Opening up trade is best way to help solve Africa's food crisis

Published on Friday 4 July 2008 22:08

THIS month is the latest G8 summit, which meets on Monday to Wednesday on the Japanese island of Hokkaido. The main agenda includes climate change and the world food crisis.

Global food inflation "threatens to destroy years, if not decades, of economic progress", the Africa Progress Panel said last week, prompting its chairman, Kofi Annan, Sir Bob Geldof and Bono to call on rich countries to honour their commitment of doubling aid to Africa by 2010. But more aid will not solve the problems that make poverty perpetual.

Annan and the self-appointed aid ambassadors are right about one thing: rising food prices and failed harvests are horrible. But the development industry is betting on the wrong horse when the United Nations Food and Agriculture Organisation demands that "rich countries dramatically ramp up their aid for agricultural development to curb rising food prices", to meet commitments made at the G8 meeting in Gleneagles three years ago.

The Commission on Nutrition Challenges in the 21st century reported that during the Nineties malnutrition fell by two-thirds to 10 per cent in east Asia and halved in Latin America. In Africa it increased by 20 per cent. Why?

A recent UN Food and Agriculture Organisation conference in Nairobi estimated that, in the past decade alone, 20 per cent of African government budgets have been used for "military hardware and other unnecessary luxuries".

Unnecessary luxuries include Congo president Denis Sassou Nguesso's hotel bill of more than $300,000 (151,000) and his $7 million on Parisian homes for his wife and son. Yet activists and Nguesso continue to call for debt cancellation and more aid.

After $2.3 trillion, most of the 70 per cent of Africans who live off the land have falling incomes and life expectancy, while Asian countries that got little or no aid have prospered.

Improving the world's least productive agricultural sector is a moral imperative and a great way to kick-start economic development. Relying on food handouts is a particularly ineffective way to help Africans when you look at the alternatives.

A better solution would be to remove the world's most crippling trade barriers – 70 per cent of which are imposed by less developed countries, including on food. The average tariff on agricultural goods in sub-Saharan Africa is 33.6 per cent, the highest of any region. Additionally, taxes and tariffs restrict access to fertiliser, making it six times more expensive in sub-Saharan Africa than the basic price.

As Ethiopia faces another famine, the World Bank ranks it 112th in a rising list of 125 countries' tariff restrictions. Despite moves to free the Ethiopian economy, all imports still require licences, state companies manipulate prices and, above all, the government prohibits land ownership, so the poor are chained to the land but cannot use it as collateral for loans.

This pushes fertiliser or hybrid seeds further out of reach and makes farmers vulnerable to droughts, heavy rains and pests.

Bono, Geldof and Annan tug at the heartstrings of people who rightly want to help, but they don't mention that totalitarian Ethiopia is already one of Africa's biggest aid recipients, that it runs a Stalinist compulsory relocation scheme for millions and that things are worse since Band Aid first hit the world's conscience in 1984.

Annual per capita food production dropped from 450kg to 140kg between 1984 and 2002 and has scarcely improved since.

To really help the world's poor, the G8 countries meeting in Hokkaido must insist they get the same economic freedoms as people in countries that are actually developing: the right to own and sell land and the right to trade with each other. Without those freedoms, more aid is yet more good money after bad.