Thomas P.M. Barnett :: Weblog

EDITORIAL: "The Doha dilemma: Does freer trade help poor people?" The Economist, 31 May 2008, p. 82.

CURRENTS: "Farming's Last Frontier: African Farmers, U.S. Companies Try to Recreate Another Breadbasket," by Roger Thurow, Wall Street Journal, 27 May 2008, p. A14.

Complex editorial basically says that "when countries cut their tariffs on farms goods, their consumers pay lower prices. In contrast, when farm subsidies are slashed, world food prices rise," so the net effect of totally free ag trade would be to raise global prices.

Good or bad?

One World Bank study (forthcoming) says that net food buyers tend to be richer than net food sellers, so the income transfer is good on a global scale. Yes, some countries will become poorer but more will become richer.

So the conclusion:

These subtleties suggest two conclusions. First, the bank, and others, should beware sweeping generalizations about the impact of food prices on the poor. Second, the nature of trade reform matters. Removing rich-country subsidies on staple goods, the focus of much debate in the Doha round, may be less useful in the fight against poverty than cutting tariffs would be. The food-price crisis has not hurt the case for freer farm trade. But it has shown how important it is to get it right.

The other big fix is suggested in the WSJ piece: give African farmers, the most disconnected from technology, the same access to hybrid seeds that unleashed the big boost in yields in America in the 1920s and 1930s.

Big U.S. ag companies have resisted trying to sell to the bottom of the pyramid farmers inside Gappish Africa for a long time, believing them too poor to afford the seeds, so in Ethiopia, for example, only ¼ of the farm land uses hybrids.

This dam needs to be broken. Keeping labor on the farm, where it's poorly employed, means we don't create consumers in Africa for our goods.

This ain't about charity. It's about who makes the most markets happen inside the Gap—our real competition with China.