Monday 31 May 2010

POVERTY: Price fixing of food by protectionist policy

we should be outraged at the protectionist agricultural policies of already-rich nations such as the United States. When we allow the agricultural lobby to garner sweetheart deals from the U.S. House and Senate, the poor in other nations simply cannot compete with American growers of many crops because the trade rules are so utterly slanted against those in other nations.
For example, it is illegal for sugar buyers in the United States to purchase their sugar from sources outside the United States, even though the world price of sugar lies below the federally mandated price of sugar in the United States. This is wonderful, though, for U.S. sugar beet growers in the United States; it means they have a captive supply of buyers at a price that is being kept artificially high by federal decree. If the United States were to abandon such self-centered policies, sugar growers everywhere would have access to our markets, and the price of sugar would fall for all of us.
Moreover, confectioners and soft-drink makers in the United States would be able to produce their goods at lower costs, thereby adding to their job security. In one well publicized case in 2002, the Life-Savers candy factory in Holland, Michigan, was relocated to Canada, though the Michigan factory had been in operation for over thirty-five years and employed six hundred or so American workers. By moving to the northern side of the U.S.-Canada border, Life Savers slashed its input costs dramatically because, in Canada, Life-Savers was free to buy cane sugar at the world price: sugar grown by those who need the income most.
Sugar is not the only market we currently protect to keep out lower-priced commodities in an effort to help poor farmers in the United States. We have erected similar barriers that turn a blind eye to the plight of the global poor in markets for cotton, peanuts, and several other products that we can grow at home. In fact, by now you can probably see another reason why coffee prices are low. Because coffee cannot be grown in Ohio, or in France, rich northerners have not erected protectionist barriers to keep out the coffee that foreigners make.
If we really care about the global poor, we should work to make trade freer for everyone in our global community: a level playing field for all. That means tearing down all of the barriers we use to keep the global poor from working in the very jobs in which they are perfectly positioned to make the greatest lasting gains.

http://blog.acton.org/archives/16651-poverty-capital-and-economic-freedom.html

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