I find blaming free trade a bit off the mark. Free trade has never been about opening your market to gratuitous dumping. A shipload of subsidized rice from New Orleans will wreck anyone’s rice market for a time. The treat of it is however sufficient to keep most traders honest.
All countries need to use import quotas to protect local market integrity. Imagine the uproar if someone dumped thirty shiploads of unwanted rice in New Orleans plugging all the storage. These types of erratic transfers are normally blocked for obvious reasons.
The historic weakness of subsistence farming has been a lack of capital to both expand established production and to establish new production. It is inevitable that this form of agriculture will modernize into larger well capitalized farms using far less manpower.
They may do a better job of that than we did, but few recall that our small rural farmers were essentially starved out of business for lack of ready capital. That is why the farm was sold and or a job taken at the local factory.
Free Trade Cripples Food Production In Africa
by Staff Writers
Corvallis OR (SPX) Feb 16, 2010
Despite good intentions, the push to privatize government functions and insistence upon “free trade” that is too often unfair has caused declining food production, increased poverty and a hunger crisis for millions of people in many African nations, researchers conclude in a new study.Market reforms that began in the mid-1980s and were supposed to aid economic growth have actually backfired in some of the poorest nations in the world, and just in recent years led to multiple food riots, scientists report in Proceedings of the National Academy of Sciences, a professional journal.
“Many of these reforms were designed to make countries more efficient, and seen as a solution to failing schools, hospitals and other infrastructure,” said Laurence Becker, an associate professor of geosciences at Oregon State University. “But they sometimes eliminated critical support systems for poor farmers who had no car, no land security, made $1 a day and had their life savings of $600 hidden under a mattress.
“These people were then asked to compete with some of the most efficient agricultural systems in the world, and they simply couldn’t do it,” Becker said. “With tariff barriers removed, less expensive imported food flooded into countries, some of which at one point were nearly self-sufficient in agriculture. Many people quit farming and abandoned systems that had worked in their cultures for centuries.”
These forces have undercut food production for 25 years, the researchers concluded. They came to a head in early 2008 when the price of rice – a staple in several African nations – doubled in one year for consumers who spent much of their income solely on food. Food riots, political and economic disruption ensued.
The study was done by researchers from OSU, the University of California at Los Angeles and Macalester College. It was based on household and market surveys and national production data.
There are no simple or obvious solutions, Becker said, but developed nations and organizations such as the World Bank or International Monetary Fund need to better recognize that approaches which can be effective in more advanced economies don’t readily translate to less developed nations.
“We don’t suggest that all local producers, such as small farmers, live in some false economy that’s cut off from the rest of the world,” Becker said.
“But at the same time, we have to understand these are often people with little formal education, no extension systems or bank accounts, often no cars or roads,” he said. “They can farm land and provide both food and jobs in their countries, but sometimes they need a little help, in forms that will work for them. Some good seeds, good advice, a little fertilizer, a local market for their products.”
Many people in African nations, Becker said, farm local land communally, as they have been doing for generations, without title to it or expensive equipment – and have developed systems that may not be advanced, but are functional. They are often not prepared to compete with multinational corporations or sophisticated tradesystems.
The loss of local agricultural production puts them at the mercy of sudden spikes in food costs around the world. And some of the farmers they compete with in the U.S., East Asia and other nations receive crop supports or subsidies of various types, while they are told they must embrace completely free trade with no assistance.
“A truly free market does not exist in this world,” Becker said. “We don’t have one, but we tell hungry people in Africa that they are supposed to.”
This research examined problems in Gambia and Cote d’Ivoire in Western Africa, where problems of this nature have been severe in recent years. It also looked at conditions in Mali, which by contrast has been better able to sustain local food production – because of better roads, a location that makes imported rice more expensive, a cultural commitment to local products and other factors.
Historically corrupt governments continue to be a problem, the researchers said.
“In many African nations people think of the government as looters, not as helpers or protectors of rights,” Becker said. “But despite that, we have to achieve a better balance in governments providing some minimal supports to help local agriculture survive.”
An emphasis that began in the 1980s on wider responsibilities for the private sector, the report said, worked to an extent so long as prices for food imports, especially rice, remained cheap. But it steadily caused higher unemployment and an erosion in local food production, which in 2007-08 exploded in a global food crisis, street riots and violence. The sophisticated techniques and cash-crop emphasis of the “Green Revolution” may have caused more harm than help in many locations, the study concluded.
Another issue, they said, was an “urban bias” in government assistance programs, where the few support systems in place were far more oriented to the needs of city dwellers than their rural counterparts.
Potential solutions, the researchers concluded, include more diversity of local crops, appropriate tariff barriers to give local producers a reasonable chance, subsidies where appropriate, and the credit systems, road networks, and local mills necessary to process local crops and get them to local markets.
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