African agriculture within the world economic environment
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Tubiana, Laurence. 1994. African agriculture within the world economic environment. Spore 53. CTA, Wageningen, The Netherlands.
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The decade 1980-1990 has in many respects been unfavourable for African countries. The economic recession in the OECD, financial restrictions, the collapse in the price of raw materials and the increase in the number of more dynamic competitors on...
The decade 1980-1990 has in many respects been unfavourable for African countries. The economic recession in the OECD, financial restrictions, the collapse in the price of raw materials and the increase in the number of more dynamic competitors on the international market have had an adverse effect on the economy of African countries. Although not all the obstacles have been removed, in fact far from it, the economic outlook for the next ten years is less gloomy. The multilateral marketing negotiations of the Uruguay Round were successfully concluded in December 1993 after seven years. Furthermore the MacSharry Common Agricultural Policy (CAP) reforms, agreed at the end of '93, will begin in 1995. The aim is to reduce farm surpluses (of cereals, meat and milk) of the EU member countries by making it compulsory for farmers to take 15% of their land out of production in order to cut the cost of agricultural support to the CAP. Before this reform prices for certain commodities were guaranteed whatever the state of the market. When prices of farm produce on the international market were lower than national prices, the governments paid the difference to ensure that consumers gave priority to Community produce. The same principle was applied by giving refunds for exports so that the prices of farm produce from the EU were in line with those on the international market. The governments paid farmers any differences. Pay to produce less The system failed to function properly. Production subsidies for all the developed countries were estimated to total Ff350 billion. Moreover, production was still too high. Producers have now been asked to reduce the area under cultivation and to accept lower prices to match those of the international market, but the CAP is still committed to paying some compensation. The MacSharry reforms are also intended to reduce subsidies for produce destined for the export market. The signatory countries undertook to reduce the volume of exports for each product over six years. Consequently by the year 2,000 the EU will have reduced its subsidized exports of flour by 9.3 million tonnes and its exports of sugar by 340,000 tonnes in comparison with the years 1991-92. Fair trade These changes in the international economic situation, the GATT negotiations and the devaluation of the CFA franc provide both opportunities and risks that have to be assessed. Some aspects of these reforms will have positive benefits for the countries of the South. By limiting the subsidies for produce exported from the KU, food produced in developing countries has a better chance on the world market. There will be new opportunities for demand as a result of the increase in revenue of the developing countries, the revival of eastern European countries and the countries of the Commonwealth of Independent States. The African countries should work towards being in on these markets in the medium term and developing countries, unlike the industrialized countries, do not have to reduce subsidies. In the case of imports into the KU, (principally fruit and vegetables) procedures have been simplified in order to improve access to the European market. Even if the international economic situation is generally more favourable, the African countries are not well placed to take advantage of the opportunities offered. Latin America and Asia are well established and, when negotiating the next Lom\E9 Convention in 2000, the countries of sub-Saharan Africa must be careful not to lose their place as privileged suppliers of agricultural products when faced with stronger competition from other countries. The Lom\E9 Convention effectively gave the ACP countries privileged status as the exports of tropical products were exempted from customs tariffs according to a fixed quota, for example for sugar. Although special treatment for each developing country was agreed on in the negotiations, the reforms reduce the privileges. Policies of aid or trade? Food aid is not covered in these agreements. As the number of emergency situations in Africa is on the increase care must be taken to ensure that developed countries do not use food aid in order to manage their own internal market which may be faced with a surplus or to oust a competitor from a specific market. There is therefore a need for cohesion between aid policy and trade. Although the economic outlook for the next few years holds out better prospects for African countries than has the past decade, it would be unwise to ignore the possibility of reversals in fortune. The main task in the immediate future will be to remove trade constraints and work for the sustainable revival of African exports. This must be started immediately if there is to be any hope of harvesting the results during the next decade.
SubjectsMARKETING AND TRADE;
- CTA Spore (English)