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Africa, the symbol of the failure of liberal policies |
Following the failure of the Doha negotiations last July, Pascal Lamy, General Manager of the WFO intervened several times insisting on the urgency to conclude the cycle. As he said it again recently during a National Assembly audition, this seems all the more necessary to him that the liberalisation of the agricultural sector would primarily benefit the poorer countries. If yesterday this hypothesis was largely shared, today a growing number of experts, NGO’s and political personalities are questioning it. Even the World Bank in the audit it conducted in 2006 highlighted the fact that the benefits to be expected from liberalisation for the developing countries were greatly overestimated1. In line with this, the latest report from the United Nations Conference on Commerce and Development (CNUCED), published in September 2008, draws up a balance sheet on the efficiency of liberalisation policies in developing countries, basing itself on the African example. Showing that in Africa liberalisation hasn’t translated into the expected benefits, the report concludes with the need to implement a new strategy for the development of agriculture going which goes beyond the commercial vision which dominates today. Such proposals are essential, not only because they back-up the “strategic U-turn” which took place in agriculture since 2005, but also because it justifies the creation of an international agriculture governance which is the only way to formulate concrete answers to the food crisis.
Liberalisation policies initiated by international institutions in the days following WWII, were supposed to have a positive influence on the long term growth of national economies. Indeed, the international community believed that through the development of trade, it would guarantee peace in the world, secure supplies and favour the development of poor countries. These arguments, strongly suggested by economic literature are still put forward by the WTO to justify its strategy. But as the CNUCED can verify it, the results for Africa are quite far from those expected.
To begin, liberalisation policies haven’t allowed African agricultural production to increase. Globally, agriculture’s contribution to Sub-saharian global production hasn’t changed since 1980, running at approximately 19% of GIP.
Then, exports haven’t increased in the proportions expected. Indeed, the increase of African exports has been 5 times lower than that observed in the other developing countries, particularly Asian countries.
Finally, liberalisation policies haven’t developed alongside a diversification of the export products offer. The African exports concentration index in fact increased by 80% between 1995 and 2006, making the continent depend on an ever decreasing number of basic products. This evolution hasn’t helped Africa’s rise in international trade : in fact Africa lost half of its market share in exports, dropping from 6 to 3% in 2006.
From there onwards, if production stagnates and exports peak while demography expands, a general impoverishment follows reinforced by the highly destabilising role of price volatility verified in the agricultural sector.
For, contrary to the other international institutions’ belief that prices will remain high for a prolonged period of time, thereby benefitting farmers in developing countries, CNUCED highlights the volatile character of agricultural raw material prices. « The basic products price take-off is generally a cyclic phenomenon and it would be quite surprising if the current increase continued forever. » The latter factor, not of a direct nature compared to the previous three, is fundamental however, to explain the inadequacy of the neoliberal policies when applied to the agricultural sector 2.
Based on this assessment, CNUCED recommends a commercial development strategy for African agriculture better adapted to its needs based on six objectives:
1/ Remove the constraints affecting the offer of African products, by setting up fiscal advantages and subsidies, aimed at encouraging investments in the agricultural sector to improve export productivity and competitiveness ;
2/ Diversify the offer, in favour of products with greater added-value, so as to allow Africa to be more profitable on production and agricultural products and be less vulnerable to basic products’ price fluctuations ;
3/ Improve the access to developing and emerging countries’ markets, by adapting especially production to specific quality, health and environmental regulations, as well as to consumer tastes and preferences ;
4/ Promote private-public partnerships to strengthen those areas of agriculture which enjoy competitive advantage while respecting the « public property » character ;
5/ Promote regional integration to benefit from trade advantages on larger but more homogeneous markets ;
6/ Maintain aid for Sub-saharian agriculture, given the important role of public aid for development in the area of public investment financing.
As long as these different points are not taken into account in the international negotiations led by the WTO, the CNUCED considers it essential not to conclude the Doha round.
If, confronted with the world food crisis, the majority of international institutions are restricted by commercial recommendations, CNUCED goes further and puts forward the need for a complementary and more global approach than the one which prevails today. As the World Development Report of the World Bank points it out3, CNUCED reaffirms the importance of government regulation and adequate governance, to favour the development of this so essential sector for economic development. We must indeed, not forget, that in a majority of developing countries 75% of the population depend directly on agriculture and that 70% of agricultural production is for local consumption. On the other hand, as international commerce today only concerns 10% of the world’s agricultural production, it is limiting and dangerous to consider agriculture exclusively from a commercial side for developing countries as well as for developed countries. Indeed, an essential question remains : if the African countries supposedly the main beneficiaries of international trade liberalisation are in fact the losers, what about other countries such as those from the European Union, supposed to suffer slight losses ? Could these in fact be much higher ? From a “win-win” situation, we would find ourselves in a “lose-lose” situation, hard to justify by Pascal Lamy.
After the reports and audits produced by the World Bank, the FAO, numerous experts as well as NGO’s, the CNUCED’s conclusions are a new element questioning the rightfulness of the WTO strategy. We can only applaud this new awareness about the need to adapt world governance to agricultural realities ; this is the very object of the 10 proposals put forward by momagri, and which are to become the backbone of a true international food and agriculture policy.
L’équipe éditoriale de Momagri
| 1 As Angus Deaton, one of the authors of the report mentions it, « the World Bank management puts some results forward more than others, which is acceptable, but I believe there’s a limit beyond which you can’t say that something is backed-up by research elements, when you can only produce weak and contradictory conclusions », especially according to the author when it says that “growth is good for the poor”.
2 See on this matter the article on the internet site www.momagri.org : « Rome Summit : Despite a correct analysis of the situation, inadapted proposals and recommendations », 09/06/08
3 « Agriculture is(…) very promising in terms of growth, reducing poverty and environmental services but, for these promises to become true, government’s invisible hand must also show, by providing essential public goods, by improving the investment climate, by regulating the management of natural resources and by obtaining expectable social results » World Development Report.
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Advocating for
agricultural market
regulation and global
food governance | |
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