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Free Trade in Agriculture: A Bad Idea Whose Time Is Done

The push for "free trade" in agriculture first took hold in the 1980s. It was part of a package of policies and investments that moved food and agriculture systems away from government control (too often centralized and unresponsive) toward private ownership. Ironically, private ownership has led to an even more centralized and tightly controlled food system. Local communities have been left more disempowered than they were before, and, increasingly, developing country national governments have found themselves disempowered, too. This essay considers what advocates of free trade promised developing countries, what actually happened, and what some alternatives might look like.

Free trade has been a powerful mantra over the last thirty years. The pure form of the concept is perhaps best captured by the image of a bazaar: a place where people come to sell and buy wares, often stall after stall selling the same things, where haggling is common and both buyer and seller must decide what price they can settle for, based on the alternatives they see around them. Early in the day the buyer gets the best choice. Later in the day, the quality falls but so do the prices. It is up to the consumer to decide her preference for quality over price and to the seller to decide what price is profitable and still generates sales.

Free trade would make the whole world a bazaar. Only, of course, it cannot. There is no global marketplace where the Argentine and Brazilian and U.S. farmers can bring their soybeans to sell to the highest bidder. The reality for those farmers is that they must sell to the elevator near their farm. There might be a choice of two firms but there will rarely be more than that. Their crops will face quality controls, sanitary standards (protecting human, animal, and plant health), and political whim. For subsistence farmers the world over, their choices are even more constrained. Poor roads, poor storage, inequitable land distribution, poor law-enforcement (and often bad laws), grossly unequal market power, and weak local and national institutions: all shape trade in multiple ways, none of them "free." A mass of regulations and political struggles, both domestic and multilateral, stand between the free trade ideal and the real world.