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Food trade: the poor feed the rich

George Kent

Department of Political Science, University of Hawaii, and Environment and Policy Institute, East-West Center, Honolulu, Hawaii, USA

THE BREADBASKET MYTH

The United Nations' Development Forum recently spoke of "how dependent other countries are on US output, which furnishes three-quarters of their imports" (1). Similarly, the Brandt Commission was concerned with the fact that developing countries have rapidly increased their imports of cereals (2, p. 91). The United States Presidential Commission on World Hunger pointed out, "Third World imports of food from the United States rose from $2 billion to almost $10 billion during the past decade," adding that "the United States is still the 'breadbasket of the world,' providing over half of all the grain imported by other nations . . . " (3, p. 7). The Global 2000 Report to the President describes the world food situation primarily in terms of grain production and trade (4). Key data of the report are shown in table 1. The industrialized countries are shown to be enormous producers of grain, while the less-developed countries are importers.

The impression conveyed is that the developed countries- and particularly the United States- feed the world, especially the hungry of the world. There is little examination of the pattern of distribution of grain exports. More seriously, there is no notice of the substantial imports of food into developed nations.

Most of the grain sold by developed countries is sold to other developed countries:

Over half of all US agricultural exports in 1978 went to the wealthy of the world's nations, those which, like the US, have an annual GNP per capita of over $7,000. If the line is drawn at the level of GNP per capita above $3,000, thus including such nations as Italy and the Soviet Union, over two-thirds of all US agricultural exports went to such well-fed nations. [5]

Only about one-fifth of the grain in international trade goes to less-developed countries. That proportion is projected to be even smaller by the year 2000.

The table in the Global 2000 study follows these data on grain with a column of data labelled "Food, per cent increase over the 1970-2000 period." This subtle shift, effectively equating grain with food in general, sustains the impression that the patterns of production and trade for grain correspond to those for food. Global 2000 and many other studies focus on grain as if it were representative of the entire picture of food trade. ls grain typical?

TABLE 1. Grain Production, Consumption, and Trade (kilograms per capita)

Source: ref. 4, pp. 28-31.
*A plus sign indicates exports; a minus sign, imports.

PROTEIN FLOWS

As Georg Borgstrom has argued, the trade pattern for grain is really exceptional:

Outside the area of cereal grains most food and feed on the world market move between the well fed and, still more surprisingly, from the hungry to the rich countries. This is particularly conspicuous in regard to protein, with the well-fed countries on balance making a net gain exceeding one million tons. [6, p. 242]

There is some dispute about the relative importance of proteins versus calories in malnutrition (7, 8) There is a broad consensus, however, that where there are severe shortages, the most serious problem is in obtaining sufficient protein. While there may be a net flow of grains to the most needy countries, the flow of animal protein foods such as meat and fish is actually in the opposite direction. Frances Moore Lappé and Joseph Collins make this point:

While we think of America as the world's beef capital, the United States is in reality the world's leading beef importer. In 1973 the United States imported almost two billion pounds of meat. Often it is stressed that this is but a small amount since it represents only about 7 per cent of our own production. The amount, however, is hardly small in relation to the needs of most other countries. In international trade more meat flows from underdeveloped to industrial countries than the other way around. [9, pp. 214215]

The United States regularly imports far more meat than it exports. As table 2 shows, in 1977 the United States exported US$608 million worth of meat, but imported US$1,289 million worth. Whether measured in terms of value or quantity, the amount imported greatly exceeds the amount exported. Much of that imported meat comes from poor countries.

The fact that the United States has consistently been a major net importer of meat may be surprising to those who see it as a major producer of meat and assume that other nations either produce or import their meat supplies. The situation is actually something like that for oil: the United States is both a major producer and a major importer. With the United States' extraordinarily high rates of consumption, it is not a matter of choosing between the two roles.

Vast quantities of Peruvian anchoveta have been shipped to developed countries for use as animal feed. Borgstrom assesses the phenomenon in this way:

No doubt everyone realizes how preposterous it is that the two most protein-needy continents, Africa and South America, are the main suppliers of the largest quantities of animal protein feed moving in the world trade- and they provide those who already have plenty.... The Peruvian catches alone would suffice to raise the nutritional standard with respect to protein for the undernourished on the entire South American continent to southern European level. The amount of protein extracted (1966-68) exceeds by one half the meat protein produced in South America and is three times the milk protein raise. The corresponding fish meal coming from Africa would be enough to reduce by at least 50 per cent the present protein shortage of that continent. [6, p. 237]

TABLE 2. US Meat Trade (Excluding Poultry), 1977

Source: ref. 10, pp. 2, 5,186, 267.

Similarly, a substantial part of the shrimp catch of India is not used to feed its own hungry, but is frozen by private enterprise for export to the United States and Western Europe.

It is sometimes suggested that, if anchoveta or shrimp or some other product were not exported, it would not be used at all and thus would be wasted. This argument fails to acknowledge that the raw resource is only one of many inputs. Export-oriented production often diverts labour, capital, and other resources away from production for local consumption. The point is certainly clear in the case of agricultural products. If, for example, coffee or banana exports were sharply reduced, the effort invested in their production would be reduced as well, and that effort could be reallocated to meeting local needs more directly.

Sometimes it is argued that certain products must be exported because local people have no taste for them. For example, it is said that Pacific islanders prefer imported canned mackerel to the tuna that is caught and canned on their own shores. There is some truth to this, but the argument is commonly overstated. The tuna sold in local markets in the Pacific islands is generally of the lowest grade- tuna flakes that would be sold as pet food in the United States- and it appears in the local markets at perhaps twice the price of mackerel. The higher grades of tuna are exported, not because there is no taste for them locally but because rich countries are able to pay more for them.

Producers' concentration on exports can help to raise incomes and can help to meet basic human needs. Much too frequently, however, the export orientation is harmful. The point is illustrated by a group of Indian fishers:

To add to our country's misery, the developed world is now making strident demands for our other varieties of fish, like sardines, tuna, mackerel and pomphrets which have also been promoted as delicacies in their countries. If this trend continues the Indian population will have to do without fish since the foreign buyers are ready to pay ten times the amount of money a poor Indian could hardly afford. Can we allow our fish which is our vital food resource to be exported at the cost of the protein-starved population of our country, even if the principle involved is the highly questionable foreign-exchange earnings? [11]

Let us examine the trade in fisheries products in detail. The dollar values of US fisheries imports and exports, including both edible and non-edible products, have increased greatly over the past 50 years (12). This is partly the result of inflation. These effects are eliminated if we examine trade in terms of quantities rather than values. The figures for imports and exports of fish by weight for edible fish alone, not non-edible fish products, show very clearly that imports have greatly exceeded exports, both by value and by weight, in every year since 1929 (12). The United States imports more fish than meat. Overall, "the United States alone imports about twice as much fish, primarily in the form of feed for livestock, as do all the poor countries combined" (13, p. 8).

As Lappé and Collins point out, meat imports account for a relatively small share of US meat supplies. Fish imports, however, constitute a large and steadily increasing share of US fish supplies. The increasing dependency of the United States on imported fish is demonstrated in table 3. As these data show, imports as share of catch rose from less than 20 per cent of the US catch in the 1950s to more than 40 per cent in the 1970s.

The shares accounted for by imports are even larger if the imports of non-edible fishery products are included as well. The determination of what is edible is not a simple technical question. Products regarded as non-edible when they reach developed countries, and thus relegated to use as feed and fertilizer, frequently are regarded as edible at the point of origin. A case from Africa illustrates the point:

In Senegal . . . there exists a factory for the production of fish meal.... This factory, Sopesine, owned by two French companies . . . treats 2800 tonnes of sardines each year (fish fit for human consumption) in order to produce 5000 tonnes of fish meal and oil.

Ninety-five percent of the fish meal is destined for consumption by French livestock.... One hundred kilometers from [the landing area], peasants don't eat fish because it is not available or it is too expensive. [[16]

Products that may be regarded as substantial food resources from the point of view of the poor may be used as livestock feed for the rich, or to feed their pets:

. . . a cheap Moroccan canned fish, developed for the Middle East markets, primarily Egypt, brought a higher price when sold to the United States as cat food. One-third of the canned fish of the United States is in effect pet food. An equally large portion of the British output of canned fish is devoted to the same purpose. In most instances this constitutes food which would be very much in demand if offered to the protein-needy and malnourished around the globe. [6, pp. 229-230]

TABLE 3. United States Fish Supply (weight in billions of pounds)

Source: ref. 14, p. 24, and ref.15, p.8

The argument that the product is not suitable for direct human consumption has been used to defend the export of anchoveta from Latin America to Western Europe and Japan to feed pigs and poultry. Actually, there are indications that, instead of being converted to fish meal for animal feed, the anchoveta technically could be converted to fish protein concentrate for human consumption. Even if livestock feed were the only possible use for these sardines or anchoveta, there would still remain the question of why the feed should be consumed by livestock used by Europeans rather than by Africans or Latin Americans.

Despite its oceanic position, Hawaii imports about two-thirds of the fish it uses, from the mainland and from other countries. The chairman of the state's Board of Agriculture believes that "while the United States has been a large exporter of food, the world need for protein is already straining American resources" (17). Just the opposite is true. Hawaii, the rest of the United States, and other developed parts of the world place very substantial demands on the world's food system. The dollar value of United States imports in 1978 exceeded the value of exports not only overall, but also for each separate region of the world (18, p. 39).

Fish in the international market tend to flow from less-developed to more highly developed countries because most countries purchase their fish imports from countries that are poorer (in terms of gross national product per capita) than those to which they export their fish (19, pp. 8792).

Another indication that the flow tends to be from the poor to the rich is that, among the market economies of the world, the developed countries export around 70 per cent of simply preserved fish (e.g., frozen) but import 90 per cent of the total value of fish traded. Thus, fish continue to migrate after they are caught. They tend to go from the more needy to the less needy. One very clear illustration is that 56 million pounds of fish were exported from the famine-stricken Sahel region of Africa in 1971 alone. For many of these countries, fish is the major source of animal protein.

There is a widespread and very commonsensical view that countries export food only when, and only because, their domestic needs are satisfied. Although this seems logical, it is not true. Many nations are, in fact, organized to meet the needs of others before they meet those of their own people. India's economy is heavily oriented toward meeting the needs of outsiders. Despite its suffering very extensive hunger and malnutrition, India is a major exporter of food. It is not simply a net exporter. For all practical purposes, India does not import food at all. Thus, India itself demonstrates that the poor feed the rich.

Many poor countries export food despite their suffering serious malnutrition at home. In Thailand, Malaysia, and the Philippines, seafood exports have expanded sharply while at the same time local consumption of this major protein source has declined. In Malaysia, the quantity of fish available per person in 1975 was 30 per cent lower than the 1967 level, despite the fact that the total catch increased substantially. Most of the increase in production has been exported. The situation in Thailand is similar:

In 1972, the total fish catch in Thailand was 1.55 million tons. It fell slightly in the next few years and returned to 1.6 million tons by 1977. Yet seafood exports boomed, though the local catch had barely changed in five years and the population had grown. [20].

Thailand is certainly not exporting only the surplus that remains after domestic needs are fulfilled; local consumption is sacrificed for exports.

A related "sensible" perception is that a country that exports a food product does not import it, since exporting it is a sign of domestic sufficiency. Thus, one observer could say, "In Indonesia, the imports [of fish] play a minor role, since the country is a net exporter" (21). In fact, many countries both import and export substantial quantities of fish and other foods. This may seem paradoxical, but the practice is actually quite reasonable. The explanation is based on product differentiation. Certain types are imported while others are exported. The major single differentiating characteristic is not taste or cultural preference but market value per unit of weight. Just as Indonesia exports high-value (low-sulphur) oil, while at the same time it imports lower-value oil for its own domestic consumption, so do many less-developed countries export fish of high market value and import varieties with low market value. The Pacific islands and the countries of South-East Asia demonstrate this pattern very clearly.

Often there is some compensation for increasing exports by increasing imports of food. Typically, however, the foreign exchange earned from food exports is not devoted to purchasing low cost, nutritious foods for the needy but is diverted to buying luxury foods and other products in demand by the local elite.

The export of food can lead to the deterioration of local nutrition in many ways. The most direct cause is that local productive resources are no longer used to meet local needs. Consider the case of Papua New Guinea:

While exports of the agricultural and fisheries sectors were increasing at a phenomenal pace- rising in value from approximately $A19.6m [19.6 million Australian dollars]in 1954-55 to $A143.5m in 1974-75- the production of food for the rapidly increasing domestic market virtually stagnated. Food imports into the economy rose from $A9.4m to $A71.5m during the same period. (Exports of food products increased from about $A17m to $A90.2m during the twenty-year period). [22, p. 42]

The mechanisms leading to the rapid rise of food imports into Papua New Guinea is illustrated by the introduction of coffee production into the Chimbu region of the highlands:

Increasing dependency in the Highlands as a whole is terribly clear. The windfall of high coffee prices today means that villagers are less willing and able to cultivate food and obliged to spend more on goods imported from abroad: in the words of Barry Holloway, then Speaker of the House of Assembly, in October 1976: "The people in most Highland areas have more than doubled their purchase of such items as beer, tinned fish, rice and frozen meats in the past three months." Consequently, some 30 percent of Highlands' children are malnourished and, in national terms (again Holloway's words), ". .. the amount of money going out of PNG on luxury and replaceable food items is reaching a peak far more beyond the point of necessity than ever before." The country's expenditures on imported foodstuffs rose from $8m in 1954 to some $23m in 1966, in which year it represented about 50 per cent of total export income. In 1973, however, food to the value of some $48m was imported. All these weak" nesses stem from the increasing concentration upon cash-crop production for export. [Ibid.,p. 120]

The situation is similar in Southeast Asia:

The fact that ASEAN countries are exporting increasingly more of their high quality food products which are still badly needed locally is a clear indication that foreign exchange is more important than local nutritional development The fertile valleys of Mindanao in the Southern Philippines, for example, are entirely devoted to banana and pineapple cultivation, which foreign multinationals process, pack and ship in refrigerated ships to Japan. None of it lands on the tables of the local population, which is among the poorest in Southeast Asia. Rejected bananas become cattle feed.

TABLE 4. United States Food Trade, 1977 (in millions of US dollars)

Source: ref. 24, p. 327.

In Indonesia, the EEC is interested in schemes to grow soyabeans on a large scale, not for protein-deficient Indonesians but for fattening European pigs and poultry. High quality fish, prawns and lobsters have been priced out of local markets because they are frozen and airfreighted to Japan and Europe.

What this has done is to create a vicious cycle of poverty High food prices arising from agricultural resources being siphoned off into export agribusiness undermine the already weak purchasing power of rural Asia. [23]

continue

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