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?
