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Thursday, 14 November 2013 10:26

Africa’s food security agenda in a liberalised and corporate global economy: The role of South Africa at the G-20.

Written by Itumeleng Makae
Aissat Abduljub and Habiba Wellba show Senegalese singer Baaba Maal their failed crops during the 2012 Sahel food crisis. Aissat Abduljub and Habiba Wellba show Senegalese singer Baaba Maal their failed crops during the 2012 Sahel food crisis. Photo © Pablo Tosco/Oxfam

Global agricultural trade policies and food systems, including the new value chains narrative, advance high and sustained productivity to cushion against unpredictable markets and volatile food prices, as well as growing commercialisation of biofuels from food crops, but most importantly for satisfying increased consumer demands and food security requirements. Advocacy claims for increased productivity are in contrast to food-activism views that even current global agricultural production and distribution, if re-allocated in the absence of distortions, would be more than adequate for all these purposes.

The G20

The G-20 has since 2009 to now advocated and prioritised food security concerns and committed to increasing global agricultural productivity and food availability. The G-20 puts great emphasis on shared responsibilities for reinforcing an open and rule-based global economic system, and commitment for cooperation in addressing inherent challenges. Food security and commodity price volatility are among these challenges.

Click here to view SAIIA Occasional Paper No 153, September 2013, A Critical Assessment of the G-20 Food Security Agenda, by Cerkia Bramley. An accompanying policy brief on the same topic can be accessed here.

South Africa’s participation in the G20 is guided by its national interests and the primacy of Africa in its national policy agenda. This legitimises hopes of greater promotion of African and developmental interests. South Africa is committed to multilateralism as necessary to manage globalisation, economic interdependence, and to advance the global developmental agenda.  As a result, South Africa has influenced the G20’s implementation of policy initiatives for growth and development in low income countries. However, South Africa needs to address deeply rooted structural challenges evidenced by economic and political elites profiting from the current food system if it is to play a meaningful role in advancing food security.

The G20 argues production and productivity growth in the agricultural sector is the solution to food insecurity and hunger. The beneficial aspects of food security safety nets cannot be denied as evidenced by the Public Distribution System (PDS) in India. But, to address productivity and food security concerns, including in Africa, distortions in global agriculture and the multilateral trading system must be addressed.

African Agricultural Political Economy

For many developing countries, particularly in Africa, agricultural trade is liberalised and there is insufficient or weak production and fragmented credit support facilities for competitive export and consumption. There is usually no systemic government protection of the agrarian sector, and sustainable, competitive domestic and regional value chains have not developed. These are the direct results of market-oriented policy restructuring coupled with neoliberal assumptions of market efficiency over state intervention; all advocated by multilateral institutions and donor organisations since the 1980s [see note 1].

Many current agricultural policies and initiatives are co-funded and equipped by the same organisations, perpetuating an institutionalised lack of local policy ownership. Liberalisation has also transformed land-use patterns, shifting agricultural land use towards various other commercial uses.

Easy access to agricultural credit and subsidised food prices has been replaced with global financial institution pricing models in order to “stabilise” financial markets (through price pressure and increased competition in staple food sectors). [see note 2] These reforms have exposed developing economies’ agro-sectors to external shocks and associated vulnerabilities.

Corporate restructuring and abuse of dominance

Emerging and smallholder farmers, the target group for the G20 in terms of increasing global agricultural productivity, have also been weakened by anti-competitive practices following corporate consolidation, value chain integration and subsequent domination by multinationals and even by former co-operatives. This has led to decreased returns offered to farmers. The farmer’s role is now relegated to that of a contract-grower to these firms. 

Agri-Biotechnology interests

In the absence of developmental state regulation in agriculture agricultural pricing policies are determined by global commodity markets. With the encouragement of multinational donor organisations, farmers produce crops for exports at the expense of local food security priorities. The agri-biotechnological revolution has also seen many farmers turn to genetically modified seeds, with uncertain long term fallout, and other advances to improve production to penetrate local markets and increasingly competitive global markets, at the expense of contaminating and polluting arable land.  Developing country farmers are also embroiled in disputes over patent rights and re-usage of seed varieties procured from developed economy firms.

The concentration of biotechnology and agrochemical companies with food production and agribusiness interests is a misguided industrialistic response to addressing food security, climate change, biodiversity preservation, and crop production challenges. For more than two decades these agri-biotech multinationals/conglomerates have promoted profit without taking into consideration potential irreversible consumer/environmental risks. In the absence of regulation, there has been little to prevent this.

The food-aid regime 

Tied-aid arrangements are used to enforce stringent import requirements on food-crops and products from donor countries. Food-aid packages, provided in a purely grant form,  are attractive as they require that food is sold to aid recipients on concessional terms, via low market credit prices and interest rates, with export credits providing long-term payment periods for recipients. [see note 3]

Per capita agricultural output and productivity in Africa are still low compared to the global average, with dire consequences for food security and social stability. Effective promotion of sustainable structural transformation in Africa requires increased agriculture productivity but this should occur through access to government subsidies and the reform of land tenure systems.  [see note 4]

Constraints of the multilateral trading system 

The G20 advocates the significance of a strong and transparent multilateral trading system under the WTO; it also calls for members to desist from protectionist measures. But the global trading system under the auspices of the WTO’s Agreement on Agriculture has created and implemented technical regulations, health/safety and standards regimes such as Technical Barriers to Trade Agreement, Sanitary and Phytosanitry Measures Agreement and various import quotas. These undermine and invalidate the Generalised System of Preferences (GSP) arrangements for developing countries and specifically least developed countries and obligations by WTO members to increase market access.

Conclusion

The slow progress in eradicating extreme poverty and hunger (MDG-1) and sharp increases in food price inflation should be understood within the construct of structural limitations that pose an inability for South Africa to effectively achieve food security objectives at the G20.

Most of the challenges in this paper are not impossible to tackle. Interventions to increase cost effective productions include state centred economic development, agricultural sector support and protection. Access to proper production infrastructure, logistics, and efficient credit support facilities could insulate Africa’s farmers, consumers and trade balance against global food market trade policies and their speculative price effects. By promoting this South Africa could have a measurable impact in advancing the African food security agenda in the G20.

Itumeleng Makae is with the Multilateral Organisations unit of the International Trade and Economic Development Division at the Department of Trade and Industry.  Mr. Makae writes in his personal capacity.


Click here to view SAIIA Occasional Paper No 153, September 2013, A Critical Assessment of the G-20 Food Security Agenda, by Cerkia Bramley. An accompanying policy brief on the same topic can be accessed here.

NOTES

[1]  Jacobs.P, (2009) Agricultural Market Reforms and the Rural Poor in South Africa Research Paper PLAAS Poverty Workshop, and Roberts. S, (2011) Competition policy, food and agricultural markets, and the role of the State in South Africa, Unpublished paper
[2]  Oya. C (2007) Agricultural Maladjustment in Africa: What have we Learned after Two Decades of Liberalisation?’ Journal of Contemporary African Studies, 25 (2), pp.275-297
[3]  Clap. J (2004) WTO Agricultural Trade Battles and Food Aid Third World Quarterly Vol. 25. No.8.
[4]  UNCTAD (2012) Structural Transformation and Sustainable Development in Africa. Economic Development in Africa Report 2012: New York and Geneva:

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