TCS Daily

The Grim Reaper

By Roger Bate - October 31, 2002 12:00 AM

Where it comes to global public policy, there is one issue that pulls all developing countries together, and nearly everyone in the rich world too - the misery caused by Western agricultural subsidies. But things may be improving since the poor nations have had enough of Northern country protection of its farmers. Regardless of the recent and obscene US farm bill, there has been a continual, if slothful, move in the North to reduce farm subsidies, since issues of food security (which was the main justification for subsidies in the first place) have receded.

But not all food subsidies are so obviously odious. Many subsidies funded by the world's taxpayers are designed to increase access of the poorest of the poor to basic nutrition.

For example the recent food aid and funding from the rich world's aid agencies to Southern Africa has saved millions from malnourishment. However, some countries, such as Zambia, are being picky about the food aid they accept and are not preventing their citizens from starving.

There are less obvious subsidy failures as well. Unfortunately, according to Per Pinstrup Andersen, the 2001 recipient of the World Food Prize, many subsidy programs are defended on the basis that they are to help the poorest, but often just help the middle classes get cheaper food, and even encourages corruption.

Dr Andersen, who has worked on food policy issues for 30 years, says that in the early 1990s the Egyptian Government spent 25% of its annual budget on allegedly providing food either free or very cheaply for the poor. But in reality the subsidy just helped farmers and other middlemen, ending up in middle class pockets, with the poor gaining little from the program. Malnourishment - and occasionally starvation - was a widespread phenomenon. Dr Andersen and other policy experts encouraged the Egyptian government to redirect funds to help the poorest, and now the subsidies are at a far lower overall level and the poor have greater access to food. For this and other work, Dr Andersen won the World Food Prize.

However, the problem of allocating funds to the correct people sometimes is the death knell of programs. Under pressure from Dr Andersen, the Colombian Government's allocation was so successfully retargeted away from special interests and to the poor (who were politically inactive) that there was no lasting political constituency in favor of the change. After a few seasons of success the program was cancelled when the politicians responsible for it changed portfolio. Dr Andersen says that because of this experience he now reluctantly endorses programs where some political constituency (like farmers) benefit a little to ensure the longevity of the subsidy. He is aware that farmers often capture these types of programs after a few years. But while starvation remains, he thinks the subsidies essential.

Zambia's Continuing Folly

Dr Andersen was concerned about the decision announced Tuesday that the Zambian President has finally decided not to allow genetically modified (GM) food aid. Agriculture Minister Mundia Sikatana said ' In view of the current scientific uncertainty surrounding the issue...government has decided to base its decision not to accept GM foods in Zambia on the precautionary principle'.

Dr Andersen said that the Zambian government was being 'unreasonable' especially since the Government has been using the food to feed Angolan refugees in the country. The refusal has sparked a fierce debate in the capital Lusaka with opposition politicians against the decision. Thousands of tons of American food aid will now have to be removed from the country - aid workers taking food away from the mouths of starving children. This is yet just one more example of the folly of the precautionary principle, and how it's killing poor people in Africa.

When I spoke with the head of US Agency for International Development Andrew Natsios last week, he dismissed any notion that the Zambians had made the right choice. He was clear 'its their choice to make, but we've been eating and shipping this food around the globe for 7 years, there is no real risk'. Furthermore, he had offered the Zambians wheat and sorghum. Unlike American corn, which is not separated between non-GM and GM, wheat and Sorghum free of GM could have been provided, but 'they wanted corn' said an obviously exasperated Natsios.

So the Zambian Government demanded corn, when there were alternatives. Later it decided to not accept it, with the inevitable result that with Tuesday's decision it will shun the hundreds of thousands of severely malnourished people in its country. President Levy Mwanawasa does not yet have the dastardly track record of his Southern neighbour, Zimbabwean President Robert Mugabe, but a few more policy decision like this and he will deserve the same international opprobrium.

Subsidies, and especially food aid, have their place, but they are often captured by vested interests, or emasculated by crazy policy decisions. In the past 7 years over 10 billion GM meals have been eaten by Americans with no ill effect. But in the perverse world of public policy, that hasn't mattered a great deal. This week's events seem to show that the gains made by pro-market and sound science forces at the World Summit on Sustainable Development in Johannesburg have not been sustained.



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