Bush to sink African aid plan

[nicky g]

I'm with Chirac on this one /forums/images/icons/shocked.gif. (Honestly, I really do despise Chirac - not as much as Bush - but on this he is right, and actually challenging vested interests in France - the farmers' lobby there is very strong). The most disgusting thing is Bush's counter-plan to send subsidised (GM) food "aid" to Africa. Obviously food aid is crucial during famines etc, but in general to dump free food somewhere obviously totally destroys local producers and economies. Africa is never going to pull itself out of its hole unless this kind of dumping is stopped. Meanwhile most African countries are forbidden from subsiding local industries under WTO rules and IMF loan conditions (though of course they couldn't match Western government spending power anyway). Europe is just as guilty on subsidies as the US but at least this plan was trying to make some sort of progress.


French plan to aid Africa could be sunk by Bush

Charlotte Denny and Larry Elliott
Friday May 23, 2003
The Guardian

President Bush is preparing to bury a radical French plan which would help some of the world's poorest farmers by ending the dumping of subsidised western food in Africa.
A war of words over the plight of the world's poorest continent was brewing last night after European officials accused the US of blocking the ban on export subsidies. In a separate attack, Mr Bush blamed European opposition to GM foods for causing hunger in Africa.

President Chirac had been hoping that next month's Evian summit of the world's eight most powerful countries would be a chance to unite western leaders around a rescue plan for Africa and heal the deep rift between Paris and Washington over the war in Iraq.

But the chances of a transatlantic rapprochement were looking slim this week as public criticism of Europe's aid policies from Mr Bush was accompanied by behind-the-scenes attempts by US officials to remove any reference to America's giant export subsidies for its own farmers from the leaders' discussions.

Mr Bush said opposition in Europe to GM had forced several starving sub-Saharan African countries to refuse American GM food aid.

"European governments should join - not hinder - the great cause of ending hunger in Africa," he told the Coast Guard Academy in Connecticut on Wednesday night.

Last week Washington mounted a legal challenge at the World Trade Organisation to Europe's moratorium on GM food imports.

Mr Bush said he would be using the Evian summit to urge EU governments to cut the $4bn a year they spend subsidising farm exports. But the White House is vehemently opposed to any discussion at the G8 of cuts to its own export-support programmes, which campaigners estimate total $3.5bn-4bn.

Aid agencies are pressing Tony Blair to use his "special relationship" with Mr Bush to persuade Washington to back the Chirac plan, which would help put a floor under commodity prices on which most African economies rely.

Campaigners were highly critical of the G8 last year for its failure to deliver a blueprint for African reconstruction, despite raising expectations ahead of the summit.

France now fears that the fall-out from the war against Saddam will poison this year's event and make even a repeat of the modest scale of help offered last year in Canada unlikely.

"American opposition to this plan is so strong, they will be negotiating over it right up until the wire," said one G8 official. "We might end up with nothing."

Washington's counter-proposal is believed to be a vast expansion of its subsidised food aid programme, allowing it to pump even more money into American farms under the guise of aid.

Aid agencies say that while European subsidies are more transparent, America's support for its farmers is equally damaging to poor countries which cannot compete with highly subsidised imports.

America's 25,000 cotton farmers collected $4bn from Washington last year, allowing them to sell their goods abroad at half the cost of production, at the expense of far more efficient producers in West Africa. Without government support most American cotton farms would go out of business, but Oxfam estimates they cost West Africa $200m a year in lost exports.


French plan to aid Africa could be sunk by Bush (http://www.guardian.co.uk/international/story/0,3604,961767,00.html)

[Jimbo]

Pretty amazing!!! We bomb the crap out of a dictator and the Europeans complain. We donate free food to Africa and the Europeans complain. Tough to be popular these days. Perhaps we should have sent free food to Iraq and bombed Africa instead. Naw, they would have complained about that as well! /forums/images/icons/smile.gif

[ACPlayer]

There was an interesting discussion yesterday on NPR of subsidised Genetic Modified foods being sent to Africa and how that is being done to protect the interests of the patent holders of the GM foods.

In another thread I mentioned economic violence. This is an example of economic violence that is brought to bear on third world countries to protect the interests of big corporation and is a direct result of a very insidious form of corruption.

Other examples of western (not just US) policies that disrupt lives and cost people their lives: forcing use patent laws on other countries to protect pharmaceutical companies; Exploitation of indigenous habitats and forests forcing people of their lands into cities; selling tobacco to the masses in other countries; moving ecological destructive factories to other places without safeguards to the environment. The list goes on.

[adios]

I just can't let this pass without a making a quick observation. After the vague claims (what countries? what food procudcts? How productive are these African farms? what prices do these African farms produce at? Where are the friggen stats to back these claims up) of the US attempting to "pull the rug out from under" local African farmers growing food by offering free food on their own for humanitarian purposes we get this little tidbit at the end of the article:

"America's 25,000 cotton farmers collected $4bn from Washington last year, allowing them to sell their goods abroad at half the cost of production, at the expense of far more efficient producers in West Africa. Without government support most American cotton farms would go out of business, but Oxfam estimates they cost West Africa $200m a year in lost exports."

I don't think Africans are eating much cotten these days! This is supposed to make the case that the US is undermining local African farmers and those that are producing food no less? I also think it's highly debatable whether or not American cotton farms would go out of business. I'd bet a whole lot of money that the US cotten industry produces way, way more than $200 million worth of cotton each year. I can tell already where this is going regarding globalization. I've got news for you guys that support socialism and are anti-globalization, every country in the world that exports goods does something to "protect it's turf" as far as exports. The fact is that the US has a huge trade defecit as American consummerism is the driving force in the world economy. There are a couple of things in the article that are ludicrous that I'll pass on for now. I may have more on this during the weekend.

[nicky g]

"I just can't let this pass without a making a quick observation".

Well sure, that's why I posted it.


"I don't think Africans are eating much cotton these days! This is supposed to make the case that the US is undermining local African farmers and those that are producing food no less? "

No, it's not just simply about food, it's about agriculture. African farmers can't export cotton for example because they are undercut by subsidised Western farmers - hence their economies collapse. It's rather like the Iraq sanctions issue you had so much difficulty with - poverty and hardship do not simply result from the witholding of goods, they comes from the collapse of national economies too. Aid can never make up for this.

"Every country in the world that exports goods does something to "protect it's turf" as far as exports are concerned."

To an extent, but as I wrote above, third world countries are unable to do this because a. they can't hope to afford to take on Western subsidised markets, and b. they labour under WTO and (US-imposed) IMF rules that prevent them from subsidising and protecting their markets in the way US and EU governments do.

Jimbo you can make the obvious joke about being ungrateful for free stuff but you know very well that dumping subsidised products on a country is bound to destroy its economy and local production capacity. Food aid is not what Africa needs - it needs fair trade rules and cash to upgrade its infrastructure. Neither of those are forthcoming from the West.

I don;t expect either of you two to respond positvely to anything I write, regardless of its merit, but you could at least respond to the points I made with some proper economic arguments. I'm sure you have it in you.

ACPlayer- yeah I was moved to post this following your mention of economic violence.

[Jimbo]

"I don;t expect either of you two to respond positvely to anything I write, regardless of its merit, but you could at least respond to the points I made with some proper economic arguments. I'm sure you have it in you.

nicky g, I have read a few of your recent poker posts and feel they have a great deal of merit. As soon as you post something comparable on this forum I will respond in kind.

How else could I respond with anything other than a joke to your biased (without sufficient data) post?

[Chris Alger]

"I also think it's highly debatable whether or not American cotton farms would go out of business."

Try running a business by selling products at half cost.

"I'd bet a whole lot of money that the US cotten industry produces way, way more than $200 million worth of cotton each year."

Of course it does (maybe $5-$6 billion a year). The point is that reducing cotton subsidies would let the market naturally increase prices to the tune of $200 million per year for West Arrican farmers.

This statistic apparently comes from "joint study by the World Bank and International Monetary Fund. In West and Central Africa," according to the Wall Street Journal (http://216.239.39.100/custom?q=cache:pxLTXxW_EkAJ:www.j-bradford-delong.net/movable_type/archives/000272.html+cotton+farmer+protectionism&hl=en&star t=19&ie=UTF-8). "The report estimates that the removal of U.S. subsidies -- which account for much of the $5 billion a year in subsidies world-wide -- would produce a drop in U.S. production that would lead to a short-term rise in the world price of cotton . In turn, that would increase revenue to West and Central African countries by about $250 million. That is a princely sum in a region where vast numbers of people live on less than one dollar a day."

As for American cotton farmers, "their affluence and influence is legendary in Washington. The average net worth of a full-time American cotton-farming household, including land and nonfarm assets, is about $800,000, according to the U.S. Department of Agriculture."

[adios]

Clearly there are crises throughout much of Africa. Also just as clearly agricultural production in many African countries is abysmal at best. Even more clearly than the proceeding you have grossly misrepresented the situation regarding France, the United States and humanitarian aid to Africa. I assume that it's either you/re pushing an agenda or you're very misinformed about economics. I suspect it's a little bit of both. The article you cite is bad journalism IMO. It doesn't mention any African country specifically. This is important because in order to have investment and capital formation in it's economy, a country must provide laws and a legal system that is conducive to these activities. My sense is that many of these countries in Africa are sorely lacking in this area. That's ok because that problem can be solved. I'll get back to that later in this post. Right now I want address what I find to be poor journalism. Second of all the article doesn't discuss the specifics of Chirac's plan. Methinks that it's not necessarily true that France and the USA disagree on the goals of what Chirac would like to have happen to agricultural production in African countries. I'm not knowledgable about the details of Chirac's plan so I will withhold comment on that. BTW I really find these kinds of issues quite interesting. I will try and find out more specifics of what Chirac proposes and hopefully comment on them. My points about US consummerism and the US trade deficit were made to indicate that US is the huge net importer of goods so accusing the US of dumping their exports seems to be wrong headed. USA agriculture is very productive and I think it should go without saying that being self reliant more or less (the US imports food as well) is certainly something that the US government should encourage. There's a saying in attributed to a congressman of yesteryear regarding the US budget that goes something like: "A billion dollars here and a billion dollars there adds up and pretty soon we'll be talking about a lot of money." A 4 billion dollar subsidy seems like a pittance to me in light of many other US government expenditures. If $4 billion is a pittance certainly $200 million is. A few links on the African food crisis:

Humanitarian Catastrophe in Africa as Money is Channeled into Arms (http://english.pravda.ru/main/2003/02/21/43602.html)

Bush Proposes Emergency Food Aid for Africa (http://www.aegis.com/news/re/2003/RE030202.html)

Africa's Food Crisis As A Threat To Peace and Security (http://allafrica.com/stories/200304080608.html)

Angola Emergency: Alarming Conditions Worsen Despite Peace (http://www.savethechildren.org/angola.shtml)

EU Response to the Humanitarian Crisis in Southern Africa (http://www.eurunion.org/legislat/extrel/HumanAid.htm)

Badly Needed Aid Slow to Come to Eritrea (http://www.fortwayne.com/mld/fortwayne/news/world/5521754.htm)

Finally I found a reference to the Chirac proposal in at this link:
Obasanjo: New Partnership making progress (http://www.un.org/ecosocdev/geninfo/afrec/vol17no1/171nepad.htm)

"During the Paris summit, President Chirac raised several proposals aimed at helping stimulate African agriculture, including measures to improve market access for African agricultural exports and restart discussions on the question of primary commodity prices. If developed countries are able to achieve a common system of trade preferences for each African country, this would be "indispensable for attracting private investments, a NEPAD priority," he said. "

We'll see what the specifics are. In general my previous comments about capital formation and investment apply. If coutries want investment and capital their laws and legal system will have to be accomodative to these activities. I'm guessing that many of these African countries that seek investment and capital are at least somewhat lacking in this area. In addition attempts to artificially restrain or enhance commodity prices are doomed to failure IMO. I'm certainly willing to discuss individual African nations regarding their economic systems, agricultural production, and their legal systems.

[adios]

You're on drugs if you think the US cotton industry goes out of business if the US removed subsidies for cottom farmers. It's simply not true whether you support subsides or you don't for US cotton farmers. But what I find really interesting is that you seem to be a supporter of globalization. Certainly ACPlayer is against globalization by his comments and from what I can gather nicky is as well. Perhaps you guys should debate the isssue. As far as countries subsidising their exports, there is no such thing as totally free trade.

[Cyrus]

"You're on drugs if you think the US cotton industry goes out of business if the US removed subsidies for cottom farmers."

I don't think Alger suggested that, and neither did the source he linked to : the Wall Street Jorunal report (http://216.239.39.100/custom?q=cache:pxLTXxW_EkAJ:www.j-bradford-delong.net/movable_type/archives/000272.html+cotton+farmer+protectionism&hl=en&star t=19&ie=UTF-8) , dated 26 June 2002. (I don't think they do much drugs at the Journal -- but what do I know /forums/images/icons/blush.gif )

"But what I find really interesting is that you [Chris Alger] seem to be a supporter of globalization. Certainly ACPlayer is against globalization by his comments and from what I can gather NickyG is as well. Perhaps you guys should debate the isssue."

Which side are you on? (Me, I'm firmly on the fence, since there are very important pros and so many cons.) An interesting anti-NAFTA and anti-globalisation book is Race To The Bottom (http://www.amazon.com/exec/obidos/tg/detail/-/0813340241/qid=1053782846/sr=1-1/ref=sr_1_1/103-0088231-9927877?v=glance&s=books) by Alan Tonelson, who worked at the U.S. Business and Industry Council.

"As far as countries subsidising their exports, there is no such thing as totally free trade."

Truer words , etc.

Now, if only everyone, from the supporters of state intervention to apostles of free traders, would drop all the ideological posturing and masquerade.

[nicky g]

I'v already told you I do have an agenda - what's wrong with that? I don't think I grossly misrepresnted anything. The US may be a net importer but I seriously doubt it's a net imorter of third world agricultural produce. I agree with you that the piece doesn't go enough into the specifics of the plan, but the general gist of it is that Bush won't budge on subsidies to agriculture (and in fact is moving the other way) while France/the EU is willing to look at cutting them and preventing the West from undercutting unsubsisised third world products by partly regulating the price of some products.

I don't have time to get back to you now on the points you make but I'll do my best later in the week. One thing - as far as globalisation goes, I'm never really sure what people mean by it. I'm all for better communications etc, all for a bigger say for developing nations, and all for more trading between the first and third world if done on a level playing field, but I'm against it if it means the IMF forcing Third World countries to sell off their vital services to Western companies (which then act as unaccountable monopolies), open capital markets before they're ready to, or open up vulnerable local producers to unfair competition for nothing in return (as in this case). Western economies (and successful Eastern ones eg Japan, Korea) spent decades protecting their markets while building up local infrastructure and capacity before opening up them to foreign competition (and they still aren't completely open at any rate) - it's disastrous to force extremely vulnerable third world nations to open up with neither those things nor proper regulatory frameworks, as you mention, in place. And if it means more power for large corporations, then I'm very against it.

[nicky g]

Turns out I have some time after all. First of all:

"A 4 billion dollar subsidy seems like a pittance to me in light of many other US government expenditures. If $4 billion is a pittance certainly $200 million is"

It is a pittance to the US. It is a fortune to sub-Saharan Africa. $4bn is half the GDP of Malawi, for example. Furthermore, the $200 million applies to one product only. The issue goes beyond cotton farming.

"USA agriculture is very productive and I think it should go without saying that being self reliant more or less (the US imports food as well) is certainly something that the US government should encourage."

Self-sufficency is one thing (although it is contrary to the principles of "free trade" the US pushes on other nations). But the general point you don't seem willing to address is that the US exports subsidised agricultural products, whereas third world countries are consistently told that they have to cut subsidies to their own farmers if they want Western aid, investment etc. This is a general economic proncple which goes beyond any single country - if third world farmers cannot compete with imported Western products, they stop producing. Hence, the economy suffers because they start importing instead of exporting the only products that they have a competitive advantage over the West in producing, and they can't produce enough food to feed themselves. When this becomes untenable they find they have no local producers to replace the imports, and bingo: mass hunger, and even relatvely minor harvest problems can trigger large scale famine, as they have no surplus capacity. If you want an example, however, lets talk about Mali. Its economy is heavily dependent on cotton exports. The price of cotton fell 50% in 2000-2001. Can you imagine what that does to an economy? Now, why should those people suffer because the US and Europe are keeping the price of cotton artificially low through subsidies and utterly needless overproduction? Other nonAfrican examples are Haiti and rice, and the Phillipines and corn - both sectors are being devestated by subsidised US imports.

[Chris Alger]

The whole industry won't go out of business but it's quite possible that (as Nicky's article says) that most cotton farmers will. According to Oxfam (http://www.oxfam.org/eng/pdfs/pp020925_cotton.pdf), "the value of subsidies provided by American taxpayers to the cotton barons of Texas and elsewhere in 2001 exceeded the market value of output by around 30 per cent. In other words, cotton was produced at a net cost to the United States." As a result, "viability [of the cotton industry] depends on huge infusions of capital from the general public on an annualised basis."

Your assumption that US "free trade" or "globalization" policy tends to enrich the world's poor is as untenable as your assumption that US military interventionism tends to liberate them.