AFRO-NETS> Going beyond the Swiss Milk Crisis

[Peter Burgess <Profitinafrica@aol.com>]

Going beyond the Swiss Milk Crisis
----------------------------------

Dear Colleagues in AFRO-NETS 

Graham White called our attention to the Swiss Milk Crisis...... but 
did not put it into the bigger global context of NORTH agriculture 
and SOUTH agriculture.

For all the talk.... in the NORTH the concept of "market" has been 
pre-empted by the role of political power and "subsidy". In the USA 
big corporate farmers get huge subsidies to maintain profit margins 
OR to "not produce" because of worry about surplus production and 
food glut.

And pretty much the same goes for the SOUTH. The market has been 
taken over by investment decisions driven by "policy" and the prior-
ity for "export cash crops" to strengthen national capacity to ser-
vice debt. The allocation of agricultural investment in the SOUTH to 
improve food production has been totally inadequate.

After 30 years or so of these policies, the global agricultural in-
dustry and the "market" is a shambles. International milk prices are 
not only a function of supply and demand, but also national public 
policy with respect to subsidy.... and national policy with respect 
to support for humanitarian needs (donations to WFP and humanitarian 
NGOs). Of course it is difficult for farmers in the SOUTH to function 
in an economically sustainable manner when humanitarian food is 
"dumped" into their local market....... 

The US PL480 agricultural product has been used for years to "help" 
developing countries, and in the process and enriched many in control 
of the system, and at the same time has impoverished local producers. 
Similar programs from Canada and Europe and Australia/New Zealand 
have served the exporters well, but at the expense of long term de-
velopment and economic sustainability of SOUTH producers. 

Not too many people are willing to look at the economics of farm pro-
duction in the SOUTH.... coffee, cocoa, tea, tobacco are all crops 
where "market" prices do not support a living wage for the work-
ers...... and the result of this is an unacceptable use of child la-
bor.... including slave children.

Graham White touches on a very big problem...... one that official 
development aid (ODA) institutions (World Bank, UN, FAO, etc.) and 
NORTH and SOUTH governments and their agencies need to get blamed 
for. The idea that enormous oversupply and glut exists at the same 
time as hunger and shortage.... is outrageous. The policies and prac-
tices of the last thirty years need to be understood for what they 
have done to cause this failure of development.... and there needs to 
be change.... not just change to maintain the protection of the 
wealthy in the status quo.... but change to create sustainable wealth 
creation for all stakeholders in the area of food and agriculture.

There are a lot of new initiatives that need to be implemented. Among 
them is the concept of linking erroneous World Bank projections of 
commodity prices that were used to justify World Bank funded agricul-
tural development projects to the related debt and have this debt 
cancelled with prejudice. The same should be done with all other debt 
financed projects that relied on NORTH experts and wrong projections. 

Another issue that should be addressed is the role of humanitarian 
food aid and subsidised food exports in wrecking the economics of lo-
cal food production in the SOUTH and setting the stage for worse and 
worse famine crises.

Investment in the infrastructure for successful agriculture and rural 
development has been inadequate.... just as investment in health and 
education... and everything else in developing countries. This is 
about failure not only of SOUTH government, but also about the insti-
tutions that have been the partners of SOUTH governments in their 
policy making and their financing. I am particularly critical of the 
systemic failure of all these institutions to address the issue of 
accounting and accountability in a meaningful way... and to let 
failed accounting and accountability to continue year after year af-
ter year....... and now arguably getting up to 40 years.

Enough..... for now,

T. Peter Burgess
VP and CFO ATCnet
New York, USA
Tel: +1-212-772-6918
Fax: +1-707-371-7805
mailto:profitinafrica@aol.com
mailto:hivaidsstories@aol.com
http://www.atcnet.org

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