>"Free trade causes the prices
>farmers receive to drop through the floor", said Rosset," driving them
>into bankruptcy by the millions." Such low prices mean only the largest
>can survive, according to the study.
>...snip
> What did I miss here? If small farms are more efficient, then
>why does a drop in prices cause the small ones to go bankrupt while the
>largest survive?
> This reminds me of the paradox that "organic" food supposedly
>costs less to produce yet costs more in the store. The only plausible
>explanation I've heard is the cost of certification, but this won't apply
>to the above discussion about small farms being more efficient but going
>bankrupt before the largest ones when prices drop.
>Regards, Edna
What is not explicit in Peter's comment is why 'free trade causes prices to
drop.' This sounds a little misleading. Real free trade does cause prices
to drop and would still give 'market' rewards to more efficient small
farmers. The problem is what passes for 'free trade' in the context of
things like NAFTA and WTO are really tremendous subsidies for transnational
corportations that, among other things, allow them to dump cheap
commodities on local markets and run small farmers out of business, no
matter how efficient they are. The politics of 'free trade' stacks the
rules of the game to subsisdize corporations' transactions costs. This
happens in a myriad of ways such as sanitations rules that favor highly
capitalized operations, environmental regulations that allow huge
ecological costs to be externalized, patents that only corporations with
full-time legal departments can afford to enforce, etc., etc.
As for organics, its the farmer and the consumer who are paying the costs
of organic transition and the restoration of soils deteriorated by
industrial agriculture. I.e. organic agriculture is internalizing the
environmental costs of decades of conventional agriculture. That, along
with a strong demand for organic products (growing 20%+ per year) keeps
prices up. In the long run, however, lower production and environemental
costs should be reflected in cheaper (and better) food, with no need for
hidden subsidies. We just have to keep working on it.
Regards to all,
Ronald Nigh
Dana, A.C.
Mexico, D.F. & San Cristóbal de Las Casas, Chiapas
Tel. y FAX 525-666-73-66 (DF)
529-678-72-15 (Chiapas)
danamex@mail.internet.com.mx
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