Deliberating In the Desert About Freer Farm Trade

Dennis T. Avery

WASHINGTON, DC – The world is starting another urgently needed effort to liberalize farm trade. Fittingly, the World Trade Organization is re-starting the trade negotiations, stalled by activist demonstrations in Seattle two years ago, in the tiny, oil-rich country of Qatar.

Much of the world is not well suited to farming, a reality that the barren desert of Qatar’s, Persian Gulf coast will dramatize for the trade negotiators. Freeing farm trade would help raise the Moslem masses surrounding Qatar out of poverty, while raising U.S. farmers’ incomes and preserving the world’s species-rich tropical forests.

All across the earth, there are solid arguments in favor of liberalizing all trade. Free trade stimulates competition bringing more rapid economic growth and higher living standards in both rich and poor countries. At the same time, countries that have not opened themselves to trade (such as North Korea) have sharply lower incomes and growth rates

Arguments for freeing trade in farm products are even stronger. Qatar, for example, cannot successfully grow its own rice and lentils. It is better suited to growing date palms. But Qatar can swap oil for food staples.

Pakistan’s hot, dry climate is best suited for growing irrigated cotton and rice. Pakistan can lower the food costs for millions of low-income Moslems by importing more wheat and vegetable oils. The rich countries, unfortunately, still limit Pakistan’s exports of cotton and textiles with high tariffs and small quotas. (Freeing textile trade is also on the Qatar agenda.)

Wheat yields in Brazil are only half as high as in neighboring Argentina, due to their climate difference. But Brazil’s yields of tropical sugar cane are twice as high as the sugar beet yields in Argentina. Both countries profit if they swap wheat for sugar. Equally important, the sugar and wheat are grown on only half as much land; high-yield farming saves millions of extra acres for Nature.

Indonesia, with the world’s largest Moslem population, has no land suited for raising beef or dairy cattle. However, its people are increasingly demanding more meat and milk as their incomes rise. Indonesia’s own limited farmlands are best-suited to growing rice, while its vast tropical forests can be sustainably logged to produce lumber and plywood for China, which has few forests left. (Logging doesn’t destroy forests; farming does.)

China doubled its meat consumption in the 1990s, to 70 million tons per year. Chinese meat consumption is still far lower than it the West, but Chinese purchasing power is already more than $10,000 per family and doubling every decade. China has no more land for crops or pasture. In fact, it’s already begun reforesting 15 million acres of hilly land, because the deforested hills produced too much erosion and downstream flooding.

India is already the world’s largest milk consumer, and most of its Hindus say they will eat meat when they can afford it. (McDonalds is already there, selling “muttonburgers with special sauce.”) But Indian farms are already being pushed too close to the tiger preserves, so more farmers get killed by tigers, and more tigers are killed as “man-eaters.”

Food prices for 3 billion Asian consumers are currently 30 to 100 percent above world market costs, because they’re barred from buying imported food. This antiquated stress on national food self-sufficiency also represents a rapidly increasing danger to the world’s tropical forests. Asia has literally nowhere to expand food production unless it clears species-rich forestland

As tens of millions of Asians demand higher-quality diets, they put enormous new stress on all the meager land and water resources of their densely populated continent. So far, Asian governments have resisted food imports more urgently than wildlands destruction. Freeing farm trade at Qatar would radically alter that pattern.

The biggest villains lurking behind the farm trade barriers, however, are the governments of the United States and Europe. Both economic giants have preferred to subsidize their farmers rather than permit free world trade in farm products. In today’s world, that means they’re defending their high-productivity farmers from major gains in export sales (mainly to Asia).

Instead, their high farm subsidies drive farmland prices up faster than farm incomes. High farmland prices drive young farmers off the land instead of preserving farming jobs.

Qatar is the first trade negotiation where the prospect of more farm export sales in Asia might finally shift the world’s two biggest farm subsidizers toward free international trade in farm products. If farm trade is freed, the farmers of North America and Europe will be big winners—along with poor people and endangered wildlife species all over the world.

This article was published by Knight Ridder Tribune

Dennis T. Avery is based in Churchville, Va., and is director of global food issues for the Hudson Institute of Indianapolis.