(Aug. 4, COLUMN)

Food and produce trade have long been in the forefront of globalization.

Yet trade in food differs markedly from trade in oil, gold, iron ore and other fungible commodities.

Foods, particularly produce, can be differentiated according to variety, quality, taste, season, growing and safety practices, and certain intangibles such as traditions, history and culinary uses.

Florida grapefruit grown close to the Atlantic Ocean traditionally brought a premium price. Grapes or apples grown on certain slopes or in valleys may carry a certain mystique.

There’s romanticism to food you won’t find with natural gas.

In addition, nations zealously protect their farmers and food security — or most do, most of the time. This columnist has long argued that food production is too vital and sensitive an area to ever completely succumb to free market and open trade theories.

Losing access to food sources and subsequent threat of starvation is not a theory. It has happened.

All this should be kept in mind as the world continues to try to reform food trade through the Doha trade talks of the World Trade Organization.

At the same time there are plenty of benefits to international trade. The Dutch eat Spanish tomatoes; Americans eat Dutch tomatoes on the vine. Canadians eat American citrus; Americans eat Canadian apples.

But the notion that nations will protect their farmers can be seen in the fact that global food trade has not grown nearly as fast as other types of trade.

The need to look after domestic agriculture can be seen in some recent events:

  • In Argentina, the government nearly fell after farmers across the nation protested a rise in food export taxes. Farmers blocked highways, took to the streets by the thousands and shut the country down. President Cristina Fernandez de Kirchner lost a critical vote in Congress, a vote shown on national television. The tax plan was withdrawn.

  • In Cuba, Raul Castro decreed that some farms would be privatized — leased to farmers in the hope of growing more food. The state would retain ownership. Cuba, in the name of ideology, failed to look after its food and farm interests. The result: this 750-mile-long tropical island with its long growing season, cannot feed itself and must import billions of dollar worth of food. There was a time when Cuba exported large volumes of fruits and vegetables.

  • In Europe, politicians and farmers resist full reform of the Common Agricultural Policy that spends billions of dollars to support the continent’s farms and rural infrastructure. Any attempt to scrap the system brings farmers into the streets, highways are blocked, foreign produce is ripped from supermarket shelves.

  • The World Trade Organization tries to enforce the trade rules but with limited success. There is a lot of winking and nodding when it comes to rules. Almost no one adheres to all the rules, and there is always some new way to erect a trade barrier. (Americans were shocked when millions of South Koreans went into the streets to protest the lifting of a ban on U.S. beef.)

  • Then there is China. The WTO is pressing China to abide by the trade rules. We wish them lots of luck. China does not seem willing to abide by agreements regarding the Olympic Games, where the whole world will be watching. Why would China then suddenly comply with obscure trade rules that only experts can understand? China has found a new “trade barrier” — deny visas to foreign businesspeople. That’s a way to keep out foreign sellers.

The Food and Drug Administration has been struggling to find the source of salmonella in produce. Was it tomatoes, peppers, cilantro or something else? The industry is being ripped financially as the mystery continues.

Now imagine trying to keep track of food safety in China with its 200 million farmers and cavalier attitude toward regulation and rules. The joke is that China complies only when the bodies pile up.

China is now moving to clean up its act regarding fish, pet food, medicines and other export items. Will these reforms last, and can inspectors gain access or receive cooperation? What if it’s all a three-card Monte game with regulators always struggling to find the right card?

Food trade will continue. It ought to grow. But buyers and sellers will work out their own deals and require standards that will be backed by inspections and careful monitoring.

No hidden cards, no under-the-table dealings. Not all barriers will fall, and nations will give preference to their own farmers — in most cases.

Food trade is different. And anyone who treats it the same way as oil or marble chips is setting themselves up for a lot of disappointment.

Food Trade struggles with open market theories
Larry Waterfield