The Truth about Trade
Dean is Chairman Emeritus of 'Truth About Trade & Technology, a nonprofit advocacy group led by a volunteer board of American farmers.
May 14, 2009
About a million people died during the Irish potato famine in the 19th century. Yet during this terrible time of mass starvation, Ireland was actually exporting food to England.
Imagine the outcry today if a new famine were to hit Ethiopia--and the government in Addis Ababa nevertheless allowed tons of locally-grown food to leave the country for the benefit of foreign consumers. It would invite loud condemnations from abroad and spark political unrest at home.
Yet we may see episodes such as this unfold in the not-too-distant future, if food-importing nations continue to buy farmland in the developing world at their current pace. Since 2006, they’ve purchased 20 million acres, mostly in Africa, according to the International Food Policy Research Institute (IFPRI). The buyers have obtained this farmland in the name of their own food security.
The desire for a dependable source of food makes sense, but this particular approach won’t bear fruit. Rather than trying to buy farmland in faraway places, the food importers should work to improve the free flow of global trade. They’ll be much better off for their efforts, and so will everyone else.
The real-estate rush is beginning to capture the attention of journalists and the public. Business Week called it the “land grab for the world’s farms.” Countries such as China, Egypt, Japan, South Korea, and the United Arab Emirates are scooping up land in agricultural regions.
In recent months, Saudi Arabian investors have paid $100 million for a wheat and barley farm in Ethiopia as well as for tracts in Sudan. They’ve also bought rice paddies in Indonesia and Thailand. China is a major player as well, with huge farms in Algeria, Mozambique, and Zimbabwe that may employ a million Chinese laborers.
The motivation is understandable. Saudi Arabia is a big desert where almost nothing grows. China has a lot of arable land, but not enough to support its own massive population. These countries, and many others, have no choice but to look beyond their borders for food.
What they’ve done, however, is confuse food security with self-sufficiency.
Food security involves the availability of food and easy access to it--an important consideration in a world that will soon have grown to a billion hungry people, according to the United Nations. Food insecurity can lead to malnourishment and starvation.
Thankfully, food security does not require self-sufficiency. Although countries everywhere seek to grow their own food, they don’t have to behave as if they’re in isolation, cut off from the rest of the planet. Farmers and consumers can trade goods and services across borders. Countries that don’t produce enough calories--because of a poor climate, bad soil, an urbanized population, or whatever--can buy them from those that produce more than enough.
A stable system of global trade in agricultural products is therefore essential. To a certain degree, we already have this. But we can do much better. Protectionism distorts trade in food more than any other commodity. World leaders should push for further reforms, through individual trade agreements such as the proposed pact between the United States and Colombia, as well as through comprehensive accords such as the Doha round of global trade talks.
This is how nations will achieve food security: When buyers and sellers can meet on a level playing field, one that isn’t tilted by political interference in the form of tariffs or taxes.
Governments that think real-estate acquisitions in developing countries represent a new path to food security are fooling themselves. Their rights to these farmlands may appear safe today, but they will be violated the moment trouble strikes. In Madagascar, a plan to lease more than 2 million acres to South Korea for 99 years contributed to violent riots and the president’s ouster earlier this year--and this was just over a prospective plan, not one that was actually doing for Madagascar what exports did for Ireland during the great potato famine.
We should let markets work, even across borders. When the world needs more food, farmers will grow it and sell it, both for their own communities and the wider world.
Dean Kleckner, an Iowa farmer, chairs Truth About Trade & Technology. www.truthabouttrade.org