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Transnational Companies: The Good and The Bad

Transnational CompaniesA transnational company is a global company that has factories and offices in different countries around the world. The headquarters are usually in advanced countries and its factories and manufacturing facilities are in less developed countries. Most of the transnational companies have home headquarters in Western Europe, Japan or the United States. Suppliers can be anywhere in the world depending on the necessary goods. However, companies usually set up their manufacturing centers in places where labor is cheap to keep operating costs low.

The operation of transnational companies in less developed countries where rates of poverty are high can be helpful in aiding people to break out of the cycle of poverty, but the risks of exploitation and low wages are still present.

Advantages

  • Creating jobs for the local population – Undoubtedly, transnational companies create jobs for the local population; they account for at least one-fifth of total paid employment in manufacturing in a number of developing countries. The creation of more and more jobs not only boosts the economy of the country but also provides local workers with a stable income, albeit that pay is low. Furthermore, these jobs help in improving the skills of its employees, which can then be transferred to future jobs and taught to others in their communities.
  • Economic growth for the country – Transnational companies bring much-needed money into a developing nation. Although most of the profits do return to the company’s country’s headquarters of origin, the local economy does benefit. By boosting business activities in the country, transnational companies contribute to economic growth and development. They could also act as growth poles for other similar companies by encouraging them to locate to that country, thus bringing in even more economic support.
  • Developing infrastructure and technology – Developing countries do not have sufficient resources needed to boost research and development, leaving them technologically behind. Transnational companies however bring in technology and knowledge that the host country does not possess, consequently furthering their development. They are a source of inventions and innovations. Also, infrastructure in the ways of transport links, airports and services are also developed as a result of transnational companies.

Disadvantages

  • The exploitation of workers – Even though transnational companies do provide employment opportunities, they also can exploit the employees. The minimum wage rate for the workers is very low when compared to the work that they complete and the long hours spent, commonly with little or no breaks. The income that workers receive may be stable, but it is not enough to survive on, let alone enough to live a decent quality of life. In a desire for cheap labor, working conditions may also be poor and sick leave that workers are entitled to may be refused.
  • Environmental damage – Transnational companies often receive critics for their harm to the environment. The use of cheaper, non-renewable resources limits sustainability and the burning of materials such as plastic and rubber pollutes the environment. Developing countries need environmental sustainability since for many their health and livelihoods greatly rely on the natural environment and the risks of air and water pollution further diminish their development.

H&M in Ethiopia

One example of transnational companies operating in a less developed country are the textiles and fashion companies such as H&M, Guess and others in Ethiopia. They create job opportunities for local people and particularly for women. However, as mentioned above, the risks of exploitation are prevalent. Garment workers in Ethiopia are among the lowest paid, with a 2019 study from the Center for Business and Human Rights reporting that they have an extremely low pay of just $26 a month. This does not cover basic needs thus not enabling the workers to live a decent quality of life.

There are several NGOs who work towards tackling exploitation in the garment industry; one such example is CARE International, one of the biggest defenders of workers’ rights in all areas, including the fashion industry. It currently has work going on in 95 countries around the world, reaching 56 million people directly via approximately 1,000 projects and indirectly working towards 340 million lives globally.

The Overall Impact on Poverty

So, transnational companies do provide jobs and boost a country’s overall development, but at what cost? There are other ways to help local workers in improvising their livelihoods without the risk of exploitation and capitalist benefits. One such example of this is Farm Africa, a more sustainable and locally oriented initiative. Farm Africa is a charity that helps to reduce poverty by helping local people in eastern Africa to earn more from their produce. Working in DR Congo, Ethiopia, Kenya, Tanzania and Uganda, Farm Africa works to boost the economic welfare of the people, whilst also ensuring environmental sustainability, thus protecting their environment for generations to come.

For a transnational company to be effective, it would need to involve the local people, not just use them for cheap labor to boost its own profits. It is imperative for an initiative to tackle poverty to be sustainable not only environmentally, but also socially and economically.

– Ruby Wallace
Photo: Flickr

Chefs for Change Connects Fine Cuisine and Rural Farming

Chefs for ChangeIn 2015, the United Nations developed a set of objectives that aim to end all forms of poverty by 2030. There are 17 points in the Sustainable Development Goals (SDG). These points, if achieved, will help to bring the world towards a more sustainable future, one without poverty or hunger. Certain organizations have implemented programs that aim to ensure that these 17 points are met. One such program is Chefs for Change.

Chefs for Change

Together with Nicolas Mounard, the Chief executive of Farm Africa, world-renowned chefs Joan Roca, Eneka Atxa and Gaggan Anand launched Chefs for Change in June 2017. This movement focuses on sustainable agriculture in developing communities and its importance in regards to achieving sustainable development goals. During an event that highlighted the cause, the three chefs talked about their involvement with Chefs for Change.

Chef Joan Roca said, “A dish is much more than the sum of its ingredients. If we consider its sourcing, we see that every ingredient has been created by a varied cast of human characters involved in every step of the food’s journey from land to the plate.” One of the main goals for Chefs for Change is to help rural farmers get the recognition they deserve to ensure that their business can be successful.

Different chef ambassadors are appointed to rural communities in Africa, Asia and Latin America. Here, these Chefs for Change shadow local chefs as they visit the local farms that provide the food and then return to the restaurants where the food is prepared and served. After working with local farmers for some time, the chef ambassadors then report the progress made in these local communities in regards to their contribution to the 17 sustainable development goals.

The Importance of Farmers in Rural Communities

More than 70 percent of the world’s food supply comes from small farms like the ones that these chefs are working with. These chef ambassadors know that without the help of these rural farmers and the role they play in agriculture, chefs around the world would not have many of the ingredients available for them to use on a daily basis. Through these experiences, the chefs are not only helping the local farmers achieve sustainability but they are learning from them as well.

When the ambassador chefs return from their trips, they have many stories to share. These stories are what help to bridge the divide between upper and lower class agricultural societies. In addition to sharing these stories, the three ambassador chefs hope to inspire other chefs to follow in their footsteps, thus continuing this path of positive exposure and success for smaller farming communities.

Chefs for Change is bringing awareness to the important issue of agricultural infrastructure. The goal is to rid these rural farming communities of food insecurity and ensure that the farmers are thriving in their agricultural practices. By continuously working with local chefs and ensuring that they progress towards achieving the U.N.’s SDG goals, those involved with Chefs for Change are helping to work towards a poverty-free future.

– CJ Sternfels
Photo: Unsplash
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How Farm Africa is Helping in the Fight Against Poverty

How Farm Africa is Helping in the Fight Against Poverty
Farm Africa is a nonprofit organization that is reducing poverty in Eastern Africa by helping farmers “grow more, sell more, and sell for more”. The organization focuses on three aspects: agriculture, environment and business.

Agriculture

Agriculture in Eastern Africa accounts for 70 percent of the population’s income. Farm Africa is enabling farmers to maximize the use of their land by sharing its expertise in growing the most appropriate crops for the region in regards to climate and soil composition, as well as the most profitable crops. They also help to provide the necessary tools in order to achieve a successful harvest year after year.

Environment

In an interview with Aid For Africa, Bridget Carle, a graduate student working in South Africa, said, “Agricultural researchers have found that increased carbon dioxide in the atmosphere can affect crop production…But now we are learning that higher levels of CO2 are likely to reduce levels of essential nutrients like zinc, iron and Vitamin A, as well as the protein content of crops.” Farm Africa is aware of the changing environment and uses its knowledge to encourage African farmers to use sustainable farming practices. The organization also helps farmers develop holistic approaches to their farming, taking special care to not overuse resources.

In Ethiopia, Farm Africa is currently working with citizens to employ sustainable practices to preserve their forests and increase their economy. One such example is teaching community members to produce honey, weave baskets and make bamboo furniture in order to generate income rather than chopping down trees so they can sell timber.

Business

Forbes Africa wrote an article showing how investing in irrigation has seen positive outcomes for Ethiopia’s economy. This article includes a section about how Farm Africa, the Ethiopian Bureau of Agriculture and local extension officers have come together in a joint effort to “help women and young people adopt small-scale irrigation…[as]part of an initiative to increase their incomes and improve their nutrition.” This project came close to reaching 6,400 women and landless people.

There are three parts to Farm Africa’s approach to business; business development, finance and trade. The organization helps Africa’s rural entrepreneurs expand their businesses and give them the tools to be successful over the long term. Farm Africa encourages the growth of co-operatives so that farmers may sell their products in bulk.

Farm Africa has 170 employees across four countries in Eastern Africa: Tanzania, Kenya, Ethiopia and Uganda. The organization works on the ground with farmers, helping them develop sustainable farming practices and yield higher quality crops year after year. They are teaching community members to be environmentally conscious as they give them different business tools to help them grow their businesses and thrive in larger markets. By focusing on agriculture, the environment and business, Farm Africa is helping to reduce poverty in Eastern Africa.

– CJ Sternfels
Photo: Flickr

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Growing Trade: The Uganda-Kenya Grain Partnership

Uganda-Kenya Grain PartnershipA recent trading partnership between Uganda and Kenya is expected to bring prosperity and better trade relations for both countries. The two countries partnered up to balance out the surplus of grain produced in Uganda with the growing demand coming from Kenya.

Below are three things you should know about the Uganda-Kenya grain partnership and its potential to foster renewed development and growth in the region.

1. Global efforts make the partnership possible.

The FoodTrade project was able to establish the Uganda-Kenya grain partnership through a $3 million grant from the U.K.’s Department for International Development.

The partnership links farmers in Uganda to buyers in Kenya through a secure trading channel. This will allow for more effective, efficient trading of popular grains including green grams and soy beans.

Farm Africa, the lead agency for the FoodTrade project, assists smallholder farmers produce crops efficiently and trade them more effectively. This will boost their incomes and provide locals across the continent with the tools needed to feed themselves.

2. The partnership will positively impact many living in Uganda and Kenya.

Uganda, home to 35 million people, is among the fastest growing populations in the world. 80 percent of Ugandans are employed in the agriculture sector. Agriculture makes up 23 percent of the country’s GDP.

With such a large portion of the country’s working population gaining its livelihood from farming, an avenue to efficiently trade the goods produced means Uganda’s citizens can earn a profit, thereby boosting their income.

On the other side of the coin, Kenya has experienced extreme drought in recent years that has significantly reduced its grain production. The country also struggles with a lack of arable land to produce enough crops to meet the country’s growing demand.

The World Bank’s data shows that 34 percent of Uganda’s land is usable for farming whereas only 10 percent of Kenya’s land is healthy enough to produce crops. The Uganda-Kenya grain partnership will help bridge the gap between Kenya’s demand for grain and Uganda’s supply.

3. Smallholder farmers become the focus.

The partnership allows smallholder farmers to be linked to high paying buyers in Kenya. This agreement establishes a well-functioning regional market, which allows farmers to earn more money for their products than they would on their own.

The Uganda-Kenya grain partnership will also help to cut down on post-harvest losses by establishing a clean, reliable storage system.

This means that less food will go to waste and farmers will suffer fewer losses that cut into their income. More than 70,000 smallholder farmers are expected to benefit from the partnership.

The Uganda-Kenya grain partnership opens the door for thousands to better their lives by bridging the gap between Uganda’s supply of grain and Kenya’s growing demand for agricultural goods.

Hopes are high that this new avenue for trading will establish a strong economic relationship between Uganda and Kenya, which will allow both countries to prosper and take steps towards furthering developed.

– Sara Christensen

Photo: Pixabay

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Farm Africa: Expanding Exports for East African Farmers

Farm Africa
Farm Africa is the top agency under the Food Trade project, a U.K. government-funded food crop trade enhancement program that assists farmers in Uganda and Tanzania to increase their household incomes and boost their living standards.

The undertaking is supported by a £3 million ($4.2 million) grant from the U.K.’s Department for International Development (DFID). The Guardian reports that the project will benefit 70,000 Ugandan and Tanzanian farmers, in part by expanding their export markets.

According to Farm Africa, 60 percent of the world’s uncultivated land suitable for crop production is in Africa. There is an enormous possibility for development in the continent that would allow for self-sustaining food production.

In the last year, Farm Africa has impacted 1.4 million people in eastern Africa. The organization has incorporated contemporary systems and methods to help farmers “grow more, sell more and sell for more.”

The Farm Africa project will assist Ugandan and Tanzanian farmers manage and supply exceptional quality grain and market it for maximum profit.

The project will help 12,000 farmers in the Teso sub-region, including 2,000 members of the Katine Joint Farmers’ Co-operative Society (Kajofaco). This will allow more isolated farmers to connect with high paying buyers, particularly in Kenya.

The Kenyan market has a large population and booming economy which is key for the success of Ugandan and Tanzanian farmers. Additionally, Kenya, for the most part, is a food importer due to its mediocre crop growing capabilities.

Farm Africa, through the Food Trade project, will train farmers in Katine which is one of the poorest areas is in Uganda. The agency will provide guidance for improving methods of harvesting, drying, sorting and grading grain in three staple crops: maize, rice and beans.

Steve Ball, Farm Africa’s county director in Tanzania said to The Guardian: “By incentivizing farmers to grow bigger surpluses and making regional trade easy and affordable, this project will help lift tens of thousands of grain farmers in Tanzania and Uganda out of poverty as well as taking eastern Africa a step closer to agricultural self-sufficiency.”

– Heidi Grossman

Photo: Flickr

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Communities Reverse Deforestation in Ethiopia

deforestation_ethiopia
Less than 5% of Ethiopia’s original forest remains today. Ethiopia experiences 0.8% deforestation per year, and is down to 4.6% forest cover. The rapidly growing population of 85 million and the 70 million livestock put pressure on land forests.

With 80% of the population living in rural areas, deforestation in Ethiopia affects their livelihood. Before 2007, the forest in Ethiopia was government-owned. Michelle Winthrop, Country Director of Farm Africa Ethiopia, helped pioneer an initiative in 2007 to place responsibility for the forest on the local communities.

“You can stick up a big fence around the forest,” Winthrop says, “but people climb fences. If you embed the ownership for the protection of the forest in the hands of communities, it is much more powerful.”

The majority of the rural population are members of the cooperatives that protect the forest; therefore, forest dwellers no longer cut down trees for fuel or livestock grazing. The forest condition has improved a great amount, allowing an opportunity for impoverished forest dwellers to find more sustainable ways of earning income.

In the Bale region, Farm Africa is implementing a participatory forest management scheme. Of the 23,000 households covered by the project in the Bale region, about 3,500 have taken up growing coffee and bamboo, as well as learning how to become bee-keepers.

Farm Africa provided agricultural expertise and equipment to start harvesting coffee and honey, rich natural resources of the Bale region of southern Ethiopia. Along with the transfer of power to local communities, those people are now also able to produce high-value crops and have connections to lucrative market opportunities.

“We built people’s relationship with that coffee and helped them understand that a small amount of it, carefully harvested, is important both for their own pockets and also the condition of the forest,” says Winthrop.

An unexpected outcome of the participatory forest management project has been a sense of civic responsibility, leading to more stable communities and building democracy at the grassroots level.

– Haley Sklut

Sources: Dowser, Herald Tribune, The Guardian
Photo: First Climate

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Smallholder Farming in Africa: 5 Major NGOs

Almost three-quarters of Africans rely on smallholder farming for their livelihood, yet one-third of all Africans go hungry. To meet that need, those farmers must increase their production dramatically over the next 40 years—and most of the world’s uncultivated land is actually in Africa. Clearly, smallholder farming in Africa is a big deal. Want to know the major players in the development of African farming? Read on.

1. TechnoServe

This is one of those organizations that has been working behind the scenes, primarily in Africa, for decades. Since the 1960’s, TechnoServe has been quietly targeting failing food markets, identifying unmet demand in those markets, finding the businesses that can meet that demand, and partnering with those businesses so that they grow and uplift their communities. Their emphasis is on partnership—they want to find the locals already doing great work and help them do it better. In 2011 alone, they helped their partners collectively earn $315 million in revenue and impacted over 2.5 million people’s lives in over 30 countries as a result.

2. One Acre Fund

This is the organization that claims to, within three years, represent the largest network of African smallholder farmers. How? They predicate their entire model on one simple idea: when a farmer increases their harvest, they lifts themselves and their community out of hunger and poverty. Toward that end, the organization offers a comprehensive “market-in-a-box” that lends farmers crucial agricultural inputs (seed and fertilizer), trains them how to use it, and connects them with markets to sell their yield. Their simple model has already reached over 60,000 farmers in Kenya, Rwanda, and Burundi, and they project that they will reach 1.4 million farmers by 2020.

 3. Farm Africa

One of the leading African agricultural development organizations, Farm Africa does it all: bringing farmers better tools, showing them how to double or triple their harvest, and training them how to navigate the market. What makes them different? They say it is their unique, compound approach of agricultural innovation and marketing savvy. Because they are highly specialized in farming, they have a wide inroad into the development of Africa’s unfarmed land and untrained famers. In 2012 alone, they increased coffee crop revenue for farmers in Ethiopia by 600% and helped 30,000 people in Tanzania double their crop yields.

4. Self-Help Africa

If you really want to know what’s going on in the African farming world, you need to know about Self-Help. For over 25 years, this organization has been supporting farming entrepreneurs in Africa with microcredit programs, enterprise development, community cooperatives, access to inputs, and policy advocacy. Because the success of smallholder farmers lies at the heart of so many poverty-related issues in Africa, their mission is to empower Africa’s rural population. They work in nine countries across Africa and have reached millions of Africans with their services.

5. Practical Action

Yes, the name is broad—but so is the organization. Although Practical Action is one of the great champions of agro-economic development in Africa, it works all over the world. Its focus is “technology justice”, which is the equitable application of technology for positive social impact. So what are they doing in African agriculture? The answer: radical community development, policy advocacy focused on food rights, and over a dozen groundbreaking agricultural innovations, to say the least.

– John Mahon

Sources: IPS, Practical Action, One Acre Fund, Farm Africa, TechnoServe
Photo: The Guardian