The Hardest Case - The Oxford Topic of Food, Politics, and Society - page 137

In the 1980s, aid donors to Africa noticed that the farm sector was underperform-
ing, but the remedy prescribed was to get the state out of the business of running the
economy, rather than to encourage more investment in public goods. The policy
reform template advanced by the World Bank and the IMF in both Africa and Latin
America was called “structural adjustment,” and it included a number of worthy
macroeconomic features designed to control inflation, free markets, and “get prices
right.” Lending money for policy change proved to be difficult, however, and the
adjustments imposed in Africa were not always significant or long lasting. In 1994
the World Bank completed a study of 29 governments in sub-Saharan Africa that
had undergone structural adjustment and found that 17 of those 29 had reduced
the overall tax burden they placed on farming, while some, because of persistently
overvalued exchange rates, had actually increased that burden. Only 4 of the 29
had eliminated parastatal marketing boards for major export crops, and none of
the 29 had in place both agricultural and macroeconomic policies that measured
up to World Bank standards (World Bank 1994). In addition, in their focus on “get-
ting prices right” these international financial institutions had largely neglected the
need for governments to make larger public goods investments in the rural sector.
Public goods investments were actually discouraged under structural adjustment,
because they could contribute to fiscal deficits condemned by World Bank and IMF
economists as inflationary.
In its pursuit of structural adjustment in the 1980s and 1990s, the World Bank essen-
tially withdrew from making loans in Africa for public sector investments in agricul-
ture. Between 1978 and 1988, the share of lending from the World Bank that went to
agricultural development fell from 30 percent to 16 percent, and by 2006 the lending
share was only 8 percent. In 2005, World Bank president Paul Wolfowitz admitted
in an offhand comment, “My institution's largely gotten out of the business of agri-
culture” (Hitt 2005). This withdrawal of international support for agricultural invest-
ment reinforced the existing tendency among African governments to underinvest in
farming.
Bilateral donors also walked away from providing assistance to African agriculture
beginning in the 1980s. The United States allowed its official development assistance to
agriculture in Africa to fall from more than $400 million annually in the 1980s to only
$60 million annually by 2006, a drop of 85 percent at a time when food grain production
in Africa was declining on a per-capita basis and the numbers of hungry people on the
continent were doubling (Chicago Council on Global Affairs 2009). This was a period
during which donor countries were losing interest in agricultural development. They
carelessly concluded from the success of Asia's Green Revolution and from low prices on
the world market that food problems in the developing world had been solved. Between
1980 and 2003, the aggregate value of all bilateral agricultural development assistance
from all rich countries to all poor countries fell by 64 percent. The fact that food and
agricultural problems were still worsening in Africa did not seem to matter to donors
during this period. Hence, among the donor-dependent governments of Africa, the pat-
tern of underinvesting in rural public goods continued.