Insight and inspiration in turbulent times.
After the food price hike in 2007-2008 and in a world that many feel is less secure, there is a renewed interest in food self-sufficiency. Food self-sufficiency is, however, widely critiqued by economists as a misguided approach to food security that places political priorities ahead of economic efficiency.
Early trade was about ecological adaptation, transporting essential food or other essential goods to a places where they were lacking. Very little in present international trade is based on that. Instead, trade in itself creates shortages.
Trade is not only a response to market demand, it creates demand and therefore recreates the need for it; trade becomes its own justification.
Because of productivity gains in developed countries, agriculture prices dropped by some 60% in the period 1960-2000. As the productivity of the poorest farmers remained much the same, it is obvious that they have lost out. Their value of production, regardless if they eat it themselves or sell it, has gone down considerably, making them poorer both in relative and absolute terms.
Trade is not only a response to market demand, it creates demand and therefore recreates the need for it; trade becomes its own justification.
We may not always think about it, but the origin of trade is found in ecology and not in economy.
