Business Day (South Africa)
April 21, 2009
www.businessday.co.za

It is heartening to note that agriculture ministers of the Group of Eight (G-8), the world’s most developed nations, have called for an end to protectionism in agriculture, hinting at the possibility of a shift among the world’s richest nations who still maintain the most impenetrable food-trade barriers.

While world food prices are significantly lower than the peaks reached in 2007-2008 and which sparked off a global food crisis, the crisis of food security and hunger in much of world, and particularly in Africa, rages unabated.

Predictably, governments fearing social and economic instability banned exports while richer countries maintained or raised import tariffs. The consequence was that production fell at the worst possible time, with rich and poor trading partners arriving at an intractable standoff. Despite the lowering of prices and other efforts, the number of people directly affected by hunger has increased from 800-million to about 1-billion since 2006.

The experience has been a particularly painful one for South African farmers, who, unable to compete with their subsidised international competitors, are increasingly calling for protection. They make a strong case for protecting staples such as wheat, which SA has been importing from Argentina at a much
cheaper rate.

Importing Argentinian wheat was acceptable until it called off the deal, forcing SA to pay higher prices on the spot market. That meant also that wheat farmers switched to maize, which, in turn suppressed the maize price and raised the clamour for protection.

However attractive yielding to their call may seem to the government, it would, at best, have a short-term stimulatory effect. That is not sustainable, in the first instance because few countries — and certainly not SA — can achieve food self-sufficiency. Moreover, production would remain highest in those countries with the highest barriers, thus distorting free trade and perpetuating food insecurity among poorer nations.

What is needed is to raise world food production where climate, culture and resources are the most conducive. And the best way to achieve food security for all is to permit trade in a global market free from protectionist barriers.

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