Farming's Unlevel Field

Let African Farmers Compete

Africa's lagging agricultural production and desertification
The desert spreads on the border of Senegal and Mauritania (Photo: AFP).

Each day, the world’s wealthy countries devote an amount roughly equivalent to the budget of Senegal in subsidies to their farmers. Meat, milk, sugar, tomatoes, and wheat receive significant subsidies. This allows their producers to dump them on the world market at very low prices, at the expense of African producers who are choked off.

While African countries are being throttled by the World Bank and the International Monetary Fund, which enjoin them to cut off all subsidies to agriculture, the countries of the North can hand out subsidies to their heart’s content. According to a report by the Organization for Economic Cooperation and Development (OECD), the wealthy countries in the North, which are members of this body, have granted their agricultural sectors US$311 billion. This represents more than 200 times Senegal’s budget. Each day, the wealthy countries, particularly the United States, Japan, Australia, and those of the European Union, pay their farmers almost 700 billion C.F.A. francs in the form of subsidies.

Consequently, these subsidies are distorting the rules of the game on the world market. According to the OECD experts, certain sectors receive considerable subsidies, which often have an effect on prices. In the case of rice, the subsidy is equivalent to 80 percent of the market price. (In other words, the farmer is assured of recovering, in the form of subsidies, 80 percent of the market price.) In the case of milk and sugar, the subsidy is equivalent to 45 percent of the market price while, for wheat, the subsidy represents 36 percent of the market price. With this system, farmers are ensured of making considerable profits.

They are unbeatable on the world market, because they are guaranteed to recover their investments. They also receive aid for production. Such aid may be granted for marketing, research, and so on, allowing the agricultural sectors of the countries of the North to be very competitive on the market. It is virtually impossible for African farmers to compete.

Thus, for strategic products like rice, sugar, milk, and tomatoes, the imbalances between African products and those of the North are glaring. When these products are subsidized, they are sold at very low prices on the international market. At the same time, African farmers must deal with high production costs. Since the state has cut the umbilical cord that linked it to farmers, these people are now laboring under great difficulties. Consumers with low purchasing power turn to imported products, which has a negative impact on domestic industry. This is true for tomatoes, sugar, wheat, and so on.

The advocates of globalization are not unaware of these mechanisms that distort the machinery of world trade. Everywhere in Africa, the International Monetary Fund and the World Bank are militating for the liberalization of economies. The borders are wide open, and products come in without any restriction. Senegal has become an open bazaar, to which products are shipped in by producers in the North. For these producers, the main thing is to collect the subsidies that are their lifeblood, even if it means selling their products at extremely low prices.

This is why vigilance ought to be the watchword, to prevent products from Gambia from flooding the market. Gambia is a transit zone where importers unload their products before bringing them into Senegal and the bordering countries. There is a major risk of seeing products like tomatoes, milk, and sugar flood the Senegalese market through fraudulent channels. This would place jobs in these sectors in jeopardy.