Herat

Herat is a city in the west of Afghanistan that has been inhabited for 2,500 years. It was and old Persian center for arts and learning and they even say that Marco Polo stopped off here for a night on his travels. I found the clean air and green trees a welcome change from the brown smoggy environment of Kabul.

I am staying in Herat for three days to gather information on almonds, grapes, wheat and other locally grown products for a new project. I am spending my days talking to farmers, traders, flour millers, dairy farmers, and others, which I find this the most fun part of my job - I couldn’t be happier than when sitting around with a translator and a group of traders (no more than 5 or it’s hard to control) in a market learning about what their market and their business. Traders always amaze me at their depth of understanding, intelligence and innovative thinking. This time was no exception.

One trader told me that he wished that the NGOs would buy their wheat in the local market to give away to poor households. There are many non-governmental organizations (NGOs or aid agencies) in Afghanistan that are giving out food to help Afghan households get back on their feet. While this seems like a good idea, in practice it doesn’t always work out that way. The food they give away is almost always imported from the US (for US NGOs). It is the accumulation of production from our government’s unsustainable subsidy of the agriculture sector. (The US government pays farms to grow crops that we do not need and cannot sell. 50% of American farmer’s income comes from government subsidies – but this is a discussion for another blog). The main problem is that the price that Afghan farmers get for their wheat declines drastically because people are getting wheat for free so they are unwilling to pay a high price for any additional wheat they may need (and many recipient households re-sell the wheat on the local market, creating an oversupply). This trader had an incredible insight into the market distortion being created by the donors and he also had the perfect solution. Amartya Sen won a Nobel prize for economics and one of his theories was that there are different types of famine. Famine from lack of food availability (usually from drought, pests or some other natural disaster) or famine from lack of access – lack of ability to buy the food that is readily available in the market (such as the Irish potato famine). Afghan households have food shortages not because there is no food in the market, but because they cannot buy it. The solution is to provide them with income (which USAID is doing through cash for work programs) and to buy wheat in the local market to distribute – which stimulates the market and boosts local incomes. This trader understood all this.