Detrimental international repercussions of domestic agricultural policies

The price support policies used by many countries for social, political, strategic or other domestic reasons have a built-in tendency to generate supplies in excess of demand at the prices which the support programmes attempt to maintain. Because of this, and because policy aims are frequently mutually contradictory, import requirements are restricted while export availabilities increase. This limits the opportunities for normal commercial trade, regardless of the comparative advantage of efficient exporting countries. It also leads to periodic surpluses, which can only be disposed of through trade arrangements on non-commercial terms and the use of special export aids. These further aggravate trade problems and provide an additional stimulus towards protective measures to insulate national producers from world markets. National policies have aggravated the tendency towards the accumulation of surpluses in developed countries where demand for foodstuffs rises slowly and where improvements in agricultural techniques have been rapid and resource mobility low. Stock policies to permit constant short-term national adjustments to meet changing conditions are needed. In the absence of a common base for the coordination of these measures, the burden of adjustment falls largely on the exporting countries.
The world's agricultural system is paradoxically producing more than ever, at a time when entire nations suffer from hunger. Deep global recession and slow recovery, in combination with a period of unusually bountiful harvests in most of the major farm countries, are responsible for the problem, and pressure grows in Third World nations for internal changes that will make them less reliant on foreign food sources.

Biotechnological innovations that create substitutes for cash crops like cocoa and coffee threaten to eliminate the livelihood of millions of Third World agricultural workers. Vanilla cultured in laboratories costs a fifth as much as vanilla extracted from beans, and thus jeopardizes the livelihood of tens of thousands of vanilla farmers in Madagascar. About 100,000 Kenyans make a living on small plots of land growing pyrethrum flowers, the source of a comparatively environmentally safe insecticide of which the USA has been the largest importer. The U.S. Department of Commerce, has awarded $1.2 million to a biotechnology firm to engineer pyrethrum genetically. Industrial countries will soon be able to synthesize all the pyrethrum they need and undersell Kenyan farmers.

As a result of EU and GATT trade liberalization measures, the UK's banana consumption has doubled in the period 1984-94. The average Briton now eats 10 kilograms of bananas a year, peaking 560,000 tonnes in 1993, all imported from developing and small island countries of The Windward Island, Jamaica, Belize, Suriname, Costa Rica, Guatemala, Honduras, Colombia, Ecuador, Cameroon and Ivory Coast. The effect on these countries of near doubling the production has been clearance of Caribbean forests with loss of biological diversity, soil erosion through cultivating steep hillsides, and increased dependence on toxic agrochemical inputs. The high ecological costs are now leading to economic hardship and social unrest. For example, Honduran banana worker were given compensation payments in 1993 for the use of the chemical DBCP on bananas; workers from Costa Rica claim it has made them sterile, in a case still pending in US courts. A Costa Rican university study claims that banana production along the Atlantic coast has caused deforestation, water pollution, the transformation of peasant farmers into agricultural labourer, the creation of all-male villages, prostitution, alcoholism, drug abuse and family disintegration. The effect of new tariff quotas imposed on banana imports by the EU in 1993 has only resulted in the laying off of thousands of workers, wage cuts and social hardship for small-scale farmers.

Problem Type:
F: Fuzzy exceptional problems
Date of last update
01.02.2001 – 00:00 CET