Illicit Imports Add To Kenyan Farmers' Competitiveness Challenges

Agricultural products between Kenya and its neighbours in the East African Community can be traded duty-free. However, collusion between traders and border officials is suspected to also result in the illegal duty-free import of large quantities of commodities from outside the EAC.

This compounds the problems Kenyan farmers face, which include relatively low productivity.  

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Squeezed Tunisian Farmers Eye EU Imports With Concern

Sitting in the restaurant of his farm in the lush Beja agricultural region, Zied Ben Yousef praises Tunisia’s farming potential, which he says goes all the way back to the days of the Roman Empire. His farm specialises in the production of cheese, which he sells in a local shop and delivers to the capital. He also teaches students about cheese production methods and agriculture. His goal is for people to come to the region, located two hours from Tunis, and enjoy his homemade products.

But the competition from Europe and other domestic producers is fierce. It’s impossible, he says, to export to the European Union because of health standards and the Tunisian market is increasingly dominated by big multinationals, leaving small farmers under pressure.

“We are in the last days of agriculture in Tunisia,” he says.

Ben Yousef is not alone: many Tunisian farmers are squeezed these days between a sector with little government investment, slowly being taken over by large producers and landowners, and a marketplace that benefits subsidised imports from elsewhere.

Full article...

Uganda's Fertilizer Use Low At 2.5 kgs Per Hectare

“The low use of fertilisers must be rectified. In Uganda, we use an average of 2.5kgs per hectare. In the USA, they use 132kgs per hectare. The fertiliser projects at Osukuru Hills and Mwitanzigye (Lake Albert) must be expedited,” President Yoweri Museveni said in 2016.

However, for various reasons, a number of initiatives to increase the country's fertilizer manufacturing capacity and usage levels have faltered.

Uganda imported nearly 80,000 tonnes of fertilisers in 2018, up from 74,200 the year before and it is  expected to import nearly the same amount in 2019.

Full Article...

Unrest in Egypt may be spurred by greater dependence on grain imports from US, reduced farmer viability

Why does there appear to be so much widespread pent up rage against the US in the Arab world, even in country considered a long time friend like Egypt?

Political analysts of all shades are groping for answers to this question, with the range of answers as varied as the people who give them. Unfortunately and typically of 'the international media,' not many think to simply ask the Egyptians and other Arabs themselves!

Thomas Kostigen has an interesting take on the issue.  In his article 'Behind Arab riots lie U.S. agricultural policies, he argues part of the antipathy is due to "U.S. policies that disrupt people’s lives and darken rays of hope."

Writes Kostigen,  "The backlash by the Muslim segment of the Arab world goes deeper than one recent, hateful film; it goes back to 1992 when small farmers in Egypt lost their land rights under a reform scheme implemented by former President Hosni Mubarak."

Kostigen cites an article he wrote at the start of Egypt's 2011 anti-Mubarak upheavals, and long before the present protests initially attributed by some to anger over a crude anti-Islamic film.

In the earlier article, Why U.S. farm policy caused Egypt crisis,
Kostigen said under U.S. and International Monetary Fund pressure, "the country’s small farmers who were ‘registered tenants’ became subject to rent increases, in many cases triple what they had been paying. As expected, these small farmers couldn’t afford the steep rent increases and were forced off their land. More than half of all Egyptians live in the countryside, and millions were forced into poverty. Moreover, Egypt itself became more reliant on imports."

Kostigen points out a great deal of those imports that have made many farmers destitute come from the United States. The fact that U.S. wheat and other grain farmers enjoy subsidies that make it that much harder for Egyptian and other world farmers to survive, let alone compete, may have just fueled resentments, suggests Kostigen.

Quips Kostigen, "It’s a great thing to provide food at cheap prices to people. But once a population is hooked on cheap food and then prices rise, as they have to their all-time highs, a shift in mood should be expected."

Some will find it easy to reject Kostigen's contentions as a rant against his country, but he provides the kind perspectives on real-world issues affecting people in country's like Egypt that more prominent political talking heads are completely oblivious of.

U.S. president Barack Obama recently announced a grand initiative to help kick-start agriculture in several African countries. It will be significantly private sector driven.

The Egyptian example given by Kostigen is just one of many reasons some agriculturally-engaged people in Africa are suspicious and worried about the 'help' the U.S. proposes to give for African agriculture. Will it be 'help' to African farmers become more productive and competitive, or will it be actually help to American agricultural corporations to create and find new markets at the expense of African farmers, as Kostigen claims has been the case in Egypt?

In agrarian societies, issues like those pointed out by Kostigen are matters of life and death for millions of people. The damage to livelihoods and resentment over them cannot be compensated by then donating military or other aid to the ruling classes.    

Kostigen provides deep, well written and very readable perspectives on some little known but important contributors to Egyptian's love-hate relationship with the U.S. Too bad it is almost entirely predictable that politicians and government bureaucrats in Washington D.C. will pay little or no heed of the warnings of people like Kostigen that the issues and feelings go far deeper than anger over an anti-Islam film.

African Agriculture

Food aid imports, rains hurt agricultural investment in East Africa

by David Muwanga

High risky rains, unfair competition from food donations and lack of affordable finance have been identified as the major causes of failure by investors to inject money into the sector, according to a study carried out on the private sector agricultural investment in Eastern Africa.

The study funded by the United Nations Food and Agricultural Organisation (FAO) and supported by Uganda Investment Authority (UIA) is on the theme "What can make it happen?".

The report says investors are not interested in the agricultural sector due to the unstable markets mainly caused by government's interventions, political risks, poor roads and lack of skilled labour.

Other reasons given include tax benefits being easier in other sectors, the high cost of utilities especially electricity and corruption that were identified at the most most causes of low investment in agriculture in East Africa.

Moderate causes included poor implementation of policies, government intervention in markets especially for cereals, limited irrigation and poor infrastructure of roads and markets.

It says that on going FAO review work on Africa reveals alarming results showing that 218m people who constitute 30% of the continent's population experience chronic hunger and malnutrition.

Africa's total annual imports of agricultural products, of which 80?90% are food products, have grown in recent years from about $25billion to $33billion(b) while exports have remained at around $14 to15b annually.

The report says Africa consumes between 25-30% of global food aid in any normal given year. The Eastern Africa subregion alone which account's for less than 4% of the world's population consumes some 20% of the international food aid. The report reveals that in the year 2006, Eastern African countries of Burundi, Djibouti,

Ethiopia, Kenya, Rwanda, Somalia, Sudan, Tanzania and Uganda required another 1.5m tonnes of food while their commercial imports totaled 4.9m tonnes.

An analysis by FAO reveals that the region has suffered a decline in self sufficiency ratio at 14% with Kenya the hardest hit at 27% decline and Tanzania at three percent decline.

The import dependency ratio increased three-fold, with Kenya again the hardest hit at 11-fold increase and Tanzania the least affected.

UIA executive director Prof. Maggie Kigozi said although the government has allocated budgetary funds to the agriculture sector that increased from 3.8% in 2006/7 to 4.5% in 2009/10 this is less than the at least 10% set by African governments.

"However Uganda's incentive package provides for capital recovery for those whose projects incorporate investments in plant and machinery," she noted.

She said the government has also signed double taxation agreements with several countries, adopted liberal foreign exchange policies and macro-economic discipline all that have created a conducive business climate.

"The sector however did not seem to be responding to government initiatives as its growth rate is less than 1% compared to the services sector which is at 15%," she said.

The report recommends investment opportunities exist in horticultural sub?sector production, with phenomenal export growth particularly in Kenya.

Investment opportunities exist in cereals and maize is a dominant staple food crop within all study countries.

Other mass commodities include oilseeds which have very high potential for development and much of Africa's significant production is exported as raw seed.

Others are diary products, and the ranching sub sector has been given least priority in the region.

There are few if established abattoirs and meat processing plants in study countries to make the subsector dynamic.

Africa offers room for substitution of unsustainable and unaffordable imports and to achieve displacement by local producers will require that they be competitive in price but also reliable on quality and quantity.

Other opportunities include the under?exploited land resources in Tanzania with expanses of under-utilized land.

Governments in the Eastern African Region are progressively adopting policies that would see greatly enhanced crop production.

A Land Act has just been adopted in Uganda though it remains controversial as it dowes not adequately address problems of land, while a Land Act draft has been tabled to the Parliament in Kenya and Tanzania has reformed socialist land policies of the past.

Businessweek

Zimbabwe poultry producers cry ‘fowl’ over imports

by Fortious Nhambura

Chicken imports have flooded Zimbabwe barely a month after the lifting of a ban on such imports.

Local chicken farmers have said the cheap imports are pushing them out of business.At the same time, consumers say they realistically cannot be expected to pay almost double just to support local farmers.

When government banned imports of animal products in March, chicken prices shot to between US$4 and US$5 per kg. This saw 2kg packs of cutlets of local birds retailing for about US$7,30.The end of the ban has seen imports returning at a cost of about US$4 for the same pack. This means imports are selling for roughly US$2 per kg.

Many chicken lovers say the imports from South Africa, Brazil and Turkey are not as tasty as local produce but they cannot afford what the Zimbabwean farmer is giving them. This has left members of the Zimbabwe Poultry Association stuck with tonnes of chickens they cannot sell. Many have to repay finance facilities they accessed to produce the birds and the money is just not flowing in. 

So what makes local chickens so expensive?

Mr Solomon Zawe, the ZPA chairman, says it costs US$2, 85 to rear one chicken in Zimbabwe.
On the other hand, it costs just US$1 in Brazil.

“So even after the transport, the bird has a landing price of US$1, 90 when it gets to Zimbabwe. “They can then sell the chicken for between US$4 and US$5 and make a massive profit. That is possible because the chicken producers in other countries are heavily subsidised by the state.”

The US$1, 90 landing prices translates to 86 percent of the total production costs of rearing a single bird in Zimbabwe. 

A day-old broiler chick costs between US$1 and $1, 05 and requires about US$2, 50 to feed it to maturity. Dressing, packaging and transportation bring the cost to US$4, 15 for large-scale producers. The costs go up for small-scale farmers.

The 2009 Poultry and Products Annual Report says while Brazilian poultry companies do not release production cost information, the estimated average cost of broiler production was about 85 US cents per kg at the time.

And after all these comparisons and the realities of breeding in Zimbabwe, the ZPA blames some retailers for further pushing up costs.

Mr Zawe says: “The problem is that government does not control the marketing of poultry products and retailers end up putting huge mark-ups to chicken. The wholesale price of a 2kg packet of chicken is US$4, 15 . . . but it is sold for up to US$9 in shops.”

Mr Zawe believes that the great potential inherent in the industry is being stymied by imports. The ZPA says 10 000 birds could be lost monthly if local producers are not protected.

Day-old broiler chick production has increased from 700 000 per month in January 2009 to 3, 1 million in March this year. Egg production has also increased. Formal sector production has shot up from 275 000 dozens in January 2009 to 1, 5 million in June 2010.

Prominent chicken farmer Mr Jonathan Kadzura believes government should look at enabling producers rather than just having mechanisms focused on consumption levels alone. “There is a whole industry to protect.”

Mr Zawe says comparing local producers to their foreign counterparts is not fair because the operating environments are different.

“We encourage government to come up with a mechanism that allows imports and discourages dumping of products. This will inspire confidence in the whole agriculture sector. Farmers in Brazil and South Africa survive in a different climate and should never be compared to us. Pitting the local producer with importers will be unfair competition as local producers have to use non-GMO feed additives.”

These are all very convincing arguments and many people sincerely do sympathise with poultry producers. But at the end of the day, money talks, and people do not have much in their pockets.

As Mr Nyasha Matsinde of Glen Norah B says: “We buy what we can afford.”

The Herald

Asia risks losing African rice markets as price increases are contemplated

by Miriam Mannak

Thailand and other major rice exporting countries are at risk of losing Africa as an important trading partner if they raise their rice prices. Half of the 10 million tons of rice exported by Thailand last year went to Africa. Nigeria, Benin, Cote d’Ivoire and South Africa were among the main buyers of rice in Africa.

"Some Asian governments are considering raising rice prices, mainly in support of their farmers. In Thailand for instance, 80 percent of the population works in agriculture and they therefore form the bulk of the government’s voters," says Mozambican-born Miguel Lima, a trading director working for SeaRice Limited.

This Swiss company specialises in exporting rice. Lima has been working in the African rice business for the past 25 years.

Earlier this year, the main farmers’ association of Thailand -- after China the world’s biggest rice producer and exporter -- asked the government to intervene to increase the price of this crop.

The motivation behind the association’s request was the drop in the price of rice over the past few months. Reasons for this include that foreign buyers postpone purchases in expectation of further price cuts.

African countries purchased 1.4 million tons of Thai rice over the first five months of this year, figures by Thailand’s government show. Over the same period last year, this amount came close to two million tons. The decline in export volume led to a price decrease.

Thai farmers fear that without government intervention the price will drop further.

"The problem with increasing prices, which came down after they skyrocketed in 2007 and 2008, is that rice-producing countries are forgetting about their most important buyers, which are African countries," Lima argues. "In general people in Africa simply do not have a lot of money to spend," he adds.

"I agree that farmers should earn a decent living, but one should not push the boundaries too far. African consumers will back off if rice becomes too expensive. They will look for other staple foods. That will destroy the market."

According to the Food and Agricultural Organisation (FAO), the average world prices for rice rose by 217 percent between 2006 and 2008. In 2008 rice was 80 percent more expensive, compared to 2007. The price hit a record 1,038 dollars per metric ton in May that year.

Although prices have since come down, uncertainty remains.

One of the problems, Lima noted, is that once someone has changed from rice to another staple food, like millet or cassava, there is usually no turning back.

This is the case "not only because changing these patterns takes a lot of effort, but also because farming and buying grains like millet is a lot cheaper. If people realise this, they usually will not go back to a more expensive staple food."

Moses Adewuyi, director of agro-processing at Nigeria’s ministry of agriculture and rural development, agrees with Lima’s statements.

"If prices should increase like they did in 2007 and 2008, Nigerian consumers will switch to other staple foods such as cassava, maize, millet, plantain, beans, and yam. "Nigeria, like other African countries, has plenty of staple foods that are a good substitute for rice if the latter becomes too expensive for the consumer," he says.

"Last year, prices came down in my country," Adewuyi continues. "Today, consumers pay approximately 450 dollars per 50kg bag. In the 2007/2008 financial year, the same bag cost up to 900 dollars. We cannot have history repeat itself."

One of the ways in which Nigeria – an importer of two million tons of rice per annum, of which the bulk comes from Thailand -- wants to gear itself against new price hikes is to develop the local rice industry.

Adewuyi said: "We, the government, are planning to increase production so that we are less dependent on the Far East in case Thai rice becomes too expensive."

Nigeria is Africa’s largest consumer of rice as well as the continent’s main grower of the crop.

"We produce 2.1 millions tons of milled or white rice a year and 4.2 million tons of paddy or unprocessed rice that has not been milled," Adewuyi explains. "We want to increase our output and the quality of our processing plants. I think other governments of African rice-growing countries should do the same."

Duong Phuong Thao, trade officer at Vietnam’s department of export and import, defends the call of Asian farmers for government intervention when it comes to the rice price.

Vietnam produces 24.3 million tons of rice per annum, of which approximately eight million tons is exported. About 30 percent of these exports go to Africa.

"Vietnamese farmers currently sell their rice below the cost price, and that is not sustainable for them. We need to think about our farmers too."

IPS News

Zimbabwe moves to cut off agro-imports from South Africa

by Moses Mudzwiti

The Zimbabwean government is moving to cut off agricultural imports from South Africa, saying it wants to protect its farmers.

Joseph Made, the minister of agriculture, mechanisation and irrigation development, was quoted in state media as saying: "There is no way we should import tomatoes when the produce is flooding and rotting at Mbare Musika [a huge fruit and vegetable market in Harare]."

South African tomato growers can expect increasing difficulty in selling their produce in Zimbabwe. Dairy and meat imports have already been limited to almost nothing. The curbs have led to food prices rising by as much as 6% in recent months.

Made said: "Agricultural imports are threatening local farmers. We should ensure fair trade and it is critical that we support our farmers.

"We will have to carry out a thorough assessment before issuing import permits. We would want a detailed study and [would] only issue permits [to those] exhausting all details .

"We are not putting a ban on imports, but surely we cannot import when we have so many beneficiaries of the land reform programme who have the capacity to produce and feed the nation?" he said.

While Made did not mention the countries whose imports were being targeted, local supermarkets were clearly running out of South African poultry, eggs and dairy products.

Zimbabwe became a lucrative market after it introduced multi-currency trade, but political sentiment has not favoured South African businesses.

Political grumbling about the lack of business from the Fifa World Cup in has been growing louder.

TimesLive

South Africa awaits decision on maize import tariffs

by Nicky Smith

South African Minister of Trade and Industry Rob Davies must make any final decision on tariffs on corn imports to protect farmers from cheap imports, Beeld reported, citing the minister of agriculture.

Grain SA, a farmers’ association, made presentations on the issue last week to the International Trade Administration Commission and also met Minister of Agriculture, Forestry and Fisheries Tina Joematt-Pettersson, the Johannesburg-based Afrikaans-language newspaper said. It is up to Davies to make the decision on import protection because Itac falls under his ministry, Joematt- Pettersson said, according to the news

Bloomberg

Senegal's cattle sidelined for imported powder milk

by Laurence Boutreux

Senegal has three million cattle, but it is imported European powdered milk that is found at the breakfast table, in coffee or local yoghurt as poor infrastructure keeps fresh milk from consumers.

In a Dakar suburb, "milk powder with vegetable fat content" from France is poured into large tanks and mixed with filtered water at the Jaboot factory to make local favourites like curdled milk and yoghurt and cereal mix, or "thiakri."

In five years, Senegal has more than doubled its bill for imported milk from 25 billion CFA Francs (38 million euros, 52 million dollars) in 2002 to 58 billion in 2007, said Djiby Dia, researcher with the Senegalese Institute of Agricultural Research.

While Jaboot has stated its intention to "gradually substitute imported powdered milk for local milk," its rapid expansion has led to import higher quantities.

"It is because the biggest problems remain the collection and transportation of fresh milk," director Pierre Ndiaye said in an interview.

Milk abounds in the largely rural country. But its mainly traditional methods of production are irregular, according to the seasons and are unable to cover the needs of the entire population.

Mostly impassable farm roads and an insufficient number of refrigerated trucks make reaching consumers all the more difficult.

When the rainy season arrives in the isolated northern region of Ferlo, an abundance of milk and a lack of infrastructure means "some farmers pour their milk on the ground to be licked up by the cows," said Dia, the author of a thesis on the "geography of milk" in Senegal.

Production channels need to be organised, professionalised and encouraged - but the imported powder has already invaded city markets, as well as those in the bush.

In the village of Niakhar, 155 kilometers (91 miles) from Dakar, farm technician Mamadou Niassy admits his own family consumes powdered milk every day.

"I prefer unpasteurized milk but it is not available, although I live few kilometres from a farmer," said the 55-year-old.

In Dakar, the director of the agriculture ministry, Mamadou Ousseynou Sakho, explained that "at the moment, conditions to collect and process the milk are still quite rudimentary." He said the government was encouraging an increase in the booming mini-dairy industry, "that is to say the small rural plants where milk is pasteurised, put in a sachet, processed into yoghurt etc." In 2009 government acquired an additional 10 mini-dairies "that we will put in place soon," he said.

Researchers increasingly question the inequality of international commerce laws, as milk from poor countries finds itself in competition with milk from rich countries. A debate over whether higher customs duties should be imposed on imported milk powder has largely fallen by the wayside as the biggest importers constitute an influential lobby and have little interest in paying more.

Bagoré Bathily, director-general of the Berger Dairy -- the first industrial unit for the collection and processing of local milk -- wants "fiscal incentives" for those who give priority to the local product.

In 2008 in the midst of a global food crisis, "the government suspended taxes on certain imported foods such as milk," said Sakho.

Presently, "small industries want Value Added Tax on milk produced in Senegal to be lifted, so that the local product is more competitive, but it is a big problem .... there is a comprehensive reflection to be carried out," he said.

AFP

South Africa suspends meat imports from EU

South Africa’s Department of Agriculture announced it was suspending imports of all meat and dairy products from the European Union due to the discovery of dioxin in Irish meat products.

"Due to concerns regarding ’soft borders’ within the EU and the wide distribution of animal feed between EU member states, a decision has been taken to suspend all imports of meat and dairy products and other edible animal products (including pet food) from the EU to South Africa," the department said in a statement.

Dioxins have been found in Irish pig meat and animal feed produced in Ireland. The European Union’s food safety authority said that the dioxin contamination in Irish pork probably posed no health risk to humans who ate the product.

The South African statement said all Irish pork and bacon from pigs slaughtered after September 1 would be recalled. "This cut-off date will also apply to meat and dairy products exported from other EU member states to South Africa," the statement added. Shipments en route or currently at inspection sites would be dealt with individually, it said.

"Meat and dairy products that have been put on the water after 12th December 2008 will be rejected and returned to the country of origin, irrespective of the slaughter or production dates," the department warned. South Africa would reevaluate the ban "once the source and the extent of the dioxin contamination are known."

The Times

How IMF-World Bank structural adjustment programs destroyed African agriculture

by Walden Bello*

Biofuel production is certainly one of the culprits in the current global food crisis. But while the diversion of corn from food to biofuel feedstock has been a factor in food prices shooting up, the more primordial problem has been the conversion of economies that are largely food-self-sufficient into chronic food importers. Here the World Bank, International Monetary Fund (IMF), and the World Trade Organization (WTO) figure as much more important villains.

Whether in Latin America, Asia, or Africa, the story has been the same: the destabilization of peasant producers by a one-two punch of IMF-World Bank structural adjustment programs that gutted government investment in the countryside followed by the massive influx of subsidized U.S. and European Union agricultural imports after the WTO’s Agreement on Agriculture pried open markets.

African agriculture is a case study of how doctrinaire economics serving corporate interests can destroy a whole continent’s productive base.

At the time of decolonization in the 1960s, Africa was not just self-sufficient in food but was actually a net food exporter, its exports averaging 1.3 million tons a year between 1966-70. Today, the continent imports 25% of its food, with almost every country being a net food importer. Hunger and famine have become recurrent phenomena, with the last three years alone seeing food emergencies break out in the Horn of Africa, the Sahel, Southern Africa, and Central Africa.

Agriculture is in deep crisis, and the causes are many, including civil wars and the spread of HIV-AIDS. However, a very important part of the explanation was the phasing out of government controls and support mechanisms under the structural adjustment programs to which most African countries were subjected as the price for getting IMF and World Bank assistance to service their external debt.

Instead of triggering a virtuous spiral of growth and prosperity, structural adjustment saddled Africa with low investment, increased unemployment, reduced social spending, reduced consumption, and low output, all combining to create a vicious cycle of stagnation and decline.
Lifting price controls on fertilizers while simultaneously cutting back on agricultural credit systems simply led to reduced applications, lower yields, and lower investment. One would have expected the non-economist to predict this outcome, which was screened out by the Bank and Fund’s free-market paradigm.

Moreover, reality refused to conform to the doctrinal expectation that the withdrawal of the state would pave the way for the market and private sector to dynamize agriculture. Instead, the private sector believed that reducing state expenditures created more risk and failed to step into the breach. In country after country, the predictions of neoliberal doctrine yielded precisely the opposite: the departure of the state “crowded out” rather than “crowded in” private investment. In those instances where private traders did come in to replace the state, an Oxfam report noted, “they have sometimes done so on highly unfavorable terms for poor farmers,” leaving “farmers more food insecure, and governments reliant on unpredictable aid flows.” The usually pro-private sector Economist agreed, admitting that “many of the private firms brought in to replace state researchers turned out to be rent-seeking monopolists.”

What support the government was allowed to muster was channeled by the Bank to export agriculture – to generate the foreign exchange earnings that the state needed to service its debt to the Bank and the Fund. But, as in Ethiopia during the famine of the early 1980s, this led to the dedication of good land to export crops, with food crops forced into more and more unsuitable soil, thus exacerbating food insecurity.

Moreover, the Bank’s encouraging several economies undergoing adjustment to focus on export production of the same crops simultaneously often led to overproduction that then triggered a price collapse in international markets. For instance, the very success of Ghana’s program to expand cocoa production triggered a 48% drop in the international price of cocoa between 1986 and 1989, threatening, as one account put it, “to increase the vulnerability of the entire economy to the vagaries of the cocoa market.” 1 In 2002-2003, a collapse in coffee prices contributed to another food emergency in Ethiopia.

As in many other regions, structural adjustment in Africa was not simply underinvestment but state divestment. But there was one major difference. In Latin America and Asia, the Bank and Fund confined themselves for the most part to macromanagement, or supervising the dismantling of the state’s economic role from above. These institutions left the dirty details of implementation to the state bureaucracies. In Africa, where they dealt with much weaker governments, the Bank and Fund micromanaged such decisions as how fast subsidies should be phased out, how many civil servants had to be fired, or even, as in the case of Malawi, how much of the country’s grain reserve should be sold and to whom. In other words, Bank and IMF resident proconsuls reached into the very innards of the state’s involvement in the agricultural economy to rip it up.

Compounding the negative impact of adjustment were unfair trade practices on the part of the EU and the United States. Trade liberalization allowed low-priced subsidized EU beef to enter and drive many West African and South African cattle raisers to ruin. With their subsidies legitimized by the WTO’s Agreement on Agriculture, U.S. cotton growers offloaded their cotton on world markets at 20-55% of the cost of production, bankrupting West African and Central African cotton farmers in the process.

These dismal outcomes were not accidental. As then-U.S. Agriculture Secretary John Block put it at the start of the Uruguay Round of trade negotiations in 1986, “the idea that developing countries should feed themselves is an anachronism from a bygone era. They could better ensure their food security by relying on U.S. agricultural products, which are available, in most cases at lower cost.”

What Block did not say was that the lower cost of U.S. products stemmed from subsidies that were becoming more massive each year, despite the fact that the WTO was supposed to phase out all forms of subsidy. From $367 billion in 1995, the first year of the WTO, the total amount of agricultural subsidies provided by developed country governments rose to $388 billion in 2004. Subsidies now account for 40% of the value of agricultural production in the European Union (EU) and 25% in the United States.

The social consequences of structural adjustment cum agricultural dumping were predictable. According to Oxfam, the number of Africans living on less than a dollar a day more than doubled to 313 million people between 1981 and 2001 – or 46% of the whole continent. The role of structural adjustment in creating poverty, as well as severely weakening the continent’s agricultural base and consolidating import dependency, was hard to deny. As the World Bank’s chief economist for Africa admitted, “We did not think that the human costs of these programs could be so great, and the economic gains would be so slow in coming.”

That was, however, a rare moment of candor. What was especially disturbing was that, as Oxford University political economist Ngaire Woods pointed out, the “seeming blindness of the Fund and Bank to the failure of their approach to sub-Saharan Africa persisted even as the studies of the IMF and the World Bank themselves failed to elicit positive investment effects.”

This stubbornness led to tragedy in Malawi. It was a tragedy preceded by success. In 1998 and 1999, the government initiated a program to give each smallholder family a “starter pack” of free fertilizers and seeds. This followed several years of successful experimentation in which the packs were provided only to the poorest families. The result was a national surplus of corn. What came after, however, is a story that will be enshrined as a classic case study in a future book on the 10 greatest blunders of neoliberal economics.

The World Bank and other aid donors forced the drastic scaling down and eventual scrapping of the program, arguing that the subsidy distorted trade. Without the free packs, food output plummeted. In the meantime, the IMF insisted that the government sell off a large portion of its strategic grain reserves to enable the food reserve agency to settle its commercial debts. The government complied. When the crisis in food production turned into a famine in 2001-2002, there were hardly any reserves left to rush to the countryside. About 1,500 people perished.

The IMF, however, was unrepentant; in fact, it suspended its disbursements on an adjustment program with the government on the grounds that “the parastatal sector will continue to pose risks to the successful implementation of the 2002/03 budget. Government interventions in the food and other agricultural markets…crowd out more productive spending.”

When an even worse food crisis developed in 2005, the government finally had enough of the Bank and IMF’s institutionalized stupidity. A new president reintroduced the fertilizer subsidy program, enabling two million households to buy fertilizer at a third of the retail price and seeds at a discount. The results: bumper harvests for two years in a row, a surplus of one million tons of maize, and the country transformed into a supplier of corn to other countries in Southern Africa.

But the World Bank, like its sister agency, still stubbornly clung to the discredited doctrine. As the Bank’s country director told the Toronto Globe and Mail, “All those farmers who begged, borrowed, and stole to buy extra fertilizer last year are now looking at that decision and rethinking it. The lower the maize price, the better for food security but worse for market development.”

Malawi’s defiance of the World Bank would probably have been an act of heroic but futile resistance a decade ago. The environment is different today. Owing to the absence of any clear case of success, structural adjustment has been widely discredited throughout Africa. Even some donor governments that once subscribed to it have distanced themselves from the Bank, the most prominent case being the official British aid agency that co-funded the latest subsidized fertilizer program in Malawi.

Perhaps the motivation of these institutions is to prevent the further erosion of their diminishing influence in the continent through association with a failed approach and unpopular institutions. At the same time, they are certainly aware that Chinese aid is emerging as an alternative to the conditionalities of the World Bank, IMF, and Western government aid programs.

Beyond Africa, even former supporters of adjustment, like the International Food Policy Research Institute (IFPRI) in Washington and the rabidly neoliberal Economist acknowledged that the state’s abdication from agriculture was a mistake. In a recent commentary on the rise of food prices, for instance, IFPRI asserted that “rural investments have been sorely neglected in recent decades,” and says that it is time for “developing country governments [to] increase their medium- and long-term investments in agricultural research and extension, rural infrastructure, and market access for small farmers.”

At the same time, the Bank and IMF’s espousal of free trade came under attack from the heart of the economics establishment itself, with a panel of luminaries headed by Princeton’s Angus Deaton accusing the Bank’s research department of being biased and “selective” in its research and presentation of data. As the old saying goes, success has a thousand parents and failure is an orphan.

Unable to deny the obvious, the Bank has finally acknowledged that the whole structural adjustment enterprise was a mistake, though it smuggled this concession into the middle of the 2008 World Development Report, perhaps in the hope that it would not attract too much attention. Nevertheless, it was a damning admission:

Structural adjustment in the 1980’s dismantled the elaborate system of public agencies that provided farmers with access to land, credit, insurance inputs, and cooperative organization. The expectation was that removing the state would free the market for private actors to take over these functions—reducing their costs, improving their quality, and eliminating their regressive bias.

Too often, that didn’t happen. In some places, the state’s withdrawal was tentative at best, limiting private entry. Elsewhere, the private sector emerged only slowly and partially—mainly serving commercial farmers but leaving smallholders exposed to extensive market failures, high transaction costs and risks, and service gaps. Incomplete markets and institutional gaps impose huge costs in forgone growth and welfare losses for smallholders, threatening their competitiveness and, in many cases, their survival.

In sum, biofuel production did not create but only exacerbated the global food crisis. The crisis had been building up for years, as policies promoted by the World Bank, IMF, and WTO systematically discouraged food self-sufficiency and encouraged food importation by destroying the local productive base of smallholder agriculture. Throughout Africa and the global South, these institutions and the policies they promoted are today thoroughly discredited. But whether the damage they have caused can be undone in time to avert more catastrophic consequences than we are now experiencing remains to be seen.

*Walden Bello is a senior analyst at Focus on the Global South, a program of Chulalongkorn University's Social Research Institute, and a columnist for Foreign Policy In Focus

Foreign Policy in Focus

Africa spends $19 billion on food imports annually

Africa currently spends an estimate 19 billion U.S. dollars annually on commercial food imports, the Alliance for Commodity Trade in Eastern and Southern Africa ( ACTESA) has revealed.
The amount spent on food imports demonstrates the immense opportunity for trade in agricultural commodities in the region, said ACTESA spokesman James Nyoro.

Nyoro also said that among the total 808 billion U.S. dollars in maize bought and sold in Eastern and Southern Africa in recent years, only approximately 30 million dollars are traded among members. The ACTESA was, therefore, created as an initiative aimed at enhancing trade in staple foods like maize, beans, bananas and cassava, Nyoro added.

He urged African countries to help small and medium-scale farmers in the region to increase their food production as they contributed about 80 percent of agricultural food production.

Xinhua News Agency

Sustainable development advocates enslaving African farmers in grinding poverty

by Dominic Lawson

Sometimes an entire philosophy can be glimpsed in a single remark. So I am grateful to Andrew Dorward of London's School of Oriental and African Studies for his explanation of why it would not be in the interests of Africans to adopt genetically modified herbicide-resistant crops. Dr Dorward told the Financial Times that this would be "disastrous for many poor households" because such crops would "allow the replacement of hand-weeding, which is a big source of income for many."

This is the sort of argument which would have dismissed the invention of the printing press as endangering the livelihood of monks and quill manufacturers. The monks, at least, were not engaged in back-breaking labour-- unlike the sub-Saharan subsistence farmer, who under the blazing sun might spend up to 120 days weeding a single field, instead of utilising the time saved in cultivating new crops or tilling new fields. Yet this is the sort of grinding, life-shortening labour in which the advocates of so-called "sustainable development" wish to keep Africans enslaved – the sort of life which no Westerner would tolerate for himself or his family.

It is characteristic of the double standards which the international aid establishment has been promulgating for years – and which has been evident during the Rome food summit over the past few days. Thus John Hilary, of War on Want, claimed both that it was the "liberalisation" of agricultural markets which lay behind the international food crisis, and also that the Western world should end its protectionist farming policies.

He's right that we should do so – yet for some reason he will not utter a word of criticism against the much-higher agricultural tariffs that exist between the countries of sub-Saharan Africa, and which have an obvious and immediate role in making food more expensive for some of the poorest people on earth. Import controls in the developing world are a dramatic contributor to "food poverty" – so why is "market liberalisation" such a terrible idea?

Such impoverishing policies are defended by the likes of War on Want on the grounds that such actions by governments in the developing world are a proper exercise of "food sovereignty." In practice this actually means nothing more than the right of landowners – who tend to be government ministers – to extort monopoly rents at the expense of those less fortunate.

If I were a cynical man, I would wonder whether the international aid agencies had a vested interest in maintaining such a failed political and economic system, since it keeps entire populations in the state of dependence which justifies their own existence, and their regular appeals to our charitable conscience.

The Common Agricultural Policy remains the most organised conspiracy to maintain global food prices at an artificially high level.

Douglas Alexander, the British Government's Secretary for International Development, was quite right to tell the Rome food summit: "It is unacceptable that the rich countries still subsidise farming by $1bn a day, costing poor farmers in developing countries an estimated $100bn a year in lost income."

It would have been even better if he had mentioned the Common Agricultural Policy, specifically, in that statement. More to the point, I wonder why Gordon Brown – who recently sought to blame the Organisation of Petroleum Exporting Countries (Opec) for the high cost of petrol and diesel in our filling stations – has not attacked the much more single-minded cartel known as the Common Agricultural Policy for its contribution to the cost of food in Britain's high streets. Oh, I remember why, now: our country is a member of that infamous cartel.

This is in part why I query the remarks by the Foreign Office minister, Lord Malloch-Brown, after Robert Mugabe had dropped in to make a speech to the gathering. Malloch-Brown declared that "Zimbabwe is one of the few countries whose food crisis is not due to climate change or global prices, but due to disastrous policies."

It's true that Zimbabwe is an extreme case, in which corrupt government policies of land requisition have turned the former African "bread-basket" into a basket-case. Yet across the world, almost every distortion of food production, every misallocation of resources, can be attributed to the interventions of governments, whether as extorters of tax on food, or as lackeys of landowners – or a bizarre combination of both.

In other words, it's not the unfettered free market and globalisation which has caused the world food crisis, but governments who insist that markets can not be trusted – unlike them, of course. What is truly terrifying is that they continue, decade after decade, to get away with it.

The Independent

'There is no need for Africa to be a food importer'

The IMF's Africa chief has said the shock of rocketing food prices should focus attention on improving farming in Africa.

There is no reason for Africa to be a food importer, but governments and donors have neglected the continent's agriculture sector, said Benedicte Vibe Christensen, acting director for Africa of the International Monetary Fund. She recommended a broad-based approach. In addition to steps to help farmers boost production, rural infrastructure needs improvement, and banks and lenders need to extend more services outside the cities, she told reporters.

Christensen was in South Africa to present the IMF's regional economic outlook. It predicts growth at about 6.5 percent this year, mostly fueled by oil exporting countries like Nigeria and Angola.

"There's no need for Africa to be a food importer," Christensen said. She called for better policies and assistance, such as fertilizer subsidies, to boost farming output. But she also said a broad approach was needed to improve infrastructure generally outside the cities and to ensure that banking and lending facilities were extended to the countryside. The result would be not only better food production, but also an extension of the anti-poverty campaign beyond urban centers.

"If you look at 20 years of development, it hasn't really taken hold," she said. Improving the agriculture sector "requires investors, it requires policies."

The food crisis has been felt around the world but particularly in Africa, where most countries import food. African consumers have protested and even rioted against high prices.

"We understand the governments need to take measures, but we urge them to be targeted," Christensen said. She urged against general good subsidies, saying that usually this helps the better off and is expensive. She also said price controls tend to hurt domestic farmers while export controls — some poor countries have banned exporting rice and other food — "is aggravating significantly the problem of world supply."

The IMF forecasts inflation of 8.5 percent, and believes inflation could be higher given the rising oil and food prices. The fund is also saying that given the food and oil prices, and given the global slowdown in the economy and global turbulence in financial markets, there is a slight chance that African growth will be less than 5 percent.

The fund predicts South Africa, a regional powerhouse, will experience economic growth of only 2.8 percent in 2008. South Africa's economic expansion has exceeded expectations for some time, but is normalizing now. Power supply problems have lowered growth forecasts for this year.

Oil giant Angola will see 12.7 percent economic growth, Equatorial Guinea will experience 7 percent growth, and Nigeria will grow at 6.2 percent, the fund said.

At the other extreme, the fund said it expected Chad would slip into negative growth of .7 percent. It said it did not have enough information to forecast Zimbabwe's economic growth for 2008, but said the country saw negative growth of 6.1 percent last year.

IHT

Nigeria to increase rice imports

Nigeria says it will continue to aggressively buy rice in the international market to feed its 140 million people, for many of whom rice is a staple food. Nigeria, Africa's top rice importer, last week ordered imports of 500,000 tons of rice from Thailand and the release of 11,000 tons of grains from strategic reserves.

This time, the government expects the private sector to take an active role in rice procurement. Under the package of incentives announced by Agriculture Minister Abba Ruma, import tariffs on rice have been suspended for the next six months to encourage massive importation by the private sector.

"We are contending with two paradoxically contending situations," said Ruma. "One is to make sure we have assisted the Nigerian rice grower, while at the same time, in the next two to three months, there must be efforts to cushion the effect of the rising cost of rice.

"And it was on account of that the government now considered the option of suspending the levy, which is about 100 percent, such that importers will feel free. It is a private sector affair and the federal government is repositioning the private sector to undertake the procurement," he added.

The government sees rice imports as a short-term solution and has outlined plans to boost domestic food production. Nigeria, once an exporter of rice, is grappling with shortfalls occasioned by a lack of investment in agriculture, inconsistency in government policies and poor harvests.

The Action Congress, one of two main opposition parties, says food imports are not the solution to the looming crisis.

"It is not a well thought-out policy," said Lai Mohammed, who speaks for the party. "By importing rice you are attacking the symptoms, not the disease. Secondly, it was the same thing we did when our refineries broke down. Rather than fix the refineries, we started importing refined products and today we are addicted to [imported] refined products. So if we do not fix the real problem, which is agriculture, then there is now way we can attack the real problem."

The prices of grains, beans, and rice have doubled in Nigeria in recent months. The national bakers union started a nationwide strike on Monday to protest the rising cost of wheat flour and sugar. Bakeries will remain closed for one week.

Protests and riots over spiraling food prices have occurred in a number of African countries. The 15-member Economic Community of West African States has scheduled a meeting to discuss the food crisis in the region on May 19 in Abuja .

VOA

Subsidised imports decimate Ghana's poultry industry

Ghana now accounts for as much as 30 percent of all poultry products imported into West Africa sub region from the European Union. These imports of live birds, frozen chicken parts and full chicken are posing serious threats to the local poultry industry.

According to a report in 2005, 50,000 tonnes of chicken was imported into the country. Unfavourable domestic policies, where there had been a low tariff regime have contributed to the continuous dumping of subsidized poultry products from the EU and the US.

Demand for local poultry has collapsed, threatening the livelihoods of over 1,000 poultry farmers in both small and large-scale poultry farming in Ghana.

In 2002 alone, more than 26,000 tonnes of chicken was imported into the country, mostly from the EU. In 2004, that figure was estimated to be as high as 40,000 tonnes. Cameroon, Togo, Senegal and South Africa are among the other nations receiving imported frozen chickens and chicken parts.

Ghana's position was further made hopeless when the poultry industry lost the battle with government not to reduce tariffs on imported poultry. The tax on imported poultry was reduced from 40% to 20%, whilst that on rice also came down from 25% to 20%. This was seen by farmers as a reversal of the government's pledge in 2003 to increase tariffs on imported poultry products and rice to boost their production in the country.

The European Union, the source of most of the imported chicken, provides 43 billion euros to its farmers annually.

The President of Ghana National Poultry Farmers’ Association, Kenneth Quartey, said the decision to pass the law is a symptom of weak leadership in the country which had bowed to external pressure.

The current situation of the poultry industry would be compounded when the Economic Partnership Agreement with the EU takes effect in 2008. The total opening of borders under this agreement can only lead to a paralysis of productive sectors in the countries of the South such as Ghana, with the invasion of European goods and services, especially in the agricultural field, where Ghanaian producers would face up to largely subsidised products.

On the other hand, it is not obvious that the removal of tariff barriers in Europe means free access of ACP exports to this market. Several limitations can exist which are related to quality standards or to phytosanitary measures.

The poultry sub-sector might be in danger of collapse. Already, big and small poultry farms in Ghana have cut down output and staff considerably because they can not compete with the cheap imports from EU and USA.

The Statesman

Nigeria spends $1.3 billion on rice imports

An estimated $1.3 billion is spent annually on the importation of about 2.2 billion kilogrammes of rice, a staple food consumed in almost every home in Nigeria.

This is part of the findings of a research project conducted by the Dutch Agricultural Development and Trading Company (DADTCO), which said the money amount could be re-channeled towards funding rice production locally.

Managing Director, DADTCO, Mr. Peter Bolt, presented the report at the signing of a Memorandum of Understanding (MoU) between his company and the Taraba State Government on the Taraba Rice Project. He added that quality rice could be produced in several parts of the country if farmers were encouraged to produce more rice using modern production techniques.

Bolt lamented the fact that Nigeria had over the years emerged as Africa's largest importer of all foodstuffs when the country had been blessed with a conducive climate and hard working people that could make her the food basket of the world.

The Ambassador of the Netherlands to Nigeria, Dr. Arie van der Wiel, who witnessed the signing, said that under the arrangement, DADTCO would be establishing plants where locally produced rice would be re-processed for export. He stressed the need for Nigeria to pay more attention to agriculture, adding that it is the green gold (agriculture) rather than the black gold (oil) that would determine Nigeria's economic future.

Taraba State Governor, Alhaji Danbaba Suntai, who endorsed the agreement on behalf of his state, described the partnership between Taraba and DADTCO as a dream come true. He said Taraba was already collaborating with the Dutch firm on cassava production, which began last year.

The cassava revolution, Suntai disclosed, was geared towards encouraging the farmers in the state to grow more cassava and transform from subsistence farming to commercial farming.

This Day

COMESA permits Kenya to charge protectionist wheat import tariffs

The Common Market for Eastern and Southern Africa has allowed Kenya to continue imposing high duties on wheat flour imports from Egypt and Mauritius, the two main low-cost producers of the commodity in the trading bloc. Under the arrangement, Kenya may impose a 60 per cent duty on the imports in addition to other taxes.

Kenya could continue with the run until the end of 2008, after which they will be reviewed by the trading bloc’s Trade and Customs committee, its main policy-making body on trade issues.

Last year, Kenya requested a review of its sugar sector by the secretariat to determine whether the industry was competitive enough to allow duty-free sugar imports from COMESA. Consequently, the COMESA Secretariat commissioned a study to assess the competitiveness of the sugar industry in Kenya.

On the import side, Sudan registered the largest market share of 17 per cent followed by Uganda at 12 per cent.

Intra COMESA trade has continued to experience robust growth with agricultural commodities such as tea, tobacco, sugar, rice, coffee, cotton and wheat topping the tables.

Commodity Online

Zimbabwe imports 3,000 tonnes of maize seed

Abut 3,000 tonnes of maize seed imported by Zimbabwe from neighbouring Zambia have so far arrived in the country.

"To date, we have received 3 000 tonnes of maize seed and its now at various GMB depots. Distribution in some regions has already begun and we are hoping that by end of this month, the distribution exercise would be complete," said the official. "We are also expecting some urea and ammonium nitrate that we imported from South Africa and China and the order will arrive in the country any time soon."

Officials said the fertilizer, especially top dressing (ammonium nitrate) might not be enough to meet the local demand but "Government will continue looking into ways of ensuring that the shortage will not have a major impact on the projected agricultural yields."

Agriculture Minister Mr Rugare Gumbo has indicated that local seed houses had the capacity to produce 35 000 tonnes of maize seed for the 2007/08 season. Already, nearly 30 000 tonnes have been distributed to farmers countrywide.

Farmers have already started planting in most parts of the country. Government has indicated that it needed to import an additional 15 000 tonnes to ensure enough maize seed to farmers.

This prompted the central bank to import a further 15 000 tonnes of maize seed worth about US$17 million from a Seed Co associate company in Zambia.

Deliveries started three weeks ago and daily deliveries of about 308 tonnes are expected until mid-December. Apart from maize seed, the RBZ is also importing 300 000 tonnes of sorghum from Botswana.

The Herald