2
Viewpoint Toxicology Letters, No 3,1979, pp 21-24. “F. Nartey, Manihot Esculenta (Cassava): Cyanogenesis, Ultfastfuctufe and Seed Gefmination, Munksgaad, Denmark, 1978. %.D. Cooke, A.K. Howlandand SK. Hahn, ‘Screening cassava for low cyanide usinn an enzymatic assay’, Experimental Agri: culture, Vol14. 1978, DD 367-372. “S. Sadik, O.U. Ok&ke and S.K. Hahn, Screening fof Acyanogenesis in Cassava, Technical Bulletin No 4, IITA, lbadan, Nigeria, 1974. ‘Federal Office of Statistics, Rum/ Eco- nomic Survey, 1977/78, Provisional Report on Crop Estimates, May 1979. 8Washing, drying, crushing are alsothought to reduce cyanide levels. ‘It should not automaticallyba concluded that the screw-press processing method is preferable to the traditional processing method. Some consumers expressed reservationsabout the taste and storability of gari made by this method. l*OP tit, Ref 7. tlWorld Bank ~nfi~nt~l Report, Nigeria Ag~cu~u~ Sector Review, Vol II, 1979. Political pressure and the role of the economist This article is a reply to the comments of Professor van den Noort published in the May 1981 issue of Food Policy.’ Any contribution from Piet van den Noott is at all times stimulating and his recent comments were no exception. Further- more, his comments are welcome since he examines the collation of the most jmpo~ant pillar of cogent economics policies in the Eu~pean ~rn~n~ -the CAP. Briefly recapitulating some of the main points raised in the article, the point of departure is the question of the prob- lems of choice as raised in economics textbooks. Logically, following this observation, van den Noort stresses that it is necessary first to know the Community’s social welfare function (SWF) if one is to make a realistic choice among the different plans put forward for the reform of the CAP. Reference is then made to the scruti- nization of alternative policies by model simulation, ‘B la Tinbergen’, to arrive at ‘optimum policy determina- tion’. At this point, reference is also made to the element of ‘intuition’ - although the author does not regard this as being scientific. Moving to the world of politics, the author enters the realm of groups, coalitions and compromises. Professor van den Noort observes that at ‘least three political categories are involved, the cabinet, parliament and the bureaucracy’. He stresses the import- ance of this last group which, to some degree appears to be great because (though not exclusively) ‘without per- fect knowledge it is not possible to calculate objective priorities and deci- sions’. This group, according to the author, possesses much knowledge. In his conclusions, the author stres- ses the dangers of the consequences of an absence of a Community SWF and even goes so far as to state, ‘we can no longer accept the Tinbergen theory of economic policy as a description of reality but only as an intellectual exercise’. Finally, he examines the special case of a change in the EEC dairy policy - referring to the different results gained when 68 Dutch agricultural economists were asked for their opinions - using the same model. In the present framework of the EEC, at the level of the EEC Council, the author says ‘compromises and trade-offs might be expected’, and he ultimately questions the place and pre- tentions of economists. Lung cancer I shall start my reply with my col- league’s closing observation or ques- tion where he queries the position of economists. To me, the position of the economist is like that of a medical practitioner who tells a patient that he will get lung cancer if he continues to smoke 100 cigarettes a day. The patient nevertheless continues to smoke the same quantity of cigarettes and sub- sequently dies of lung cancer. This fact, however, does not remove the role of the medical practitioner, but rather reinforces the joint roles of education and information. Such, I believe, is the role of the economist and the relevance of the theory of economic policy in relation to the CAP. Theory in itself is mainly a yardstick indicating optimum situa- tions and/or targets. However, to give it rn~~urn relevance in real life it may be useful to return to the classical tradi- tion of political economy rather than remaining in the narrower field of econometrics. However, I shall return to this consideration towards the end of my reply. Turning to the specific case of the CAP, we enter, at the same time, a world of everyday reality (since we must all eat food) and extreme tech- nical complexity (as manifested in the fo~ulation and application of even the most simple a~cultural policies). Immediately, we also encounter political groups, as mentioned by Pro- fessor van den Noort. However, the most important group, especially in agriculture, has gone umnentioned. This group is the ‘lobby’. In the EEC, the most important lobby is the agri- cultural one, followed by the textile lobby and then by other manufacturing lobbies. The consumer lobby comes right at the bottom of the list and is practically unimpo~ant. The agricultural lobby has the most immediate and direct access both to the relevant ministers at the national level, as well as to the Commission and other bodies in Brussels, Luxemburg and Strasbourg. Hence, straddling the world of eco- nomic theory and reality, a ‘public preference welfare group’ has arisen with the EEC. This fact appears to be the missing link in economic theory and in my colleague’s ~ont~bution. It is this variable which should be included and given greater weight in any model. This does not remove the possibility of hag- gling and compromises when the Council of Ministers meet for their annual price-fixing marathons. But, it does mean that these sessions are, in advance, strongly influenced by the farmers themselves rather than by other interest groups. What should be done then to make the theory of economic policy more FOOD POLICY August 1981

Political pressure and the role of the economist

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Toxicology Letters, No 3,1979, pp 21-24. “F. Nartey, Manihot Esculenta (Cassava): Cyanogenesis, Ultfastfuctufe and Seed Gefmination, Munksgaad, Denmark, 1978. %.D. Cooke, A.K. Howland and SK. Hahn, ‘Screening cassava for low cyanide usinn an enzymatic assay’, Experimental Agri: culture, Vol14. 1978, DD 367-372. “S. Sadik, O.U. Ok&ke and S.K. Hahn, Screening fof Acyanogenesis in Cassava, Technical Bulletin No 4, IITA, lbadan, Nigeria, 1974. ‘Federal Office of Statistics, Rum/ Eco-

nomic Survey, 1977/78, Provisional Report on Crop Estimates, May 1979. 8Washing, drying, crushing are also thought to reduce cyanide levels. ‘It should not automatically ba concluded that the screw-press processing method is preferable to the traditional processing method. Some consumers expressed reservations about the taste and storability of gari made by this method. l*OP tit, Ref 7. tlWorld Bank ~nfi~nt~l Report, Nigeria Ag~cu~u~ Sector Review, Vol II, 1979.

Political pressure and the role of the economist

This article is a reply to the comments of Professor van den Noort published in the May 1981 issue of Food Policy.’ Any contribution from Piet van den Noott is at all times stimulating and his recent comments were no exception. Further- more, his comments are welcome since he examines the collation of the most jmpo~ant pillar of cogent economics policies in the Eu~pean ~rn~n~ -the CAP.

Briefly recapitulating some of the main points raised in the article, the point of departure is the question of the prob- lems of choice as raised in economics textbooks. Logically, following this observation, van den Noort stresses that it is necessary first to know the Community’s social welfare function (SWF) if one is to make a realistic choice among the different plans put forward for the reform of the CAP. Reference is then made to the scruti- nization of alternative policies by model simulation, ‘B la Tinbergen’, to arrive at ‘optimum policy determina- tion’. At this point, reference is also made to the element of ‘intuition’ - although the author does not regard this as being scientific.

Moving to the world of politics, the author enters the realm of groups, coalitions and compromises. Professor van den Noort observes that at ‘least three political categories are involved, the cabinet, parliament and the bureaucracy’. He stresses the import- ance of this last group which, to some degree appears to be great because (though not exclusively) ‘without per- fect knowledge it is not possible to calculate objective priorities and deci- sions’. This group, according to the author, possesses much knowledge.

In his conclusions, the author stres-

ses the dangers of the consequences of an absence of a Community SWF and even goes so far as to state, ‘we can no longer accept the Tinbergen theory of economic policy as a description of reality but only as an intellectual exercise’.

Finally, he examines the special case of a change in the EEC dairy policy - referring to the different results gained when 68 Dutch agricultural economists were asked for their opinions - using the same model.

In the present framework of the EEC, at the level of the EEC Council, the author says ‘compromises and trade-offs might be expected’, and he ultimately questions the place and pre- tentions of economists.

Lung cancer

I shall start my reply with my col- league’s closing observation or ques- tion where he queries the position of economists. To me, the position of the economist is like that of a medical practitioner who tells a patient that he will get lung cancer if he continues to smoke 100 cigarettes a day. The patient nevertheless continues to smoke the same quantity of cigarettes and sub- sequently dies of lung cancer. This fact, however, does not remove the role of

the medical practitioner, but rather reinforces the joint roles of education and information.

Such, I believe, is the role of the economist and the relevance of the theory of economic policy in relation to the CAP. Theory in itself is mainly a yardstick indicating optimum situa- tions and/or targets. However, to give it rn~~urn relevance in real life it may be useful to return to the classical tradi- tion of political economy rather than remaining in the narrower field of econometrics. However, I shall return to this consideration towards the end of my reply.

Turning to the specific case of the CAP, we enter, at the same time, a world of everyday reality (since we must all eat food) and extreme tech- nical complexity (as manifested in the fo~ulation and application of even the most simple a~cultural policies). Immediately, we also encounter political groups, as mentioned by Pro- fessor van den Noort. However, the most important group, especially in agriculture, has gone umnentioned. This group is the ‘lobby’. In the EEC, the most important lobby is the agri- cultural one, followed by the textile lobby and then by other manufacturing lobbies.

The consumer lobby comes right at the bottom of the list and is practically unimpo~ant. The agricultural lobby has the most immediate and direct access both to the relevant ministers at the national level, as well as to the Commission and other bodies in Brussels, Luxemburg and Strasbourg. Hence, straddling the world of eco- nomic theory and reality, a ‘public preference welfare group’ has arisen with the EEC. This fact appears to be the missing link in economic theory and in my colleague’s ~ont~bution. It is this variable which should be included and given greater weight in any model. This does not remove the possibility of hag- gling and compromises when the Council of Ministers meet for their annual price-fixing marathons. But, it does mean that these sessions are, in advance, strongly influenced by the farmers themselves rather than by other interest groups.

What should be done then to make the theory of economic policy more

FOOD POLICY August 1981

Page 2: Political pressure and the role of the economist

relevant to everyday life and to the CAP in particular - and to improve the role of the economist? All economics, whether theoretical or applied, is as the textbooks imply, a question of choice. However, to make any effective choice, individuals must have adequate information at their disposal. As Pro- fessor van den Noort suggests, mini- stries do possess much info~ation; and, as I suggest, the lobbies (in the present case, the farmers’ lobby) also possess much information. Thus, it is relatively easy for the civil service and the farmers’ lobby to influence the ministers and to ignore the consumers.

Ivory towers At this point, the future role of eco- nomists becomes more clear. They should, at least, obtain more reliable info~ation for their own equations, proposals, models and plans - which will then enable the groups concerned to make better decisions. They should certainly move from their ivory towers of pseudo-monetarist and neo-Keyne- sian sterile quarrels and instead more fully inform the general public about the issues involved. In this context, it is absolutely astonishing that whole armies of economists are not avidly competing with each other in informing and helping the still relatively weak Bureau Europeen des Unions des Con- sommateurs in Brussels.

As already suggested, I consider that many economists have, over the past 20 years, isolated themselves in a too theoretical world of econometrics. This is rather negative since the real world of economics cannot be divorced from that of politics. Therefore, a move back to the more classical tradition of poli- tical economy may bring economic theory closer to reality. Such a move would automatically include a study of the role of the lobby in the formulation of the Community’s economic policies - especially the CAP.

It is true, as Professor van den Noort observes, that owing to the differences in tastes and traditions among the dif- ferent EEC member states and as a result of the rule of unanimity adopted by the Council of Ministers for major decisions, compromises become inevit- able. This implies that both economic

FOOD POLICY August 1981

theory and the role of the economist have to be improved if decisions are to be taken even only modestly more scientifically. In turn, this underlines the necessity of improving economic theory though the procurement of more realistic and up-to-date informa- tion which should be placed at the dis- posai of both governments and public

Viewpoint

alike. Here, economists have a major role to play.

Peter Coffey, Europa Instituut,

Universitait van Amsterdam, Amsterdam, the Netherlands.

‘PC. van den Noort, ‘Economic theory, intuition and the CAP’, Food Policy, Vol 6, No 2, May 1981. pp 122-124.

Planning the Bakalori irrigation project

The development of the Sokoto-Rima river basin as a network of irrigation projects was first envisaged by the FAO in a report published in 1965. It is through thjs organ of the United Nations that the planning for agricultural deve- lopment in this part of Nigeria became intimate/y /inked with the desire of the indust~a~ firms in Western Europe, North America and Japan to find export markets for jnd~s~‘~p~uc~ in agriculture. By 1975, when the first contract for the irn~~ pm~t at Beads was signed and a company (I~PRE~IT 8~a~~, Nigeria) was ~~~, the FAO had already w~jn it an agency (the industry Cooperative Programme) whose putpose was to promote the penetration of agricultural p/ant&g in Africa, Asia and Latin America.

It was intended that agricultural change in these areas would provide new ex- port markets for fertilizers, herbicides, pesticides, irrigation pipes, construc- tion equipment, employment oppor- tunities, etc, manufactured and marketed by agribusiness companies who were members of this agency. These companies had decided on the strategy that their proposals would be less suspect in the eyes of Third World governments if their agents made pro- posals for this new agricultural colon- ialism under the legitimation of the United Nations.’ From the beginning therefore, the planning exercise for the Bakalori irrigation project was biased in favour of the export interests of the company that won the contract for its construction. This bias has profo~n~y affected the character of the project.

The impetus for Bakalori was a group of banks controlled by the italian multinational company FIAT who pro- posed it to the Nigerian government as part of an aid package. FIAT used the climate of Nigeria’s financial weakness before the oilboom to insist on both a non-competitive contract in which they both designed the project and con- structed it. Usually, the company that designs the project is different from the

company that constructs it, in order to protect the financial interests of the customer against designs meant to pro- mote the profits of the construction company.2 By the time the Nigerian government began to question this ar- rangement , officials at the Sokoto River Basin Development Authority (SRBDA) had already signed a WlO million contract, and paid IMPRESIT W18 million.

A British company (MRT) was then awarded a contract to act as supevisors and consultant engineers to watch over the project, but their officials com- plained that the Italians who designed the scheme were resident in Rome and not in Bakalori. Consequently their designs tended to look more for new ways to create export opportunities for FIAT industries than to be sensitive to local conditions.

The project involved two contracts. The main contract signed in 1975 was for W110321157, but ‘it excluded the provision of hydraulic and electro- mechanical equipment and also land levelling’. For this a subsidiary contract of #44 780 137 was signed in June 1977. Another subsidiary of FIAT, Bonifica, ‘was entrusted with preparation of studies, research and design of the

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