Subsidized Dumping Criticized for Harming African Agriculture
Global trade policies are being criticized for enabling the dumping of subsidized products, which undercuts local agriculture in African nations. This practice is seen as eroding food sovereignty and creating an uneven playing field for producers in developing markets.
- The European Union's Common Agricultural Policy (CAP) has been criticized for undermining the livelihoods of farmers in developing nations by enabling the dumping of cheap, subsidized products like milk and sugar. For example, the EU's dairy regime has had a devastating impact on local farmers in Jamaica. In 2019, the CAP had a total budget of €58.4 billion, which accounted for almost 40% of the EU's general budget. - Specific commodities heavily impacted by subsidized dumping in Africa include poultry, tomatoes, and cotton. In Ghana, the flood of cheap tomato paste imports from Italy and China led to a 650% increase between 1998 and 2003, causing local processing plants to shut down. Similarly, Ghana's poultry industry, once self-sufficient, now sees imports making up the vast majority of consumption after trade liberalization in the 1990s. - In 2016, the United States, the European Union, and China spent $33 billion, $100 billion, and $212 billion respectively on trade-distorting agricultural subsidies. These subsidies lead to overproduction, and the excess is often exported at prices below the cost of production. For instance, in 2015, U.S. wheat was exported at 32% less than its production cost. - The "Cotton-4" countries in West Africa—Benin, Burkina Faso, Chad, and Mali—are significantly affected by U.S. cotton subsidies. Despite African farmers often being more efficient cotton producers, the U.S. and China dominate global production, accounting for over 40%. A 2007 Oxfam study estimated that eliminating U.S. cotton subsidies would cause the global price to rise by 6% to 14%. - The World Trade Organization's (WTO) Agreement on Agriculture is meant to regulate these practices, dividing subsidies into categories or "boxes" based on their potential to distort trade. However, critics argue that the system still allows Europe and the U.S. to spend hundreds of billions annually on subsidies that lead to dumping. - In South Africa, the poultry industry faces significant pressure from dumped chicken imports, predominantly from Brazil and the U.S. Imported chicken from Brazil can cost as little as R9 per kg, compared to the local production cost of R25 per kg, leading to job losses in a sector that employs an estimated 70,000 people. - The African Continental Free Trade Area (AfCFTA) is seen as a potential mechanism to strengthen food sovereignty and reduce dependence on external food imports. Proponents believe that by reducing intra-African tariffs, the AfCFTA could boost regional agricultural trade and make local producers more competitive.
