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FAIR GLOBALIZATION RULES ARE NOT FOR TOMORROW

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Eleven years ago, in 1993, developing countries were told that, according to computer' simulation, giving away their right to regulate imports and exports would turn around their stagnant economies into prosperous ones. And the rounds of negotiations started in 1995 at WTO center, Geneva, Switzerland, followed by Seattle, Doha and Cancun.

It is odd that poor countries' policy-makers bought into that false and misleading concept. For instance, how sub-Saharan African countries, which garner 70% to 90% of national budget revenues from customs duties - levied on imports and exports - could become richer if they forego said revenues? Furthermore, how could they compete against heavily subsidized agricultural commodities dumped by the United States of America and the European Union on international marketplace and particularly in Africa? Click here to read more

WE HAVE OPENED OUR ECONOMY. THAT'S WHY WE ARE FLAT ON OUR BACK - Statement by Sam Mpasa, Malawi's Commerce and Industry Minister.

The above statement made some times ago by Malawi's Minister, Sam Mpasa, summarizes the current bad economic performance existing in sub-Saharan African countries (particularly with regards the output and market value of several agricultural productions), which is the consequence of the naive adhesion to Free Trade and globalization - by African policy-makers.

Indeed, since 1995 African policy-makers played a fair game accepting new trading rules in accordance to WTO globalization policy. They either cancel or sharply diminish taxes and duties on all sorts of commodities and goods imported from developed countries - without obtaining reciprocal compensation. One striking example is the decision taken in 2000 by the economic regulation body of French speaking west African countries - Union Economique et Monétaire Ouest-Africaine (UEMOA) - to divide by three customs duties on imported poultry products.

A very unwise decision as, since 1995-1999, the import of frozen poultry products by west African countries was already growing year after year at the steady pace of 20% a year.

These imports are made of left off pieces (rumps, hindquarters, broken legs, pieces of aisles) - that are raw materials used in European countries to produce canned feed for cats and dogs. Benefiting from production and export subsidies, the sellers from Europe can afford selling these left off products on African markets at the very low price of US$ 50 cent per kg - against US$ 1.5 - 2 per kilogram for local bred live birds.

No mystery then that imports are growing fast to threatening the existence of local breeding companies in several African countries. In fact, several poultry breeding African companies - particularly in West Africa - are closing down because they have difficulties to compete against imports from Europe.

For instance, the import of frozen chicken in Cameroon increased sharply from 978 metric tons in 1996 to 25,000 metric tons in 2003. During said period of seven years, the local production halved from 27,000 metric tons to 13,500. The same trend is occurring in Senegal where the import of frozen chicken products multiplied fivefold between 1998 and 2003; driving out of business 40% of local breeding companies.

The decline of African poultry meat's production is not the only example. There are other African agricultural commodities, which production and marketing on the international marketplace are severely hampered by subsidies granted by developed nations to their farmers. Cotton is a good example that is one of the main reasons for the collapse of Cancun WTO round of negotiation at the end of 2003.

FAIR GLOBALIZATION? YES. ECONOMIC STRANGULATION ? NO.

After the collapse of WTO Cancun round of negotiation on free trade, it is now obvious that big economic powers are not ready to relinquish market shares to new comers. It will take decades before one sees the cancellation of subsidies granted by developed countries to their producers - in primary and secondary economic sectors.

Below, in the Business Opportunity Section one sees there is a huge potential market (US$ 20 billions) in Africa to develop poultry breeding, creating jobs and wealth for African nations.

Unfortunately, as exposed above, poultry breeding companies are closing shops because they cannot compete against the dumping prices of imported frozen chicken products.

The decline of poultry meat's production now occurring in several African countries is a vivid example of the negative impact that WTO free trade rules are exercising on Africa's economy.

It is now obvious that the blind application of said free trade rules is impeding the development of agribusiness in Africa. Further, it is also hampering the emergence of a strong economy capable of creating jobs and building up wealth for all.

Therefore, should African countries adhere to and strictly carry out WTO globalization rules to becoming net importers of agricultural products?

If they do so, the economy would remain stagnant for decades to come. It would not grow at high pace to creating jobs and building wealth. In the contrary, the already high level of poverty (in the range of 60 to 85% of the population living with less than US$ One per day) would worsen.

Therefore, poor nations policy-makers need to take necessary measures to salvage and strengthen the economy. They need to find solutions to regulate import and export in and out their countries together with fighting to obtain financial compensations to balance the loss of revenues resulting from the adhesion to WTO trade deregulation rules. [Watch videos about globalization: 1, 2, 3, 4, 5, 6, 7].

If they do not act quickly, poor nations would continue - for decades to come - to play against first class economic countries, when still in the third or fourth division in the process of building and strengthening up the economy.

Of course, one could not, honestly, put the blame solely on WTO free trade rules to explain the bad performance shown by the economy in sub-Saharan African countries.

Indeed, for four decades running, the economy in sub-Saharan African countries did not create jobs on a progressive manner to cope with demand, which explains the high level of unemployment (up to 70% of the working force) existing in said countries. The economy had never been strong enough to build up wealth - year in year out - to increasing the per capita Gross National Product (GNP). Said per capita GNP evolution for sub-Saharan Africa remaining flat (around US$ 500) for four decades running.

Therefore, a honest observer of African countries' economy should recognize that said countries do lack proper developing strategies that create jobs and wealth for all.

It is obvious, due to the bad performance of the economy, that economic strategies carried out since four decades by African nations lack the fusion between Agriculture, Industries and Services. That is why the economy in said countries do not create jobs to cope with demand; and do not build-up wealth year after year to alleviate poverty - as here exposed.

Nevertheless, a sober observer cannot deny that WTO free trade rules that establishes the deregulation of international trade, are contributing to the decline of the economy in Africa.

THERE ARE LEGAL POSSIBILITIES TO FIGHT AGAINST PREDATORS WITHOUT BREAKING WTO RULES

Those who cooked the free trade's concept do not hesitate tempering with rules and regulations set forth when it suits their best interests - as demonstrated by huge subsidies they grant to their producers through Farm Bill. They are also ready to increase customs duties on imported goods and services as shown by 30% duty enforced on imported steel by the Bush Administration, on February - March 2002.

African nations must do the same. Till fair trading rules are enacted and enforced by WTO, African nations have to act to protect their nascent economy against predatory practices. They should learn how to play the game on the global marketplace and not be the perpetual losers.

To do so, they have many options at their disposal.

For instance, considering the case of poultry breeding, they have the possibility to invoke sanitary considerations to restrict the import of frozen chicken and, consequently, protect and boost local production.

Indeed, imported frozen poultry products are dangerous for human consumption.

They are second quality left off (rumps, hindquarters, broken legs, pieces of aisles) that are bundled with large pieces of poultry, which have overpass the selling date set by European sanitary regulatory bodies.

Further, during the export dispatching period from Europe to Africa - one to two weeks - plus the time required to clear through customs (that may take several days), the cold-chain is broken several times.

Thus, there is a legal basis, on sanitary considerations, to restrict the import of said products.

It is also possible to mount dossiers that show the negative impact any import that benefits from export subsidies is causing on African countries national economies: Disruption of production, negative impact on jobs' creation and loss of revenues for national budget. These consequences are valid arguments to use to take restrictive measures about said imports.

A responsible policy-maker, from the North or the South, that cares for the stability of the global village, cannot allow the current trend to continue that is killing the economy in sub-Saharan African countries.

It is high time for African decision-makers to take necessary measures to protect and salvage their agriculture and nascent food industry.

This delivery is a in line with several other Africabiz issues (40, 54, 55, 63, 66).

You may visit Africabiz Interactive to post comments and discuss about this article.

"CONTRIBUTOR'S GUIDELINES" are available here. We invite you to contribute to AFRICABIZ ONLINE MONTHLY ISSUE - with articles related to "How Africa Could Bridge The Developing Gap".

Many thanks for subscribing to Africabiz. See you here on December 15, 2004.

Dr. B.M. Quenum
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Business Opportunities

FOWL BREEDING AS BUSINESS OPPORTUNITY - PART II: - UNTAPPED US$ 20 BILLION POULTRY MEAT MARKET IN AFRICA

Last delivery starts a new series of "Business Opportunities" dedicated to fowl breeding. A brief general introduction about duck breeding shows how it is possible to start cheap with few couples of animals and grow big fast.

Table below lists figures about Total Poultry Meat Consumption in Africa compared to Europe.

One sees that Africa is a net importer of poultry meat and that production has ups and downs, year in year out. From 1999, the production level dropped sharply due to the competition from imported frozen chicken from Europe.

As shown in Table 2, South Africa is the only sub-Saharan African country that cover 93% of the national demand for poultry meat and eggs - producing 460,000 metric ton of poultry meat and 342,000 metric tons of eggs for a population of around 43 million people.

Owing to the fact that other sub-Saharan African countries (around 650 million people) are net importers to the level of 90% of the demand, one could estimate the potential market existing in Africa to be in the range of [460,000 divided by 43 and multiplied by 650] = 6,953,500 metric tons for poultry meat and [342,000 divided by 43 and multiplied by 650] = 5,169,800 metric tons for eggs.

Both products representing a total minimum market value of around 20 billions US$.

The development of poultry breeding industries (through a combination of small scale family operations and big broilers corporations) would provide jobs and revenues to rural folks around the continent, develop food industries related to poultry meat and egg transformation, help solving the hunger problem, participate in boosting the global developing of African nations. And help African states garnering substantial budget revenues through taxes.

Unfortunately, figures listed in Table above show that Africa's poultry meat production is dwindling fast due to the competition exercised by imports from Europe. For more about the matter please read: Fair Globalization? Yes. Economic Strangulation of Africa? No

MORE ON FOWL BREEDING

1- Poultry Breeding and Genetics by R.D. Crawford 2- The Dollar Hen: The Classic Guide to American Free-Range Farming. by Milo M. Hastingd, Robert Plamondon 3- Small-Scale Poultry-Keeping: A Guide To Free-Range Poultry Production. By Ray Feltwell 4- The Encyclopedia of Farm Animal Nutrition by M.F. Fuller, et al 5- The Mating and Breeding of Poultry by Harry M. Lamon, Rob R. Slocum. 6- Modern Livestock and Poultry Production by James R. Gillespie

7- Success With Baby Chicks: A Complete Guide to Hatchery Selection by Robert Plamondon. 8- The Classic Guide To Poultry Nutrition: Chickens, Turkeys, Ducks, Geese, Gamebirds, and Pigeons. By Gustave F. Hauser 9- The Strange History of The Ostrich In Fashion, Food and Fortune. By Rob Nixon 10- Ostrich's Avian Incubation: Behaviour, Environment and Evolution. By D. Charles Deeming

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