Does Africa lack market or what to sell?
Dec 21, 2005
WORLD leaders are meeting in Hong Kong for the World Trade Organisation (WTO) negotiations, a global forum that is increasingly becoming unpopular. As representatives of over 150 countries meet, there are 9,000 police officers up against over 10,000 demonstrators.
Samuel Mugasi
WORLD leaders are meeting in Hong Kong for the World Trade Organisation (WTO) negotiations, a global forum that is increasingly becoming unpopular. As representatives of over 150 countries meet, there are 9,000 police officers up against over 10,000 demonstrators.
The main contention is that the WTO is seen as a “club†dominated by the rich nations where the poor countries have no say, especially regarding the controversial issue of farm subsidies.
Due to high subsidies, farmers from the rich nations are able to export to the world market at prices below the actual production costs, so farmers without support are thrown out of the market. It is unfair playing ground that casts serious doubt about the rich nations’ commitment to end poverty. Analysts say that ending farm subsidies and all forms of domestic support by the rich nations would increase competitiveness and thereby boost world trade by $280b, theoretically to the benefit of poor countries.
However, for this thinking to hold, a number of questions must be answered. If the developed countries opened their markets wide today, what would African countries have to export?
Taking an example of agriculture, where we have considerable potential and comparative advantage, how many of our farmers have marketable surplus that meets the world market standards?
Opening up markets does not mean we take whatever we produce. There are strict standards to be met. Agricultural production in Uganda is largely for subsistence and the majority of households do not even have enough to eat.
The Uganda National Household Survey of 2003/04 revealed that only 33% of Ugandans could afford to have more than two meals a day.
Taking a bigger picture, statistics show that a significant number of African countries are unable to feed their populations and are relying largely on food aid. The question therefore is whether Africa’s main problem is lack of market for her products or rather what to sell. For example, to what extent has the rural African farmer benefited from AGOA?
What is the way forward then, with these unanswered questions? The “Suruma Rural Development Strategy†has the potential to transform Uganda’s agricultural sector and there are already examples to learn from, like the Vice-President’s upland rice programme.
Africa should embark on modernising agricultural production for rural transformation and advocate for a common African market, rather than wait to survive at the mercy of the rich nations.
The writer is an agricultural economist
WORLD leaders are meeting in Hong Kong for the World Trade Organisation (WTO) negotiations, a global forum that is increasingly becoming unpopular. As representatives of over 150 countries meet, there are 9,000 police officers up against over 10,000 demonstrators.
The main contention is that the WTO is seen as a “club†dominated by the rich nations where the poor countries have no say, especially regarding the controversial issue of farm subsidies.
Due to high subsidies, farmers from the rich nations are able to export to the world market at prices below the actual production costs, so farmers without support are thrown out of the market. It is unfair playing ground that casts serious doubt about the rich nations’ commitment to end poverty. Analysts say that ending farm subsidies and all forms of domestic support by the rich nations would increase competitiveness and thereby boost world trade by $280b, theoretically to the benefit of poor countries.
However, for this thinking to hold, a number of questions must be answered. If the developed countries opened their markets wide today, what would African countries have to export?
Taking an example of agriculture, where we have considerable potential and comparative advantage, how many of our farmers have marketable surplus that meets the world market standards?
Opening up markets does not mean we take whatever we produce. There are strict standards to be met. Agricultural production in Uganda is largely for subsistence and the majority of households do not even have enough to eat.
The Uganda National Household Survey of 2003/04 revealed that only 33% of Ugandans could afford to have more than two meals a day.
Taking a bigger picture, statistics show that a significant number of African countries are unable to feed their populations and are relying largely on food aid. The question therefore is whether Africa’s main problem is lack of market for her products or rather what to sell. For example, to what extent has the rural African farmer benefited from AGOA?
What is the way forward then, with these unanswered questions? The “Suruma Rural Development Strategy†has the potential to transform Uganda’s agricultural sector and there are already examples to learn from, like the Vice-President’s upland rice programme.
Africa should embark on modernising agricultural production for rural transformation and advocate for a common African market, rather than wait to survive at the mercy of the rich nations.
The writer is an agricultural economist