agricultural production requires an integrated approach that brings together risk-coping, mitigation, and adaptation in the short and long term. In terms of government interventions, this means coordinating and integrating disaster risk management programmes, social safety net programmes, and agricultural development interventions. The solution is for governments and their partners to adopt pre-agreed, prefinanced, rules-based preparedness plans that can be implemented after a disaster strikes without the need for further political decisions. Therefore, it is critical to rethink and reshape current policy to shift towards ex-ante support as a long term and sustainable response strategy to disaster risk management.

Market Disaster

In this respect, economists like to advocate insurance markets. According to this mainstream environmental economics view, insurance is an effective apparatus for responding to losses. Insured individuals are identifiable, the value of insurance is known, and the extent of losses can be quantified according to established standards. However, even insurance structures, markets and products are exclusionary in nature, and black South African farmers have little to no agricultural insurance protection due to prohibitive costs and inappropriately designed products that do not address their risk transfer needs. An approach that profits largely white capitalists and, yet, does not address the needs of the majority of South Africans and cannot provide the needs of the most vulnerable is definitely ‘market disaster’. The process of rethinking disaster risk financing should be accompanied by a parallel and sobering interventionalist approach to rethink the position of black South African farmers. This is critical in making progressive stride to building a more resilient society.

Ecological Imperialism

by Franklin Obeng-Odoom

Now that the science on existential sustainability crises is settled, it is important to raise questions about how we should analyse the present ecological problems in order to find suitable solutions. We need to define what the key problems are, whom they afflict, where, and how. We also ought to know what can be done and by whom to alleviate these key problems. Another important question is how to move from ‘here’ to ‘there’ and should the steps taken be revolutionary or evolutionary. The evidence is not yet conclusive on all these issues. What is clear is that ecological imperialism characterises much of the sustainability crises today in ways that engage with, but transcend how Alfred Crosby framed the problem. Seeking autonomy and inclusion, citizenship and justice must, therefore, be priorities in the struggle to appreciate and address the current sustainability crises.

Growth and Degrowth

One prominent view about addressing the sustainability crises is to do nothing. Proponents of this perspective contend that with more economic growth environmental problems will go away by themselves. After all, economic progress leads to innovation which, in turn, can be used to solve ecological problems. So, more growth is good for the environment. Graphically defined as the Environmental Kuznets Curve, this view is quite problematic. Real-world evidence clearly shows that with more growth, there have been more crises. Many would point to The Limits to Growth study, or Herman Daly’s Steady-State Economics as the definitive antitheses of the pro-growth alliance. However, even these had precedents. E.J. Mishan’s work, The Costs of Economic Growth, is one early example of the devastating effects of unfettered economic growth.

More recently, the critique of more growth has become much wider, and far more politicised. Advocates of this ‘degrowth’ are unlike those who posit steady-state or a no-growth imperative. Instead, degrowth scholars and activists seek a non-capitalist world in which production is radically reduced. As its advocates and commentators point out in Degrowth in Movement(s): Exploring Pathways for Transformation, degrowth is centrally about reducing the ‘global growth paradigm’. The degrowth case for the Global South includes broader claims (here is a piece by Tejendra Pratap Gautam on the topic). As a wide movement, there are many different political positions that are all canvassed under the term ‘degrowth’. However, there are other, quite distinct ways of framing the sustainability crises. These approaches are neither centred on production nor on growth. Instead, they start from the problem of domination and distribution.

Domination and Distribution

The current soaring or searing forms of long-term inequalities and social stratification give pause for thought. It seems the present sustainability crises are not only correlates of, but also contingent on, these inequalities. Long-term social science research shows that, internally, countries and counties that are more unequal face more severe environmental problems. These are also disproportionately borne by the marginalised and the meek who, usually, contribute the least to the problems in the first place.

Internationally, such dynamics are also at play. China is often seen in the West as a pariah, but for years it was the dumping grounds for Australian waste. Globally, transnational corporations have also acted as conduits for shifting the waste of the Global North to the Global South. Many fossil transnational entities corrode the environment of the South when they extract metals and minerals for the comfort of the Global North. Others create global markets in forests and fauna which privilege the North but pillage the South. Decision making on what can be done to address, or even reform, this global system is, again, unequal.

These dynamics create self-perpetuating and institutionalised long-term inequalities. The powerful nations in the North compete with one another to maintain status. World development agencies such as the IMF, OECD, and the World Bank use conditionalities and other tools to compel or cajole countries in the Global South to join the rat race between the world powers. However, doing so entails maintaining and expanding the privileges of the North. Its power to dominate ecological decision-making grow has grown exponentially and enabled its defenders to fend off serious crimes of ecocide. Reflexively, the demands from the South for ecological repair and restoration are dismissed or diluted. For these and other reasons of domination and distribution, the drivers and social costs of the sustainability crises cannot be framed simply as ‘limits to growth’

‘Limits to inequalities’ might be a more compelling starting point. Those who foreground the sustainability crises primarily on transforming historical and existing inequalities of power, wealth, and want must be taken seriously. However, the discussion must be deeper than simply asserting unsustainable inequalities. The prevailing mainstream economic theories of distribution need to be revisited. The current levels of domination are not fortuitous. Distribution does not simply arise from differences in work attitudes, from variations in human capital, or from distinctions in free choices.

Land is critical for the purpose of reconstruction property, institutions, and social stratification. Without land, the environment or the built environment in the city and country cannot exist in any meaningful sense. Although often seen as secondary to capital and labour, and to profiteering and exploitation, land, the control of territory, and rent theft seem to be cornerstones of domination and distribution. Under capitalism or even in other economic systems, the distribution of land, land use, and land rent are sources of tension and transformation. Sustainability challenges must be about class and caste, colour and race, gender and more. Both over space and time, these identities are intertwined and interlinked with global domination and gross distribution. Under all of them is land.

Accordingly, pioneering proponents of just sustainabilities, such as Julian Agyeman, seek much wider causes, including the decolonisation of nature, economy, and society. Demands for ecological repair and ecological reparations can be found in their policy proposals centred on addressing long-term inequalities, uneven, and unequal geographical relations, and ecological imperialism. Just sustainabilities and degrowth are two distinct ways of viewing the sustainability crises. Consider their ontologies about nature, economy, and society on the one hand, and how nature is related to economy and society on the other. These ontologies and their related epistemologies are largely irreconcilable. Additional differences stem from, or complicate, this incommensurability. For example, one is centred mainly on questioning growth under capitalism (hence, de-growth); the other is based fundamentally on challenging ecological imperialism, political domination, and economic maldistribution (hence, just sustainabilities). Certainly, both the drivers and ramifications of change have been unequal and uneven, so have processes of production and exchange, historically and currently, locally, and globally.

Voices of the South

The discussion on the centrality of growth occludes the political economy of knowledge production in sustainability science and scientific advance generally. However, ecological imperialism also includes the domination of sustainability knowledge by Western thought, institutions, and actors who devalue and ignore the voices of the South. This intellectual marginalisation must be challenged, too, whether in teaching or in research. ‘The Global South is rich in sustainability lessons, that students deserve to hear’. Addressing ecological imperialism should aim at questioning the peripheralization of the voices of the South who seek to challenge and transcend ecological imperialism.

Acknowledgements

Many thanks to Michiru Nagatsu, Tiia W. Kolari, Sophia Hagolani-Albov, and Tomás Garnier for helpful feedback.

Just Ecological Political Economy

The  latest report from the Intergovernmental Panel on Climate Change (IPCC), Climate Change 2022 Impacts, Adaptation, and Vulnerability, provides a sobering account of the health of our Earth. According to the report, not only have ecological crises worsened, but our planet will continue to deteriorate. Describing the problems is one thing; analysing them is another. Probing why the crises persist or recur is yet a third step. Effective ways to address the problem must be found, but no solution can be effective without being just. As a political-economic approach, “just ecological political economy” considers the ecological problem to be fundamentally a reflection and projection of long-term historical and contemporary institutionalised, group-based inequalities. They are global, but these inequalities are also local, urban, national, and regional. The emphasis on inequalities echoes the aspirations of the Global South theme of the Helsinki Institute of Sustainability Science (HELSUS). Just ecological economy, along with its key principles such as “rent theft”, “Global South”, and “just land” energises HELSUS in general.

The Just Ecological Political Economy (JEPE) blog is a new space to drive the aims of the Global South theme of the HELSUS. The theme was collectively created by diverse groups working at the University of Helsinki, and seeks to further sustainability science through seeking just sustainabilities. The pursuit of holistic agendas for justice is always exciting—even exhilarating—but often it is also exacting. There are many jarring and important questions that need to be asked and explored, especially considering Global South perspectives. For example, while there is some acceptance in conventional thinking that some compensation is justified in the light of ecological injustices against the Global South—do current climate finance proposals centred on continued growth of global GDP—like the Stern Review: The Economics of Climate Change—amount to ecological reparations?

Other questions are even more jarring. For instance, do current pathways lead to the great paradox of historical beneficiaries of injustice determining the price of justice? How much trust should be placed in the ‘commitment’ to just transition, which can be a highly problematic concept? The outrage and cynicism of political leaders from the South, like Mia Mottley, Prime Minister of Barbados at the Opening of the #COP26 World Leaders Summit may not be enough to solve the problems at hand, but are they justified? Crucial to addressing all these questions is accepting that ecological imperialism is a core attribute of the ecological crises. Yet—to date—what has commanded most of our attention is a drop in the ocean. The biological aspects of ecological imperialism have been demonstrated extensively in the nineteenth and twentieth centuries. However, more research is still needed as contemporary ecological imperialism is even more complex. Current ecological imperialism reflects more than biological processes; it is an expression of the intermingling of cumulative and current political-economic forces. Are new questions about long-term institutional inequalities, power imbalances, and ecological injustice combined causes or simply correlates of current socio-ecological processes? How and why do these relationships persist? Our next blog post will explore some answers to these pressing questions.

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