Are western governments inclined to amend their trade and agricultural policies for the sake of Africa’s revival?

Muhammad Rislan

@rislan1

In case you are wondering why Africa is still underdeveloped, then here’s a part of the reason. An excerpt from the book ‘The State of Africa- A History of Fifty Years of Independence’ by Martin Meredith sheds light on the plight of the African farmers and the culpability of the developed economies to keep him perpetually dependent on foreign aid. 

“Determined to protect their own producers, industrialized countries operate a system of subsidies and tariff barriers that have crippling effect on African producers. The total value of their agricultural subsidies amounts to 1 Billion Dollars a day - 370 billion a year- A SUM HIGHER THAN THE GROSS DOMESTIC PRODUCT OF THE WHOLE OF SUB-SAHARAN AFRICA. The European Union subsidy for each cow is about $900 a year - more than the average African income; the Japanese subsidy is $2,700 per cow. Western surplus produced at a fraction of their real cost are dumped on African markets, undermining domestic producers. Simultaneously, African products face tariff barriers imposed by industrialized countries, effectively shutting them out of Western markets. 

The case of cotton illustrates the hurdle that Africa has to surmount. Africa is the world’s third largest producer, turning out high-quality cotton at competitive prices. In West Africa, cotton provides a living for a million farmers. Cotton production in francophone West Africa has soared from 100,000 tons a year at independence in 1960 to 900,000 tons. In Benin,  Burkina Faso, Chad, Mali and Togo, cotton represents between 5 and 10 per cent of the GDP, more than a third of export income and more than 60 per cent of agricultural export income. Production costs in the United States are more than twice as high. But the US provides its 25,000 Cotton farmers with an annual subsidy of $4 billion - more than the value of the entire crop. US farmers have therefore been able to export cotton at one-third of what it costs them to produce. Over a period of fifteen years, they have gained nearly one-third of the world market. A study by Oxfam in 2002 calculated that, as result of the US subsidy, the world price was 25 per cent lower than it would otherwise have been. It is estimated that the cost to Burkina Faso was 1 per cent of its GDP or 12 per cent of its export; to Mali, 1.7 per cent of GDP or 8 per cent of exports; and to Benin, 1.4 per cent GDP or 9 per cent of exports. According to Oxfam, the TRADE LOSSES associated with US farm subsidies that West Africa’s eight main cotton exporters suffered OUTWEIGHED the benefits they receive from US aid.

The European Union and China each supports its cotton producers with a subsidy amounting to about $1 billion a year. The world bank estimated that eliminating cotton subsidies altogether would raise west Africa’s income by $250 million a year. 

in similar fashion, African farmers have struggled to compete against a wide range of other subsidized agricultural products - European sugar, Asian rice, Italian tomatoes, Dutch onions; many have been forced out of business.”

 

In these unfair atmospheres, how can we thrive and compete? There is certainly unfair trade practice and our governments need to start calling out these nations through the World Trade Organization (WTO). And if WTO isn’t there to offer fair arbitration, then all African nations should leave the organization and set up a means of ensuring fair play. With the current practice in place, we will never go anywhere for next 100 hundred years.

 

Time to act is now