G8 Deal Opens Africa For West To Dump Cheap Goods

by Sanjay Suri

(IPS) GLENEAGLES, Scotland -- Powerful western nations are committed to developing Africa -- as a market for their goods, a leading agricultural economist says.

"There is talk of the need for action by way of aid, debt cancellation and trade," Devinder Sharma, long-time campaigner for the rights of farmers in the developing world told IPS. "An impression is given by George Bush and others that of the three, trade is the real answer to Africa's problems. But actually trade is the problem."

In four African countries -- Burkina Faso, Mali, Chad and Benin -- whose economies are based on cotton production, U.S. cotton is being dumped and livelihoods are being lost, all in the name of free trade, said Sharma.

U.S. cotton prices are cheap because 25,000 U.S. cotton farmers get four billion dollars a year in subsidies, he added. "This is obviously depressing the market in Africa, and other countries. Then they ask farmers there to diversify and go for other crops."

One cotton grower in the U.S. state of Arkansas received subsidies worth six million dollars, equal to the combined annual earnings of 25,000 cotton farmers in Mali, Sharma said.

U.S. subsidies on cotton are more than the gross domestic product (GDP) of several African countries, and three times the amount Washington spends on aid to half a billion Africans living in poverty, he added.

Ethiopia and Uganda have reported huge losses in export revenues, Sharma said. Earnings through agricultural exports in Uganda were about 110 million dollars in 2001, a fifth of the amount five years earlier, Sharma said. In Ethiopia, export revenues have also dropped heavily.

In January 2002, the European Union (EU) and the U.S. Agency for International Development (USAID) warned of increased food insecurity in Ethiopia without acknowledging that "much of the fault rests with their own policies," Sharma argued.

Talk of developing Africa is just a public relations exercise, he added. "They know Africa is the future market for the agricultural produce of the United States and the European Union."

Debt cancellation too has not been decided without consideration of advantages to the EU and the United States, according to Sharma. "When you write off the debts of the poorest countries, you enable them to that extent to buy agricultural produce from the EU and the U.S."

In the EU, the so-called reform of the Common Agricultural Policy (CAP) ensured that the level of subsidies given to farmers in 2004 became their entitlement, he said. "That will continue until 2013, so the farmers are completely protected until then. That means they will continue to produce surplus goods."

Among other produce, the EU will churn out 200 percent more milk than it needs. "Where is the market for this?" Sharma asked, answering, "the market is Africa. And if cheap milk for Africa is produced in the EU, what will African farmers do?"

Eventually farmers everywhere will lose out to corporations, Sharma predicted. "Through the World Trade Organization (WTO) farmers in different countries are being pitted against one another," he said.

"Jamaicans are worried about cheap milk from Britain, the Americans are worried by cheaper apples from China -- it goes on. The more individual farmers suffer, the easier it becomes for corporations to move in."

Just 10 companies control the global trade in agriculture, Sharma said. Cargill, the biggest among them, has almost 60 percent of the world trade in cereals, he added.

"They are taking control, and buying from big farmers, and the small farmers are disappearing, even in the West," he said. "The U.S. had 900,000 farmers in 2002; in 2004 their number was down to 700,000."

The EU has about seven million farmers, but is losing them at the rate of about three a day, according to Sharma, yet more and more money is being given to more and more wealthy producers, he said.

In Britain, whose leaders today are showing so much about concern for Africa, the Duke of Westminster -- who owns about 55,000 hectares of farm estates -- receives an average subsidy of 300,000 pounds (more than half a million dollars) as direct payments, and in addition gets 350,000 pounds a year for the 1,200 dairy cows he owns, Sharma said.

"The recipients of the U.S. agricultural subsidies in 2001 also included Ted Turner and David Rockefeller."

Produce grown by such farmers, bought by giant companies, is now being distributed in world markets through firms like Wal-Mart, Sharma said. "Local farmers' marketing channels are being destroyed."

If Africa is to emerge from poverty, it would have to be through agriculture primarily, he argued. "If it's agriculture that is being destroyed, then where is the hope for Africa?"