JUNE 1991 / WORKING PAPER 11 The Economics of Cain and Abel: Agro-pastoral Property Rights in the Sahel V Rogier van den Brink Daniel W. Bromley Jean-Paul Chavas CORNELL FOOD AND NUTRITION POLICY PROGRAM THE ECONOMICS OF CAIN AND ABEL: AGRO-PASTORAL PROPERTY RIGHTS I N THE SAHEL Rogier van den Brink* Daniel W. Broml ey** Jean-Paul Chavas** * Cornell University Food and Nutrition Policy Program. ** University of Wisconsin-Madison, Department of Agricultural Economics. The Cornel 1 Food and Nutrition Pol icy Program (CFNPP) was created i n 1988 within the Division of Nutritional Sciences to undertake research, training, and technical assistance i n food and nutrition policy with emphasis on developing countries. CFNPP i s served by an advisory committee of faculty from the Division of Nutritional Sciences, the departments of Agricultural Economics, City and Regional Planning, Rural Sociology, and Government, and the Program of International Agriculture. Several faculty members and graduate students collaborate with CFNPP on specific projects. The CFNPP professional staff includes nutritionists, economists, and anthropologists. CFNPP i s funded by several donors including the Agency for International Development, the World Bank, UNICEF, the Pew Memorial Trust, the Rockefel 1e r and Ford Foundations, The Carnegi e Corporation, The Trasher Research Fund, and in div id ual country governments. o 1991 Cornell Food and Nutrition Policy Program ISBN 1-56401-111-9 ' This Working Paper series provides a vehicle for rapid and informal reporting of results from CFNPP research. Some of the findings may be prel imin ary and subject to further analysis. This document i s produced by the CFNPP Publications Department. The text was prepared by Gaudencio Dizon and Nancy Kim. For information about ordering this manuscript and other working papers i n the series contact: CFNPP Publications Department 1400 16th Street NW , Suite 420 Washington, DC 20036 202-822-6500 CONTENTS Paqe LIST OF FIGURES LIST OF APPENDIX TABLES FOREWORD 1. INTRODUCTION 2. - THE AGRO-PASTORAL PRODUCTION SYSTEM OF THE SAHEL . 3. - A MODEL OF AN AGRO-PASTORAL PRODUCTION SYSTEM 4. POLICY ISSUES 5. CONCLUSIONS APPENDIX REFERENCES LIST OF FIGURES - 1 Locational Grid and Sty1 ized Sahel ian ~ainfall Distribution 12 - - 2 Expected Utility of Abel A Nomad 13 - 3 Value of Flexibility 15 - 4 Cain and Abel 19 LIST OF APPENDIX TABLES - 1 Simulated Rainfall Pattern Using Gamma Distributions FOREWORD The importance of pastoral production systems is often overlooked by donors and pol icy makers, many of whom argue that the nomadic 1 i festyl e is no longer viable. The empirical facts suggest, nonetheless, that as much as one-quarter of the West African population are in fact pastoral, and that 30 to 40 percent of the agricultural value added in the Sahel is attributable to livestock production. One of the underlying causes of the seeming skepticism or under- estimation of the role of nomadic peoples undoubtedly emanates from the long-standing conflicts between nomads and farmers. Indeed, the complementarity of the economic systems of nomads and farmers, manifested in the exchange of productive output, has generally been overshadowed by the conflicts inherent in the competition over the control of land. The conflict is essentially one of property rights. In order to better understand the nature of this conflict, this paper initially. describes the agro-pastoral production system of the West African Sahel This is followed by the presentation of a model that simulates the emergence of a dual economy based on the comparative advantage of farmers and pastoral ists. In doing so, the paper establ ishes two points. First, it points to the fact that exclusive private property rights have no monopoly on economic optimal ity. The analysis of risk in an intertemporal - framework points to the value of another type of property right the right to adjust. Second, the latter property right is of crucial importance to livestock production in Sahelian West Africa and as such to the livelihood of millions of people in the region. The structure of - - property rights entitlements determines the winners and losers of economic reform. Thus, the analysis contributes directly to the larger CFNPP research program in that i t draws our attention to the specific institutional context in which reform takes place. Additionally, identifying the structure of property rights also forms the point of departure for the modeling exercises that the CFNPP undertakes in order to identify welfare effects of policy reform presently under way in Africa. Recent upheavals in Mali involving the Touareg nomads highlight the actual i ty of the issues addressed by van den Brink, Bromley, and Chavas in this working paper. Moreover, there is growing anecdotal evidence that the rejuvenation of indigenous institutions is a significant side effect of many economic liberalization programs in sub-Saharan Africa. In general, the study of the impact of economic reform on the poor should not take place in an institutional vacuum. It is hoped that papers such as this one will contribute to fill this void. Ithaca, New York David E. Sahn June 1991 Deputy Director, CFNPP 1. INTRODUCTION Nomads and farmers seem to have been in conflict throughout history and throughout the world. In fact, one Hebrew version of the Bib1 ical story of Cain and Abel provides the first recorded clash between a nomad and a farmer.' In some respects, conditions today are not much improved. Conflicts between nomads and farmers continually recur. However, next to confl ict, complementarily is a1 so a structural characteristic of the. dual economy represented by Cai n, the farmer, and Abel , the pastoral ist The two economic systems complement each other with respect to the exchange of outputs but seem to be continually at odds with one another over inputs, especially over the control of land use. The conflict should be understood as one of property rights. In agriculture as we1 1 as 1i vestock production, property rights emerge to secure income streams generated by production acti vi ties. The nature of the income stream, then, may affect the type of property right that is 1i kely to be established. The crucial difference between sedentary farming and nomadic livestock production lies i n the extent to which the respective production techniques induce exclusive property rights with respect to a particular location. In Africa, as well as elsewhere, cultivation rights of farmers are property rights which, by virtue of the underlying farming technique, are territorially more exclusive than the typical pastoral property rights of grazing, watering, and passage. The economic value of territorial exclusivity of certain property rights is derived from a basic distinction between the production techniques of nomads and farmers. They differ in their ability to react ex post to temporal uncertainty, or, i n other words, they differ in flexibility. The concept of flexibility has only recently drawn the attention of economic analyses of risk in an intertemporal setting (see, e.g., Epstein 1980; Dreze and Modigliani 1972). Economic theory has generated an extensive literature on the effects of risk on economic decision making. However, risk is commonly modeled as if it were 1 "Some say that the quarrel arose at Earth's division between the brothers, i n which all land fell to Cain, but all birds, beasts and creeping things to Abel. They agreed that neither should have any claim on the other's possessions. As soon as this pact had been concluded Cain, who was 'tilling a field, told Abel to move his flocks way. When Abel replied that they would not harm the tillage, Cain caught up a weapon and ran i n vengeful pursuit across mountain and valley, until he overtook and ki 11 ed him" (Graves and Patai 1964, 91). "timeless." In this context, the individual is forced to make a decision ex ante, i.e., before the uncertainty is resolved. The formulation of the problem in terms of timeless risk precludes the theory to investigate important economic behavior such as learning-actively and passively-and adaptive strategies-a set of dynamic decisions that are influenced by new information as it becomes available. Once we introduce temporal uncertainty, a wider variety of economic behavior under risk can be modeled. Moreover, risk preferences have played a prominent role in studies that focused on ex ante risk reduction, notwithstanding the difficulty of the direct measurement of risk preferences. One advantage of the formulation of economic theory under temporal uncertainty is that it establishes the value of information or the value of an adaptive strategy for any risk preference. If economic institutions are a response to uncertainty, it seems logical not to restrict our attention to one type of risk. In other words, the recognition that uncertainty is not timeless, but resolves over time, is important for the analysis of economic institutions, i n general, and property rights, in particular. If a farmer puts up a fence around his fields and establishes an exclusive private property right to the land, he reduces a particular type of uncertainty. He reduces the risk that others may claim the field, and he assures himself of the full benefits of any investments he would care to undertake in his fields. He establishes ex ante certainty to the exclusive use of the land. The higher and the more certain the income stream he can derive from the exploitation of his field, the more he will be willing to pay for the "fence, i .e., the exclusive private property right. 'I However, where there is ex post uncertainty, there is a positive economic value attached to the capacity to adjust ex post. Thus, the ex ante "certainty," which a nomadic pastoralist would acquire by fencing his range i n a situation of extremely variable rainfall and a limited potential to improve the productivity of the range, does not represent a high economic value. The nomad, then, might not be interested in an exclusive private property right to a particular field. He might be more interested i n establishing a property right that would enable him to ex post adjust to temporal uncertainty. In particular, he would value property rights that assured him mobility. Such property rights are no less property rights than exclusive property rights. They assure the property right holder of a secure income stream. From a pastoralist perspective, then, establishing "tenure security" means establishing the security of such property rights as are best suited to capture the income stream of a mobile economic activity. However, in the context of the Sahel , we submit that pastoral ist property rights have been considerably eroded. Ever since the pub1 ication of Sen's (1981) seminal essay on the relation between famines and entitlements, the implications of the loss of property rights to nomads hardly need elaboration. Not only has such erosion led to an increase i n transaction costs of the nomadic enterprise, but it has also affected the pastoralists' ability to overcome periods of drought. The paper consists of four parts. The first part of the paper describes the agro-pastoral production system of the West African Sahel. Emphasizing the universal nomad-versus-farmer problem, the second part of the paper models the West African reality as the dual economy of Cain and Abel. The model simulates the emergence of a dual economy based on the comparative advantages of two different production techniques faced with envi ronmental uncertainty. An economic theory of optimal production techniques and property rights is developed i n a context of dynamic risk. The third part of the paper touches upon policy issues, both in a historical as well as i n a current framework. Conclusions are drawn in the fourth part. 2. THE AGRO-PASTORAL PRODUCTION SYSTEM OF THE SAHEL Even i n enlightened circles the "nomadic dilemma" is seldom understood as a problem of property rights, but, rather, as one of nomads "lacking modern education, ignoring frontie.r s and spreading cattle diseases" (Adamu and Ki rk-Greene 1986, xi i i) Additional ly, "Pastoral nomadism tends to be regarded as anachronistic, unconducive to good administration or education, and is expected to be superseded in time by 'resettlement' programmes" (Mortimore 1989, 223). Thus, a commonly he1 d assumption is that nomadism is ultimately doomed and that efforts should be geared towards making this outcome as painless as possible (e.g:, Lowe 1986). This attitude is best illustrated by a proposal for a principal motion at the Fifteenth International African Seminar on Pastoralists of the West African Savannah: The conference notes that the nomadic aspect of the life of pastoralists is no longer tenable i n the face of ever greater pressure on land, and that it is not in the interest of the pastoralists themselves to continue to lead a nomadic or semi- nomadic way of life. The conference therefore recommends the governments of the various countries i n which these people are found to encourage and actively aid their permanent settlement, the modernization of their methods of husbandry and to include animal husbandry in agricul ture devel opment programmes, whi 1e at the same time taking care to preserve whatever is worth preserving in their culture, including their languages (Adamu . and Ki rk-Greene 1986, xvi i ) The empirical reality of the effectiveness of pastoral production systems provides a stark contrast with the above presumptions. Maybe as much as 25 percent of the total population of West Africa can be classified as pastoral (Si hm 1989). In Sahel ian West Africa (Senegal, Ma1 i , Burkina Faso, Niger, and Chad) 1i vestock production typical ly accounts for 30 to 40 percent of total agricultural value added. Shapiro (1979) estimated that cattle originating i n Mauritania, Ma1 i, Burkina Faso,. Niger, and Chad supplies more than 50 percent of all slaughter cattle i n the wider West African region. These "low-productivi ty" Sahel i an 1 ivestock production systems operate at 1e ve1 s of animal protei n production per hectare that significantly exceed the levels for comparable regions in the United States and Austral ia (Breman and de Wit 1983). The supposedly "subsistence oriented'' and "backward" pastoralist economy supplies all major urban centers in West Africa with a steady and increasing flow of meat (Swift 1986). This flow is made possible 1a rgely by an elaborate and effective international trading network that links the