How to Solve Africa's Food Crisis
by Thompson Ayodele, Baltimore Chronicle & Sentinel
http://www.baltimorechronicle.com/2008/060308Ayodele.shtml
This story was published on June 3, 2008.
The little that is left of domestic food markets in Africa is ruined by the inflow of cheap or free food aid.
Since the beginning of the year, the world has been scourged with a food crisis. An increase in the price of food staples to sometimes astronomical levels has raised the risk of famine, exposed more people to malnutrition and led to protests around the globe. World leaders, seeking to avoid regime-toppling unrest, are trying to figure out how best to feed the world’s inhabitants.
U.S. President George W. Bush, in particular, has announced about $200 million in emergency food aid. This is in addition to his call upon the U.S. Congress to make another $770 million available for food aid. In total, the emergency food aid from the U.S. alone may total almost $1 billion.
Historically, the U.S. has been the largest provider of food aid. In the 2007 fiscal year, for example, it provided 2.5 million metric tons of commodities to over 70 countries, with a monetary value of $2.1 billion. Within the same period, it provided 1.5 metric tons of emergency food aid to 30 countries valued at $1.2 billion.
Aside from those who are victims of natural disasters like the recent cyclone in Burma, however, food aid will do nothing to assuage the rising cost of food and food shortages in the long run. One risk is that the little that is left of domestic food markets is ruined by the inflow of cheap or free food aid. In the long run, regular deliveries of food aid to food-insecure populations have meant that autocratic governments have been to stay in power and avoid much-needed reforms.
Africa can feed its own people—the problem is that it has never been allowed to try to succeed.
To be sure, the concern shown by President Bush to feed the hungry of the world is welcome. Such compassion, however, seems to have been largely misdirected. While the U.S. food aid might feed few millions of Africans, it does not do so for long. Africa should not need food aid to feed its population. Africa can feed its own people—the problem is that it has never been allowed to try to succeed. The continent has been held back in food production by harsh local policies and an unfair trade regime inflicted on it by the developed world.
Eighty-five percent of Africans live in rural communities. Their main occupation is farming. They rely on it to feed themselves and their families. What profit can be had used to buy other farm implements and chemicals needed to enhance yields and reduce manual labor. The European Union Common Agriculture Policy and the U.S. farm policy of providing subsidies to farmers have been displacing African agriculture products, and hence limiting income that could have been used to re-invest to enhance increased production. This has retarded growth in the continent while at the same time undermining food production.
According to the World Bank, if the U.S. and E.U. abrogate or reduce the subsidies to their own farmers, the impact will be felt in lifting millions of Africans out of poverty. Despite calls for phasing out these trade-distorting policies, the U.S and the E.U have been shifting the goalpost—contrary to the agreement reached during the Doha Round. Unfortunately, trade talks to get this agreement ratified have ended in fiasco.
According to a study conducted in 2001 by the Economic Research Service of U.S. Department of Agriculture, tariffs have the largest price distortion, with 52 percent, followed by domestic support, with 31 percent and, lastly, export subsidies, with 13 percent.
Trading with the developed world has not been on equal footing, with African countries facing high tariffs for their exports. Furthermore, while the developed world has made trade policies skewed against African countries, the countries of Africa have not been able to trade among themselves. An increase in trade among African countries by less than five percent, for example, would yield more than $70 billion in annual income. This ultimately would be more than the continent receives yearly as foreign aid.
According to International Monetary Fund (IMF) trade statistics in 2005, trade within Africa is a mere 9 percent compared to 43 percent among countries within Asia. Africa's share in world trade has been reduced from six percent to less than two percent in the last two decades. When South Africa is removed from the calculation, this figure shrunk to 0.6 per cent.
Over the years, the handouts have not helped Africa in the long term; instead, they have crippled its production base.
In times of crises such as this, it is common for the developed world to look at Africa as a continent that can only survive on handouts. The current food crisis, however, has brought to the fore the need for Africa to urgently map out a strategy to meet the growing needs of its inhabitants. Over the years, the handouts have not helped Africa in the long term; instead, they have crippled its production base.
Solving the food challenge in Africa goes beyond President Bush and simple food aid. What Africa actually need is a further commitment from the U.S. and its allies in the West to inject life into comatose trade negotiations. The U.S. can end the waiting game in trade talks by unilaterally commencing the gradual reformation of its farm policy.
The advantage is obvious. Such action will put pressure on the E.U. to reduce its subsidies as well. Secondly, it will spur an increase in economic growth. Thirdly, the direct beneficiary will be African farmers whose products are displaced in the world market. Low yields in Africa have a direct connection with lack of improved technology. Efforts by African farmers to embrace improved hybrids and biotechnology have been resisted by groups who often cite unproven scientific evidence over possible effects of the technology. Poor countries should be allowed to use available technology to solve their problems. When this is obtained, it will bring about high yields and abundant food production. It will make Africa a continent that can feed its population, rather than being with a cap in the hand over food.
Thompson Ayodele is the Executive Director of the Initiative for Public Policy Analysis, a public Policy think-tank based in Lagos, Nigeria. He may be reached at Thompson@ippanigeria.org.
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NEW YORK, 1 July 2008 (IRIN) - New ground was broken in US attempts to break the link between foreign food aid and supporting its own farmers in a new farm bill, but for many, including the Bush-led administration, it was too little, too late.
[See IRIN in-depth on global food crisis]
For the first time, the legislation freed some of the money to be used in cash for food purchases locally or regionally in recipient countries instead of in-kind produce shipped from the US, the world’s largest food aid donor.
The farm bill governs food aid and is updated every five years.
But the amount - US$60 million over four years – was a fraction of the $300 million President George Bush had sought for one fiscal year and will be spent on a pilot programme.
Congress’s decision was rued by Bush, who noted that the farm bill, “… restricts our ability to redirect food aid dollars for emergency use at a time of great need globally … The bill does not include the requested authority to buy food in the developing world to save lives.”
The bill authorises $1.2 billion for food aid. As this often amounts to $2 billion or more in the appropriations phase and Bush asked for 25 percent for cash payments, this could have reached $500 million. The issue – and the lack of bolder Congressional action – goes to the very heart of the food price crisis and reforms that the UN, governments and NGOs say are needed to avoid plunging up to 130 million more people around the world into hunger, in addition to 850 million already suffering.
In the short term, local purchasing provides much more food for aid since it frees up money used on expensive freight and reduces delivery delays that can reach four months. In the longer term it could help stimulate agricultural production in the developing world as part of a global solution to the crisis.
Almost all food aid donated by the US is tied to domestic requirements for procurement, processing and shipping.
Mixed reactions
“We are happy to see at least a new precedent for some funding for local purchase. They never got anything in the past,” David Kauck, senior policy analyst at CARE, told IRIN.
However, UN Special Rapporteur on the right to food, Olivier de Schutter, said: “I deplore the fact that the US have not learned the lessons from the past distortive impacts on local markets in recipient countries of food aid distributed in kind, especially in a context where, due to the increase in the prices of oil, the transport of food by US ships will significantly raise the costs of providing aid and thus the net benefits for the end beneficiaries.”
Oxfam policy director Gawain Kripke agreed: “The farm bill itself doesn’t demonstrate a lot of leadership or vision about how agriculture should operate and it’s pretty much a validation of the status quo.”
And International Food Policy Research Institute (IFPRI) research fellow Marc Cohen said the US was still using approaches that were 50 years old. “Not only the European Union but also Canada and Australia have moved towards providing more of their food aid locally and regionally,” he told IRIN. “The US is lagging behind even though it’s the leading source of food aid.”
Costs of transporting food
The US Government Accounting Office (GAO), the Congressional investigative agency that examines the use of public funds and evaluates federal programmes, estimated last year that transportation costs totalled 65 percent of overall aid, with only 35 percent going to actual food. Since then, skyrocketing commodity prices that translate into fewer tonnes and higher transportation costs due to soaring oil prices, have further upset even the previous adverse ratio.
NGO officials are loath to put a figure on lives potentially saved or additional people helped if the money spent on transportation went to food instead, but one analyst said it could roughly double the number of beneficiaries based on the assumption that 70-80 million people now receive US food aid annually.
A supplemental appropriations bill for another $1.2 billion for the fiscal years 2008 and 2009 is winding its way through Congress, but that too would be subject to the in-kind strictures of the farm bill unless otherwise directed by the legislators. At present it would provide some $50 million more for cash purchases.
Subsidies
The huge subsidies for US agriculture are seen as putting farmers in poor and developing countries at a great disadvantage.
“When commodity prices are at record highs, it is irresponsible to increase government subsidy rates for 15 crops, subsidise additional crops, and provide payments that further distort markets,” Bush said in his veto message.
Kauck of CARE said African farmers had to compete with American and European farmers on very disadvantageous terms but stressed that if subsidies were to be dramatically reduced or eliminated, agricultural prices would go up.
“This would provide development opportunities for farmers and traders in many places, so it could provide a stimulus for development in many developing countries, but it would at the same time put poor people who are net purchasers of food and food deficit countries at an even greater disadvantage,” he told IRIN. “So it would essentially contribute to the kind of price rise that you are seeing now.”
Challenges
In a report in April 2007, the GAO noted that multiple challenges hindered the efficiency of US food aid programmes by reducing the amount, timeliness, and quality of food provided.
“Specific factors that cause inefficiencies include (1) funding and planning processes that increase delivery costs and lengthen time frames; (2) ocean transportation and contracting practices that create high levels of risk for ocean carriers, resulting in increased rates; (3) legal requirements that result in awarding of food aid contracts to more expensive service providers; and (4) inadequate coordination between US agencies and food aid stakeholders to track and respond to food and delivery problems.”
Indeed, Concern Worldwide chief executive Tom Arnold told IRIN: “[The farm bill] is not going to help the situation on food aid nor will it help to make any deal in the World Trade Organization talks more likely. Overall, from a development viewpoint, it would have to be seen as a setback.”
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Theme(s): (IRIN) Aid Policy, (IRIN) Economy, (IRIN) Food Security
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