African Entrepreneurship Record

Chapter 1062: Chapter 71: Agricultural Crisis

Germany is one of the main import countries for East African minerals and primary agricultural products, with East African cotton holding an important position in Germany’s textile industry.

Currently, nearly all raw materials for Germany’s cotton textile industry are imported, and the industry ranks first in Europe and fourth in the world. Previously, Germany’s cotton imports mainly came from the United Kingdom and the United States. After the growth of East African cotton plantations, East Africa has become Germany’s largest source of cotton imports.

Germany’s annual cotton imports are about one billion pounds and were still growing before 1907, while East Africa’s current total cotton production is about 2.3 billion pounds, with nearly 400 million pounds exported to Germany annually. Combined with approximately 700 million pounds to Austria-Hungary and other major cotton-importing countries like Tsarist Russia, East Africa’s annual cotton export volume exceeds one billion pounds, roughly 400,000 to 500,000 tons, with Central and Eastern Europe countries being East Africa’s main market.

Therefore, the European economic crisis will greatly impact the export of East Africa’s primary agricultural products. Of course, East African cotton planting clearly caused a significant impact on the global cotton industry, notably affecting the United States and the United Kingdom the most. The UK, having sizeable cotton plantations in India and Egypt, finds itself in competition with East Africa.

It’s fortunate that East Africa and the United Kingdom already experienced the South African War, where just suppressing East African cotton planting and textiles was enough for the UK to find an excuse to go to war, and after the South African War, East Africa indeed exerted immense pressure on traditional agricultural exporting countries in the agricultural sector.

Particularly the United Kingdom, the United States, or other tropical countries, East Africa leveraged its territorial and population advantages to outpace others, causing a severe impact on the international economic crop market, especially the tropical and subtropical economic crop market.

This includes crops like cotton, rubber, tea, coffee, and certain spices. Moreover, during the first five-year plan, East Africa’s agricultural technology, mechanization, and output of pesticides and fertilizers increased, further lowering East African agricultural production costs, which impacted agricultural nations like Brazil and India the most, as they were less developed agriculturally.

At the time, Brazil, in terms of landmass and population, couldn’t compete with East Africa. Moreover, the agricultural homogeneity between the two countries was high, and East Africa was geographically closer to the Europe and Asia market than Brazil, positioning Brazil as the first victim of East African agricultural rise.

India fared a bit better. Although it has a smaller land area, India’s proportion of arable land is large, with a population of 300 million, and its labor costs are even lower than East Africa, this country of slavery. With the British backing, India’s agricultural advantages are still relatively significant. However, East Africa’s highly developed agriculture means that British exploitation of India has intensified further.

Aside from these two countries, while other nations have some competitive relationship with East African agriculture, due to different latitudes and climates, they are relatively less affected.

Ernst said to the Ministry of Agriculture: ”Our agriculture is significantly impacted by the world economic crisis, with international agricultural product prices maintaining low levels for a long time. Now, facing the international market’s downturn, this is not good news for our agricultural development.”

An official from the Ministry of Agriculture said, ”Your Highness, regarding this, there’s not much we can do. The only thing we can do is to absorb the surplus agricultural capacity through massive domestic industrialization, and further distribute agricultural products to optimize the population’s living standards, counterbalancing the overproduction in the agricultural sector.”

In reality, the world’s demand for agricultural products is quite strong. After all, per capita consumption of agricultural products in the early 20th century was far lesser compared to future generations, and many regions of the world still experienced substantial hardship.

For example, the Far East Empire, perennially afflicted by various natural disasters and now impacted by internal unrest, faced widespread famine. This was especially true in 1906 when a severe drought struck the north during the fervent implementation of East Africa’s two-five plan, with the Huaihai Economic Zone being the most affected area.

In other parts of the world, except for industrial countries or some colonies, most people lived below the poverty line, and this poverty meant the constant risk of not having enough to eat.

Tsarist Russia is a typical example. After the Russo-Japanese War, to repay debts and restore the navy, Tsarist Russia naturally resorted to exploiting wealth further, and as an agricultural country, not even half-industrialized, any additional taxes only exacerbated the suffering of the lower classes, making it no wonder it became the weakest link in imperialism.

East Africa was not much better off; however, East Africa just needed to ensure its people’s living standards were higher than the world average, and being a slave state, it didn’t need to exert much pressure on its citizens.

Ernst said: ”The challenges in the agricultural sector are significant, but this crisis shouldn’t last too long. The government needs to withstand the pressure, maintain current agricultural production, and with the advancement of industrialization, future agricultural development will also take a big step towards mechanization, and the proportion of the agricultural population will drastically decline. Once our industrialization reaches a certain level, the influence on the agricultural sector will also diminish.”

East African industrialization is quite different from the Soviet Union’s, mainly due to its more stable nature, meaning East Africa’s exploitation of agriculture doesn’t reach the level of the Soviet Union’s. Of course, there’s still a distinct difference between the agricultural and industrial populations.

Without creating such differences artificially, East Africa’s industrialization wouldn’t proceed so smoothly, as agricultural populations wouldn’t actively shift towards industry unless their survival was threatened.

The main reason is that East African industrialization funds didn’t need to solely rely on agriculture, which is a benefit of being a colonial nation, as a significant portion of East Africa’s national wealth came from exploiting Black people. Wealth was firmly controlled by the state from the founding.

The Soviet Union, on the other hand, was in a completely different situation. For initial development funds, the Soviet Union even had to sell antiques. After the revolution, many of Russia’s former upper class, who controlled wealth, fled overseas, and the early Soviet regime didn’t control the entire country. This ensured that the social upper class, holding most of Russia’s wealth, had ample time to flee. Simultaneously, the original ruling class waged war against the Soviet regime, massively sabotaging factories and other basic infrastructure, further destroying Russia’s original industry.

This resulted in the original social wealth of Russia being entirely plundered. What the Soviet Union could capture was only a small portion. Therefore, when the Soviet Union pursued industrialization, and even later when the Far East Empire attempted early industrialization, they faced severe financial difficulties. The Far East Empire was even worse off than the Soviet Union. The Soviet Union industrialization phase coincided with the capitalist world’s major crisis, whereas the Far East Empire not only lacked such an opportunity but also faced an even stricter blockade.

In comparison, East Africa was undoubtedly much more fortunate, with a significantly better international environment. Additionally, as a slave state, East Africa could avoid many problems through the exploitation of indigenous people, and the fate of Black people was not the concern of the East African government.

”Ensuring agricultural products’ export is an important task for the upcoming period. Simultaneously, our industry’s absorption of agriculture is greatly increasing. The scope of this agricultural crisis can never compare to the agricultural crisis of 1873, so we don’t need to be overly worried,” said Ernst.

During the agricultural crisis of 1873, East Africa’s national agriculture was still mainly focused on food crops. By 1907, East African agriculture had shifted towards economic crops as the main focus. Through the suppression of agriculture in other tropical countries in the 1990s, East African agriculture’s resilience is still strong. Moreover, the 1907 economic crisis is not nearly as severe as the economic crisis of 1873, a crisis Ernst had not even heard of in his past life, so the market recovery speed should be quite fast.