Africa’s Unnatural Disaster

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 is the director of 50 Years is Enough and blogs at shirinandsameer.blogspot.com, a Foreign Policy In Focus contributor where this article first appeared.

*Please send comments to [email protected] or comment online at http://www.pambazuka.org/