African Famine; D. Osterfled

corded in California in 1977 and the The policies include the following. 1975-76 drought in England was labeled "unprecedented" in its sever-Marketing Boards ity. Yet none of these resulted in fa-The stated purpose of these Boards, mine. In fact, the 1977 California which are found in most of the 24 harvest was a record high. And food countries including Ethiopia, is to production in England increased by insulate the farmer from price fiuc 15 percent between 1975 and 1980. tuations. In fact, the Boards are typWhy is it that droughts occur in all ically used to raise government rev parts of the world but, with a few ex-enue. The farmer is forced to sell his ceptions, famines are confined to produce to the Board which, because Mrica? it is a government monopoly, need pay him only a fraction of its actual market value. The typical farmer in Tanzania receives about 10 percent of the value of his produce. In Kenya 607 608 THE FREEMAN October it is 15 percent and in Ghana 20 per cent. Adding insult to injury, the farmer must then pay taxes on the income he does receive.

Outlawing Middlemen The Boards could not operate as revenue agents if farmers were free to sell their produce elsewhere. Thus, the private sale of food has been out lawed or severely restricted in many countries. In Ethiopia and Tanzania, for example, those caught violating the prohibition are beaten or killed. Protectionism In order to stimulate local indus try and to appease a small but po litically powerful urban elite, pri vate foreign investment has been discouraged and foreign-owned com panies have been nationalized. Tar iffs, subsidies and licensing restric tions have been enacted. These policies have allowed local manufac turers to sell their goods at well above free-market levels. This means that the African farmer must confront artificially inflated prices with an artificially deflated income. State Farms State farms are notoriously inef ficient. While other socialist coun tries such as China have been dis mantling them, African countries have been busy creating them.

Ghana established large state farms in the 1960s. Its per capita food output fell 19 percent during the 1970s. Tanzania began its Ujama Program in 1970, resettling some 13 of its 18 million people onto collective vil lages. Its per capita food output fell 15 percent in ten years. A food ex porter in 1970, it imported over $16 million worth of food in 1980. Moz ambique became independent in 1975 and promptly created state col lectives. Within 5 years per capita food output fell 12 percent. In Ethio pia state farms comprise 4 percent of the land, receive 90 percent of the state's agricultural investment, but 80 percent of them operate at a loss. Yet the ten-year plan calls for a dou bling of the state farm sector. Land Reform Several countries, including Mo zambique, Zaire and Tanzania, have implemented land reform, but Ethiopia's is the best known. Con trary to the way it is depicted by the media, much of Ethiopia is ex tremely fertile. It would be the breadbasket of Africa, agronomists said, were its development not re tarded by feudalism. In 1975 the new Marxist government nationalized all land. Feudalism ended; "Ethiopian Socialism" began. Instead of devel opment, farm output, low to begin with, declined. Why? The principle of land distribution was to allocate to each family enough land to feed itself but no more. The use of hired 1985 AFRICAN FAMINE 609 labor was prohibited, as was the pri vate sale of farm produce and ma chinery. The primary purpose of the reform said the UN, which ap plauded it as "progressive" and "forward-looking," was to prevent the emergence of "commercial ag riculture" by making farm plots too small for machinery to be economi cally viable. Thus, the reform changed little. Under feudalism the farmer had little incentive to pro duce. Under socialism he has even less. Over 60 percent of Ethiopia is arable. But only 10 percent is culti vated. As one authority commented: "The low rate of land use may be at tributed to lack of motivation to pro duce anything beyond subsistence levels."

It is hardly surprising that these policies produced shortages. Indeed, it would have been surprising if they had not. The Market Solution History shows two things quite clearly: 1) the application of Social ist measures to agriculture results in declining production, food short ages and sometimes even famine; and 2) the application of Capitalist measures to agriculture tends to pro duce agricultural abundance. For example, prior to the 1917 Rev olution, Russia was a major exporter of food. By 1920, however, the area under cultivation in the Soviet Union had declined by 50 percent and yields per acre fell by 40 to 50 percent. An estimated six million Russians died of starvation. Millions more died in the 1930s as a result of Stalin's collectivization program. Eventually single-acre private plots were grudgingly permitted. Small as they are, these plots are about 40 times as efficient as the collective farms. There is certainly a degree of irony in the fact that despite its tre mendous agricultural potential the Soviet Union is now the single larg est purchaser of US grain exports.

India provides a very instructive contrast to the Soviet Union. After highly interventionist if not socialist policies resulted in famine in the early 1970s, India abandoned price controls on agriculture. By 1977 In dia not only was self-sufficient, it was exporting large quantities of grain. In addition, it had built up a grain reserve of 22 million tons, which enabled it to manage the se vere drought of 1979 without the need for food imports. The famine in Africa is certainly a tragedy. It is all the more tragic be cause it need not have happened. There is no need for it to happen again. Anyone with a serious desire to end recurrent famines would do well to take a look at what results from an ideological commitment to socialism. Let the free market op erate, for wherever farmers have been exposed to market incentives, farm output has increased. ~ Henry W. Vanderleest Karoline Bola • RailroadDeregulation ON February 4, 1887, Congress passed the Act to Regulate Com merce. This legislation also created the Interstate Commerce Commis sion (ICC) whose job it was to ad minister and enforce provisions of the Act. The Act to Regulate Com merce, along with several subse quent amendments which sought to strengthen it, placed the railroad in dustry securely under the control of the federal government. While the original intent of the Act was to abolish the numerous abuses of pub lic trust by the railroads, the long term effect was the stagnation of the industry. For nearly 100 years, rail roads had little or no flexibility in marketing their services to shippers.