Stop Subsidies, Mr Bush
Jul 09, 2003
US PRESIDENT George Bush arrives in Uganda tomorrow on the fourth leg of his whistle stop tour of Africa.
US PRESIDENT George Bush arrives in Uganda tomorrow on the fourth leg of his whistle stop tour of Africa.
Bush is, among other things, encouraging good governance, global security, a sustained fight against AIDS, and economic prosperity.
Bush has already done well in enhancing AGOA, the Africa Growth and Opportunity Act, initiated by the administration of Bill Clinton, his predecessor, who also visited Uganda. AGOA gives 38 African countries quota-free, tariff-free access to the American market for a specific range of goods. Uganda is so far at the forefront of exploiting this opportunity.
However, AGOA can be supplemented, and Africa would benefit infinitely more, if agricultural produce competed favourably in the American and European Union markets. Right now, both markets are inaccessible because of farm subsidies that actually caused Africa’s share of global agricultural trade in 2000 to reduce from 4.5% to 2.5%.
Our main endowment is in agriculture, and, for a continent whose share of world trade is a mere 1.4%, the obvious competitive advantage would be in farming. For Uganda in particular, our vision for industrialising can best be realised through agro-processing. But when (ultimately uncompetitive) American farmers have their prices guaranteed by the $200bn Farm Bill that Bush signed into law last year, it means that the US can go on producing in large quantities, and their farm produce gets either dumped on the market at artificially low prices or is given out as relief aid. Fixed prices, which Uganda did away with in abolishing marketing boards, do not encourage free trade. Neither dumping nor relief aid benefit Africa in the long run. They simply create a vicious cycle of sustained underdevelopment, which we otherwise can go a long way in breaking if farm subsidies were cut. Ends
Bush is, among other things, encouraging good governance, global security, a sustained fight against AIDS, and economic prosperity.
Bush has already done well in enhancing AGOA, the Africa Growth and Opportunity Act, initiated by the administration of Bill Clinton, his predecessor, who also visited Uganda. AGOA gives 38 African countries quota-free, tariff-free access to the American market for a specific range of goods. Uganda is so far at the forefront of exploiting this opportunity.
However, AGOA can be supplemented, and Africa would benefit infinitely more, if agricultural produce competed favourably in the American and European Union markets. Right now, both markets are inaccessible because of farm subsidies that actually caused Africa’s share of global agricultural trade in 2000 to reduce from 4.5% to 2.5%.
Our main endowment is in agriculture, and, for a continent whose share of world trade is a mere 1.4%, the obvious competitive advantage would be in farming. For Uganda in particular, our vision for industrialising can best be realised through agro-processing. But when (ultimately uncompetitive) American farmers have their prices guaranteed by the $200bn Farm Bill that Bush signed into law last year, it means that the US can go on producing in large quantities, and their farm produce gets either dumped on the market at artificially low prices or is given out as relief aid. Fixed prices, which Uganda did away with in abolishing marketing boards, do not encourage free trade. Neither dumping nor relief aid benefit Africa in the long run. They simply create a vicious cycle of sustained underdevelopment, which we otherwise can go a long way in breaking if farm subsidies were cut. Ends