This piece ran in yesterday's NY Times:
Farm Issues Stall Talks for a Deal on Trade
By EDMUND L. ANDREWS
WASHINGTON, Nov. 9 - Any hope of advancing a global trade pact this year all but evaporated on Wednesday, as negotiators from around the world said that they were at an impasse over agriculture.
The immediate cause of the breakdown was the refusal of European leaders to offer more than modest reductions in their tariffs on farm products ranging from beef and sugar to dairy products and fruit.[snip]
What hits you in the eye here? Why is it that the world's pro-free trade governments are so reluctant to lower the barriers on food?
Trade negotiators are doubtful that European leaders will offer greater access to their protected farm markets, even if talks resume next spring.
Peter Mandelson, the European Union's chief trade negotiator, is already under sharp attack from the French president, Jacques Chirac, for offering too many concessions. [snip]
Some negotiators were more sympathetic to Europe, contending that the United States was offering less than Europe in reducing farm subsidies. [snip]
Gene Sperling, a top economic adviser to President Bill Clinton who endured the collapse of trade talks in Seattle in 1999, said American leaders need to pay more attention to the people whose lives and jobs are disrupted by more open trade.
"If you care about progress in market opening, you are going to have to have more ambitious compacts for sharing the downside costs as well as the benefits of open trade," Mr. Sperling said. "As economists, we talk about how the benefits of lower prices are broadly shared. But the costs are very heavily concentrated."
Think branding. A lot of capital has been tied up `consolidating' the manufacturing markets for the past twenty years. Once they finish putting a stranglehold on that market they will likely turn to the food market...and real estate after that.
How many major automobile manufacturers are there? Then consider how many computer manufacturers there are, how many operating system manufacturers...you can count the major players (that control a majority of the market share) on one hand
It's all about market share good citizen and the major players are sewing it up all over the world.
The next thing to consider is why farm subsidy programs exist in the first place. When 99% of everything you buy at the supermarket comes from one or two megaplayers farm subsidies will be irrelevant but until then try and wrap your head around `free market' farming.
Not all crops pay the same. Farmer's interested in maximizing their profits would naturally focus on growing the most profitable crops their climate and soil conditions would permit.
Which would produce an abundance of some crops and shortages of others, skewing the market and destroying margins in the process. We may have tomatoes coming out of our ears but what of corn or wheat?
Savvy farmers with large spreads would hedge their bets by producing a variety of crops placing smaller operations at a disadvantage by having to consistently out guess their larger competitors.
As the smaller operations fold the chances are good they won't be bought out by their competitors but by developers, further reducing capacity and shrinking what is brought to market.
The only way to save us from the famine this would produce is if the mega players stepped in quickly to buy out their competitors. But the profit potential of a good famine may cause them to drag their heels, wear their competitors down a little.
Allowing poor nations access to the markets of rich nations isn't about sharing the wealth. Free markets would shift foreign farmers' focus from producing crops for the local population to producing what the highest paying markets is seeking...resulting in famine and civil unrest.
Civilization is only nine meals deep. Probably less than that if you consider that some of us are already skipping one or two a day as it is.
It is suicidal for a government to permit its farmers to place their own interests ahead of the native population. In this respect free markets and food don't mix.
The farm subsidy program manages food production. Remove that control at your own risk.
Once the crop is in the ground the deed is done. Very few climates allow you to plow under the radishes to plant turnips if the market turns around.
That said good citizen there is very little `free' in our free market system primarily due to the destabilizing effects of self-interest on the economy. The whole damn thing is carefully managed to the point where destabilizing elements (competition) is ruthlessly rooted out.
This is what creates a stable civilization. Unfortunately our civilization is not being managed for the benefit of all of its members. It is managed to benefit the managers but that's a separate issue.
Thanks for letting me inside your head,
Gegner