Nader idea wouldn't help farmers
August 20, 2001
by Dennis T. Avery
This article appeared in BridgeNews on August 13, 2001.
President Bush attempts to get negotiating authority for a new round of trade liberalization, activist Ralph Nader's organization, Public Citizen, claims the North American Free Trade Agreement unleashed a "seven years' war" on the world's farmers and ranchers.
The evidence? World farm prices have gone into a slump since NAFTA went into effect in 1994.
How did an agreement that lets U.S. and Canadian farmers supply some of Mexico's rising food needs trigger a worldwide slump in farm prices? It didn't. Public Citizen is overlooking things that did produce the current farm-price slump, including: farm trade barriers preventing commodity exports to China and India, the 1997 Asian financial collapse that temporarily halted growth in Asian feed demand, and farmers' inevitable tendency to compete with each other.
The most dangerous thing about the Naderites' NAFTA report is their proposed solution: a virtual end to world farm exports.
Nader's folks say that "countries must be allowed to give priority to sustaining family farms and achieving food security for their populations." Under that guideline, the only farm importers would be desert countries like Saudi Arabia, Egypt and Algeria.
All others would invest in irrigation, greenhouses and whatever else was needed to achieve high-cost food self-sufficiency for their overtaxed citizens.
Nader's no-NAFTA solution would mean cutting farm output from the productive, safe farmlands in the United States, Canada, Europe and Argentina by perhaps one-third. Presumably U.S. prices for farm commodities (food demand being inelastic) would drop by considerably more than one-third.
Meanwhile, Mexico would try to feed its 100 million people and supply a rapidly rising demand for pork, poultry and milk by plowing more highly erodible semi-desert.
Nader's farm policy would cause more ecological destruction than the old Soviet government, up to now the worst enemy the environment has had. Millions of acres of Asian tropical forest would have to be cleared for Asian food self-sufficiency. Millions of tropical species would be put at risk of extinction. That's a strange view for the guy who ran for president on the Green ticket.
One of Nader's goals seems to be keeping more Mexican peasants on that country's low-quality croplands, which were divided into cooperatives about a century ago.
The farmers don't own the land, and can't afford fertilizer or high-yield seeds to generate higher incomes. They grow just enough 25-bushel-an-acre corn to avoid starvation. Their children don't get good educations or have any hope of rising out of poverty. Nader seems to want lots of small farmers no matter how poor or miserable they are.
Nader said NAFTA enriches the big agribusiness corporations, but the companies' dividends and stock prices haven't reflected any such bonanza. Luther Tweeten of Ohio State University said that, far from gaining monopoly profits, big agribusiness has narrowed farm marketing margins. Unfortunately, because farmers compete so urgently to stay in farming, all the benefits of the narrower margins have gone to consumers.
Western Europe is following the sort of "small farmer" and anti-trade policies Nader advocates. The European Union lost nearly 3 million farmers (more than one-fourth of its total) in just the past 10 years. Why? Farm subsidies quickly become incorporated in land values, and the only way to really cash them in is to sell the farmland, usually to a larger farmer. And off-farm jobs pay better than do small farms.
Nader's policies would save neither small farmers nor the world's natural resources and wildlife.
Dennis T. Avery is based in Churchville, VA, and is director of the Hudson Institute's Center for Global Food Issues.