There is ongoing debate on how to harness Policy Coherence for Development (PCD) in Europe to improve food (and nutrition) security in poor countries, in particular in Sub-Saharan Africa where about a quarter of the population still suffers from hunger. By screening the EU’s external and internal policies for their development implications, many hope that negative impacts can be detected and then eradicated or at least mitigated. These screening exercises often fall short of expectations because of the contradictory internal interests behind EU policies.
There is, however, also a more fundamental problem with achieving PCD for African food security: the differential and often opposing impacts of a given policy for different target groups and for different circumstances. This makes an objective coherence judgment extremely difficult. Thus, PCD in this area is bound to remain patchy, and may be limited to addressing some particularly damaging side-effects of European policies.
The underlying reason for this is that food insecurity in Africa is an extremely complex issue. One key challenge for improving PCD is that food insecure countries and households vary in terms of how they are affected by markets for food and agricultural products. Prices are the pivotal element for most food security issues. The interaction between the level of prices and the direction of price change induced by European policies creates complicated patterns of food security impact in poor countries.
When prices were depressed in the 1980s and 1990s, countries which exported agricultural products experienced negative terms of trade and low export revenues. If their national markets were not protected or subsidized, smallholder farmers were pushed out or made low profits. Many reduced or abandoned production and started local off-farm employment or migrated into urban areas. On the other hand, cheap food allowed for low wages and thus eased industrialization.
With the advent of high agricultural prices since 2007/08, the opposite has occurred. Exporting countries and farmers with a surplus profit, but importing countries, urban consumers and many farmers with a current net deficit of food sales lose, at least in the short run. In the longer run, many farmers should be able to return to profitable surplus production, others not. Thus, food prices are never “good”, “fair” or “development-friendly” for all.
Against this general picture, assessments of the PCD effect(s) of many EU policies are inconclusive under changing circumstances. The most widely discussed case is the EU’s Common Agricultural Policy (CAP) and agricultural trade regime. In the past, it substantially added to low world agricultural prices. Highlighting the producer and exporter rather than the consumer and importer perspective, the CAP was considered a major case of incoherence. The EU introduced second best solutions to reduce price dumping like setting aside agricultural land, or tried to compensate some countries through preferential market access. Finally, the community moved toward price-biasing direct support. However, the overall amount of subsidies was not reduced and kept many farmers in business and regions in production. Thus, the allegation of price dumping was still valid.
Under today’s high world market price regime, the assessment of the impact of the CAP on world food security has to be modified dramatically. Direct subsidies may keep small farmers in business, but their land would most likely continue to be used by the remaining farms. Thus, direct subsidies nowadays hardly promote dumping. In contrast, it has become difficult to justify measures to reduce food production in the EU in the name of food security. To the contrary, measures which support production must be welcomed.
Another policy with an ambivalent PCD record is biofuel promotion in the framework of the EU’s Renewable Energy Directive (RED). Previously considered an expensive but harmless outlet for overproduction, this is now heavily criticized for increasing food prices. RED is also blamed for another type of policy incoherence: it induces large scale land acquisitions, which are harmful in many locations. Nevertheless, where land acquisitions are handled responsibly, the indirect effect of the RED can be development friendly.
Other contentious areas of EU policies related to African food security are food regulation and support of private standards, climate change policies, investment treaties, and regional Economic Partnership Agreements. For all, positive and negative effects on aspects of local food security can be found.
In summary, many EU policies produce losers and winners simultaneously, and these change with time, with world price regimes and internal policy responses. Quantitatively balancing the effects requires to trade off winners against losers, which is often difficult. Thus, a clear coherence judgment at the EU level for food security in Africa will remain inconclusive in many cases. Some areas of incoherence can be isolated where negative effects clearly outweigh positive ones, such as export subsidies. These must be abandoned. Partial incoherencies, however, will usually not justify the abolition of the entire policy, but rather corrective measures such as standards and regulations, policy dialogue with the affected countries and, where appropriate, development aid. In any case, to better detect incoherencies ex-ante impact assessments of EU policies and a general complaint mechanism would be useful.
This post was written by the German Development Institute.
This topic will be discussed in greater detail at the upcoming European Think-Tanks Group conference: Looking Beyond 2013 Are EU-Africa Relations Still Fit for Purpose?