NationStates Jolt Archive

My random thought for the day. Would you consider western produce fairtrade if it rejected any subsidies offered to the farmer (like the CAP).

1) you know this has little effect on the farmer as they are still recieving the same amount for their produce.
2) this helps the farmers of developing countries as the price distortions caused by the subsidies are alleviated. Hence a farmer can sell produce within his own country and not be underpriced by subsidised European exports or whatever.
3) This would primarily help small farmers in the west because they could add branding to their produce which large scaler producers could not so easily do - due to the disproportionate amount of subsidies that large agricultural companies recieve.

The vast majority of crops in the US are not program crops - i.e. do not receive subsidies, do not have a price floor, and no import quotas or tariffs. Thus they are indeed fair trade.

While there was a legitimate argument for agricultural subsidies in the 1930s, these days they are an anachronism which needs to be ended. There will be some farms which go out of business but that is not a bad thing. The cost to the consumer is reduced, the cost to the tax-payer is reduced, most farmers are unaffected, foreign farmers have new markets, consumers have new suppliers... there is no downside.

While that is the US, I cannot imagine that Europe will suddenly descend into anarchy because the CAP is adjusted to be a free trade system.

There is a big market for local and specialty foods. People are willing to pay a premium for locally grown foods and for foods which come from a region which specializes in said food. Most Europeans place a premium on foodstuffs grown in traditional areas, so it isn't like there will no longer be a market for it. While the total volume of food will drop significantly, that is not such a bad thing.

The problem, much like the problem in the US, is the lack of political will to carry through these reforms. The costs will be borne by a small and highly motivated demographic while the benefits will be thinly dispersed amongst everyone. Simple political calculation points to it being a pain in the ass which will cost you votes and easily smear your public image while bringing negligible personal benefit. It is a lot of hard and dangerous work which will cost you much, but gain you nothing.

There simply are not enough selfless politicians, or enough savvy voters, to do the blatantly obvious.

You can't have fair trade unless the product is traded on a free market without government intervention of any kind. By definition, fair trade would mean that the market is truly competitive and free.

So, if Western producers eliminated subsidies and tariffs and traded their products on the free market they would be fair trade products. Anything less than that is neither free trade nor fair trade; our current policies are definitely far freer and fairer than ones in the past, but they are still not truly fair or free by any stretch.

So, effectively, yes.