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Where better to start pondering the global politics of food than in China, some 2500 years ago? The adviser to Duke Wen of Wei noted that the vagaries of farming caused paradoxical problems:
If grain is very expensive, consumers suffer and their families are scattered and emigrate. If grain is very cheap the producers suffer and the state is impoverished. Whether the price is very high or very low, the prosperity of the states suffers
Fast forward to eighteenth century France. Philosophers were still grappling with the way grain production was affected by the weather’s annoying inconsistency. Leading French Physiocrat Francois Quesnay in 1757 described how a strong harvest created such a superabundance of grain that prices collapsed and farmers faced ruin, and proposed all sorts of ingenious state-led schemes to manage the problem.
And so to today, where supermarket chains around the world manage to bring to our tables all round the year food from around the planet. Fresh raspberries from Kenya and lamb’s lettuce from Morocco with one’s Christmas dinner in icy Edinburgh? Yum!
More than that. Millions of people in Western societies scarcely cook food at all, preferring to heat up something pre-prepared bought on the way home from work. What goes on in the countryside and how food is produced is now a complete mystery to many modern city-dwellers. For great sections of humanity in the better-off parts of the planet, the earlier tight if not existential links between food, climate, seasons and painful work have been broken by technology and human ingenuity.
My own first encounter with this huge subject in a diplomatic context came in 1986. I was the Foreign Office speechwriter. Foreign Secretary Sir Geoffrey Howe decided to use the opulent (and nourishing) surroundings of the Lord Mayor’s Banquet to deliver to the London diplomatic corps a speech about the world’s food problems. I worked up for him the following passages that pointed up how competing subsidy schemes were creating vast food stockpiles in the USA, Europe and Japan:
The first paradox is this. More plus more can equal less. It is hard to accept, but true. Too much food in some parts of the world can simply aggravate food shortages in poorer countries. Why? Because subsidised food surpluses on world markets depress prices. They make local production uneconomic and they undermine self-reliance. And so they compound the dire effects of droughts and other disasters.
The second paradox is the way in which NATO taxpayers, who spend heavily on defence in response to the Soviet and Warsaw Pact arms build-up, simultaneously subsidise the Soviet Union and her allies by selling them surplus food and drink at knockdown prices. The diet of detente indeed!
… We rightly devoted much time to thinking about the arms race, but the international community must think too about the reckless “subsidy race” in food … Sensible agricultural policies should help the laws of supply and demand work better, not subvert them.
Sir Geoffrey was right. And since the mid-1980s a lot has changed for the better. The threat of famine has decreased in many parts of the world. There are no more EU butter mountains and wine lakes. World trade in agricultural products is much freer. But still, of course, not free. The world’s most prosperous markets still robustly defend their farming sectors from direct competition from farmers in Africa and other developing markets. We pay higher prices for food than we need to.
One of the noisiest supposedly progressive demands these days is for ‘Fair Trade’. It’s obviously unfair (the claim goes) that farmers in developing countries get so little of the money that their products eventually sell for in Western shops.
But is that really unfair? What are you in fact buying when you choose a smart box of chocolates in a Western shop? Those chocolates indeed contain a good dose of cocoa products. But you’re also paying something towards the costs of processing the cocoa and shipping it round the world; the groovy teams in London designing the box; the Swiss experts who invent enticing new chocolate flavours; the Belarusian software that makes all this work smoothly; the wages of the people who have driven the box to the shop; the electricity bill of the shop, and the wages of the person behind the till, and so on. The actual cost of the original food ingredients is only a fraction of the value and integrated cleverness that the box of chocolates represents.
In fact the box of chocolates exists at all only because the genius of the Invisible Hand of market forces brings all these factors together and costs them as compared with each other with incredible precision. There is no a priori reason to think that the farmers who grow the cocoa beans are any more ‘unfairly’ treated than the Belarusian software engineers who help everyone in the production chain get the cocoa into a form that consumers want to buy. Each gets a tiny slice of the money paid for each chocolate box sold. Yes, the farmers who grow the cocoa are not well off. But that’s because their societies have not yet moved strongly into the more creative and rewarding parts of the global value-chain.
Anyone drafting a keynote speech on world food problems now might start by noting that the politics and economics of food do not sit easily with traditional Western categories of Left and Right. It’s bad to subsidise rich farmers! Localism is good! It’s madness to carry food (and mineral water?!) round the world in aircraft. It’s madness not to let farmers in developing countries compete freely!
When and why should markets do their job without state micromanagement? Stable relationships between growers and consumers and climate and baffled policy-makers are as elusive today as they were to Duke Wen of Wei, all those centuries ago.
The views presented in this article are the author’s own and do not necessarily represent the views of any other organization.
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Food and Diplomacy
May 6, 2015
Where better to start pondering the global politics of food than in China, some 2500 years ago? The adviser to Duke Wen of Wei noted that the vagaries of farming caused paradoxical problems:
If grain is very expensive, consumers suffer and their families are scattered and emigrate. If grain is very cheap the producers suffer and the state is impoverished. Whether the price is very high or very low, the prosperity of the states suffers
Fast forward to eighteenth century France. Philosophers were still grappling with the way grain production was affected by the weather’s annoying inconsistency. Leading French Physiocrat Francois Quesnay in 1757 described how a strong harvest created such a superabundance of grain that prices collapsed and farmers faced ruin, and proposed all sorts of ingenious state-led schemes to manage the problem.
And so to today, where supermarket chains around the world manage to bring to our tables all round the year food from around the planet. Fresh raspberries from Kenya and lamb’s lettuce from Morocco with one’s Christmas dinner in icy Edinburgh? Yum!
More than that. Millions of people in Western societies scarcely cook food at all, preferring to heat up something pre-prepared bought on the way home from work. What goes on in the countryside and how food is produced is now a complete mystery to many modern city-dwellers. For great sections of humanity in the better-off parts of the planet, the earlier tight if not existential links between food, climate, seasons and painful work have been broken by technology and human ingenuity.
My own first encounter with this huge subject in a diplomatic context came in 1986. I was the Foreign Office speechwriter. Foreign Secretary Sir Geoffrey Howe decided to use the opulent (and nourishing) surroundings of the Lord Mayor’s Banquet to deliver to the London diplomatic corps a speech about the world’s food problems. I worked up for him the following passages that pointed up how competing subsidy schemes were creating vast food stockpiles in the USA, Europe and Japan:
The first paradox is this. More plus more can equal less. It is hard to accept, but true. Too much food in some parts of the world can simply aggravate food shortages in poorer countries. Why? Because subsidised food surpluses on world markets depress prices. They make local production uneconomic and they undermine self-reliance. And so they compound the dire effects of droughts and other disasters.
The second paradox is the way in which NATO taxpayers, who spend heavily on defence in response to the Soviet and Warsaw Pact arms build-up, simultaneously subsidise the Soviet Union and her allies by selling them surplus food and drink at knockdown prices. The diet of detente indeed!
… We rightly devoted much time to thinking about the arms race, but the international community must think too about the reckless “subsidy race” in food … Sensible agricultural policies should help the laws of supply and demand work better, not subvert them.
Sir Geoffrey was right. And since the mid-1980s a lot has changed for the better. The threat of famine has decreased in many parts of the world. There are no more EU butter mountains and wine lakes. World trade in agricultural products is much freer. But still, of course, not free. The world’s most prosperous markets still robustly defend their farming sectors from direct competition from farmers in Africa and other developing markets. We pay higher prices for food than we need to.
One of the noisiest supposedly progressive demands these days is for ‘Fair Trade’. It’s obviously unfair (the claim goes) that farmers in developing countries get so little of the money that their products eventually sell for in Western shops.
But is that really unfair? What are you in fact buying when you choose a smart box of chocolates in a Western shop? Those chocolates indeed contain a good dose of cocoa products. But you’re also paying something towards the costs of processing the cocoa and shipping it round the world; the groovy teams in London designing the box; the Swiss experts who invent enticing new chocolate flavours; the Belarusian software that makes all this work smoothly; the wages of the people who have driven the box to the shop; the electricity bill of the shop, and the wages of the person behind the till, and so on. The actual cost of the original food ingredients is only a fraction of the value and integrated cleverness that the box of chocolates represents.
In fact the box of chocolates exists at all only because the genius of the Invisible Hand of market forces brings all these factors together and costs them as compared with each other with incredible precision. There is no a priori reason to think that the farmers who grow the cocoa beans are any more ‘unfairly’ treated than the Belarusian software engineers who help everyone in the production chain get the cocoa into a form that consumers want to buy. Each gets a tiny slice of the money paid for each chocolate box sold. Yes, the farmers who grow the cocoa are not well off. But that’s because their societies have not yet moved strongly into the more creative and rewarding parts of the global value-chain.
Anyone drafting a keynote speech on world food problems now might start by noting that the politics and economics of food do not sit easily with traditional Western categories of Left and Right. It’s bad to subsidise rich farmers! Localism is good! It’s madness to carry food (and mineral water?!) round the world in aircraft. It’s madness not to let farmers in developing countries compete freely!
When and why should markets do their job without state micromanagement? Stable relationships between growers and consumers and climate and baffled policy-makers are as elusive today as they were to Duke Wen of Wei, all those centuries ago.
The views presented in this article are the author’s own and do not necessarily represent the views of any other organization.
