International

African policy makers would be wise, in the first place, to look at what the European Union has itself done in the past to develop its agriculture, rather than listening to what those who currently guide European policy are saying, according to Niek Koning and Eric Smaling.

Eric Smaling is a member of the Senate for the SP and a professor of sustainable agriculture. Niek Koning teaches at the University of Wageningen.

Early in 2008 we were taken aback by rising food prices. Drought in Australia, a boom in bio-fuels, and speculation forced world grain prices upwards. At the same time stocks had dwindled to nothing as both Europe and the United States ran down their public grain stores. High food prices caused riots to break out in many parts of the world. In a reflex ‘own citizens first’ reaction, a number of countries limited their exports. Some economists thought they could see a ray of hope, in that higher prices would help agriculture in regions such as Africa to develop. Here and their production in these regions did indeed revive, but often price rises in the short term were of benefit only to trade. Since then higher prices in different parts of the world have stimulated new, higher levels of production and prices on the world market have declined markedly. Then, however, the financial crisis made itself felt, and more than a billion people are going hungry. Renewed food riots are looming, according to the UN Food and Agriculture Organisation (FAO).

With the European elections just behind us, it is striking how the EU budget continues to be devoted in large part to providing support for European farmers via the Common Agricultural Policy (CAP). Partly because of this policy we have, in Europe, a strong agricultural sector. We have not achieved this by leaving agriculture to the free market. Prices on the free market were not only extremely unstable, but on average too low. Farmers were not quick to resign themselves to a situation in which their incomes were under pressure, clear overproduction being the result. Because this was not conducive to the development of agriculture, western European countries began to protect the sector. This brought stability to prices which were limited to a considerable degree by the lag in real wages in non-agricultural sectors. Many Asian countries have followed the European example. Their governments have invested in roads, irrigation and agricultural research. They also profited from post-World War Two US support to Taiwan and South Korea, and from donor support for international institutions dedicated to crop improvement, such as the International Rice Research Institute (IRRI) and the International Maize and Wheat Improvement Centre (CYMMIT), which produced new strains of grain for developing countries. Just as in Europe, these countries pursued a price support policy along with price stabilisation and subsidies on inputs such as artificial fertilisers. One after another paved the way for the Green Revolution, which provided the starting motor for industrialisation. All of this led to a sharp fall in the proportion of underfed people in these countries.

Africa does not have a strong agriculture sector. The continent has for the most part poor soils, consisting of granites between one- and two billion years old. In many places rainfall is irregular, and the area suitable for irrigation is much smaller than in Asia. More important still are the kinds of policy followed. African farmers enjoy little protection. Governments seeking to increase import duties are pressured not to do so by the IMF and World Bank. The same institutions have forced the abolition of subsidies on seed and on fertilisers. Public investment in rural roads and agricultural knowledge infrastructure lag far behind. Large-scale international aid to African agriculture is often promised (such as at the G8 summit in Gleneagles), but the promises are never made good. All of this means that a green revolution has been aborted and population growth has led to a downward spiral of poverty and soil degradation. Because of poverty in the countryside, the domestic market for industrial goods has remained underdeveloped. Many young people have left their villages, only to find that there was little employment available in the towns and cities. Most African countries became dependent on mass imports of wheat, maize and/or rice, and have a strong negative balance of trade in agricultural products. A sudden rise in food prices, as is happening this year, poses a direct threat to the existence of many poor Africans.

Nevertheless, Africa has excellent opportunities to develop its agriculture. This, however, requires regional economic unions which, just as in the EU in the past, pursue a strong agricultural policy. Tariff walls within such a union must be demolished and replaced with a stabilising protection against imports from outside the union. This must not be allowed to lead to a sudden increase in food prices, but instead to a gradual and moderate increase above the disastrous levels of the last twenty years. This price increase must be accompanied by measures to compensate poor consumers for the short term consequences. Preferably, measures must be considered which at the same time stimulate the development of agriculture, such as road-building or the provision of school meals based on domestically-produced foodstuffs.

To date, the West has attempted to deter African governments from adopting a protectionist price policy. In the framework of its Economic Partnership Agreements (EPAs), the EU is trying to force African countries to lower their import duties still lower, flaunting neoliberal principles to which the West itself, with good reason, has never adhered. African policy-makers would be wise, in the first place, to look at what the European Union has itself done in the past to develop its agriculture, rather than listening to what those who currently guide European policy are saying. In this, the original CAP of the then European Economic Community serves as an example. And if the EU wants to kill two birds with one stone, then it should support Africa in this and in so doing make its own development policies more relevant, in that they would carry the mark of the Union, and not be merely something which its member states are themselves already doing.

This article first appeared in the August edition of Vice Versa, trade journal for development cooperation.