This section discusses the technical responsibilities and leading roles of participants of nucleus A in the centralised-diffusion process of technologies for PC management (or PC related practices)47. In other words, it examines the governance of nucleus A. It is important to highlight that these technical roles and commitments were a set of rules that actors negotiated at the beginning or during the development of the CFA; however, it did not guarantee that the participants would actually fulfil these obligations and that technology transfer occurred. This is also the case for the next two empirical chapters (Chapters 6 and 7).
Nucleus A was a scheme for oil palm production located in the Central zone, in which 35 small-scale producers sold their product to Anchor Company A. This agro-industrial firm owned oil palm crops and a processing mill, and processed the fruit provided by other surrounding plantations. According to an interviewed technical assistant48, this nucleus was created as a part of Anchor Company A’s business strategy, where negotiating a contract with fruit providers was more convenient for the company than extending its landowning. The small-scale producers marketing their fruit to Anchor Company A, were
47 Apart from the interviews, surveys and fieldwork observations, there is no publicly accessible information of the CFAs corresponding to all case studies of this thesis. This is because oil palm agro-industrial firms in Colombia usually keep these contracts private.
48 Unless otherwise stated, a technical assistant is a member of staff from Anchor Company A.
distributed in 17 towns in the Central zone49. Although most producers (31) were conveniently located in the same geographical department where the anchor company had its plantation and mill, there was an exceptional few (4) that were located in a neighbouring department, 116 kilometres farther from the company.
The CFA in this nucleus was mainly based on a market contract for fruit commercialisation50, in which smallholders assumed most technical responsibilities of crop management whilst Anchor Company A had a minimum involvement with farmers’
crop management. As such, this CFA had predominant features of an agreement with low agro-industrial control governance (one of the CFA typologies identified in Table 2.4).
Interviewed representatives of the company51 asserted that the anchor company provided the seedling plants to selected producers for these growers to initiate their oil palm cultivation. Following this initial stage, the company facilitated the purchase of fertilisers to some producers and provided free technical assistance regarding agricultural management, including PC management. In exchange, smallholders agreed to sell the oil palm fruit to Anchor Company A at the international based price of FFB52 for a period of 20 to 25 years. Within this period, the company discounted the price of the seedlings and fertilisers from the harvest sales. Interviewed technical assistants and producers of this nucleus asserted that there were no legal sanctions in the event of small-scale producers deciding side-sell to other anchor companies. However, there was a financial commitment with the company that needed to be fulfilled through the agreed discount from FFB sales.
If the total cost of the credit was not paid off, legal sanctions might be applied resulting in
49 The specific location of these towns is not provided due to confidentiality requirements between the author of this thesis and anchor companies.
50 This type of CFA has some of the characteristics of the marketing contract of sell-purchase described on p.44.
51 Representatives include technical assistants and the head of the department for management of fruit providers in Anchor Company A.
52 It was mentioned that, although the Colombian agro-industrial firms adhere to international prices, the choice of smallholders to sell their harvest to certain companies depended on the additional benefits that these companies offered (see footnote 18).
breach of the arrangement and cancellation of the technical assistance provided by the anchor company to producers.
Regarding the role of Anchor Company A, this firm aimed for what company officials and technical assistants called a non-paternalistic model, in which the firm provided technical assistance with minimum involvement in smallholders’ crop management. A technical assistant, for example, reported that ‘the head manager has clarified that we shouldn’t do everything for them, otherwise they will take advantage of the situation mostly because this assistance is free of charge’ (E.M, personal communication, 9 July 2015). According to this scheme, the anchor company provided regular support, training and, in some cases, facilitated credits to purchase fertilisers. Several interviewed smallholders pointed out that despite having regular technical assistance (e.g. monitoring and recommendations regarding convenient periods for adoption, products and farming methods), the anchor company did not get involved in the implementation of these practices.
On their part, smallholders led the management of their own plantations without being technically or economically dependent on Anchor Company A. Although the company might have a significant influence on smallholders’ decision-making processes through recommendations and training, the producers always made the final decisions and employed their own methods for technology adoption. Consistent with the low agro-industrial control governance, smallholders in this CFA had a high level of autonomy and made decisions about the provision of equipment and inputs, planning and implementation of agricultural activities, and access to sources of technical support.
There was, however, an exception in which company A became highly involved in the decision-making process and implementation of PC monitoring and PC surgeries (shock practices). The difficult situation of epidemic emergency in Puerto Wilches, required the adoption of complex and new agricultural practices that drove leaders in the Central zone and in the oil palm sector to coordinate top-down strategies. In fact, interviewed smallholders affirmed that, after the ICA declared an emergency in Puerto Wilches in 2013,
Anchor Company A increased the frequency of awareness campaigns and technical assistance for PC management, particularly for the implementation of shock practices.
Due to the epidemics in the Central zone, the anchor company decided to play a more leading role and undertake important responsibilities related to the management of shock practices in the nucleus.
The leadership of company A in the management of shock practices was noted by a technical assistant of this company when he said:
‘…whilst they [the owners and officials of anchor company A] don’t like a paternalistic scheme in which the company does everything for smallholders, because of the epidemics of PC, they started getting highly involved in the organisation of plantations and trainings (…) we monitor the disease and sometimes help with the surgery treatment…’ (C.M, personal communication, 5 July 2015).
Observations during the fieldwork indicated that company A planned, transferred and verified the strategy and the methods for adoption of shock practices. In some cases, technical staff implemented practices such as PC monitoring and surgery treatments in smallholders’ plantations. According to the technical assistant, this close verification guaranteed that smallholders implemented scientific protocols that resulted from R&D processes. He asserted that ‘…without the pressure of the company, our farmers would not be doing the Cenipalma protocol’ (E.M, personal communication, 9 July 2015).
One can argue from fieldwork observations that three reasons could explain the significant interest of Anchor Company A in controlling the spread of the PC disease in smallholders’ plantations. These reasons can also explain the interests of Anchor Companies B and C in controlling the spread of PC disease in their nuclei, as will be seen in Chapters 6 and 7.
First, smallholders were an important population of fruit providers from whom the agro-industries obtained raw material for oil palm processing. In addition, the anchor company provided free seeds to smallholders to initiate the oil palm production. The reduction of
the FFB supply caused by the PC disease, directly affected the investment made by the company, the amount of input that oil palm mills could process, and the efficiency of their installed production capacity. As a technical assistant said, ‘if they lose, we lose because money from us is invested in their agribusiness’ (E.M, personal communication, 9 July 2015).
Second, the PC disease represented a risk for not only the affected, but also for neighbouring plantations, including the oil palm crops of anchor companies. As was indicated at the beginning of this section, most producers were located in the same region, albeit not in the same department, where Anchor Company A had its oil palm crops and processing mill. Failure to control PC disease outbreaks in producers’ crops posed a risk of infection for the anchor company.
A third reason was related to the regional strategy for PC epidemic control that Anchor Company A took on, together with Anchor Companies B, C and other agro-industrial firms in the Central zone. Due to the epidemic in Puerto Wilches, these companies developed a regional strategy and committed themselves in what this thesis named a UG alliance, mainly to establish procedures and follow scientific protocols for the control of PC disease53. Through this alliance, the anchor companies joined financial and technical efforts to systematically monitor plantations, unify criteria for PC management, and verify these criteria in their respective nucleus. These criteria were based on the Cenipalma protocols and the shared experiences of technical assistants, mainly concerning shock practices such as monitoring, treatment and eradication of diseased trees. Thus, we can infer that there was a top-down strategy establishing a hierarchy in the decision-making process for the shock practices, in which the UG alliance defined rules for its members and from these companies to smallholders.
53 Later, the UG alliance dealt with other types of oil palm pests and diseases in the region.
In order to fulfil the commitments defined by the top-down strategy of the UG alliance, Anchor Company A had to play more of a leading role in the management of shock practices than would typically be dictated by its non-paternalistic model. Interviewed technical assistants affirmed that the anchor company had to hire technical workers to be in charge of recording accurate information and verifying the implementation of shock practices in producers’ plantations (C.M, personal communication, 5 July 2015; E.M, personal communication, 9 July 2015). Technical workers indicated during the fieldwork that in exceptional cases, with delayed or unskilled producers, they directly implemented PC surgery treatments to support these plantations.
The high emphasis on shock practices by Anchor Company A also ensured the involvement of Cenipalma, who not only developed these practices but also trained technical assistants and smallholders in their correct adoption. It was observed during the fieldwork that Cenipalma was one of the main sources from which company A acquired technical knowledge that was subsequently transferred to smallholders. Interviewed technical assistants asserted that Anchor Company A first and foremost followed protocols recommended by Cenipalma and criteria decided by the UG alliance.
This section described the type of CFA that participants of nucleus A agreed for crop management. From this characterisation, it is possible to infer two important aspects of this agreement. First, this agreement showed that the priority of Anchor Company A was the adoption of shock practices rather than preventive practices. Second, with the exception of shock practices, these rules gave high autonomy to smallholders to implement preventive practices and other agricultural practices. The rest of the chapter discusses what the implications were in terms of technical support to both shock and preventive practices and in levels of adoption.