Should Africa protect its farmers to revitalise its economy

Abstract

All is not well in Africa south of the Sahara. Western experts are looking for the causes in bad governance and insufficient social capital. At present, donors only support those administrations that endorse governmental and market-oriented reform. Results however are disappointing. In this paper I argue that domestic liberalisation is not enough to revitalise the economies of Sub-Saharan Africa. Farmers must also be protected from cheap imports. To explain why, I refer to the historical interaction between Africa and the world economy. The emergence of the European world trade system in the 15th century stimulated export agriculture in America and Asia. But in Africa high internal transport costs, malaria and the iron weapons of indigenous societies kept colonial plantation economies away. In the late 19th century, quinine and machine guns allowed Europeans to penetrate Africa, and the internal transport barrier was reduced. By that time, however, the Industrial Revolution had led to global agricultural overproduction and a fall in international prices. Western countries resorted to protection to safeguard farm progress. But African farmers were not protected. The prices they faced were further depressed as Western countries shifted their overproduction on to world markets. During the European population booms of the 16th and 18th centuries, the obstacles to sustainable agricultural intensification were hardly less than in Africa today. But overcoming them was simpler because population growth raised the prices of agricultural products, encouraging farmer investment and innovation. The new dynamics of international agriculture complicated this picture in 20th century Africa. Other than in a few places with sufficient market demand or during the rare times that world market prices improved, prices were too low to allow farmers to invest. Rather than leading to sustainable intensification, therefore, population growth led to vicious cycles of impoverishment and soil degradation. Agrarian malaise dragged the rest of society with it. Low rural incomes restricted the domestic market for industries and services, also depriving them of opportunities for warming up for competition on the world market. Rural poverty also bred conflict and distrust, which spread to the rest of society, plaguing modern enterprises with high transaction costs. Agrarian malaise caused a massive flight from the land. With no strong non-farm sector to flee to, this led to a proliferation of marginal activities and a jostling for jobs in the public sector, encouraging bad governance and further complicating the situation for farmers. The only way forward is to revitalise agriculture. Besides public investment in infrastructure, this requires better prices for farmers. Domestic reform will not achieve this as long as world market prices are too low. Trade policy reform in the World Trade Organisation will have little effect while Western countries continue to subsidise their farmers and reject a balanced system of managed agricultural trade. African policy-makers would be well-advised to consider the example of successful Asian countries like South Korea or Taiwan. There tariff protection against cheap imports was an important element in supportive policies that allowed agriculture to develop and become the driver for overall economic growth.

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