Banana Entrepreneurs Should Follow the Cocoa Initiative
Last Wednesday, The New York Times ran an appealing story on the rise of an Ecuadorian Quichua community from a cocoa grower to a chocolate producer. The 850-families cooperative, located in the Amazonian rainforest, sells rich chocolate bars to American supermarkets without intermediaries.
This initiative is worth emulating, and should be followed by Ecuadorian agribusiness men who export fruits with no added value, such as bananas, mangoes, passion fruits, and coffee beans. Read NYT’s When Chocolate is a Way of Life
Wearing a faded red t-shirt and worn out sneakers, a banana farmer was happy to chat with me about the “green gold,” as the fruit is called, back in my days as an agribusiness reporter in Ecuador. Without an appointment, I was able to jump from the road into the plantation to have my first hands-on experience in the banana business. Like the farmer I met, over two million Ecuadorians depend on banana production either directly or indirectly. Bananas are the main agricultural export of Ecuador, with a monthly volume of 20 million boxes, according to the Banana Exporters Association (AEBE).
Despite Ecuador’s leading position in the global banana market, sales of the fruit represented only 8.1 percent of the nation’s exports between January and August 2008. That’s because Ecuador is an oil-producing country, and margins on basic products such as agricultural products are low. A solution, then, is to graduate up the producer ladder into products that have added value such as processed agricultural goods.
If my country, like many other developing nations, could learn from the Quichua cocoa experience, maybe next time I visit my hometown I won’t provoke giggles from the skillful artisans who offer hand-woven bags and placemats made of dry banana leaves on Ecuador’s streets when I suggest they market their products overseas. After the Quichua success, my encouragement to sell such handcrafts internationally should inspire excitement rather than laughs or sighs.
Entrepreneurs are the ones that should take advantage of these opportunities, export these unique products to America or Europe, and change the lives of the world’s poorest.
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Perspective on trade in the Obama Administration
During the presidential primaries and in the campaigns, there was a lot of rhetoric about the need for “fair” trade instead of free trade. Candidates were in a populist mode, catering to critical manufacturing states that have lost jobs and serving up trade as the villain.
Now that Senator Barack Obama is the President-elect, there is renewed speculation on what path his administration will take on international trade. Will he make good on his campaign rhetoric that echoed the Democratic platform’s call for renegotiation of trade agreements to include even more stringent labor and environmental standards? Will he continue to hold up pending trade agreements with close U.S. allies? Will he embrace isolationism and protectionism or adapt to geopolitical realities?
In a new C:\Spin publication, I provide some perspective on the outlook for trade in the Obama Administration. I opine that President Obama will face enormous pressure to make good on some of his campaign promises on trade. But, with his top-notch economic advisers, he may pull back from drastic anti-trade actions that would harm the fragile economy and alienate U.S. allies and trading partners.
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U.S.-Colombia Free Trade Agreement Stirs in Its Sleep
The stalled U.S.-Colombia free trade agreement has become a campaign issue in Florida’s 25th District, which is home to a substantial Colombian-American population. Rep. Mario Diaz-Balart is using his support of the agreement as a club with which to beat his challenger.
That challenger, Joe Garcia, doth protest. He says he is “for fair trade and getting it done in a way that protects American jobs and American commerce.” That’s another way of saying that he thinks consumers are paying too little for goods and services.
Here at CEI, we believe that trade cannot be fair unless it is free. For more on how the U.S.-Colombia free trade agreement promotes both fairness and freedom, see this study that Fran Smith and I co-authored in July.
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More Trade Means More Peace
If goods do not cross borders, then soldiers will.
It’s an old saying. Maybe even a cliché. But there is some truth to it. What wonderful news, then, that India and Pakistan have re-opened a trade route through the Kashmir region.
Soldiers have been crossing that border for 60 years. Replacing those soldiers with spices, apples, and other, ahem, non-fatal goods will have two positive effects. First, those goods will become cheaper and more abundant in India and Pakistan.
Second, the new trade route will help to strengthen the blossoming but still fragile peace; killing the customer is bad for business. Indians and Pakistani in and around Kashmir are developing a financial incentive to get along.
Expanding international trade is not just good economics. It is good foreign policy. Congress and our next president, whoever he is, would do well to heed that lesson.
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Iowa, the Halloween grinch
Iowa has decided to put a tax on pumpkins that are not consumed. You have to sign a form promising to eat the thing and you will save 7 percent sales tax. Between the added paperwork for both vendor and customer and the invasion into my kitchen, this is an example of stupid taxation.
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Give it up already!
Just as France has put a temporary freeze on growing corn bred with molecular plant breeding techniques, Austria fails to create a majority within the EU for banning the corn altogether. WTO has already said its an illegal ban, and none of these countries can come up with new scientific information to justify further moratoriums.
We have eaten the food for 11 years now, and there has not been any evidence, either litigious or trustworthy scientific evidence, that indicates risk connected to consumption. Why spend time and money on a case that’s lost?
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Costly Sugar Subsidies to Increase, Impoverishing the Poor
Congress is set to pass a bloated farm bill that will increase federal sugar subsidies, which have cost taxpayers billions of dollars, and prevent farmers in some of the poorest countries in the world from selling their sugar to the United States at low prices. Even The New York Times thinks President Bush is right to consider vetoing the bill.
In a letter to the House Agriculture Committee joined by public interest and consumer groups, Fran Smith explained that the sugar subsidies will harm the environment, cause job losses, and increase food costs. And in National Review, she explains the bizarre workings of the sugar subsidy program, while in the Monthly Planet, she describes how the program costs thousands of American jobs in the candy manufacturing industry.
In an earlier blog post, I explained how the farm bill as a whole is a big rip-off of American taxpayers, full of corporate welfare, criticized for contributing to pollution and obesity, and an obstacle to negotiating international trade deals that would create jobs in America for our exporters.
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Differences between rich and poor creates strife in India
The other side of India’s boom is the corruption and lack of protection of rights for the poor. This story from NPR about a month long protest march for protecting the property rights of the poor gives a picture of India that you seldom see in the media.
If you have been to India, you might have passed through the roadside encampments outside the big cities, where nothing stays clean for more than half an hour, where people live, not paycheck to paycheck, but from hand to mouth. The people that live in these camps are domestic labor refugees from the poor states in India. They came to the big cities in the richer states to look for work.
These are the people that globalization, free trade, and more respect for individual rights will help.
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Organic bananas won’t save lives
Owner of one of the largest food retailers in Norway, Trond Lykke says organic food is selfish because it requires more land area and drives up retail prices at the cost of poor farmers in developing countries, according to Norwegian Dagsavisen. Other Norwegian retailers agree with him and say consumers should not get caught up in food fads and hysteria.
The organic food movement in the country does not appreciate such heresy. Some claim that the inefficiency of organic food production does not influence the price on the world market. One researcher even goes as far as to say that organic food production will increase access to food and food security in poor developing countries.
Unlike the reporter who cited BioForsk, I actually read the report to figure out how someone could claim that FAO would come to this conclusion. The argument was that organic food principles would increase the need for labor, increase need for self-sustaining household, and decrease transportation. Organic farming in this case is just a proxy for low growth economic development. These so-called contributions are not a result of organic farming; organic farming is a result of keeping poor people poor.
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Happy Birthday, Biotechnology
So far as I can tell, it’s gotten no attention whatsoever, but today is the 25th Anniversary of the Food and Drug Administration’s approval of the very first ever biotech medical product: Humulin, a recombinant version of human insulin invented by the biotech company Genentech, and marketed by Eli Lilly.
This was a stunning breakthrough because, until Humulin was approved, diabetics used insulin taken from pig and cow pancreases to treat their condition. Using recombinant DNA techniques, Genentech was able to create a product consisting of actual human insulin. FDA completed the review in a remarkably fast five months, at a time when the average review of new medical products was close to three years. CEI adjunct scholar and Hoover Institution fellow Henry I. Miller, who was the FDA medical reviewer in charge of the Humulin dossier, told The New York Times that the speedy review confirmed the ‘’scientific and commercial viability of” recombinant DNA technology and the biotechnology industry.
Biotechnology has revolutionized the practice of medicine and the pharmaceutical industry. Over the past 25 years, more than 187 biotech medicines have been approved in the United States, and they have been prescribed to an estimated 325 million patients. Over 300 more such biopharmaceuticals are in development. The biotechnology industry has delivered extraordinary medical advancements and has helped to create medicines that treat diseases once thought intractable. Biopharmaceuticals currently are used to treat cancers, stroke, multiple sclerosis, diabetes, cystic fibrosis, and many other diseases. Many forms of cancer that were invariably fatal a decade or two ago have now become treatable and even curable. Other once-fatal diseases have now become manageable conditions for many sufferers thanks to biotech medicines.
Unfortunately, while food biotechnology has the same potential, it has not fared nearly as well. A broad scientific consensus has concluded that rDNA technology (known variously as gene splicing, genetic engineering, and genetic modification) is merely an extension, or refinement, of less-precise breeding techniques that scientists have long used for similar purposes, but it’s use has been hobbled by vast over-regulation in the U.S. and around the world — a phenomenon I have written about at length elsewhere. So, today, let’s celebrate the tremendous success of the medical biotechnology industry, but let us not forget how government has nearly strangled food biotechnology in its crib.
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