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Food Crises and Restrictive African Trade Practices
By Thompson Ayodele
Food prices have skyrocketed
internationally. In my own Nigeria, rice has epitomized
the crisis after doubling in price since last year.
Riots happening around the world over
food supplies are prompting panicked governments to find
solutions to stem the crisis. Whether they will
bringabout an abundance of food is debatable.
Nigeria, for example, is considering
increasing rice imports anddisbursing loans to domestic
rice processors. While this might provide brief
improvement, it will not prevent future shortages or
ensure food abundance.
Promotion and management of food imports
in Nigeria in the past has bred abuse - so much so that
the primary result is no longer the protection of local
food producers. Such actions do show the economic folly
of allowing government to manage what private
individuals could do better.
It's not hard to link African food crises
to inappropriate government agricultural policies that
stifle the continent's great agricultural potential.
Over the years, nothing has been done to address low
crop yields. To the contrary, government has seemingly
gone out of its way to hamper production with policies
that are often flawed from conception and
ad hoc in nature.
According to the Rice Farmers Association
of Nigeria, Nigeria fell 800,000metric tons short of a
five-million ton production target for 2006 due to
inconsistent government policies. Of the
projected annual 4.64 million metric tons of national
demand for rice, current local production stands
at a meager 525,000 metric tons - requiring $267
million in imports. Because most locally-produced rice
is of low quality, its market potential is limited even
within Nigeria.
By protecting local rice growers, the
government shields them from competition by. Farmers
have no incentive to improve quality or yields nor are
able to invest. This naturally breeds reduced
production.
dditionally, taxes starve the poor and
needlessly drive up food costs. With import taxes, or
tariffs, averaging 33.6 percent, agricultural trade
barriers within Sub-Saharan Africa are the highest
compared with the rest of the world. Since these costs
show up in consumer prices and poorer people must spend
a larger percentage of their income on food, this spells
disaster.
In Nigeria, the tariffs on rice are at 55
percent, including a five percent levy for increasing
local production. In neighboring Benin, it is mere 35
percent. That's a whopping $200 per ton price advantage
Benin imports have over Nigerian ones.
Fertilizer is yet another thing import
tariffs put out of the reach of many - causing low
yields and hard manual labor. Distribution is
additionally cumbersome and can be manipulated - with
sizeable amount sending up in
the hands of politicians and their cronies who rake in
profits at the expense of farmers.
Furthermore, efforts to promote and
embrace biotechnology are thwarted byoutside resistance
on the part of relatively well-fed groups of largely
western activists.
At different times, Nigeria has also
banned the importation of staples including wheat, rice,
maize and vegetable oil. Such restrictions may protect
local industry for a short time, but it punishes
consumers and discourages production. Protectionism
allows local producers to hikeprices and lower quality.
Relaxing restrictions does the opposite.
Hunger is an everyday problem in Africa.
What can be done about it? For one thing, a better
governmental infrastructure and incentives can stimulate
production if done right. Anything that would dampen
competition, and thus lower the incentive to produce,
should be avoided. When these programs are instituted,
they must be administered with professionalism and
transparency.
To avert social unrest in the short term,
food reserves can be tapped. Inthe long-term, the
solution still lies with increased, private
productivity.
In ensuring food for all in Africa and
elsewhere, government can help foster a solution once it
decides to stop being a problem.
Project 21 associate Thompson Ayodele is the
executive director ofInitiative for Public Policy
Analysis, a public policy think-tank based in
Lagos, Nigeria. This commentary is an
abridged version of what appeared
in the Kigali New Times of Rwanda on May 19,
2008. Comments may be sent
to thompson@ippanigeria.org.
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