Thursday, October 15, 2009
By Douglas Southgate and Caroline Boin
The current food scarcity in several East African nations is not caused by drought, climate change or population pressure. Rather, these countries are unable to deal with dry conditions because their governments have continually discouraged investment in agriculture and kept food prices artificially high.
When food does not cross borders, hunger does. Politicians and experts meet in Rome this week at the UN Food and Agriculture Organization to address “How to Feed the World in 2050,” building up to World Food Day on Friday. But famine looms right now in Kenya, Ethiopia and their neighbours, as many governments continue to reject the UNFAO’s recipe for success: free trade in food.
The UNFAO recently calculated that there were no physical reasons preventing global food production from keeping pace with human population growth. So, with sufficient land and water to feed the extra 2.3 billion mouths expected by 2050, and ever-more efficient farming techniques, why has the number of malnourished people recently increased to more than one billion? Because getting food past government barriers and to those who need it most continues to be a struggle in many developing countries.
The current food scarcity in several East African nations is not caused by drought, climate change or population pressure. Rather, these countries are unable to deal with dry conditions because their governments have continually discouraged investment in agriculture and kept food prices artificially high. They do so by refusing to trade food freely with their neighbours and the rest of the world.
Focusing on food production is meaningless if food cannot be transported and sold freely. The 2006 Horn of Africa famine is a telling example. While crops were abundant in South-West Kenya, people in the North of the country were starving. This is an oft-repeated pattern. Famines, such as the one in Bangladesh in the 1970s, are caused by bad policies.
With weak rule of law and high intervention in the economy, many African countries are hardly investment- or business-friendly environments. But farmers are hit especially hard: overall, African farmers pay 60% more in export taxes than other African businesses. Perversely, many developing countries fight all global trade, with barriers four times higher than in high-income countries.
Export restrictions and bans begin by keeping domestic food prices artificially low, but this is true only for a short while. Farmers soon lose the incentive to grow more, so crop prices rises, both domestically and abroad. This is exactly what has happened in the Ukraine and Argentina, two countries with fertile lands and weather fit for farming.
If Ukrainian farmers were allowed to sell to international customers, they could easily double cereal production and export 50 to 80 million more tonnes a year–enough to feed 50 million people in China. Argentina could easily produce 30 million more tonnes of cereal for export every year–if it weren’t for steep export taxes.
Barriers to trade shrink the global harvest and drive up prices. The impacts on poor consumers are devastating. Nobel economics laureate Gary Becker estimates that a 30% rise in food prices over five years would cause a 20% fall in living standards in poor countries.
Trade barriers also lead to waste. Almost half of food is inedible by the time it reaches its intended customer in developing countries, having rotted during lengthy and bureaucratic customs checks.
Many governments have repeatedly accepted the need to lower tariffs on food and agricultural technology. In 2008, governments from all around the world agreed that reducing tariffs on food was the best way to reduce prices and hunger. Yet 40 countries have applied new restrictions on food trade in the past year, according to the UNFAO. Fifteen of those are in sub-Saharan Africa, the region that is worst afflicted by hunger.
While the UNFAO meets and speaks of "cautious optimism" about feeding the world of the future, food prices are out of control for the very poorest. Prices may have fallen significantly following their peak in 2007 and 2008 but they remain high in many sub-Saharan countries. With stifled markets and top-down control, the region’s farmers have found it hard to bounce back and recover. Just a few months ago, maize prices in Kenya and Ethiopia were still twice as high as they had been before the crisis.
To ease today’s hunger, and to prevent the world of 2050 from condemning ever more victims to tariff-inflicted starvation, governments need to see their promises through. The main challenge of the UNFAO’s next summit in November is to “eradicate hunger from the Earth”. Removing barriers to the sale of food is crucial if Kenya and Ethiopia’s recurrent famines are to become a horror of the past.
Caroline Boin is a Project Director at International Policy Network. Douglas Southgate is Professor of Agricultural, Environmental and Development Economics at Ohio State University.