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Europe and Africa
How Europe contributes to Africas misery
(part I)
B u s i n e s s
He said the world's wealthiest countries made it difficult for Africans to succeed by charging high tariffs on agricultural products. "Wealthy countries also gave their farmers more than US$300billion in annual subsidies, making African products uncompetitive.
Trade rules meant that Africa faced massive tariffs if it tried to export processed goods, which placed African economies at the mercy of commodity prices and erratic weather." (Africa-Union.Org)
To support his claim Mkapa mentioned the European Union imposed tariff of 7.3% on unprocessed coffee as any example, compared to 30% tariff on processed beans.
The EU wants to replace the expiring trade accords with so-called Economic Partnership Agreements (EPAs), which anti-poverty groups have criticised for failing to provide protection for Africa's poor farmers and its fragile industry.
"It's clear that Africa rejects the EPAs," the Senegalese president, Abdoulaye Wade, said angrily. "We are not talking any more about EPAs, we've rejected them ... we're going to meet to see what we can put in place of the EPAs."
In contrast to that Namibia seems to support the idea of EPAs (allAfrica.com).
'How Europe Underdeveloped Africa' is a book written by Walter Rodney in which he portrays the view that Africa was deliberately exploited and underdeveloped by European colonial regimes.
Rodney argues that a combination of power politics and economic exploitation of Africa by Europeans led to the poor state of African political and economic development evident in the late 20th Century.
"The question as to who, and what, is responsible for African underdevelopment can be answered at two levels. Firstly, the answer is that the operation of the imperialist system bears major responsibility for African economic retardation by draining African wealth and by making it impossible to develop more rapidly the resources of the continent. Secondly, one has to deal with those who manipulated the system and those who are either agents or unwitting accomplices of the said system. The capitalists of Western Europe were the ones who actively extended their exploitation from inside Europe to cover the whole of Africa. In recent times, they were joined, and to some extent replaced, by the capitalists from the United States; and for many years now even the workers of those metropolitan countries have benefited from the exploitation and underdevelopment of Africa." (p.27-28)
"None of these remarks are intended to remove the ultimate responsibility for development from the shoulders of Africans. Not only are there African accomplices inside the imperialist system, but every African has a responsibility to understand the system and work for its overthrow." (p.28)
If Africa is to be freed from poverty, rich countries must stop giving with one hand and taking with the other. While world leaders are promising to give increased debt relief and aid to the continent, taxpayers in rich countries are bankrolling lavish subsidies which pay for its producers to compete with the same people who will benefit from the G8's 'generosity'. One of he most powerful commitments Europe could make is to abolish the Common Agricultural Policy.
Last years (2007) 'debt forgiveness deal', which could write off the debts of more than 30 poor countries to the World Bank and International Monetary Fund, will be worth up to €40 billion, spread over the next 25 to 30 years. Europe spends more than that (€44 billion) every single year, subsidising its farmers.
Europe is not alone - the farm lobby in the US is also powerful, and Washington subsidises a range of products, from cotton to maize.
When all Europe's leaders pay lip-service to the principles of free trade - and of making poverty history - it is hard to justify giving this one business a €44billion-a-year helping hand.
With this I don't want to deny that subsidies can be a good thing. For example when they support small farmers that promote higher eco- and animal-welfare standards. Furthermore it is important to notice that many farmers in Europe would be unprofitable if EU subsidies were withdrawn. And it is totally understandable and better for the environment if a country doesn't want to depend on food imports but the population is always able to sustain a basic food supply itself.
An economic system where either the European farmers cease to exist or African farmers can't compete with the subsidised cheap food from overseas is not acceptable!
Handouts are only part of the problem. In order to protect the European market, the EU imposes hefty tariffs on certain kinds of foreign agricultural goods, helping to push up prices at Europe's checkouts.
Europe also pays export subsidies to farmers when they sell into global markets, which, when combined with direct handouts, allows them to 'dump' excess goods on world markets, sometimes at below-cost prices. Europe exports milk to Brazil, sugar to South Africa, and dried milk powder to Jamaica.
While agriculture constitutes less than 3 per cent of Europe's GDP, it is more than 90 per cent of many African economies; and when cheap European farm goods flood in, it's hard for African producers to compete, even in their own home markets.
There has been some progress since the 1980s and 1990s, when farmers produced far more than Europe's consumers wanted to eat or drink, and the EU built up notorious 'wine lakes' and 'butter mountains' to prevent prices from plummeting. Under the latest, and most radical, round of reforms, subsidies have been 'decoupled' from levels of production, to use Brussels jargon.
But there is much more that needs to change. Import tariffs are applied to specified goods imported into the EU. These are set at a level to raise the World market price up to the EU target price.
Import quotas are used as a means of restricting the amount of food being imported into the EU. Some non member countries have negotiated quotas which allow them to sell particular goods within the EU without tariffs.
Direct subsidies are paid to farmers. This was originally intended to encourage farmers to choose to grow those crops attracting subsidies and maintain home-grown supplies. Subsidies were generally paid on the area of land growing a particular crop, rather than on the total amount of crop produced. Reforms implemented from 2005 are phasing out specific subsidies in favour of flat-rate payments based only on the area of land in cultivation, and for adopting environmentally beneficial farming methods.
Wealthy companies and estates are among the ten highest recepients in the list of payouts.
Germany, which has large collective farms still in operation in what was East Germany also vigorously oppose changes which were marketed as "reforms".
In May of 2007, Sweden became the first EU country to take the position that all EU farm subsidies should be abolished (except those related to environmental protection).
The subsidies mentioned above, add to the problem of what is sometimes called Fortress Europe; the West spends high amounts on agricultural subsidies every year, which amounts to unfair competition. The OECD countries' total agricultural subsidies amount to more than the GDP of the whole of Africa (WorldBank.Org).
Moreover, it is argued that in creating an oversupply of agricultural products which are then sold in the so-called Third World and simultaneously preventing the Third World from exporting its agricultural goods to the West, the CAP increases Third World poverty by putting Third World farmers out of business. According to the Human Development Report 2003 in 2000 the average dairy cow in the EU received $913 in subsidies, compared with an average of $8 per person in Sub-Saharan Africa.
With food prices dropping over the past thirty years in real terms, many products have been making less than their cost of production when sold at the farm gate.
On the other hand, high import tariffs (estimated at 18-28%) have the effect of keeping prices high by restricting competition by non-EU producers.
If things on the African continent are really to be changed for the better, than changes initiated by the Africans themselves are also needed. But since I am part of the so-called West, I concentrate in my criticism on what ultimately the West can do. In the end the 'West' with its imperial tendencies and capitalist economic system, with its own tendencies to expant continuously, is responsible for many of the world's problems. But it is us - those living in 'western countries' - who tolerate this system and usually just engange in our role as a passive consumer or legitimate the political elite by casting our vote every four or five years.
You tell me - do we really care?
~GlobalPeace&Solidarity~
Coming up next: How Europe contributes to Africas misery (part II) - Europe profiting from wars and unrest in Africa. -- Oki, done. It can be viewed here.
