The recent WTO agreement to end export subsidies by 2013 needs some unpacking. What's an export subsidy? Who benefits from their elimination?
An export subsidy is a payment to a producer when their goods are exported to another nation, just as you would expect from the name. In agriculture they arise due to government efforts to prop up domestic prices or enhance security. When the government sets a price floor they have an obligation to purchase excess production at the floor price. That can be wasteful and expensive since things can spoil and facilities to store them are expensive. A cheaper solution is to dump the excess on the world market at below cost prices. Thus, export subsidies. The US spends about $1 billion on such subsidies and the EU spends 4 times as much.
Ending them is a mixed benefit. World prices will rise and make life harder for poor countries that import more than they export, but make life better for those that export more. It will enrich countries that pay export subsidies, such as the US and EU, though the benefits go to different people. Farmers lose but taxpayers gain, sort of. Their tax burden won't drop but the money will be spent in different and perhaps more beneficial ways. That may be wishful thinking.
The effects will be temporary. Increased prices will result in increased production by low cost producers. Prices will then fall again. Some will prosper in the near term, some will fail in the long term and everything will settle down again at a level probably little different than today and be determined in a deeper and longer term sense by other factors such as land, water and energy prices and availability as well as demand. Beneath all the manipulations there are reality constraints. Demand may rise a great deal by those who have no money to buy.
The real benefits of the recent agreement are not those trumpeted by politicized groups including the media. The most harmful trade restrictions are the tariffs and subsidies poor nations impose, even on each other, and there will be increasingly less justification for them if developed countries drop their barriers. There are also agreements to liberalize trade in manufactured goods and services which will jump start developing world economies currently mired in protectionist stagnation.
This agreement doesn't seem to address what are called trade-distorting domestic subsidies, those paid within nations to their producers. We won't soon see and end to all subsidies or national tinkering. Politics hasn't been repealed and outlawed.
On balance, though there will be some who suffer, the world will be richer. But will it be better? Will it last? Is economics the sole consideration? Many think so but consider these absurd assertions by Tim Harford - The Undercover Economist.
. . . we are talking about all kinds of agricultural protectionism. Agricultural subsidies get the most airtime. But actually more direct trade barriers like taxes and tariffs I think are more serious. They all push the same kind of way. They will push towards having crops grown on land which is not as suitable as it could be if their crops were grown in another country.So you have got acres of fertile land in Guatemala that you could grow sugar there. But because of protectionism, the sugar is grown in Florida and the Everglades are destroyed. And meanwhile the Guatemalans are either growing coffee for basically nothing, or like the Columbians, they think, well, maybe we should grow cocaine instead.
Now this is not a good idea. And I have a little graph -- I don’t have a lot of graphs in my book. I prefer the written word. But sometimes the picture is worth 1,000 words -- and it’s just a graph of trade barriers for different countries and how much fertilizer they use on their agricultural land. The countries that have the highest trade barriers, Japan and Korea use so much fertilizer. Then it is the EU. They use a lot. American less, but you know they still have quite a lot of protectionism and they still use quite a lot of fertilizer.
And then countries like Brazil that don’t have a lot of agricultural protectionism don’t use much fertilizer either. And when you think about it, it makes perfect sense. The protectionism is necessary because the land is not good. And the fertilizer is necessary because the land is not good. So free trade in agricultural products is -- well it’s good for a lot of reasons. But one of the reasons is it is good for the environment.
What an idiot. The best ag soils in the world are in the EU and US. See Special Sauce for discussion but a simple look at the graphic to the right where the red areas are mollisols speaks volumes. The use of fertilizer does not correlate with the quality of the land, it correlates with production on the land. No fertilizer, no production. You can mine natural fertility for a very few years without replacing what you took, but that's just exploitation, strip mining the soil, and isn't possible for long. Slash and burn agriculture precisely targets that reality. The land is fertile enough to grow a crop or two and is then exhausted. Then they move on to new land and repeat the destructive cycle.
What a tard. He not only doesn't have enough information to make a grade school analysis, he bungles the reasoning as well by making the magical leap from the use of fertilizer to environmental harm. What harm? Compared to what? Reality is just the opposite. Failure to fertilize reduces yields and so requires the use of more land, more water, more energy and more labor to produce the same amount as fertilized land. This is far more environmentally harmful - rain forest destruction etc. - than the use of fertilizer, especially the enlightened use of fertilizer that avoids runoff by using precision methods.
Like every politicized issue the loudest voices most commonly heard are nonsensical. In some cases this is intentional, political strategies of deceit and misdirection, but increasingly it seems that it is an activity that simply doesn't attract bright people. They are often sincere idiots. They believe the nonsense they say.
They are stuck on stupid. Hartford and Nick Schultz, his interviewer, probably have at least moderate intelligence but their knowledge and focus are so narrow that they can't make smart analyses. Their ideas are even dumber when you think of the dynamics of food and fiber production over time. The world's needs are not met now and the amount needed is growing rapidly along with development and population increase. They speak in static terms, as if all that is needed is to shift current production to undeveloped lands in underdeveloped nations (as if a grassland or a forest had no value!). In truth it will be a huge challenge for those nations to increase production enough to feed their own growing populations. That will also stress their supplies of fresh water, dry up rivers and alter local climates and rainfall.
The world faces a challenge. Every nation, rich or poor, has to do everything it can to produce food and fiber in order to feed and clothe 9 billion humans at a level that provides simple human dignity, nourishes the growing bodies and minds of children, and positions the world to face its future with some fitness, raising the chances of survival.
With regard to soils, what are the good books on them? Personally, I gained a huge respect for what's underfoot from "Out of the Earth: Civilization and the Life of the Soil", Daniel Hillel, 1992. Any others that are good, eye and mind opening reads?
Posted by: JMG at December 22, 2005 03:22 PMWe should ask Philip Small about that since he's a soil scientist.
I'm a grazier with no formal education to speak of. I read papers and articles, google around on subjects that seem important to my work, and have experience applying concepts to land. I've also learned a lot from academics who lurk on practitioner mailing lists and pipe up now and then with an authoritative take on a subject under discussion. There are also consultants who do this as a way to advertise their services.
I've read plenty of books about my ag specialty that had sections dealng with soil, but none devoted to soil science as a separate subject.
I googled the Hillel book you mentioned. The synopsis mentioned the antiquity of soil degradation so perhaps you will enjoy this old Wes Jackson mudge:
"The Greek landscape has been subject to episodes of deforestation and soil erosion for 8000 years. History tells us that the ancient Greeks considered themselves careful stewards of the land, people who felt guided by their gods and goddesses in this endeavor. Even so, those early Greeks and their gods, like essentially all agricultural civilizations, failed to hold the top soil (Runnels, 1995). The recent archaeological evidence of soil erosion in ancient Greece due to agriculture is now well documented. The story begins with the farmers who first settled Greece when the landscape was pristine. But archaeological investigations of ancient ecosystems using soils and fossil pollen along with human relics and artifacts reveal that: when hill slopes lose their soil, people move; when usable soils reform thousands of years later, people return to farm (Runnels, 1997, emphasis added). This is no surprise for here is where both Plato and Aristotle witnessed first hand land degradation and its consequences. Plato, in one of his dialogues, has Critias proclaim: "what now remains of the formerly rich land is like the skeleton of a sick man, with all the fat and soft earth having wasted away and only the bare framework remaining. Formerly, many of the mountains were arable. The plains that were full of rich soil are now marshes. Hills that were once covered with forests and produced abundant pasture now produce only food for bees. Once the land was enriched by yearly rains, which were not lost, as they are now, by flowing from the bare land into the sea. The soil was deep, it absorbed and kept the water in the loamy soil, and the water that soaked into the hills fed springs and running streams everywhere. Now the abandoned shrines at spots where formerly there were springs attest that our description of the land is true."
Not all erosion is human made of course. There was erosion during the last ice age due to climate changes. The past 5,000 years, however, is another story. Four episodes of erosion — at about 2500 BC, 350-50 BC, 950-1450 AD and in recent times — according to Professor Curtis N. Runnels "was followed by a period of stability when substantial soil profiles formed" (1995). The researchers "place the chief blame on the activities of the local inhabitants" citing "the correlation between the periods of erosion and the periods of intense human settlement, and the formation of soil during the periods when the human impact was minimal. ... Soil erosion on a similar scale has been reported from other parts of Greece — the northern provinces of Macedonia and Thessaly and the islands of Euboea in the center of the country and of Crete in the south. The episodes date from as early as the sixth millennium BC and continue through virtually every historical era to the present day."
Posted by: back40 at December 22, 2005 06:40 PM