Was the wage burden too heavy? - Settler farming, profitability, and wage shares of settler agriculture in Nyasaland, c. 1900-60

The historical role of European farming in southern and central Africa has received a great deal of attention among scholars over the years. Going through this vast literature, a striking consensus emerges: the success or failure of European farming in southern Africa was to a large extent dependent upon the colonisers’ access to and control over cheap labour, which they in turn could only access through strong support of the colonial state. Yet, these propositions have so far never been systematically and empirically tested. This paper is a first attempt to do that by analysing the ‘wage-burden’ European settler farmers faced. The wage-burden is identified by measuring wage shares (total amount paid in the form of wages as a share of total profits) on European farms in colonial Africa. Based on archival documents, we construct time-series for value of output, transportation costs, investments in agriculture, and wages paid for the European tobacco and tea sector in colonial Malawi. Our results contradict both with previous research on settler colonialism in Africa and the historiography of Nyasaland. Our estimates show that settler farming did not collapse in the 1930s as commonly assumed. On the contrary, the value of production on both tobacco and tea farms increased significantly. And so did the settler farmers capacity to capture the profits, manifesting itself by a declining wage share over time. In contrast with previous research we argue that the developments cannot be explained by domestic colonial policies but rather through changes in regional migration patterns, and global commodity markets. Migrations patterns had a significant impact on the supply of farm labour and global commodity markets influenced value of production. Market forces rather than colonial policies shaped the development trajectory of settler farming in Nyasaland.