African governments interfere with agriculture

Thomas Ayodele:

Food prices have skyrocketed internationally. In my own Nigeria, rice has epitomized the crisis after doubling in price since last year.

Riots around the world over food supplies are prompting panicked governments to find solutions to stem the crisis. Whether they will bring about an abundance of food is debatable.

Nigeria, for example, is considering increasing rice imports and disbursing loans to domestic rice processors. While this might provide brief improvement, it will not prevent future shortages or ensure food abundance. Promotion and management of food imports in Nigeria in the past has bred abuse — so much so that the primary result is no longer the protection of local food producers. Such actions do show the economic folly of allowing government to manage what private individuals could do better.

It's not hard to link African food crises to inappropriate government agricultural policies that stifle the continent's great agricultural potential. Over the years, nothing has been done to address low crop yields. To the contrary, government has seemingly gone out of its way to hamper production with policies that are often flawed from conception and ad hoc in nature.

According to the Rice Farmers Association of Nigeria, Nigeria fell 800,000 metric tons short of a five-million ton production target for 2006 due to inconsistent government policies. Of the projected annual 4.64 million metric tons of national demand for rice, current local production stands at a meager 525,000 metric tons — requiring $267 million in imports. Because most locally-produced rice is of low quality, its market potential is limited even within Nigeria.

By protecting local rice growers, the government shields them from competition. Farmers have no incentive to improve quality or yields nor are able to invest. This naturally breeds reduced production.

Additionally, taxes starve the poor and needlessly drive up food costs. With import taxes, or tariffs, averaging 33.6 percent, agricultural trade barriers within Sub-Saharan Africa are the highest compared with the rest of the world. Since these costs show up in consumer prices and poorer people must spend a larger percentage of their income on food, this spells disaster.

In Nigeria, the tariffs on rice are at 55 percent, including a five percent levy for increasing local production. In neighboring Benin, it is mere 35 percent. That's a whopping $200 per ton price advantage Benin imports have over Nigerian ones.

Fertilizer is yet another item import tariffs put out of the reach of many — causing low yields and hard manual labor. Distribution is additionally cumbersome and can be manipulated — with sizeable amounts ending up in the hands of politicians and their cronies who rake in profits at the expense of farmers.

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Talk about counterproductive tariffs, taxing fertilizer imports is a good way to inhibit domestic production. It sounds like these guys have been taking economic advice from Argentina on how to screw the farmers. Africa is plagued with unenlightened governments and Nigeria's is among the most corrupt and inefficient. It is not as bad as Mugabe's Zimbabwe but that is damning with faint praise. It is not as genocidal as Sudan's government, but it is still bad.y

Africa has the potential to be a major food exporter but its government policies and its uneducated farmers are just not up to the task right now, and some governments are running off the smart farmers the way Zimbabwe did. Zimbabwe is paying a high price for its own racism.