International trade in agricultural products remains one of the most regulated economic sectors in the world today. Agriculture was not included in the first rounds of GATT agreements. Regional agreements, notably in Europe, have tended to make matters worse by giving expression to interventionist and protectionist tendencies and entrenching « managed trade » policies to the detriment of genuine free trade. New controversies surrounding genetically modified organisms and the use of antibiotics or hormones on farm animals are complicating the matter even more. Trade in agriculture has now become an almost metaphysical controversy. Debate takes place, for example, over the merits of products that express local identity versus those that reflect a uniform worldwide taste. But we have to wonder if some of the debaters aren’t really old-fashioned protectionists under a new guise.
Opponents of free trade in agriculture have recently found a new champion in the person of José Bové, spokesman for the farmers’ union in France, the Confédération paysanne. Bové quickly became an international star after forcefully dismantling a McDonald’s restaurant under construction two years ago. He went to jail for three weeks and later went on to protest against the WTO and globalization in Seattle. He attracted attention again more recently at the Porto Alegre « anti-globalization » summit, where he was arrested with others for destroying experimental crops at a Monsanto laboratory.
Bové’s rhetoric is thick with economic fallacies and is essentially an emotional appeal to nostalgic values in defence of protectionist policies. In a nutshell, he believes that some regions of the world (i.e., the U.S.) are taking advantage of very efficient but dangerous methods of agricultural production to flood the world with their cheap produce, leading to the destruction of local farming and local traditions. Public health catastrophes and « lousy food » also result. Movements of farmers like the one he heads « are challenging the attempt by some regions to control agriculture for the whole world. » (From an interview in Le Devoir, November 23, 2000)
It is no surprise that McDonald’s has become the symbol of this global assault and standardization. But how exactly does the restaurant chain succeed in « imposing » its products? Nobody is forced to eat Big Macs. It seems McDonald’s is simply offering a desirable product at an affordable price for millions of people around the world. What Bové is really attacking, beyond this symbol of the foreign invader, is the freedom of his countrymen to decide what food to eat.
Consumers in captive markets are never well served. They invariably have less choice and must pay more for what is on offer. On the other hand, free trade increases choice, fosters competition, forces producers to better answer consumers’ needs, brings down prices, and makes everybody richer. This standard economic argument in favour of free trade has never been disproved.
Bové has become prominent because in addition to his fight on behalf of French farmers, he has been trying to rally farmers’ lobbies around the world and is reaching out to other protest groups opposed to globalized trade. He bemoans the fact that « self-sufficiency » has been destroyed and that small farmers in the Third World cannot compete with cheap food imported from rich countries. But the efficiency and productivity of First World producers is not a threat to the economic development of poor countries; on the contrary, it can only be beneficial.
When cheap foreign food is sold in poor countries, the citizens of those countries can either buy more food with their meagre income, or buy the same amount of food and have more money left to spend on other amenities that will increase their standard of living. Overall, consumers have either more money in their pockets or more food in their belly, and there is no question that they benefit from this.
What about farmers? As consumers of food, they benefit like everyone else. As producers, they can invest and adopt new techniques to stay competitive against imports. Or they can switch to other crops for which there is a new demand not met by imports. Or, if they are still too inefficient to prosper in agriculture, they can leave the fields and switch their capital and manpower to other activities. All three choices will ultimately lead to the production of a greater amount of food and goods, in addition to the greater amount imported. This is indeed how rich countries transformed themselves and saw their agriculture, as well as their manufacturing and service industries, become more productive.
Pre-industrial communities that were self-sufficient in terms of food production were also invariably poor. These farmers would not be productive enough to keep alive the billions of consumers on the planet today. Returning to the self-sufficiency advocated by Bové would mean the starvation of whole populations in rich countries. If applied in the Third World, it would preclude all efforts to bring economic development to these countries. The image of the small independent farmer selling his goods to his neighbours is a thing of the past, and thankfully so.
Michel Kelly-Gagnon est président de l’IEDM.