Primarily because US farmers as a rule don't understand that they need to brand and differentiate to offset the fact that farm products are commodities-shoes are a commodity as well, but look what Nike has done...
I think that an improved US farm policy would be to allow imports of many farm products currently produced in the US that are subsidized through federal payments and tariffs/quotas from countries with low labor costs. The key would be to turn family farmers into branding and distribution concerns. I believe that the average American farmer understands that the American food market breaks down into two segments: cheap and plentiful basic foods; and premium specialty foods. What the farmer needs to do is rather than bringing workers to farm his land is to arrange for crop production in say, Mexico, and then his task would be to manage the transport of the crop across the border and marketing the product to food processors and consumers. Distribution and marketing bring higher margins than commodity production and therefore this would improve the farmer's net income.
Ranchers are getting the idea to a degree as we are seeing some ranchers turning to marketing their beef as "free-range" and "hormone-free" and getting higher prices at the supermarket for that product.
In any case, changing this policy would likely significantly reduce illegal immigration into the US...
Showing posts with label agriculture. Show all posts
Showing posts with label agriculture. Show all posts
Wednesday, June 06, 2007
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.
"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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