Africa and the Difference Between Growing Food and Eating it; D. Osterfeld

The problem is that, by themselves, the figures prove little or nothing. In fact, histori cally, the conversion of cropland to nonfarm use has been a sign of economic advance. There is little doubt, for example, that the average American is better fed today than, say, in 1776 when a much larger proportion of the cleared land was devoted to agriculture and over 90 per cent of the people were farmers. By the same token, the average American is better fed today than he was in 1776, even though only about 3 per cent of the population is di rectly involved in farming. This pattern is not confined to the United States. It is a universal, historical pattern. Thus, if one could draw any conclusion from the above figures, it would be that they are an indication of economic advance in Africa, not decline. David Osterfeld is Associate Professor of Political Science at St. Joseph's College in Rensselaer, Indiana.

But, it is common knowledge that the eco nomic situation in much of the African conti nent is perilous. The number of deaths from the recent famine is generally placed at one mil lion.2 According to World Bank data, the low income economies of Sub-Saharan Africa have an average per capita income of only $210. And while Africa is the only continent in which incomes have fallen, averaging a 0.1 per cent decline per year for the last two decades, what is most alarming is that the rate of decline has been accelerating.3 How can one explain the seeming paradox between regional declines in agricultural output, which is historically associated with economic advance, and falling incomes, an ob vious indication of economic deterioration? Excluding theft, there are three basic ways in which individuals can provide for their own and their families' needs: they can (1) produce directly for their own consumption, i.e., en gage in subsistence agriculture, (2) produce for their consumption indirectly, i.e., produce for the market and then use the income obtained to supply their needs, or (3) engage in some mix of the two.

Direct and Indirect Production Direct production requires one to be the pro verbial "jack-of-all-trades." And that means, to finish the proverb, that one is condemned to be "master of none." By definition, direct pro duction precludes specialization and economies of scale, and thus those engaged in it must for feit all of the associated economic benefits. Thus, such forms of direct production as sub sistence farming are characteristic of economi cally backward economies. The simple fact is that some areas are better suited for growing certain types of food and ag ricultural products than other areas. Recogni tion of this fact opens up the possibility of spe cialization and gains from trade. Some farmers specialize in growing bananas while others spe cialize in com. Since neither can use nor want to use all that they produce, bananas will be traded for com or other items. But since spe cialization increases productivity, there is more of everything to go around. Thus, the transition from subsistence to cash-crop farming repre sents significant gains in utility for members of the society.

Similarly, as farm output increases and markets expand, some individuals and families find that the best use for their land lies in such nonagricultural pursuits as industry, manufac turing, or services. That is, some people dis cover that the best way to feed and provide for themselves is not to grow food at all, but to produce other things, sell their products, and then purchase the food they need. Production for the market-because of the tremendous gains in both productivity and utility resulting from the division of labor, specialization, and free trade-is a far more efficient method of satisfying one's needs than direct, subsistence production. Africa's Plight The basic "food problem" in the world today is not one of shortage but of surplus. As Barbara Insel of the Council on Foreign Rela tions has put it, "the world is awash in grain."4 Worldwide production of wheat and feed grains has grown 20 per cent over the last decade and 100 per cent since 1964. Many na tions that traditionally have been major food importers, China and India to name but two, are now food exporters. 5 The result is that world grain stocks currently exceed 190 million tons-enough, Insel notes, to feed all of the 191 hungry in the African sub-continent for the next 50 years.

Governments in the United States and Europe have programs designed to reduce farm production. Some land in Europe and America is being withdrawn from agricultural produc tion and, as farm productivity in these countries rises, the percentage of the population engaged in farming continues to fall. In fact, according to John Harris, owner of Harris Farms in Coalinga, California, if the United States had not experienced a cycle of very poor weather in recent years the surpluses would have been even larger. "At this point, '.' says Harris, ,'farmers have become capable of producing a surplus of just about everything. "6 Put differently, farm output could easily be increased substantially. The consensus is that the earth is capable of feeding and clothing at least 11 billion people, or twice the current world population. 7 And some authorities, such as the late Herman Kahn, feel that this is a very conservative figure. 8 It is clear that the basic problem in Africa is not really a food problem at all. It is a poverty problem. The reason so many Africans are starving or suffering from malnutrition is not that there is a shortage of food, but that they do not have the means to purchase it. The problem, as economists put it, is a lack of ef fective demand. This raises the questions: Why is Africa so poor? Why is Africa the only area of the world where per capita incomes are de clining?

Comparative Advantage To deal with this question, we need to draw upon the principle of comparative advantage. While the reasons frequently offered to explain Africa's plight range from the belief that the Western nations "control" international markets and deliberately have subjected the na tions of Africa to unfavorable terms of trade,9 to the argument that Africa's workforce is un skilled and capital is relatively scarce,lO a common argument is that Africa is poor be cause it simply cannot compete on the world market. Since the nations of Africa are "harmed" by foreign trade, the logical conclu sion is that they would be better off severing 192 THE FREEMAN. MAY 1988 Yam farming in Ghana. Cl ..J a::o ~ w Cl §: their economic ties with the rest of the world. This argument is fundamentally unsound. The economic argument for free trade is pre mised on the "Law of Comparative Advan tage, " formulated by the English economist David Ricardo (1772-1823). This law, simply stated, says that "If the greatest possible ad vantages of foreign trade are to be secured for all, each nation should devote itself to what it can do most cheaply." 11 In view of the fore going objection that Africa is hurt by free trade because everything that it can do can be done more cheaply by other nations, the expression "what it can do most cheaply" needs careful definition.

Whether everything can be produced more cheaply elsewhere is debatable. It is also irrele vant to the question of whether free trade would benefit the nations of Africa. What is relevant is not absolute but relative advantage. The two are quite different. For example, assume that Howard is both a better chef and a better dishwasher than Fred. Thus, Howard possesses an absolute advantage over Fred in both jobs. But if Howard's advan tage over Fred as a chef is greater than his ad vantage as a dishwasher then it would be in Howard's interest to specialize in cooking, leaving the dishwashing to Fred. Similarly, if Fred were a better dishwasher than a chef, even though inferior in both to Howard, it would be in Fred's interest to specialize in dishwashing, leaving the cooking to Howard. Thus, even though Howard were better at both cooking and dishwashing than Fred, Fred would still have a comparative advantage over Howard in dish washing. And both would benefit by special izing in that area where their comparative or relative costs were cheaper.