American farmers need to replace China with Africa as trade partner
Last year was tough for American farmers. The media mostly covered the trade war casualties, but not every problem in the world will trace back to the occupant of the White House. The wettest stretch in recorded United States history delayed planting and harvesting last year, which left crops vulnerable to frost. It took the largest amount of federal support in more than a decade to stop farm incomes across the nation from falling.
Hopes for better luck this year have been crushed. Due to the pandemic, net farm incomes are projected to drop by $20 billion. Yet that number is surely too rosy, because it assumes that China will honor all its trade deal commitments, which is now increasingly unlikely. Instead of contributing toward its agreed upon agricultural purchases by buying from American farmers, China purchased a record number of Brazilian soybeans earlier this year. It also included a superior force clause in the trade deal, which was finalized just as the coronavirus was spreading through Wuhan.
Moreover, the deteriorating relationship with China makes it increasingly risky. The solution? Find new ones. Africa should be at the top of the list. According to the African Development Bank, the net food imports to the continent were $35 billion in 2015. In five years, they will be $110 billion. This is a huge opportunity for American agriculture, as the government can assist domestic farmers while it aids struggling people in Africa.
The impact of the coronavirus is likely to harm African farmers more than American farmers. As developed countries shut down to fight the disease, they shut out imports of African commodities. From cashews to crude oil, trade is slowing and prices are plummeting, as the World Bank estimates the first recession in most of Africa in a quarter century as the economy shrinks by around 5 percent. The African Union predicts 20 million jobs will disappear from the continent as trade may fall by 35 percent.
This will be disastrous for people already living in dire poverty, many of whom are in Africa. The number of people suffering from food insecurity around the world will nearly double to 265 million this year. East Africa is particularly at risk now because of heavy rains, flooding, and a swarm of locusts three times the size of New York City. A second wave of locusts, which could be 20 times the size of the current one, is on its way.
At the very moment that Africans are most in need, other countries are backing away. Africans depend on food from abroad, however, some of the most important agricultural producers are refusing to sell. Russia is capping its wheat exports, and Vietnam is not allowing any more orders for rice. Because a relatively small share of food produced each year is traded on the international market, all these actions are driving up food prices during the commodity slump. This undercuts the ability of most African countries to pay for all these desperately needed imports.
As they respond to the greatest global crisis in eight decades, American policymakers must take a page out of the World War Two playbook. Back at the time, the United States shipped out millions of tons of food under the lend lease program, saving Britain from starvation and feeding allied armies. Today, the United States must take action to help African nations access American food supplies. Because of this commodity slump, they will have trouble paying full price right now during the pandemic.
Fortunately, the Cares Act topped off the Commodity Credit Corporation, which assists American farmers to access markets overseas. It also helps the United States Agency for International Development provide food aid. Those funds should be directly used for food aid and generous financing for purchases, perhaps in return for more imports after the pandemic has passed. American farmers can have reliable markets and their buyers will not have to worry about the next time Russia decides to cut them off.
Congress should assess what further authorities or funding are needed to save lives there and jobs at home. From racial mistreatment of Africans in China to that “only look out for number one” trade policy of Russia, these authoritarian countries are not just hurting people who need help but are also creating a great opening for democracies like the United States.
Michael Watson is associate director of the Center for the Future of Liberal Society and specializes in international relations with the Hudson Institute.