Friday, 29 October 2010

Farm subsidies could be good for Africa

I came across this stat in a paper I was reading yesterday:
It was reported at the June 2002 WFS that "OECD (Organisation for Economic Co-operation and Development) countries provide a billion dollars a day in support to their own agricultural sector, six times more than all development assistance" 

Of course, the figures have changed somewhat, but farm subsidies remain a contentions issue. Every single time they are discussed, the same thing seems to happen: developing nations demand that subsidies be reduced/abolished, the powerful Western nations refuse and everyone leaves in a bad mood with no resolution whatsoever.

This strategy obviously isn't working, so what if we tried something different. Perhaps it is time that we demand that we be allowed to subsidise our own agricultural sectors. Unorthodox? Perhaps, but Africa is the continent suffering most with food shortage and one of the places most severely affected when food prices fluctuate. The AU chairman, Malawian president Bingu wa Mutharika, says, "Yes." As he points out, the governments on the continent have to do something for the "400 million people who live on less than $1 a day and who cannot afford to buy food to eat". The FAO reports that farms (worldwide) need investment of $30-$100 billion every year between now and 2015 to produce enough food. Surely some of that should come from governments, particularly because it doesn't look like it's going to come from anywhere else. 

Nor does this mean that subsidies must "support small holder agriculture and fund endless ‘livelihoods’ activities which do nothing more than keep people desperately poor but not starving, and which have almost zero growth potential". The path towards technologically-advanced farming, as discussed in this great post from Aid Thoughts, can occur just as happily in a subsidised environment. Perhaps more happily because subsidies decrease input costs making it easier for farmers to hire labourers and grow their businesses more rapidly.

The current situation s a problem. Subsidies in rich nations protect their own food security and make it difficult for African agricultural producers to compete. At the same time, people in Africa starve because it costs too much to farm so good food becomes an unattainable luxury. Surely the logical answer would be to see what works and apply those strategies to African agriculture?

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