Tag Archives: Agricultural Subsidies

the rising cost of food, can africa cope?

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This week’s economist newspaper has a piece on the issue of “agflation” – the recent upsurge in global food prices. The rise in food prices should be a wake up call to least developed countries whose populations mostly depend on food aid to keep body and soul together.

The fact of the matter is that as food prices rise, the cost of sending food aid will go up and if the donors who distribute this food do not get additional funding they may have to cut their budgets – meaning more poor people in the world will have to die of undernutrition related deaths.

But can this be avoided? The answer to this question, I can dare say with “high confidence,” is a simple yes, and here is why.

Ideally, rising food prices should be good news for countries who still consider agriculture  to be the backbone of their economies. (mostly in Africa and the rest of the global south) What this means is that these countries will have a chance to earn more forex from their exports of wheat, maize and what not. But this is not the case. Most of these agri-economies are net food importers because their arable land potential is not being maximised. This is largely due to poor farming practices in the underdeveloped countries and food subsidies in the global north that make farming not so attractive to entrepreneurs.

The WTO, among other such international institutions, has failed to resolve this adverse state of affairs but it is my hope that may be now that prices have gone up Washington and Brussels will finally cut off their subsidy-addicted farmers and let Adam Smith’s invisible hand do its work in determining returns on agriculture and thus give global southerners a fairer chance. At the same time, governments of the underdeveloped agri-economies should strive to be food sufficient – like Malawi has recently done, without much help from outside.

the AU – EU summit, focusing on the essentials

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Following the Berlin conference circa 1884-5, Europe has always felt obligated to care about matters African – be it during the colonial period or in the post colonial era. This historical accident resulted in an Afro-European relationship that has mostly been characterised by tension and mistrust.

But things are changing. These days the two peoples talk of a “constructive engagement” and a cessation of paternalistic lecturing by the (former) colonialists. Although some leaders of Europe still suffer from what a Zimbabwean daily calls “an apparently incurable colonial master hangover,” most of them have moved on and come to see African countries as sovereignties that deserve to be treated with respect.

It is under this new arrangement that the EU-AU summit is being held in Lisbon, Portugal. Although the summit has been marred by a lot of controversy – from Mugabe’s attendance to Brown being accused of sending a junior cabinet member to the summit simply because she is black – it still has potential to provide the framework for a more productive relationship between the two continents based on trade and exchange of ideas.

Brussels has realised that its aid to Africa – sometimes due to guilt, but mostly because of humanitarian concern – is not sustainable in the long run. It has dawned on the EU that investment in African economies and allowing freer trade is the only way that is going to alleviate poverty in Africa and make the EU competitive against the Chinese and the Americans who have significantly increased their respective trade involvements with Africa over the last few years.

My hope is that the summit will focus on trade (making it fairer and easier) and good governance. With regard to trade, the EU should commit to reducing all non-tariff barriers to trade with the continent – from the controversial agricultural subsidies to the rather tasteless “place of origin” labels insisted upon by some pesky pressure groups. On matters to do with government, Brussels (and especially Sarkozy’s men) should send a clear message that they will not prop up leaders who do nothing but steal from and oppress their people. They should do this openly and explicitly. Previously, Europe has shied away from direct criticism in fear of the African leaders playing the race and neo-colonialism cards. But these sorts of Africans are a tiny left over of the immediate post-colonial period. Majority of Africans would welcome such criticism and even offer support it if indeed it is good natured rectitude.

So on the whole, the success of the Lisbon Summit will depend on the attending leaders’ commitment to addressing the issues that are most relevant to the average farmer in the African countryside: fair trade and good governance.