Why are African countries using direct and indirect taxation against their farmers to tax them at a rate twice as high than anywhere in the world?

I found this in a research paper entitled Why kill the golden goose? A political-economy model of export taxation by Margaret McMillan:

Virtually every country in postcolonial Africa with a major export crop has used marketing boards or caisses de stabilisation to tax farmers directly by fixing producer prices below world prices. In addition, farmers have been taxed indirectly through overvalued exchange rates. Table 1 shows that both direct and indirect taxation of agriculture has been twice as high in Sub-Saharan Africa than anywhere else in the world. Direct taxation, the main focus of this paper, has been almost ten times higher in Africa than in Asia, and three times higher than in Latin America and the Mediterranean. Indirect taxation has been roughly the same in all regions of the world.

I was reading it and I was wondering why African countries are imposing such a high tax rate against their farmers through direct and indirect taxation. Is there any motivation for doing this?

  • Isn't that answered by the paper you mentioned? The conclusion starts off by saying "Results presented in this paper are consistent with a model in which the government finds it difficult to commit to a low-tax policy because farmers incur sunk costs to produce export crops"?
    – JJJ
    Aug 7, 2021 at 1:45
  • But I haven't seen any explanation as to why African countries are doing this.
    – Sayaman
    Aug 7, 2021 at 2:22
  • 1
    Fair enough, I haven't read the entire paper either but I think the answer may well be in there. Just a hint for future answerers; and feel free to self-answer should you come across a good explanation (in the paper or elsewhere). :)
    – JJJ
    Aug 7, 2021 at 2:24
  • 2
    Might it be because #1 a lot of people don't hold formal jobs and would be hard to tax otherwise and #2 agriculture is a significant part of African economies? Besides Africa isn't the only place doing this, so does Argentina and note the reasons given there. Aug 7, 2021 at 3:26
  • 1
    @Sayaman: In at least some cases (Zimbabwe, for example) it's at least partly because the prosperous farmers are, or were, white.
    – jamesqf
    Aug 7, 2021 at 16:54


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