Wednesday, September 24, 2008
Ethiopia, notorious for receiving food aid is unwilling to do what is right- allowing ordinary Ethiopians to own the land to be incentived enough to invest in it. The UN defies this basic logic and is playing along with its latest request of US$ 460 million to buy food for Ethiopia’s self-imposed famine.
After decades of socialism, Ethiopia’s agricultural sector — the mainstay of the economy — is less productive per capita than 20 years ago when Band Aid tried to defeat famine. Although 60% of the country is arable, only 10% has been cultivated.
Ethiopia’s Prime Minister Meles Zenawi believes that allowing Ethiopians to own their land would make them sell out to multinationals. He seems to have overlooked a basic market principle: It demands a willing seller and a willing buyer at an agreed price. If that price is worth selling for, the farmer might have some money to reinvest elsewhere; if that price is worth buying for, the purchaser must have plans to make the land profitable. If there is no sale, owners might have an incentive to invest in their own land and future, having, at last, the collateral of the land on which to get a loan.
In the same vein, the United Nations seems to think that mere provision of the right tools; mechanized agriculture equipment, irrigation for all-year-round farming, good roads and storage facilities will solve the annual food crisis in Africa. They are dead wrong!
There is no use providing all these when individual farmers do not own the land they till, much more face taxes on agricultural inputs and find it difficult to assess credit, if at all without exorbitant interest rates.