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Author Topic: USA Discovers Pitfalls in Supporting WTO
DrConway
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posted 02 September 2002 12:41 AM      Profile for DrConway     Send New Private Message      Edit/Delete Post  Reply With Quote 
Check it.

quote:
Having capitulated to demands from farmers for more than $100 billion in subsidies, the administration is advocating a plan that would drastically reduce subsidies and farm tariffs around the world. But perhaps the most startling twist in a tangled relationship came Friday, when the World Trade Organization ruled that the European Union could impose as much as $4 billion in penalties on the United States because its tax break for exporters, the trade body said, amounts to an illegal subsidy under international law.

Sucks when the organization you want to manipulate turns on you by being manipulated by another heavyweight group of industrialized nations, doesn't it?

This should be the clearest sign that all countries should mutually agree on a standard schedule of tariffs on manufactured goods, exempt services from any trade or investment treaties (since services are best rendered domestically anyway), and allow zero duty on agricultural products and raw materials.

Further to this, the export of agricultural products should be grounds for prohibition of subsidies to anyone who exports such goods. This prevents taking advantage of the zero duty on food products to "dump" goods in another country whose farmers can't match your cost of production because you get subsidies and they don't.


From: You shall not side with the great against the powerless. | Registered: May 2001  |  IP: Logged
Terry Johnson
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posted 02 September 2002 01:41 AM      Profile for Terry Johnson     Send New Private Message      Edit/Delete Post  Reply With Quote 
I like the idea of zero duties and no subsidies on exported agricultural goods. A combination of import tariffs or quotas and high subsidies on food in Europe and the US has hurt agricultural production in much of Asia, Latin America and Africa, and diverted tax money and consumer dollars from more productive uses.

But I don't think it's as simple a problem to solve as you suggest.

What about Canada's supply management programs, for example? They use import quotas to protect domestic farmers from external competition--and production quotas to protect them from domestic competition. Would you allow them?

It's also hard to define what constitutes a subsidy on exported agricultural goods. That's what most trade disputes have focused upon. How can you subsidise domestic farm production, as you suggest, without interfering in international food trade?

And what about processed goods? Would those food processors who export product be required to buy only from farmers who refuse subsidies? How would you then differentiate between subsidised wheat, say, which can only be consumed domestically, and non-subsidised wheat, which could be exported or sold to domestic processors for export?

Even programs that might seem helpful, such as the US don't-grow-wheat subsidies, have unwanted effects. They simply drive up world wheat prices, which hurts the poor in grain-importing countries.

The WTO has suggested that if countries want to pursue social goals--supporting family farms or propping up rural communities--they instead use targetted income supports which would have the least effect on trade. Instead of supply-management programs, or subsidies for irrigation or freight costs, or price supports for specific crops, give farmers income subsidies regardless of what they produce.

I hate to agree with the WTO but I think that's a beter approach, for both Canadian farmers and for farmers in poorer countries.


From: Vancouver | Registered: Jul 2001  |  IP: Logged
DrConway
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posted 02 September 2002 02:54 AM      Profile for DrConway     Send New Private Message      Edit/Delete Post  Reply With Quote 
Targetted income supports are just an analog of the attempt to use US-style bifurcated policies in developing their stunted welfare state. It doesn't work as efficiently and there's less broad popular support for those kinds of measures.

Contrast the European or Canadian model where health care is guaranteed to all versus the USA's targetting of such medical insurance. In the former countries, such measures enjoy broad popular support because everybody who pays in gets something out.

In the latter model, people perceive that they're paying in for something they get no benefit from.

Same principle applies in targetted subsidies. Richer farmers who can escape the problems related to the economics of agriculture will feel that they're paying in to support (as they see it) "inefficient" farmers.

The current system, regardless of how its mechanics function, sets a target price and sets subsidies to meet that target price regardless of who gets them. (or, in times of shortage, will sell the surplus crop to bring the price into the target range)

I think I see a contradiction in this paragraph, by the way.

quote:
The WTO has suggested that if countries want to pursue social goals--supporting family farms or propping up rural communities--they instead use targetted income supports which would have the least effect on trade. Instead of supply-management programs, or subsidies for irrigation or freight costs, or price supports for specific crops, give farmers income subsidies regardless of what they produce.

First you argue for targetted programs, as does the WTO, and then you argue for what is essentially the current system, since subsidies are granted in order to, in essence, float every farmer's boat.


From: You shall not side with the great against the powerless. | Registered: May 2001  |  IP: Logged
Apemantus
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posted 02 September 2002 03:43 AM      Profile for Apemantus        Edit/Delete Post  Reply With Quote 
From a brief reading of what you say Doc, you seem to disagree on targetting wealth redistribution on the basis that it is unpopular.

Also, what does 'bifurcated' mean?

And why does it not work as efficiently?

Ta.


From: Brighton, UK | Registered: Nov 2001  |  IP: Logged
josh
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posted 02 September 2002 10:07 AM      Profile for josh     Send New Private Message      Edit/Delete Post  Reply With Quote 
Ape:

I don't mean to speak for the good Doctor, who is perfectly capable of speaking for himself, but inasmuch as he's probably still asleep, I will venture a guess.

By bi-furcated, he means non-universal. The lack of efficiency is due to the existence of a two-tier system.

As nearly always, the good Doctor and I are on the same page with respect to the general point.


From: the twilight zone between the U.S. and Canada | Registered: Aug 2002  |  IP: Logged
WingNut
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posted 02 September 2002 10:17 AM      Profile for WingNut   Author's Homepage     Send New Private Message      Edit/Delete Post  Reply With Quote 
Did you guys read the article:

quote:

Conservative critics asserted that the panel had eroded American sovereignty and stepped far beyond its authority.
.
"The whole purpose of the WTO was to lead to the reduction of trade barriers," said Daniel Mitchell, a senior fellow at the Heritage Foundation. "For the WTO to start commenting on whether U.S. tax policy is acceptable is a huge expansion of its authority. You have to ask, where does it stop?"

Suddenly, Dr. Frankenstein realized he no longer controlled his monster.


From: Out There | Registered: Aug 2001  |  IP: Logged
Michelle
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posted 02 September 2002 11:26 PM      Profile for Michelle   Author's Homepage     Send New Private Message      Edit/Delete Post  Reply With Quote 
Yeah, it's only okay when the WTO questions OTHER countries' domestic economic and tax policies, not the US.
From: I've got a fever, and the only prescription is more cowbell. | Registered: May 2001  |  IP: Logged
Terry Johnson
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posted 03 September 2002 01:12 AM      Profile for Terry Johnson     Send New Private Message      Edit/Delete Post  Reply With Quote 
quote:
The current system, regardless of how its mechanics function, sets a target price and sets subsidies to meet that target price regardless of who gets them. (or, in times of shortage, will sell the surplus crop to bring the price into the target range)

That's true, but target prices are set for each individual commodity: soybeans, corn, wheat, etc. That's what makes it trade distorting. If the target price for an individual crop is well above the market price, farmers grow more of it, and that creates surpluses.

Those groaning surpluses in the US and Europe are then dumped on world markets, driving down world prices--and bankrupting farmers in poor countries and in those developed countries like Canada and Australia that aren't so generous in their farm subsidies.

Canada did have similar although less generous farm support programs up until the mid-1990s, when they were reworked to be WTO-green.

quote:
First you argue for targetted programs, as does the WTO, and then you argue for what is essentially the current system, since subsidies are granted in order to, in essence, float every farmer's boat.

In Canada, most farm support--outside the supply-managed sector--is now delivered through NISA, an RRSP-like program. Farmers place a portion of their income into a NISA acocunt, which is then matched by government. When their annual farm income falls below a moving average, they can withdraw from their NISA account. Its advantage is that it's commodity-blind. It doesn't matter whether you grow apples, canola or organic spelt, it's only your farm income that matters to NISA. It's that kind of program the WTO likes.

By targetted, I meant that NISA-like programs should have an income cap, like the RRSP limit. Otherwise, wealthy farmers would benefit disproportionately from the program: they would be able to make proportionately larger deposits into their NISA accounts than smaller farms could when incomes are high, and therefore would draw a greater share of matching government grants.

quote:
Yeah, it's only okay when the WTO questions OTHER countries' domestic economic and tax policies, not the US.

That kinda hits the nail on the head.

I don't think there's anything wrong in principle with the WTO. Trade liberalisation could be of great benefit to developing countries. And a strong WTO could help counter domestic pressure in the US for protectionist trade measures.

But the US is playing a double game. It wants to liberalise those sectors it feels are important, like intellectual property and business services. It wants the WTO to also deal with investment issues, rather than just trade. But the US also wants the freedom to protect its uncompetitive industries.

This isn't a straightforward right-left debate. In the US, much of the right is dead set against participation in any international institutions that limit US government actions. Think Buchanan. And in the developing world, many countries see a strong WTO, and a reduction in protectionism in Europe and the US, as a key element in growing their economies.


From: Vancouver | Registered: Jul 2001  |  IP: Logged
DrConway
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posted 03 September 2002 02:37 AM      Profile for DrConway     Send New Private Message      Edit/Delete Post  Reply With Quote 
Well, as I said, the way to keep any kind of subsidy system going without screwing up Third World economies is to prohibit farmers from obtaining subsidies if their crops are intended for export. Since farmers are required to go through the agricultural marketing boards for domestic produce sales, it'd be an easy enough matter to conclude that anyone who isn't selling through the domestic board is selling for export, and thus terminate his or her subsidies.
From: You shall not side with the great against the powerless. | Registered: May 2001  |  IP: Logged
Terry Johnson
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posted 03 September 2002 02:57 PM      Profile for Terry Johnson     Send New Private Message      Edit/Delete Post  Reply With Quote 
quote:
Since farmers are required to go through the agricultural marketing boards for domestic produce sales, it'd be an easy enough matter to conclude that anyone who isn't selling through the domestic board is selling for export, and thus terminate his or her subsidies.

In Canada, agricultural marketing boards only exist for some commodities. And some, like the wheat board, are primarily exporters.

But assume you set up domestic marketing boards for all commodities. And you also have some form of price supports for domestic sales. That would still be trade-distorting.

Let's say you use price supports to help domestic corn growers. They would grow more corn than they would without subsidies. That would be good for corn growers in Canada--but for corn growers in other countries, it would limit their export possibilities--and depress world prices.

The same thing would happen if you extended Canada's supply management system to cover additional commodities.

And then you have a host of complications when you come to the food processing industry. Say you use subsidies to create artificially high prices for raw commodities. Domestic processors, then, would find it difficult to compete. Unless you subsidise them, too. Which Canada now does for supply-managed goods--food processors can buy dairy, eggs and poultry at a discount to the domestic price to compensate for the price supports given to farmers.

You can't neatly separate domestic and export farm production. Subsidise one and you affect the other.

A good example is Japan. To protect its domestic rice growers, it sets domestic rice prices at a ridiculously high level--and sharply limits imports. That's precisely the kind of trade-distorting subsidy by rich countries that hurts farmers in developing countries. It means rice exports that might have gone to Japan go elsewhere instead.


From: Vancouver | Registered: Jul 2001  |  IP: Logged
DrConway
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posted 03 September 2002 09:57 PM      Profile for DrConway     Send New Private Message      Edit/Delete Post  Reply With Quote 
Here's the converse, though. Murray Dobbin writes in his (somewhat dated) analysis of the Reform party that the first thing that got him worried about Preston Manning et al was that the Reform platform called for "competitive agricultural prices." That means a cheap food policy, which devastates individual farmers in favor of agribusiness, who can use monopoly pricing power to escape the problems associated with the economics of agriculture.

I could score a cheap rhetorical point by asking you if you feel like vanquishing the family farm by taking away subsidies, but I won't.

Instead I will note that nothing in my agricultural price support plus zero duty idea requires the nonimportation of agricultural goods by industrialized nations.

It simply recognizes that Third World countries are, today, all too often undercut by farming in industrialized nations at a lower cost of production and, to add insult to injury, their people are often hired as agricultural laborers to grow luxury crops for export back to industrialized nations.

Examples include coffee and sugarcane.

Third World countries should be able to produce for domestic needs without fear of industrial nations undercutting them.

This is why it is necessary to keep the carrot-and-stick system of subsidies in place, because it provides a lever via which governments can entice farmers not to overproduce for export.

And finally, nothing in the subsidy policy I promote requires the target price set by the government to be significantly out of whack from the world price.

In a concession to you, the free-marketer in this one, I would suggest allowing the price support board to set the target price as equivalent to the world price at the time of decision, backing off the average freight cost to Third World countries. This keeps food relatively cheap for the consumer, and since the freight is taken out, the cost at the farmgate effectively reflects the price to Canadian food processors.

(The cynic in me suspects you would argue against fixed exchange rates on the grounds that that "distorts trade", too - never mind that the exchange rate sets the terms of trade and thus a fixed exchange rate stabilizes the terms of trade between nations and thus becomes a more reliable indicator of when trade has a basis that benefits both parties or not.)


From: You shall not side with the great against the powerless. | Registered: May 2001  |  IP: Logged
Terry Johnson
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posted 04 September 2002 12:31 AM      Profile for Terry Johnson     Send New Private Message      Edit/Delete Post  Reply With Quote 
quote:
I could score a cheap rhetorical point by asking you if you feel like vanquishing the family farm by taking away subsidies, but I won't.

Good. I'd probably fall for it and say something like, why the hell should the tax dollars of working class Canadians prop up families who have average assets, less liabilities, of $1 million or more?

quote:
Third World countries should be able to produce for domestic needs without fear of industrial nations undercutting them.

We agree on that.

But they should also be able to sell their goods to consumers in the developed countries without being shut out of those markets by tariffs or import quotas.

quote:
I would suggest allowing the price support board to set the target price as equivalent to the world price at the time of decision, backing off the average freight cost to Third World countries.

We could agree on that, too. But you don't need a marketing board to do that. The world price less freight would equal the domestic price if there were no domestic subsidies. That is, presuming the target price changed in line with changes in world prices.

I'd probably say something about fixed exchange rates as well, just to be argumentative, but I actually don't have an opinion on them. My first impression is that there's little difference between a fixed or floating exchange rate. With a fixed rate, instead of the currency changing in value, the terms of trade would, as you note. But fixed rates would make the process less volatile, which might outweigh any disadvantages. At least that's my impression. But it's not something I know much about.


From: Vancouver | Registered: Jul 2001  |  IP: Logged
DrConway
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posted 04 September 2002 12:40 AM      Profile for DrConway     Send New Private Message      Edit/Delete Post  Reply With Quote 
However, by definition, if there are no subsidies, the "world price" of an agricultural good cannot be different from the domestic price, or farmers would sell into the world market and not the domestic one, thus forcing the domestic price up to equilibrium with the world price.
From: You shall not side with the great against the powerless. | Registered: May 2001  |  IP: Logged
Terry Johnson
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posted 04 September 2002 01:16 AM      Profile for Terry Johnson     Send New Private Message      Edit/Delete Post  Reply With Quote 
That was my point.

If you want to help farmers by artificially propping up domestic prices, you need to restrict imports. (Canada used to do that for all wheat not used as feed--grain processors in Canada were dinged almost twice the world price for the wheat they bought, right up until the late 1980s, and forbidden from buying cheaper wheat elsewhere). But you don't need a price-setting marketing board to establish the world price as a target price because the markets do that.

Right? Or maybe I'm missing something.

[ September 04, 2002: Message edited by: Terry Johnson ]


From: Vancouver | Registered: Jul 2001  |  IP: Logged
DrConway
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posted 04 September 2002 02:15 AM      Profile for DrConway     Send New Private Message      Edit/Delete Post  Reply With Quote 
Well, you're the one telling me the sky's gonna fall in if a comprehensive marketing-board setup with subsidies is developed in order to get farmers to sell into the domestic market rather than the world market.

Every industrial nation has experienced the problems of agriculture. It suffers from a disconnect between productivity and total revenues due to inelastic demand on the part of the consumers of food.

Why do you think every country, even Third World countries (when they're not being thumped by the IMF), subsidizes or otherwise props up its domestic agricultural base?

Otherwise what happens is farmers can't make a buck, and the only guys that can are, as I said before, big corporations that do the same thing as marketing boards do, only they do it by exerting monopoly pricing power over the product, and capturing the surplus thereof. In effect, consumers still don't benefit, and instead of a redistribution across a diffuse network of individually-owned farms, the redistribution is from many people to one big company.

It has been mooted elsewhere here on babble that nobody gets rich from farming. Those farmers you see driving Cadillacs went out with the 1970s, after food prices stabilized and inflation receded.


From: You shall not side with the great against the powerless. | Registered: May 2001  |  IP: Logged
Apemantus
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posted 04 September 2002 04:14 AM      Profile for Apemantus        Edit/Delete Post  Reply With Quote 
I just want to ask about this comment, if I may:

quote:
inelastic demand on the part of the consumers of food.

Is this really true? It seems that consumers in the West have been consuming ever more food over the past 50 years, and their choice has broadened rather a lot. In addition, with the huge numbers of consumers if we look at the world as one market, many of whom are not yet getting their demand, I just wonder whether inelastic demand is true? Maybe I am misunderstanding what it means?


From: Brighton, UK | Registered: Nov 2001  |  IP: Logged
WingNut
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posted 04 September 2002 07:41 AM      Profile for WingNut   Author's Homepage     Send New Private Message      Edit/Delete Post  Reply With Quote 
Inelastic means the demand for food does not change with price. I am certain, in this context, that would mean food staples such as grains.
From: Out There | Registered: Aug 2001  |  IP: Logged
Apemantus
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posted 04 September 2002 09:29 AM      Profile for Apemantus        Edit/Delete Post  Reply With Quote 
Ok, but how true is it given that meaning - if certain staples drop in price, they are eaten more, if they rise, they are eaten less. Most people don't have rigid diets that they don't divert from, certainly in the West.
From: Brighton, UK | Registered: Nov 2001  |  IP: Logged
Terry Johnson
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posted 04 September 2002 04:14 PM      Profile for Terry Johnson     Send New Private Message      Edit/Delete Post  Reply With Quote 
quote:
Otherwise what happens is farmers can't make a buck, and the only guys that can are, as I said before, big corporations that do the same thing as marketing boards do, only they do it by exerting monopoly pricing power over the product, and capturing the surplus thereof.

That's true. But there are better ways of solving the problem.

Farmers can get better prices for their products when they market them collectively. You don't need to subsidise farmers directly--or indirectly by giving their marketing boards price-setting powers--to solve this many sellers/one buyer dilemna. Take the Canadian Wheat Board: it is unsubsidised, but manages to fetch a better price for wheat than farmers could individually simply because it is a single, collective seller.

quote:
It has been mooted elsewhere here on babble that nobody gets rich from farming. Those farmers you see driving Cadillacs went out with the 1970s, after food prices stabilized and inflation receded.

To evaluate farm income you first need to define what's a farm. The great majority of farms in the StatsCan definition, for example, are hobby operations; it includes virtually every acreage that sells a couple cows or a few bushels of vegetables as a farm. Statistics, I'm trying to say, underestimate the economic situation of commercial farm operations.

And while farm incomes, even for large commercial operations, are generally modest and supplemented by off-farm income, most farmers are sitting on a mountain of equity. Last time I looked at the figures--in 1995--a typical family grain farm on the Prairies had net assets of more than $700,000. And dairy farms typically have more than $1 million in the value of quota alone.

One of the problems with subsidies, in fact, is that they are quickly capitalised by existing farm operations. That makes it difficult for younger farmers to enter the industry without taking on crippling debt loads.


From: Vancouver | Registered: Jul 2001  |  IP: Logged
ronb
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posted 04 September 2002 05:49 PM      Profile for ronb     Send New Private Message      Edit/Delete Post  Reply With Quote 
I'm just wondering something, because I never see it mentioned in this debate... not that I follow the agricultural subsidy debate THAT closely...

A nation's agriculture is not simply a collection of commodities, it's also a vital strategic asset. It seems counter-intuitive to expect nations to sacrifice control of so basic a need as the abilty to feed its citizens. So, while I enjoy the delicious irony , can the US be faulted for protecting the long term health of its agriculture?


From: gone | Registered: Jan 2002  |  IP: Logged
WingNut
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posted 04 September 2002 06:42 PM      Profile for WingNut   Author's Homepage     Send New Private Message      Edit/Delete Post  Reply With Quote 
quote:
Ok, but how true is it given that meaning - if certain staples drop in price, they are eaten more, if they rise, they are eaten less. Most people don't have rigid diets that they don't divert from, certainly in the West.

Well, yes, if the cost of rice increases people may eat more wheat. But the basic premise, that demand for food remains constant, still applies. Consider it from the perspective of someone in a developing country where rice is the only staple available. The demand for rice will remain constant regardless of the price. This doesn't mean that if the price rises signifigantly, merchants sell the same amount. It could mean merchants sell less but more people are going hungry. Demand does not always translate into sales.

From: Out There | Registered: Aug 2001  |  IP: Logged
Terry Johnson
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posted 04 September 2002 07:06 PM      Profile for Terry Johnson     Send New Private Message      Edit/Delete Post  Reply With Quote 
Dr. Conway could probably explain this better, but prices of staple foods aren't perfectly inelastic, but relatively inelastic: increase wheat prices by 50% and consumption will likely fall, but by much less than 50%.

That's because we need to eat, for one. And also because there are few appropriate substitute goods. If you have eaten bread all your life, you don't effortlessly shift to rice or corn with every increase in wheat prices. It's, well, a matter of taste.

(As an interesting, distantly related aside, I was reading Braudel's (sp?) History of Everyday Life in the 16th to 18th Centuries, and was amused to learn that because the price of bread was often set by diktat, bakers responded to changes in the price of wheat by changing the size of the loaf.

[ September 04, 2002: Message edited by: Terry Johnson ]


From: Vancouver | Registered: Jul 2001  |  IP: Logged
DrConway
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posted 04 September 2002 10:33 PM      Profile for DrConway     Send New Private Message      Edit/Delete Post  Reply With Quote 
I should clarify that inelasticity of demand does indeed refer to relative insensitivity to price changes.

quote:
Dr. Conway could probably explain this better, but prices of staple foods aren't perfectly inelastic, but relatively inelastic: increase wheat prices by 50% and consumption will likely fall, but by much less than 50%.

That's because we need to eat, for one. And also because there are few appropriate substitute goods. If you have eaten bread all your life, you don't effortlessly shift to rice or corn with every increase in wheat prices. It's, well, a matter of taste.


Precisely.

As well, you have illuminated a subclass of goods whose name I forget now, but let me cheat and find a Microeconomics text and I'll get back to you - whose property is that they are nonsubstitutable, generally the most widely available, and generally the cheapest (on a relative basis) in their class. These goods have a peculiar characteristic wherein since demand for them is inelastic, when the price goes up the demand for that good can appear to increase, which is not normally what you expect to happen.

The answer is that people have found the prices of other imperfect substitutes for that good to have increased as well, so they switch to the cheapest good, which is now relatively more expensive than it was before. Thus, demand for it is inelastic but increases.


From: You shall not side with the great against the powerless. | Registered: May 2001  |  IP: Logged
Apemantus
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posted 05 September 2002 03:32 AM      Profile for Apemantus        Edit/Delete Post  Reply With Quote 
Ok, thanks for all that. Next question: If all global food markets were opened up to free trade, and the only regulation was, say, price caps, by a board, to ensure monopolies did not unfairly push prices up, or indeed, monopolies were prevented by some global monopolies and mergers commission, then wouldn't that suffice? Surely opening up all food markets to becoming free trade, the price would fall.

Then, I presume, the argument goes that that depresses prices enough that many small scale farmers cannot survive (though would that be worse than now in the developing world I wonder?), and so big corps move in, and theoretically would push prices up? SO as long as that latter is prevented (monopolies), what is the problem?

Thanks, I know I am probably being stupid but I need this one explained in simple terms.

Ta.


From: Brighton, UK | Registered: Nov 2001  |  IP: Logged
Terry Johnson
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posted 05 September 2002 03:57 PM      Profile for Terry Johnson     Send New Private Message      Edit/Delete Post  Reply With Quote 
When it comes to international trade in food, the biggest problem today isn't that agri-businesses have pushed prices up--it's that subsidies to help farmers in Europe and the US have created surpluses that are flooding markets in developing countries and are keeping prices artificially low.

That's good for consumers in the food-importing countries. But it's not so good for farmers. In Mexico and Central America, for example, cheap American corn is stealing away local markets from peasant farmers.

At the same time, Europe and the US have put in place tariffs and import controls on agricultural products that they don't export and can't produce cheaply. Like sugar in the US. So farmers in developing countries get squeezed on two sides: world prices for grain and other products are depressed by European and US subsidies, and if they try instead to produce alternate goods for export, they run into tariff walls.

When those farmers can't make a living farming, they pour into the cities to look for work; or they get uppity. This process would have taken place anyways. With increases in agricultural productivity, fewer farmers can produce more food. But withut the dumping/tariff squeeze, it would take place at a slower pace and developing countries would be able to better control it.

Dr. Conway and I differ on the solution. I think the developed countries should simply get rid of subsidies for food production, and encourage collective marketing institutions, like the wheat board, to counter the control over food markets exerted by agri-business.

But then, I think we also differ on what we would consider appropriate trade in agriculture. I like the idea of trade. I think it makes perfect sense for countries to specialise in producing those products they're good at. So I don't see anything wrong with Canada exporting wheat and beef, and importing fruit and fresh vegetables. Trade, I think, erodes petty nationalism and national insularity, and when organised on a global scale, promotes international solidarity between workers. Cue the Internationale.

But there are good (but incorrect, of course) arguments to be made for nations to promote agricultural self-sufficiency instead of counting on trade. As RonB noted earlier, food security is often seen as a question of national security. And that certainly is one of the motivations for European and US policy.


From: Vancouver | Registered: Jul 2001  |  IP: Logged

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