By Chris | May 24, 2008
It seems like just the other day that Bono was vilifying developed countries for flooding the world markets with cheap food. Consider this excerpt from a news article leading up to the 2006 G8 summit:
In Senegal, a resilient showcase of democracy in a continent otherwise pervaded by corrupt dictatorships and brutal wars, producers of tomatoes and other food products have been suffering for more than a decade under the unfair trade relations with Europe and other wealthy regions of the world. Their markets are overflowing with cheap, subsidised tomatoes from Italy, onions from the Netherlands, rice from Japan, cotton from the United States, and chicken parts from across Europe. As the UNHDR 2005 put it, “Sub-Saharan Africa has become increasingly marginalised (in the global trade). Today, the region, with 689 million people, accounts for a smaller share of world exports than Belgium, with 10 million people.”
Today, no one in Senegal is complaining about an overflow of cheap food:
The world food crisis, with rising prices causing shortages, riots and hunger — often for those already struggling to feed themselves — has brutally exposed Senegal’s Achilles’ heel: it imports the majority of its needs. This has left the west African state particularly at risk as it struggles to keep prices under control while setting up a vast programme to stimulate food self-sufficiency…locals grumble they can no longer afford to buy sufficient food.
Agricultural subsidies are neither efficient nor equitable. They often end up in the richest farmers’ pockets. For example, take a look at this map showing the 2007 subsidies received by farmers living in…Manhattan…New York. Nevertheless, I have always been hesitant to blame agricultural subsidies on the economic woes of lesser developed nations. Subsidies in rich countries effectively subsidize the cost of food for people around the world. Some producers are hurt, but on net, the world is getting free food. Domestic farmers may complain when prices are too low, but nations riot when prices are too high.
While writing this post, I learned that the U.S. requires that all food aid originate in the United States. Transportation costs make this incredibly wasteful.
One cost-cutting measure, supported by many economists and by relief organizations such as CARE, would be to permit the U.S. government to buy at least some of the grain it donates from farmers nearer to famine zones — to buy, say, South African or Ethiopian wheat and ship it to the hungry elsewhere in Africa. Both the European Union and Canada have recently authorized such “local and regional purchases,” with broadly successful results. President Bush has called for allowing as much as 25 percent of the U.S. food aid budget to be used this way.
The provision did not make it into the final bill that was passed by Congress, despite the president’s veto.