IMF policies leave legacy of hunger, insecurity

By Shawn Hattingh | Last updated: Jul 9, 2008 - 1:49:00 PM

CAPE TOWN, South Africa (IPS/GIN) - People across Africa have taken to the streets in recent months to protest the rising cost of food. In response their various governments have reacted swiftly and brutally.

—NEWS ANALYSIS—

IMF headquarters in Washington, D.C.

Between 1950 and 1980, small- and medium-scale farmers provided for most of the food needs of Africa. Indeed, until the end of the 1970s, Africa was a net exporter of food. This situation was turned on its head in the decade that followed.

They have deployed security forces armed with shields, batons, tear gas, rifles and even machine guns against the protesters. The result has been that hundreds of people have been killed.

The reason why millions of people are struggling to afford food is because of the huge disparities and inequalities that have been exacerbated by the current economic system. Over the last 30 years almost all states across Africa have adopted neoliberal economic policies.

These policies have favored giant corporations’ interests over those of the people and have enabled a handful of companies to gain a virtual monopoly over the human food chain.

Prior to the advent of neoliberalism in the 1980s, many African governments, such as Tanzania, assisted small-scale farmers within their borders by subsidizing research, transport and processing services.

In the first few years of independence in Zimbabwe, the government even subsidized the seeds, compost and equipment that small-scale farmers needed. Across Africa, states also applied high import tariffs on staple foods such as maize, rice and grain. The aim of this was to protect small-scale and medium-scale farmers from cheap imports and dumping. A number of states also played an active role during this period in assisting small-scale farmers in establishing cooperatives.

The result was that between 1950 and 1980, small- and medium-scale farmers provided for most of the food needs of Africa. Indeed, until the end of the 1970s, Africa was a net exporter of food. This situation was turned on its head in the decade that followed.

In the early 1980s, the United States, the International Monetary Fund (IMF) and the World Bank used the debt stranglehold that they had over many African states to force them to adopt neoliberal economic policies through structural adjustment programs. This forced most African governments to sell off their public assets to multinational companies; to allow foreign companies to move money in and out of their borders; to end food subsidies; to create export processing zones; to smash workers’ rights; to dismantle environmental laws; and to implement wage freezes.

Under structural adjustment programs, almost all African governments were also forced to reduce their import tariffs on agricultural goods, thereby creating new export markets for multinational companies. African states were also required to dramatically reduce the subsidies that they offered to small-scale farmers, who were producing for domestic needs.

Of course, the U.S. and European countries continued to subsidize their own farmers, mostly through agribusiness corporations. The U.S. and European countries also maintained high tariffs on selected agricultural products—those that their farmers were producing.

The result was that by the mid-1980s, small-scale farmers all over Africa were losing an unfair competition with subsidized agricultural products flooding into their countries from the U.S. and Europe.

Although the IMF, U.S. and World Bank demanded that African states end any form of assistance to small-scale farmers, they encouraged these same states to continue assisting agricultural corporations and large-scale farmers producing for export.

From Ghana to Kenya, states were encouraged to grow certain export crops that were needed or desired in Europe and the U.S. For instance, Kenya was instructed to focus on growing flowers for export to Europe, while Ghana was told to focus on producing cocoa for export to the U.S. Through this, these states—along with the IMF, World Bank and the multinational companies involved in these industries—prioritized these export commodities over growing food for the people in these countries.

American and European companies have also used the free trade regime to swoop into different countries in Africa to take over entire markets or set up export operations. For instance, Parmalat used neoliberal policies in South Africa to enter into the country on a massive scale in the 1990s through buying existing local dairy companies such as Towerkop and Bonnita.

Initially, they subsidized their ventures in South Africa through their international operations. This allowed them to start a price war, which eventually drove many of their smaller competitors out of business. Through this, they gained a virtual monopoly over the dairy industry in South Africa.

With the advent of free trade and the slashing of import tariffs in Africa, subsidized agricultural products exported by corporations from the U.S. and EU flooded into African countries. Most small-scale farmers, who no longer received subsidies under the structural adjustment programs, could not compete with the price of these imports.

For instance, when tariffs were lowered in southern Africa and West Africa, corporations in the EU took advantage and flooded these regions with beef exports. The result was that thousands of cattle raisers were ruined. In fact, millions of small-scale farmers and farm workers in Africa have been forced off the land. The result has been that most countries in Africa are no longer able meet their own food needs. In fact, Africa imports 25 percent of its food from the U.S. and EU—which of course benefits multinational companies.

It is this dire situation that has driven people across Africa to take action through protest to gain access to food. Africa’s poor are rising up and demanding their right to food and the dignity that accompanies it.

This struggle, however, is not new. International movements such as La Via Campesina—to which many rural movements in Africa are affiliated—have been fighting for the right to food for decades. The idea behind the struggles linked to La Via Campesina has been to prioritize local production to meet needs locally outside of the global corporate controlled economy.

Indeed, the power of corporations to control the food chain needs to be broken, and only the people can do that. Only the people through their own actions can create a world of freedom, democracy, dignity and equality—a world where people don’t starve simply because they don’t have money.

Related links:

The impoverishment of Black Africa (FCN, 12-08-2003)

The IMF enslavement of Black Africa (FCN, 11-24-2003)

The IMF Moves Against West Africa's Monetary Union (BlackElectorate.com)

The Final Call