The UN head Ban Ki-moon has an op-ed in the Washington Post, Globe and Mail and the Guardian pushing the current G8 summit on several issues. One of them is agriculture in Africa. He writes:
Begin with the global food crisis. It has many causes, among them a failure to give agricultural development the importance it deserves. What’s needed, in effect, is a second green revolution of the sort than once transformed south-east Asia, this time with a special focus on small farmers in Africa. With the right mix of programs, there is no reason why productivity cannot be doubled within a relatively short span, easing scarcity worldwide. We’ve seen it happen in Malawi, which with international assistance has gone in a few years from famine to become a food exporter.
Was ‘international assistance’ really the reason Malawi achieved food security and could even export food stuff? No:
Over the past 20 years, the World Bank and some rich nations Malawi depends on for aid have periodically pressed this small, landlocked country to adhere to free market policies and cut back or eliminate fertilizer subsidies, even as the United States and Europe extensively subsidized their own farmers. But after the 2005 harvest, the worst in a decade, Bingu wa Mutharika, Malawi’s newly elected president, decided to follow what the West practiced, not what it preached.
Stung by the humiliation of pleading for charity, he led the way to reinstating and deepening fertilizer subsidies despite a skeptical reception from the United States and Britain.
…
The United States, which has shipped $147 million worth of American food to Malawi as emergency relief since 2002, but only $53 million to help Malawi grow its own food, has not provided any financial support for the subsidy program, except for helping pay for the evaluation of it. Over the years, the United States Agency for International Development has focused on promoting the role of the private sector in delivering fertilizer and seed, and saw subsidies as undermining that effort.
So the point Ban Ki-moon is making is a false one. The Malawi government took the right step by ignoring ‘international assistance’ and doing what was the best for its people.
Of course subsidies are inherently problematic as they always come with some corruption. People acquire cheap subsidized fertilizer and sell it to a neighboring country for a 100% profit. Better government control could prevent most of that. In many cases targeted subsidies are a much better policy than to follow the free market advise the usual suspects always try to press upon nations in trouble.
But why is Ban Ki-moon writing this? Is he ill informed and really believes that ‘international assistance’ helped Malawi, or is he, in a twisted way, telling the G8 to stop their free market peddling?
I for one suspect the first to be the case but hope for the second. What is your take?