Your location: Home > Publications > New Ground > No. 62

Exports Are Not the Only Fruit

New Ground 62
Winter 2001

The argument that international trade will reduce hunger and increase the income of the poor in developing countries is wrong. Everyone benefits from local markets, says Emma Cypher-Dournes of the Soil Association

The Soil Association has just launched its Eat Organic! Buy Local campaign to persuade people to buy food grown sustainably close to where it is sold.

It could seem unfair to developing countries if the UK and other Western nations produce more food at home. Developing countries are encouraged, some would say coerced, by structural adjustment programmes to grow more export crops. If the market for such crops shrinks because the British consumer buys locally, surely developing countries will suffer damage to their economy through lower export earnings and lower supplies of foreign currency?

Yet the evidence would suggest the contrary. Focusing on export crops has many negative effects. Export crops force farmers off their land, reduce local food production and thrust millions of people into poverty and food insecurity.

In 1994, developing countries were obliged by the GATT agreement on agriculture to open their markets to imports – an arrangement meant to be reciprocated by developed nations. However, a 1999 study by the UN Food and Agriculture Organisation of sixteen developing countries found that the agreement had led to a surge in imports, but not an increase in developing countries’ exports.

The FAO found examples such as Guyana, where "imports of food and live animals almost doubled between 1994 and 1998…[raising] the fear that…many commodities that have historically been produced domestically (e.g. milk, poultry, fruit, juice, beans, peas, cabbage and carrots) will be imported and the domestic diet will increasingly shift towards greater dependence on imported food products."

Similarly in Ghana, the FAO reported, food imports "have demoralised the small-scale farmers. Having produced maize, rice, soya beans, rabbits, sheep and goats, these farmers can not obtain economic prices for them, even in village markets. Their produce can not compete with imported maize, rice, soya beans, chicken and turkey. Smallholder incomes have fallen and malnutrition among the rural poor has risen."

In India, cropping patterns changed significantly. "Land under wheat and rice has increased, while land under some pulses and coarse cereals, the staple foods of the poor and landless, has declined. Land use and cropping patterns are shifting from low-value foods to exportables, including flowers" – and cat and dog food for Western countries.

Imports from the West have decimated local markets, damaged local economies and pushed small farmers out of business. This led to "a concentration of farm holdings into larger entities" as land was bought up, often by multinational corporations. A vast proportion of trade in export crops is now controlled by multinationals. Six corporations handle about 85% of world trade in grain, eight corporations account for between 55% and 60% of world coffee sales, three multinationals control 80% of world banana trade. Very little of the foreign exchange they earn remains in developing countries and the benefits to poor farmers from export crops are minimal.

Neither has international food trade reduced hunger and malnutrition, which are still major concerns.

Across the world, including that bastion of free trade, the US, small farmers are lamenting the industrialisation of food production. Canadian farmers complain that an export-oriented food production system brings about "the erosion of people, of culture." Even the World Bank has recognised that " ‘greater openness to trade’ has a negative impact on the income growth of the poorest 40% of people in developing countries". This is two billion people, including the 800 million who live on less than a dollar a day.

De-localisation of food production and distribution has affected the UK, just like the rest of the world. It is no longer seriously disputed that BSE may have been caused by the spread of contaminated feed by large feed processors. Meat imports from developing nations may have caused this year’s outbreak of foot-and-mouth disease, the worst ever in the UK, which was exacerbated as transport of animals around the country spread the infection. Centralised food distribution in Britain has also encouraged large-scale, specialised, intensive farming practices which usually depend on exploitative and unsustainable production methods.

In the UK, promoting local food has already helped regenerate local communities and allowed farmers’ markets and box schemes to flourish. Reduced transport and pesticide use because of a shift towards organic production and local food networks means less environmental pollution – of air, land and water – and makes organic, healthy products affordable by more consumers by cutting out middlemen, packaging and processing costs. Local food also leads to much greater investment in the local economy. A recent study by the New Economics Foundation, Plugging the Leaks, found that £1 spent in a local organic box scheme in Cornwall resulted in a £2.50 investment in the local economy, because a high percentage of the £1 is re-spent locally, and of this, a high proportion is spent again. In contrast, £1 spent at a supermarket resulted in only a £1.40 investment locally.

This multipler effect means the vast majority of people of developing countries would also benefit from growing and consuming locally produced food. The Bangkok Post, for example, reported that some Thai farmers, fed up with growing rice for the export market and being in debt as a result, had disregarded advice from economists and started growing food for themselves and their local communities. After a few years they had paid off their debts, were much happier and found their children were taking an interest in the farm again.

Such local approaches allow sustainable, low-input farming methods which can also be surprisingly productive. Professor Jules Pretty, an authority on the economic and social effects of food policy at Essex University, reviewed over 200 sustainable agriculture projects in developing countries. These require production to be in the hands of family farmers and communities He found they had increased yields between 46% and 150%.

The Soil Association is calling for government to review the value of international trade in food versus regional and local food trade and to adopt the "proximity principle" for food distribution. Trade negotiators rarely consider the impact of new trade deals on local and regional food buying patterns. This needs to change. UK foreign development aid should also support local, low-cost, diverse food production, rather than promoting single crops for export markets.

But while we see a greatly reduced role for global food trade, especially for basic food needs, this does not mean an end to it. There will always be a role for export crops, for example supplying bananas and other tropical products. Ideally these would be sold through fair trade schemes, to ensure that profits go back to the producers. Developing countries should be able to earn foreign exchange without having to concentrate on exports at the expense of food security and the local economy.

The argument that international trade will increase the income of the poor in developing countries and reduce hunger is a gross over-simplification and generally wrong. Enough food is produced in the world to provide everyone with an adequate diet, but the global trading system restricts access to this produce and undermines the systems which do provide for local people. By building sustainable, locally based food economies around the world, we believe all societies will gain.

To join the Soil Association campaign, email action@soilassociation.org telephone 0117 987 4562