Tuesday, December 16, 2014

Imported Foods: Is Free or Fair Trade a Solution to Affordable Food?

Can Canada's Supply Management ("SM") system be replaced (or co-exist) with free trade or fair trade chicken?

There are small flock farmers in third world countries who would benefit from additional opportunities to sell their chicken, eggs, and other agricultural products.  Since Canadians pay one of the highest prices for SM products, likely these third world suppliers can produce those products far cheaper than Canadian suppliers.

I believe Canadians want more affordable food, provided it is safe, dependable, and nutritious.  I also believe that Canadians prefer to buy from and support Canadian producers, but are not prepared to be gouged in pricing, or held hostage so as to support Canadian suppliers.

In yesterday's Blog posting (see Import Chicken: Help the Poor in both Canada & the World? ), I presented Mr. Cline's research that says the poor, both the first world poor customers and the third world poor suppliers, would benefit from free trade in agriculture products.  Expensive, unaffordable food is regressive, as the poor have to pay a far greater percentage of their income to buy that food than what is paid by the rich.

If income taxes are adjusted based on an individual's income and wealth, why not food?

The Guardian in its Sept. 2008 article Free trade can mean the poor stay hungry challenges the agricultural free trade proposals of Mr. Cline.  This article presents evidence that the majority of the benefit from third world free trade is gained by the intermediaries and the 1st world suppliers of the 3rd world producers.  For example, asparagus from Peru for importation to the USA is presented:
"A hearing of the US Congress's Ways and Means committee in 2006 unintentionally provided one of the most succinct accounts of the problem I have come across. The Peruvian asparagus industry was up before the house to reassure representatives that any growth in imports to the US from Peru would be in US interests.

For every dollar spent by a US consumer on imported asparagus from Peru, 70 cents stayed in the US, the industry explained. The money goes not to Peruvian farmers but to US supermarkets and wholesalers, and to US shippers, distributors, importers, and storage owners. Just 30 cents stays in Peru. (The UK too imports most of its out-of-season asparagus from Peru.)

But Peru doesn't even get the full benefit of that 30 cents, because a large portion of the 30 cents Peru makes comes back to the US anyway: it is spent by Peruvians on US seed, US materials for processing, US fertiliser and US pesticides. US-based vegetable corporations, Del Monte and General Mills Green Giant, have been able to enjoy lower land values, cheap labour and low environmental costs by moving some of their production to Peru. The handful of corporations that dominate the global markets in seed, fertiliser, pesticides, trading, distribution and retailing take care of the rest.
Increased agricultural exports have indeed contributed to a growth in Peru's GDP, but the benefit to the poor of its population is hard to see."
One Ag. expert thinks that as soon as a WTO trade agreement is announced that allows for free trade agriculture imports, all of the multi-national billionaire Big Ag. companies will use huge amounts of cheap foreign money to buy the best farm land.  Next, they would build food production and processing systems in third world countries to export to their sister branch plants in Canada and elsewhere.

It is unclear if the third world poor would see any benefit.  Perhaps they would get slave labor wages working in those new farms and food processing plants.

If the supply chain can get free trade food from third world sources at a small fraction of domestic sources, their profits magnify greatly if they can sell at the same domestic price.  Since Big Ag. tightly controls the domestic food distribution system in an oligopoly, there is little competition, so there is no significant downward force on domestic retail prices.

Therefore, as long as Big Ag. has tight control of the food distribution systems, there is likely marginal benefits from agricultural free trade, neither for the domestic poor nor the third world poor.

So what is the solution?

Can "Fair Trade" be better than "Free Trade" ?

Perhaps Small Flockers in each domestic market are the best answers.


  1. What a joke? Canada's own small farmers aren't even allowed to raise as many chickens as the market demands. In Ontario we are limited to a measley 300 meat birds and 99 laying hens a year. Other provinces are more than that, luckily for their citizens, but we could easily be raising 10,000 meat birds per farm. By all means help small farmers in other countries, but please don't turn your back on the remarkable resource the Chicken Farmers of Ontario have cut off at the ankles here in Canada.

    1. Thanks for reading, and especially for your comments. I agree with you. Please spread the word to all your family, friends, neighbours, and your MP MPP. Come join as as a member of SFPFC, just $1.00 per year.


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