Trade Practices Undercut African Agriculture

Article excerpt

WITH growing impatience, the world waits for the European Community and the United States to resolve their differences on farm-trade reforms under the current Uruguay round of talks. Meanwhile, calls from some developing countries for fair trade in agriculture have largely gone unheeded.

Sadly, the marathon dispute over farm trade is overshadowing the plight of food exporters from developing countries such as Zimbabwe. Until this year's drought, the worst in southern Africa this century, Zimbabwe had been regarded as the region's food basket, exporting an average of half a million tons of maize a year.

Back in 1986, while sitting on a huge grain stockpile, the country struggled with its surplus, unable to off-load it on the world market because of low prices, thanks to food dumping by heavily subsidized European farmers. Zimbabwe's mounting stockpiles led to the twin problems of storage and marketing.

Defying the odds against it, the government embarked on a rigorous marketing campaign. Food was exported to neighboring countries, including Mozambique, Botswana, Tanzania, and sometimes South Africa. This was achieved despite fierce competition from international aid agencies that were bringing food aid all the way from the US and Europe. Penetrating other overseas markets was a daunting task for Zimbabwe, because of protectionist trade practices. Hopes that international relief agencies would purchase substantial amounts of food as donations for famine-stricken African countries proved futile. These agencies refused requests to buy Zimbabwean grain, which not only would have helped the country dispose of its stockpiles but also could have reduced donor transportation costs.

A world glut and the preference of aid agencies to purchase supplies from their home countries resulted in lower exports from this southern African country. Frustrated by what it considered an unfair trade system, Zimbabwe sought other options. In 1990 it slashed grain production by 50 percent and offered incentives to farmers to grow more profitable crops such as tobacco.

To the extent that net food exporters from the third world would be compelled to abide by decisions reached under the General Agreement on Tariffs and Trade (GATT) talks on farm trade, their efforts to achieve food security are likely to remain a distant goal, making them perpetually dependent on outside food. Export subsidies in the North create mountains of food that are then off-loaded on the international market at knock-down prices, destroying the viability of agriculture in poor countries. Even when prices pick up, tariffs and nontariff barriers protect northern farmers from foreign competition.

Dumping practices and protectionist trade policies have imposed enormous burdens on the ability of developing economies to sustain agricultural industries and increase earnings from this sector. Ironically, by driving down food prices on world markets subsidies have also depressed producer prices in industrialized countries and prompted calls for more subsidies. In contrast with subsidies by the North, third-world government support programs are meant to achieve food self-sufficiency. …