The Concoction

An Ethiopian woman's musings on Africa, the world and everything in between

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        Saturday, August 25, 2007
        What would Adam Smith say?
        Hooray for CARE for taking a stand against a dubious US' food policy where NGOs such as CARE are required to sell US produced grains in poor countries to finance their development programs. According to this Time article, EU stopped this practice in the 90's and UN agencies don't allow NGOs to sell food.

        It does not require a PhD in Economics or have Adam Smith advising us from the dead about the bad economic implications this policy has on the livelihood of farmers in those poor countries. It only makes perfect sense for American farmers (one of the strong lobby groups in the US) to twist Congress' arm to continue dumping their grain wherever it is profitable. I even understand Congress struggling with this issue because morally it's asked to choose between American and non-American farmers and economically it means losing the campaign "contribution" (aka as, elsewhere in the world, "bribe") it so enjoys from the farm lobby. What I don't understand is why nobody took this up with international agencies such us the World Trade Organization.



        Obviously, putting out trade-related fire is WTO's main purpose in life. The US dumping its grains in the markets of poor countries, unfortunately, has not been a "dispute" as far as I understand. However, the fight over banana - EU (favouring African, Carribean, Pacific bananas) and Equador joined by the US "making bananas" over EU's exclusive taste has been keeping the WTO busy. Why wasn't the US food aid policy, which was obviously damaging to local farmers in poor countries organized in such a way that it was brought in front of the WTO?

        Hat off for CARE for finally standing up to what's right and rejecting $45 million worth of food aid.

        Related links
        Agriculture lobby & US farm bill
        CARE's story on NPR
        Banana fight

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