Monday, 30 September 2013

Zambia Cuts Subsidies

Article here:

This bothers me a lot. I realise there are some relatively strong arguments against subsidies. Perhaps the most important is made in the article:
“The question one has to ask, is: were the funds spent instead on research, extension, better rural roads, and perhaps - because it's difficult - some intervention to kick-start rural financial services, would this do more to increase production than subsidizing inputs?” Wiggins asks. 
This only matters, of course, if you can be sure that the money you don't spend on subsidies gets spent on research, extension, better rural roads ans rural financial services. And if these things have a greater impact, and more sustainable, than subsidies. Which they might. More evidence, from places where funds that would otherwise be spent on subsidies are actually spent on these things, is required.

What really, really irks me about the whole subsidies debate, however, is the way both sides seem comfortable calling the money spent on preventing chronic malnutrition and making sure people are not hungry a "loss" instead of an investment. How many years of evidence of the effects of chronic malnutrition and stunting is it going to take for people to recognise that short-term savings on subsidies can have devastating, long-term costs in the ability, attainment and educational achievement of the children you could have been feeding?

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