What Kenya can do to gain from lifting of WTO farm subsidies
02/02/2016 12:00
Developing nations fought a good fight at the latest round of the World Trade Organisation (WTO) talks.
Their lobbying appears to have borne fruit, with pledges to have farm subsidies in developed countries come to a stop – or at least become significantly diminished – by 2020.
For a long time, developed countries’ support of their agriculture sector has been deemed unfair and declared the root cause of the eroded potential of agricultural development in poor and developing countries.
Certainly, farm subsidies by developed countries have been a long standing disincentive to investing in agriculture in developing regions such as sub-Sahara Africa.
With that era coming to an end, it’s high time we took stock of our own agricultural sector’s strengths and weaknesses.
Assuming the pledges at the WTO are observed and the playing field is levelled for all, chances are we are about to find out that we have not have cornered the global agricultural produce market to the extent we imagined.
As agricultural monetary incentives fall off elsewhere in the world made possible by our own pressure on WTO, we realise that, as developing countries, we may have played our last card.
Yet, it is not the fair rules that we have fought so intensely for that will finally lift us out of our agricultural sector rut.
Farm subsidies, though significant, have not been the only advantage that developed countries have had over poor ones. Agriculture in sub-Sahara Africa is plagued with ginormous other challenges.
The sector in most developed countries is already much more advanced in terms of policy, technology and markets. Vis-a-vis these nations, we have a steep learning curve to scale just to catch up.
Creation of a fair market is one thing. The ability for all to be able to participate in it significantly is another thing. As sub-Sahara Africa, we need to evaluate how to reap the full benefits of the opportunity that is about to present itself.
As we brace for 2020, we must be careful that our own recommendations to the rest of the world do not evolve to become our biggest pitfall.
Having started this quarrel with the WTO and won, developing nations have in effect put themselves under the microscope. They can expect they will be called upon to pull down any safeguards they have been enjoying.
Case in point, Agoa. Such a trade-off is almost certain to be invoked.
It is inevitable also that there will be a massive restructuring in the affected countries to prepare for the elimination of subsidies.
This will only serve to make certain that extremely high levels of efficiency are achieved ahead of time to adequately meet the changes.
Getting rid of the subsidies that have vexed developing nations for so long may not necessarily render a free passage to better times. In fact, the opposite may happen.
If major changes are not made, there may be no benefit gained from the elimination of subsidies.
Agriculture is Africa’s top development agenda. But its potential is grossly undermined by a host of challenges, starting with climate-linked farming, political interference, lack of funding, low use of mechanisation and technology and pestilence.
Despite its importance to the overall economy, agriculture in Kenya also remains relatively mismanaged.
A lot has to take place for Kenya’s agriculture to make significant gains post first world subsidies. A lot of talk about revamping our agriculture, however, has been focused on what we need to start doing forgetting what we need to stop doing.
While we have called out the rest of the world on their perceived unfair trade practices, theirs pale when cast against our own bad internal trade practices.
State intervention in the maize market for instance, which has perennially encouraged inefficiencies, is one example.
Failure to privatise sugar mills is another example of how government may be standing in the way of efficiency. Subsidised inputs such as fertiliser also need to be checked.
The government needs to step aside from being an active operator in the market and in all its forms stop lending indirect support to certain areas of our agriculture, which only serves to create market distortions and breed inefficiency.
We also need to kick out corruption and political interference from our agriculture.
The strategic grain reserve system, in addition to lending price support to maize farmers and distorting the market, has continually been subject to abuse by politicians.
Price fixing by cartel-like traders and processors also hurts us more than any foreign subsidies could because it boils down to the livelihood of Kenyans.
No matter how much we speed up reforms and make steps to improve our yields, if we still have to contend with a rigged system we will never get off the ground.
Each passing government has leveraged agricultural reforms in its campaigns with little to show for it. Now, more than before, agricultural reforms must take centre stage to justify the quarrel that we’ve had with the WTO.
Those reforms begin with the government kicking itself out of the market and imposing the law on anyone interfering with a free and fair domestic market.
This is the only way to foster growth and development in the agricultural sector, enough to start thinking of the market outside our borders.
It’s what we need to stop that will set the stage for what needs to be done.
Their lobbying appears to have borne fruit, with pledges to have farm subsidies in developed countries come to a stop – or at least become significantly diminished – by 2020.
For a long time, developed countries’ support of their agriculture sector has been deemed unfair and declared the root cause of the eroded potential of agricultural development in poor and developing countries.
Certainly, farm subsidies by developed countries have been a long standing disincentive to investing in agriculture in developing regions such as sub-Sahara Africa.
With that era coming to an end, it’s high time we took stock of our own agricultural sector’s strengths and weaknesses.
Assuming the pledges at the WTO are observed and the playing field is levelled for all, chances are we are about to find out that we have not have cornered the global agricultural produce market to the extent we imagined.
As agricultural monetary incentives fall off elsewhere in the world made possible by our own pressure on WTO, we realise that, as developing countries, we may have played our last card.
Yet, it is not the fair rules that we have fought so intensely for that will finally lift us out of our agricultural sector rut.
Farm subsidies, though significant, have not been the only advantage that developed countries have had over poor ones. Agriculture in sub-Sahara Africa is plagued with ginormous other challenges.
The sector in most developed countries is already much more advanced in terms of policy, technology and markets. Vis-a-vis these nations, we have a steep learning curve to scale just to catch up.
Creation of a fair market is one thing. The ability for all to be able to participate in it significantly is another thing. As sub-Sahara Africa, we need to evaluate how to reap the full benefits of the opportunity that is about to present itself.
As we brace for 2020, we must be careful that our own recommendations to the rest of the world do not evolve to become our biggest pitfall.
Having started this quarrel with the WTO and won, developing nations have in effect put themselves under the microscope. They can expect they will be called upon to pull down any safeguards they have been enjoying.
Case in point, Agoa. Such a trade-off is almost certain to be invoked.
It is inevitable also that there will be a massive restructuring in the affected countries to prepare for the elimination of subsidies.
This will only serve to make certain that extremely high levels of efficiency are achieved ahead of time to adequately meet the changes.
Getting rid of the subsidies that have vexed developing nations for so long may not necessarily render a free passage to better times. In fact, the opposite may happen.
If major changes are not made, there may be no benefit gained from the elimination of subsidies.
Agriculture is Africa’s top development agenda. But its potential is grossly undermined by a host of challenges, starting with climate-linked farming, political interference, lack of funding, low use of mechanisation and technology and pestilence.
Despite its importance to the overall economy, agriculture in Kenya also remains relatively mismanaged.
A lot has to take place for Kenya’s agriculture to make significant gains post first world subsidies. A lot of talk about revamping our agriculture, however, has been focused on what we need to start doing forgetting what we need to stop doing.
While we have called out the rest of the world on their perceived unfair trade practices, theirs pale when cast against our own bad internal trade practices.
State intervention in the maize market for instance, which has perennially encouraged inefficiencies, is one example.
Failure to privatise sugar mills is another example of how government may be standing in the way of efficiency. Subsidised inputs such as fertiliser also need to be checked.
The government needs to step aside from being an active operator in the market and in all its forms stop lending indirect support to certain areas of our agriculture, which only serves to create market distortions and breed inefficiency.
We also need to kick out corruption and political interference from our agriculture.
The strategic grain reserve system, in addition to lending price support to maize farmers and distorting the market, has continually been subject to abuse by politicians.
Price fixing by cartel-like traders and processors also hurts us more than any foreign subsidies could because it boils down to the livelihood of Kenyans.
No matter how much we speed up reforms and make steps to improve our yields, if we still have to contend with a rigged system we will never get off the ground.
Each passing government has leveraged agricultural reforms in its campaigns with little to show for it. Now, more than before, agricultural reforms must take centre stage to justify the quarrel that we’ve had with the WTO.
Those reforms begin with the government kicking itself out of the market and imposing the law on anyone interfering with a free and fair domestic market.
This is the only way to foster growth and development in the agricultural sector, enough to start thinking of the market outside our borders.
It’s what we need to stop that will set the stage for what needs to be done.
Source: businessdailyafrica.com
Các tin khác
- New-generation FTAs open wider export opportunities to Middle East and South Asia (15/06/2026)
- Updated regulations on foreign trade management and import quotas (15/06/2026)
- Mandatory traceability for high-risk goods from July 1st: What should businesses prepare for? (15/06/2026)
- Tariff pressure is forcing businesses to restructure in order to adapt. (15/06/2026)
- Coffee Citizens model aims to lift Vietnamese value chain (15/06/2026)
About Us
