Best blog comment of the year…

…comes from Paul Collier, commenting on a Martin Wolf column about the food crisis in the FT. There’s this:

The best solution to a problem is often not closely related to its cause (a proposition that that might be recognized in the climate change debate). China’s long march to prosperity is something to celebrate. The remedy to high food prices is to increase food supply, something that is entirely feasible. The most realistic way to raise global supply is to replicate the Brazilian model of large, technologically sophisticated agro-companies supplying for the world market. To give one remarkable example, the time between harvesting one crop and planting the next, in effect the downtime for land, has been reduced an astounding thirty minutes. There are still many areas of the world that have good land which could be used far more productively if it was properly managed by large companies. For example, almost 90% of Mozambique’s land, an enormous area, is idle.

Unfortunately, large-scale commercial agriculture is unromantic. We laud the production style of the peasant: environmentally sustainable and human in scale. In respect of manufacturing and services we grew out of this fantasy years ago, but in agriculture it continues to contaminate our policies. In Europe and Japan huge public resources have been devoted to propping up small farms. The best that can be said for these policies is that we can afford them. In Africa, which cannot afford them, development agencies have oriented their entire efforts on agricultural development to peasant style production. As a result, Africa has less large-scale commercial agriculture than it had fifty years ago. Unfortunately, peasant farming is generally not well-suited to innovation and investment: the result has been that African agriculture has fallen further and further behind the advancing productivity frontier of the globalized commercial model. Indeed, during the present phase of high prices the FAO is worried that African peasants are likely to reduce their production because they cannot finance the increased cost of fertilizer inputs. While there are partial solutions to this problem through subsidies and credit schemes, large scale commercial agriculture simply does not face this problem: if output prices rise by more than input prices, production will be expanded because credit lines are well-established.

And this:

But the true European equivalent of America’s folly with bio-fuels is the ban on GM. Europe’s distinctive and deep-seated fears of science have been manipulated by the agricultural lobby into yet another form of protectionism. The ban on both the production and import of genetically modified crops has obviously retarded productivity growth in European agriculture: again, the best that can be said of it is that we are rich enough to afford such folly. But Europe is a major agricultural producer, so the cumulative consequence of this reduction in the growth of productivity has most surely rebounded onto world food markets. Further, and most cruelly, as an unintended side-effect the ban has terrified African governments into themselves banning genetic modification in case by growing modified crops they would permanently be shut out of selling to European markets.

And this:

While the policies needed for the long term have been befuddled by romanticism, the short term global response has been pure beggar-thy-neighbour. It is easier for urban slum dwellers to riot than for farmers: riots need streets, not fields. And so, in the internal tussles between the interests of poor consumers and poor producers, the interests of consumers have prevailed.

(HT: Alex Tabarrok)

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29 Responses to Best blog comment of the year…

  1. Dan says:

    The most realistic way to raise global supply is to replicate the Brazilian model of large, technologically sophisticated agro-companies supplying for the world market.

    Which has been responsible for one of the largest and most swift clear felling operation known in human existence…not a good example. Because eventually, in the medium turn, the forest runs out and the soils become poor.

    To give one remarkable example, the time between harvesting one crop and planting the next, in effect the downtime for land, has been reduced an astounding thirty minutes.

    While remarkable, it strikes me as odd that the author doesn’t consider the potential long-term ramifications of this excessive use of soil nutrients. The long term impacts of artificial fertilization are evident in food bowls around the western world.

    The promotion of this type of short term efficiency that continues to drive population growth, but destroys the core of what actually drives human capacity (food, or more significantly the nutrients in the soil from which it grows) belies his broader argument – for more intelligent, solution orientated policy.

  2. Kevin Cox says:

    The replacement of large scale agriculture with suburban gardens on the limestone plains of Canberra now produces more food from the land than when it was a sheep farm and the land is used 24 hours a day without any 30 minute downtime.

    The rice paddies and intensive farming of Java and other similar countries are much more efficient in terms of food production than the sugar farms of Brazil.

    This blog is another example of the ridiculous use of one measure – money from consumption – to evaluate whether something is efficient and productive. Economists have a lot to answer for if they keep up this pretense of saying that only things measured by consumption which is paid for with money is worthy of inclusion in any evaluation.

  3. reason says:

    Kevin Cox…
    Now that IS one of the best Blog Comments of the year.

  4. Anthony Overmars says:

    I am more concerned with the problems at home and the pending food / water crisis looming in Victoria. Please visit my blog comments on water policy attached to “Australian Institute of Public Policy” http://andrewleigh.com/?p=1915

    Latte Anyone?

  5. Biofuels are curious, why is it combined with the neo-mercantalist doctrine of ‘energy independence’ that has such a hold on American public opinion, perhaps it enables the left to bash oil-company bogies and the right Arabs? On Africa recall W K Hancock’s analysis of West African plantations. Is new technology finally initiating the age of capitalist concentration in agriculture when elsewhere it seems to encourage the growth of smaller firms?

  6. Gavin Findlay says:

    I think it is about time we expected consideration of cultural and social impacts of such proposals. While I am in favour of assisting African nations to modernise but if it is done without consultation, without equity for the local people and consideration of their way of life, we will end up with more Zimbabwes.

    Of course we in Australia were falling over to sell our birthright with the USFTA.

  7. Patrick says:

    Uh, righty-o then. Can you elaborate on the causual link between building a modern and productive African agricultural sector, helping lift millions of Africans out of subsistence and feed millions more, and creating another Zimbabwe?

    Double points for addressing Collier’s point that African agriculture is now less industrialised than fifty years ago.

    Triple points for addressing the fact that Zimbabwe’s problems are the result of local people throwing out a colonial government, and extremely hard to pin on the west’s imposition of anything, even the lefty part of the west. Not to mention that the biggest role played by the nasty whiteys was, until they were kicked out, feeding the country.

    If you are stumped for ideas there, try elaborating on the cultural and social impacts of:
    enough food to grow, from the perspective of a child; and
    a surplus, from the perspective of a working adult.

  8. Gavin Findlay says:

    You’ve made my point yourself. The colonial government did not adequately to address the social dislocation it created. The native population remained disenfranchised and boom, mess. I can see that happening repeatedly unless greater consideration is given to developing local communities than it has in the past. How many news reports of people starving because land is turned over to cash crops, do you see?

    I’m not giving this as a reason not to modernise, only to sound a note of caution that most economists fail to put a value on culture and way of life.

  9. Patrick says:

    In the face of starvation, I think it is almost an indicia of humanity to fail to put a value on culture and way of life, frankly. Not to mention that the comment about cash crops is a furphy, and anyway my answer would be ‘bugger-all’.

  10. NPOV says:

    Patrick, surely Gavin was implying that a poorly thought out attempt to modernise African agricultural practice could result in another revolt of the sort that got Mugabe elected in the first place, not that it would directly result in economic collapse.

  11. NPOV says:

    And BTW Patrick, have you read Diamond’s Collapse? He suggests that the collapse of the Viking settlement in Greenland was partly because they put more value on their “culture” and “way of life” than survivability. In other words, they’d rather die out than adopt new customs (e.g. from Inuits).

  12. Patrick says:

    I haven’t read Diamond’s book. From the summaries I have read, I think he massively overstated his case. And I doubt you’ve thought that example through. Try this, circa 2750:

    Still-NPOV, have you read Marchand’s Collapse, take XVII? He suggests that the collapse of the Africans in the late twentieth and early twentyfirst centuries was partly because they dumb lefties put more value on their “culture” and “way of life” than survivability. In other words, they’d rather poor Africans die out than adopt new customs (e.g. from the twentyfirst century West, or indeed even from their early twentieth century African predecessors).

    Re your first comment, it is pretty hard to see how. “Shit, we have too much food, let’s overthrow the government and impose a tinpot dictatorship propped up by an amazingly incompetent and stupid neighbouring PM” – yep, that’d be pretty much my first thoughts too.

  13. Gavin Findlay says:

    Thanks NPOV. Patrick, I accept that extreme situations sometimes call for extreme measures. But assuming you can ignore cultural factors “because we know best” will inevitably lead to serious problems.

    I can’t claim to be very knowledgeable on Africa but am assisting some friends working there. Have a look at the doco Millionaires Mission currently showing on SBS for some examples. Also Dr Fiona Terry’s book Condemned to Repeat? The Paradox of Humanitarian Action.

  14. Gavin Findlay says:

    And I would be interested in some discussion about putting a value on culture in less extreme circumstances, as per my comment about the USFTA.

  15. ChrisPer says:

    Having spent a couple of years living in Zimbabwe, I suggest that our good friend who linked colonialist attitudes to native culture with the creation of ‘Zimbabwe’ is RIGHT!

    Ignoring inefficient, incompatible cultures and modernising, with capitalist investment and a modern rule of law, created a modern agricultural powerhouse, took responsibility for and educated the dispossessed and in time helped liberate them politically despite a serious wrong turn toward oppression. I asked Mr Mahoso, then head of the Zimbabwe Broadcasting commission, whether the leaders of the country had been educated in the eastern bloc like other countries with a liberation history; he said to me ‘Well, actually we were educated by the Catholics.’

    Mushy western political ideas were implemented as support for ‘liberation’ politics and surrender to majority rule. As a result the world put in power the true African ‘culture’ of paternalist and tribalist corruption, complete with appropriation of any benefit to the individual at any cost to the commons.

    Where it could do most harm the Government did the reverse of the best thing – making ‘communal’ or reserving to the powerful the critical capital that could be used by individuals, farmland. This is an expression of the African power culture, and directly led to the destruction of that agricultural powerhouse, and the present situation of deaths of staggering numbers of the people. Once that western-created powerhouse provided jobs, a functioning western health and education system, the rule of law and direct economic benefit through employment for all people, though very unequally.

    FFS, is it some kind of a sheltered-workshop Trotskyist nitwit that would blame ‘ignoring the local culture’ for the RESULT of putting that culture in power?

    Or have I completely misunderstood the reference?

  16. ChrisPer says:

    Scuse the rant – moderator feel free to blow away if I have offended the culture of civility 😉

  17. NPOV says:

    Patrick your “Shit, we have too much food, let’s overthrow the government and impose a tinpot dictatorship propped up by an amazingly incompetent and stupid neighbouring PM” categorisation is absurd on so many leves I’m not sure it’s worth responding to, but hey, what the hell…

    a) We’re talking about what sort of revolts might happen while trying to modernise the agricultural sector, not what might happen 10 years down the track when the modernisation has been successfully implemented and the results are there for all to enjoy

    b) At the time Mugabe seized power, there was little reason to suppose he would become a tinpot dictator. People genuinely believed he represented a chance for liberation.

    As far as Diamond goes, yes, there is debate about the degree to which “cultural conservatism” plays a part in social collapse. But there is good evidence that it was a key factor in the case of the Vikings, as nearby Inuit tribes survived on just fine, despite being technologically inferior. The Inuit were prepared to adopt technologies from the Vikings, but the Vikings basically ignored everything the Inuits had to offer.

    Your “2750” comment seems to imply you think there are Westerners actively arguing against modernisation of African agriculture on the basis that it destroys traditional cultural values. While I don’t doubt that such people might exist, I don’t see what they have to do with the debate here.

  18. Gavin Findlay says:

    Well thanks all, I think. I’m not quite sure if I’ve been insulted, but obviously I’ve struck some sort of nerve.

    But if anybody thinks that lefty attitudes are to blame for poverty in Africa, or will obstruct the alleviating of poverty, rather than the years of colonial exploitation and continued collusion of western multinationals with local despots, or simply lack of education… take a pill.

    I still maintain that culture needs to preoprly valued in economic modelling.

  19. Patrick says:

    NPOV, in response to your question about culture in the context of the US FTA, my thoughts are largely as set out in this thread. Your side is represented as well!

    I would add only that I oppose the ridiculous extensions to copyright around the world but most egregiously in the US.

  20. NPOV says:

    Um, which question? That thread seems to be largely about public funding of arts/culture (which coincidentally I’ve been writing about today at andrewnorton.info).

  21. ChrisPer says:

    Patrick: “culture needs to preoprly valued in economic modelling.”

    Agreed. It’s best valued by reference to the choices of those in it, IMHO.

  22. derrida derider says:

    ChrisPer has hit the nail on the head with that last sentence. The value of a culture lies only in its value to its practitioners, because “culture” does not exist independently of those practitioners. If it keeps them involuntarily hungry and ignorant then I say the sooner it is transformed the better.

    At a more technical economic level, there is deep confusion here between the productivity of land and the productivity of labour. If we want to feed the world then we need to raise the productivity of the average hectare of land, whether that requires either more or less farm labour. If we want to make farmers richer then we need to raise the productivity per hour of their labour. The two goals are not the same.

    Large agribusiness tends to raise both land and labour productivity, but mostly labour productivity. It may be more practical in densely packed parts of the Third World, where labour is plentiful and capital scarce, to focus directly on land productivity of labour-intensive crops instead. GM has a potentially important role to play here – but only if the development of new strains using this technique is geared to these conditions, rather than geared, as it currently is, to reducing the need for labour inputs (which is appropriate in the First World).

  23. NPOV says:

    Derrida, it’s possible that improving the labour productivity of farming could increase net land productivity, if less food is needed to feed the farmers. Though of course historically in Western nations, the net human energy expenditure has decreased while calories consumed has increased, with the inevitable result of widespread obesity.

    There are other ways to increase the income of third-world farmers of course – anyone watching Millionaires’ Mission? One of the projects was simply to build a store room where surplus produce could be stored until there was high demand for it.
    If this was taken further, and the sort of sophisticated storage and marketing used by Western farmers (where they electronic access to worldwide prices etc.) was eventually adopted, I’ve no doubt incomes could be increase dramatically with no increase in the direct labour-output productivity. Indeed, in general, planting, harvesting and selling the crops that there is highest demand for would surely be the simplest way to increase income. Meaningful productivity is not just producing more, but producing more things that people actually want and at the time when they want them most.

  24. Patrick says:

    The best thing for food would be more hedge funds and speculative trading.

    Pace the stupid Indian government which thinks that banning futures trading in rice will help.

  25. NPOV says:

    Giving poor farmers in third world countries access to futures markets was basically what I was proposing. It wouldn’t even be all that expensive to set up, surely.

    That first article was pretty interesting – the hypothesis that as China and India comes out of poverty, there is no longer the big buffer of poor people who cut back their consumption when prices rise, hence prices have to go very high to effect even a small drop in demand seems pretty reasonable. I wonder, were we to ever entirely rid the world of poverty, would it even be possible to keep prices stable, and indeed prevent real shortages occurring, assuming that food production remains so dependent on fickle factors like the climate?
    The only solution would seem to be a move towards greater production of food that’s easier to store (and perhaps better storage methods), and production methods that aren’t so dependent on the climate.

  26. Patrick says:

    That article was fascinating – another reason to read marginalrevolution more often!tmarg

    I wonder, were we to ever entirely rid the world of poverty, would it even be possible to keep prices stable, and indeed prevent real shortages occurring, assuming that food production remains so dependent on fickle factors like the climate?

    Pretty piss-poor assumption imho. The major implication of your thesis, though, is that price volatility of staples wouldn’t fundamentally matter because we would all have enough surplus income to re-allocate from leisure to staples. One thing that article points out is that a tenfold increase in the price of wheat is basically invisible to first-world consumers.

  27. NPOV says:

    But surely not to farmers!

    I can’t possible see how it would be a good thing to have prices swinging wildly all the time due to production fluctuations. Still, it’s probably a small price to pay for an end to widespread global poverty. Not that it’s likely to occur in my lifetime anyway.

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  29. JM says:

    “The ban on both the production and import of genetically modified crops has obviously retarded productivity growth in European agriculture”

    Assuming of course that GM crops have higher yields – which even Monsanto now admits they do not.

    See: http://www.independent.co.uk/environment/green-living/exposed-the-great-gm-crops-myth-812179.html

    From the article reporting a University of Kansas study “GM soya produces about 10 per cent less food than its conventional equivalent”

    And from Monsanto: “Monsanto said yesterday that it was surprised by the extent of the decline found by the Kansas study, but not by the fact that the yields had dropped. It said that the soya had not been engineered to increase yields, and that it was now developing one that would.”

    Given that Monsanto originally sold this particular GM crop has having higher yield, I find it interesting that they’re now saying “oh no, we lied, but trust us, we’ll do it better next time”

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