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Farmers' protests and the fair price

2024-02-12T04:35:11.419Z

Highlights: We have enormous quantities of agricultural products circulating at low prices. Is this bad? It is what has allowed large chains to offer cheap food. It is important to understand why things happen in order to remedy them. The only thing that can be done with them is to manage them with imperfect solutions. The rich steal land from the poor using methods ranging from intimidation and murder to legal tricks or expropriation by complicit governments. There are large employers who do not comply with the labor rights of farm workers and exploit them.


We have enormous quantities of agricultural products circulating at low prices. It is bad? It is what has allowed large chains to offer cheap food. Are they evil for buying as cheap as possible? If they didn't, they would be out of business in two days


Before the birth of agriculture, apples grew naturally in paradise and also allowed you to discern good from evil at no additional cost.

Nowadays they must be cultivated with great use of natural resources and discerning good from evil is further away than ever, at least agronomically speaking.

One of the big problems faced by most NGOs—less and less—that are dedicated to rural development or the fight against hunger is distinguishing the causes of the problems faced by poor farmers.

It is a logical, and also natural, tendency to think that if something bad happens it is someone's fault.

That is why we talk about food justice or sovereignty and ask for fair prices for producers.

It is important to understand why things happen in order to remedy them.

Even more important is to recognize that there are problems that have no solution, and that the only thing that can be done with them is to manage them with imperfect solutions.

Let's go back to the culprits.

There often are: climate change has been caused by rich countries, and is paid for by farmers in poor countries suffering from droughts and floods.

In countries where law enforcement leaves much to be desired, the rich steal land from the poor using methods ranging from intimidation and murder to legal tricks or expropriation by complicit governments.

There are large employers who do not comply with the labor rights of farm workers and exploit them without a government lifting a finger to defend them.

It is important to understand why things happen in order to remedy them.

Even more important is to recognize that there are problems that have no solution, and that the only thing that can be done with them is to manage them with imperfect solutions.

However, on other issues we have to tread more finely.

One of the most controversial is the fair price.

We can see in Europe these days the agrarian protests, in which this is one of the main issues.

Recognizing that no such thing exists, or that it only exists under very restrictive conditions, is necessary to manage the consequences.

Even the most persistent urbanites have enough intuition to understand that there is something in the economic functioning of agriculture that makes it different from other sectors of the economy.

Production is variable, and depends on good and bad years, presence of pests or not.

Yields vary depending on soil quality and fertilizers applied.

And, although it is not recognized, they depend on the skill of whoever manages the farm in applying good practices.

In years of abundant harvests, prices go down, but they do not go down proportionally to the surplus: they go down much more.

And the opposite happens when there is a shortage—just look at olive oil.

This has been known since the 18th century, thanks to Messrs. King and Davenant, but we seem to have forgotten it.

If we add globalization to this, we have enormous quantities of agricultural products circulating at low prices, depending on where the good conditions were.

Is this bad?

It is what has allowed large chains to offer cheap food.

Are they evil for buying at the cheapest price available?

If they didn't they would be out of business in two days.

No better alternative has been discovered, and anyone who says otherwise should prove it with facts.

What are the exceptions to this law?

There are only two that I know of.

The first is the European Union's dairy quota, which was in effect from 1984 to 2015. It could control prices because it controlled the quantity produced.

If the surpluses are smaller, the variation in prices is smaller.

The second alternative is fair trade and direct local purchases from producers.

It is what the critics of this article can put forward as “there is a solution to the problem, but you do not present it as such.”

It is not, at least for everyone.

What these two do is limit purchases, not production.

That is, they apply a quota with favorable conditions that limit price variation to a specific group of producers.

But anyone outside the group suffers from the same surplus problems, so it's not a solution for everyone.

Since production is variable in time and space, at some point you will have too much food or too little in this group, and you will have to look for it elsewhere, or the price variations will be wild.

What the agrarian protests show – at least in their part of the fair price, another day we will talk about the others, some very fair – is that society does not tolerate problems without solutions.

The great economist Karl Polanyi said it 80 years ago: when politics offers few options and few prospects for solving its problems, people look for extreme solutions.

This is why it is embarrassing to see some of the banners on the tractor units.

Gabriel Pons Cortès

is a consultant for rural development and promoter of estatera.org. 

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Source: elparis

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