Tuesday, April 10, 2007

Possible solution to developing countries' export problems

Over at the Adam Smith Institute Blog, David Cuthbertson describes how

"It’s a bumper year for cotton farmers in Africa but even so, farmers are not celebrating. World cotton prices are at their lowest since the Great Depression and are showing no sign of recovery. Farmers are facing starvation as unsold and unsellable cotton begins to pile up in storehouses across the continent. The problem is American farm subsidies", and that "Government bodies, including USAID, DFID and the World Bank, have been pouring money into African economic development encouraging countries to specialize in internationally traded cash crops including cotton. But what the developed world gives with one hand it takes away with the other, effectively cutting competitive African farmers out of international markets through aggressive price competition."

My response to this is that government and international agencies should be directing developing countries to invest in indigenous crops that don't compete directly with subsidized crops produced by developing countries. As an example, there is a fruit called breadfruit, which according to Wikipedia "is a tree and fruit native to the Malay Peninsula and western Pacific islands"...and "it is one of the highest-yielding food plants, a single tree producing up to 200 or more fruits per season." In addition, "Breadfruit is a staple food in many tropical regions. They were propagated far outside their native range by Polynesian voyagers who transported root cuttings and air-layered plants over long ocean distances. They are very rich in starch, and before being eaten they are roasted, baked, fried, or boiled. When cooked the taste is described as potato-like, or similar to fresh baked bread (hence the name)."

A well-calibrated marketing program could succeed in getting consumers in developed countries to start consuming this food regularly, which would generate revenue for developing countries, and there are no developed countries that have subsidized production of this food, as far as I know.

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