Africa's Unnatural Disaster

Publié le par hort

http://www.fpif. org/fpiftxt/ 5324

Africa's Unnatural Disaster
Sameer Dossani 
June 26, 2008

While the mainstream media doesn’t always ignore the pressing issue of hunger in Africa, it rarely explores the root causes of this problem. Behind most news on the issue, there’s an assumption that casts hunger as a natural result of unfortunate weather conditions, coupled with bureaucratic inefficiency and bad economic planning.

With this in mind, in 2005 the Bill and Melinda Gates Foundation announced a plan to “help millions of small-scale farmers lift themselves out of poverty and hunger.” In the years since, the foundation has been joined in its efforts by a number of other organizations that have founded the Alliance for a Green Revolution in Africa (AGRA).

According to AGRA’s website:

AGRA programs develop practical solutions to significantly boost farm productivity and incomes for the poor while safeguarding the environment. AGRA advocates for policies that support its work across all key aspects of the African agricultural “value chain”—from seeds, soil health, and water to markets and agricultural education... . A root cause of... entrenched and deepening poverty is the fact that millions of small-scale farmers—the majority of them women working farms smaller than one hectare—cannot grow enough food to sustain their families, their communities, or their countries.

AGRA’s assumptions – and those of the mainstream media – rest on the premise that Africa’s hunger problem is one of production. While production may be part of the story, it’s far from the complete picture. The heart of the agricultural crisis that Africa and the world are currently experiencing lies in the failed policy paradigm promoted by the World Bank and the International Monetary Fund, institutions that still have enormous control over economic policy in many African countries.

World Bank Role

The World Bank’s intervention in African agriculture began in 1981 with the study Accelerated Development in Sub-Saharan Africa: An Agenda for Action. Also known as the Berg Report, the study paved the way for World Bank involvement in the African agriculture sectors. The Berg Report prescriptions represent the first incarnation of the market fundamentalist policies that have been dominant in the African agricultural sector thereafter.

Since the Berg report, the World Bank has insisted on market liberalization and privatization of Africa’s agricultural markets. Subsidies of all kinds have decreased since 1981 and most state marketing boards and crop authorities have been greatly weakened or eliminated. No one – including the World Bank – denies that the net result of this policy is to expose small farmers to increased shocks. But the World Bank argues that shocks may be beneficial, in that exposure to actual market fluctuations will lead small farmers to grow high-value export crops instead of low value crops for local consumption. This “rational peasant” theory, as it was known in the 1980s, argued that small farmers shifting to high value exports such as coffee, sugar, cut flowers, etc. would ultimately bring in more money to the domestic economy, enabling rapid growth and development.

Market Fundamentalism

This theory – that government regulation should get be eliminated so that the market can do its job of “getting the prices right” – underlines World Bank thinking not only in the 1981 Berg report but also in their 2008 World Development Report, titled Agriculture for Development. Twenty years of the same failed policies are apparently not enough for the World Bank to change its tune.

The World Bank’s continued market fundamentalism is difficult to understand, especially in light of the fact that after more than 25 years of imposing these policies in Africa and Latin America, success stories are few and far between. Those countries that do have productive agricultural sectors (almost none of which are in Africa) either rely on huge landholders to be productive (Brazil, Argentina, Chile) or on massive subsidies (India) or both (U.S., EU). The countries that have eliminated their subsidies and privatized their grain boards, including many in Africa, are those that are doing the poorest.

In fairness, one or two changes can be seen in the World Bank’s thinking between 1981 and today. The first can be seen as an admission of failure – migration to more developed countries and the subsequent flow of remittances to families left behind, is mentioned as part of a strategy for reducing rural poverty (p. 73). While this is certainly true in the current global economy, there are few who would argue that forced migration is a path to development. Anecdotal evidence suggests that remittances may have a slightly greater correlation to development than the correlation between aid and development, but this is hardly high praise, considering the failures of the aid programs of the last 30 years.

The second concession that the 2008 WDR makes to reality (as opposed to market fundamentalist ideology) is an allowance for targeted subsidies. While subsidies have historically been a four-letter word for the World Bank, in recent years the Bank has come under fire for insisting on market liberalization in developing countries while acknowledging that developed countries have much higher subsidies than those in African countries. The World Bank’s answer to this is to continue to talk about various kinds of subsidies that distort trade and the need to stay away from those policies, while simultaneously allowing for the possibility of targeted subsidies to help the poorest of farmers who may be the most vulnerable to price shocks. This may be a step forward, but it is a small one and does little to relieve the burden of over 20 years of lost African development for which the World Bank bears a large share of responsibility.

The Real World

If one is willing to look at the events of the last 30 years without the quasi-religious belief that free markets lead to development and growth, one would undoubtedly find that the opposite is true. In his groundbreaking work Kicking Away the Ladder (2003), Ha Joon Chang documents the development of every industrialized country, showing that protectionist policies were a fundamental part of development strategy in almost every case. The process of development that emerges from this story is not maximizing comparative advantage (for if so, the U.S. would be a sparsely populated country of fur traders and fisher people) but rather shifting comparative advantage to high value goods through calculated market distortions. In the case of the U.K. and the United States, those market distortions originally came in the form of colonialism and slavery.
But market distortions continue in the U.S. today in the form of agriculture and steel subsidies, not to mention the tremendous government spending on biotechnology and defense, which largely serves as a subsidy for those sectors.

In light of these fundamentals of developmental economics, the World Development Report 2008 can be seen as an ideological continuation of the failed agricultural policies of the last 20 years, without an adequate analysis of why that period has been a failure for countries who would rely on agricultural exports as a path to development. The report does point out that a few countries (Brazil and Chile are the examples given) have successfully used agriculture to increase growth, but in Brazil and (to a lesser extent) Chile, small farmers are all but extinct, and agriculture is big business. Given the preoccupation with small farmers and poverty alleviation in other parts of the document, the examples are odd.

In addition to the failures of the free-market paradigm, the ongoing crisis of food prices has exposed global agricultural production as a disaster. Since about 1970, the World Bank, other international financial institutions and the private sector have succeeded in completely transforming agriculture from a primarily local affair to a complex industrialized process. Monocropping, over-reliance on chemical pesticides and fertilizers and trans-genetic manipulation have in some cases increased yields; but these practices have not led to a significant reduction in the number of hungry people in the world. The recommendations of the Alliance for a Green Revolution in Africa and the World Bank amount to insanity – recommending more of the same and expecting better results.

Perhaps most shocking is that this new push towards increased globalization and industrialization is occurring at precisely at the moment when many in the United States are moving towards a diet that is both local – produced somewhere in the vicinity of where it is consumed – and organic – produced without the use of synthetic hormones, chemical fertilizers, pesticides, and genetic modification.

In the United States, Europe and elsewhere, many are beginning to understand that industrialized agriculture benefits neither those who produce nor those who consume food. In the current food crisis, more than 25 countries and the European Union have imposed tariffs, subsidies, price controls or other measures to protect consumers from the global free market. So why the double standard when it comes to Africa?

For those interested in solutions, the organic and local movements aren’t far off the mark. What producers and consumers in many parts of the world are beginning to understand is that the way that farmers have been growing food for millennia is more or less a good system. While there may be room for technology, (drip irrigation systems, for example) that innovation should not alter the food product nor add layers of cost.

Many parts of Africa have an advantage in that they have never really lost their traditional relationships with the land. The problem has been that cheaper food from Europe and the United States is often dumped on African countries, undercutting the possibility for farmers to earn a living from their production. In the case of Africa, all that may be needed is a sensible trade policy to protect those who already grow enough food for all Africans.

Sameer Dossani, a Foreign Policy In Focus contributor, is the director of 50 Years is Enough and blogs at shirinandsameer. blogspot. com. This commentary is adapted from a longer paper soon to be published by Africa Action.

The World Trade Organization, (WTO), is the primary international body to help promote free trade, by drawing up the rules of international trade. However, it has been mired in controversy and seen to be hijacked by rich country interests, thus worsening the lot of the poor, and inviting protest and intense criticism.

WTO principles

Founded in 1995 after the 8-year “Uruguay Round” of talks, it succeeded the General Agreement on Tarrifs and Trade (GATT), which was created in 1948 to lower trade barriers. The scope of the WTO is greater, however, including services, agriculture, and intellectual property, not just trade in goods.

The main principles of the WTO boil down to the following:

Non discrimination

National treatment implies both foreign and national companies are treated the same, and it is unfair to favor domestic companies over foreign ones. Some countries have a most favored nation treatment, but under WTO the policy is that all nations should be treated equally in terms of trade. Any trade concessions etc offered to a nation must be offered to others.


Nations try to provide similar concessions for each other.


Negotiations and process must be fair and open with rules equal for all.

Special and differential treatment

A recognition that developing countries may require “positive discrimination” because of historic unequal trade.

Reality different from the principles

As principles, many of these sound good. Certainly the vast majority of the world’s nations believe so for they have signed up to the WTO.

However, in reality, power politics has meant that the WTO has received criticized by various groups and third world countries for numerous things, including:

  • Being very opaque and not allowing enough public participation, while being very welcoming to large corporations. (That doesn’t help the claims of free, open and democratic!)
  • That while importing nations cannot distinguish how something is made when trading, though it sounds good at first along the lines of equality and non-discrimination, the reality is that some national laws and decisions for safety and protection of people’s health, environment and national economies have been deemed as barriers to free trade. Take the following as a very small set of examples:
    • Countries cannot say no to genetically engineered food
    • or milk that contains genetically engineered growth hormones known to cause health problems
    • or trees that have been felled from pristine forests and so on.
    • Guatemala took efforts to help reduce infant mortality, in accordance with the World Health Organization’s guidelines, and to counter aggressive marketing by baby food companies aimed at convincing mothers their products are superior to the more nutritious and disease-protecting breast milk for their babies. The result? The affected corporations managed to take this to GATT (the predecessor to the WTO) and get a reversal of the law amidst the threat of sanctions. Profits prevailed.
    • Canada complained to the WTO about France’s ban on asbestos. (The previous link also makes the point of how the victim’s views are not heard in WTO proceedings, nor ar they part of the debate, even though there may be thousands of them.)
    • The United States’ attempt to ban shrimp caught using apparatus that were harmful to endangered sea turtles has been ruled as WTO-illegal, forcing the US to reverse its decision.

Lori Wallach, Director of Global Trade Watch, provides further examples in a video clip (6 minutes, transcript) also noting that various global trade agreements have been pushed in such a way that they often undermine local laws and constitutions. If for example, health or environmental protections get in the way of the trade agreement, then they often have to be revoked or changed in favor of trade agreements:

  • That instead of respecting the reasons why there has been special and differential treatment for developing countries, rich countries instead want to push poor countries to reciprocate equally, in what would therefore actually be an unequal result (as it would maintain the unequal terms of trade.)

A number of countries have also spoken out against the WTO saying that there needs to be more co-operation between the North and South (a general term to refer to the Rich and Developing countries, respectively) with regards to international trade.

  • During the week of May 20, 1998, celebrations marked 50 years of multilateral trade. However, as the following link mentions, the African nations did not feel that there was much to rejoice at and said that it was a party where only the rich nations has something to celebrate.
  • Most people in the world have not benefited from the current form of “multilateral” trading systems.
  • At a Mercosur (South America’s Southern Common Market) summit, then South African President, Nelson Mandela, had spoken of the need to ensure that there is more fairness in the globalization process. Mercosur is the world’s fourth largest economic power, after the United States, European Union and Japan.
  • There have been so many examples, it is impossible to list here. For more, see other parts of this site’s section on Trade, Economy, & Related Issues. (to continue reading
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