TheAgitator.com
Bush in Africa
Monday, February 18th, 2008I suppose on the one hand it’s nice that there’s at least one corner of the world where we aren’t loathed.
On the other hand, it’s too bad that Bush is being feted for what amounts to little more than throwing barrels of money at a problem. I wrote a bit about Bush’s Africa plan back when the first incarnation of it passed back in 2003. A few excerpts from that piece…
Asking every American for 53 cents to help fight pictures of AIDS babies isn’t bold. It’s easy.
Bold would be standing up to the politically savvy cotton industry, for example, and saying “no” to the $3.4 billion subsidy it got from the 2002 Farm Bill. The average cotton farmer in the United States is worth $800,000. He can get up to half of his annual income from government subsidies. And thanks to the 2002 Farm Bill, he can expect to earn about 16% more in the years ahead.
Meanwhile, in impoverished Mali - where cotton is pretty much the only export - U.S. and European subsidies will drain an additional 10% from what little income Malian cotton farmers managed to bring in last year. Economists estimate that U.S. cotton subsidies take a quarter of a billion dollars from African farmers every year.
And that’s just cotton.
Thanks to subsidies, American corn sells on the international market at just 80% of the cost of production. Wheat sells at just 54%. There’s simply no way African farmers can compete with behemoth western corporate farms that, while feeding at the public trough, sell grain on the world market at a fraction of what it costs them to actually grow it.
The United Nations estimates that American and European agricultural subsidies cost African farmers $50 billion annually. That’s three-and-one-third “let’s fight AIDS in Africa” bills, every year.
You can throw all the money you want at Africa. We’ve been doing it for 50 years, to no effect. Yes, much of Africa also faces problems with corruption. But corruption’s easier in countries where poverty makes it too difficult for the people to hold their political leaders accountable. Until politicians in the U.S. and Europe have the guts to stand up to protectionist forces within their own borders, Africa isn’t going to bet any better.
Radley,I agree with you on trade,we need to end subsidies and buy where it is cheaper.The problem I have is Africa is a vast area with many countries.They could easily create a free trade zone on the continent yet won’t.They don’t trade with one and other.With the amount of human and natural resources there you would think it would be a power house economy.What’s stopping them?
Americans are not loathed in Africa - but Bush is. Tanzania has many Muslims, especially on the coast and islands, they do not speak nicely of him. I would bet many of those who greeted the president were paid.
Africa’s best natural resource is sunlight.
And that’s leaving aside the fact that taking tax money from ordinary Americans and handing it to anyone as a production subsidy is just flat out immoral.
Social welfare vs. Corporate welfare
I think people subconsciously shrug their collective shoulders when it comes to fighting corporate welfare. Fighting against money and power is much more difficult than fighting against the disenfranchised. Individually, I think we can all see the inequality in the system, but turning that into popular policy is like climbing a vertical cliff face. It can be done, but damn its hard.
Michael, the political obstacle to free trade zones comes down to who loses out. Markets allocate resources to the most efficient producer of the products people want. There’s no fat left over to fund bribes, buy votes and all of the other ways that political power is reinforced.
Political power, whether through tariffs and subsidies or government contracts, is under the direct control of politicians who can therefore make decisions that reinforce their wealth and power at the expense of market efficiency. This power can then be directed to securing the votes and the contributions of powerful minorities (farmers, corporations etc.) at the expense of a larger but less focussed majority.
Given how hard it is to keep politics out of markets in a highly educated and pluralist country like the US imagine how hard it is in countries where education is limited and tribal connections often trump national cohesion.
A free market in Africa would be great for everyone except the people who retain power and wealth by directing patronage to their supporters and sponsors. Unfortunately they’re the ones in control.
As for how we solve that, I’m not sure we can. The key benefit of dismantling our own trade barriers, though, is to ourselves. We get cheaper stuff and get to watch poorer areas of the world develop to a stage where their brightest and best can contribute in meaningful ways (and to a stage where the people can really demand change from their leadership as is starting to happen in China as a result of the same forces).
Mr. Balko - I think you’ve really nailed this farming problem. You really seem to have a grasp on farming in general.
I’m in agreement with you that we need to end domestic farm subsidies. But to the issue of trying to help Africa by throwing money its way is simply not going to fix anything. Until the people of Africa end their tribalistic ways nothing will change.