The achievement of so-called food security is one of the reasons why government officials in the Third World insist that certain goods must be produced locally, even if it implies limiting the specialization and exchange of goods among individuals. According to those politicians moonlighting as economists and economists moonlighting as politicians, the only way to assure the readiness of certain staple foods for consumption is having them produced locally, even if that production is carried out with complete cost disadvantage. They fear that if the citizens depend on foreigners for the supply of those goods, at any time those bastards can halt supply or elevate their prices unreasonably. For them, less but secured is preferable to plentiful but unsecured.
Take the case of a person from Guanacaste, Costa Rica. If he uses his resources to produce rice, he will obtain 4 tm/ha; but if he uses those same resources to produce, for example green peraltas, sell them to an American (export them) and then purchase cheap rice in that country, he obtains 48 tm. Trade allows him to multiply by 12 the productivity of his resources. For the proponents of protectionism as a means to achieve food security, the only option available to the Guanacastecan farmer is poverty with security; he would obtain 4 tm/ha instead of 48, but they would be secure. Secure? What happens when his scanty crop fails, as it often does?
Free trade offers infinitely greater food security to the farmer for two reasons. First, with the 48 tm/ha, the Guanacastecan can save, for several years, the 4 that he would obtain producing the rice (or even more, in the form of grain or money) and still have 44 tm left over to increase his well-being and that of his family. His consumption would be more than secured. Second, free trade opens up to the Guanacastecan a broader array of supply sources. If the rice farmers of the US were to face production problems in a given year, the Costa Rican peasant could purchase the rice in China, Thailand, Brazil, or in so many other countries. The peasant knows this, and if he had the freedom to choose, he would specialize in the production of the good that allows him greater rice consumption and well-being. In self-sufficiency, forced by protectionism, if he suffered a crop failure, he would have nowhere to turn, because he would lack the necessary funds to buy the rice, which, by the way, is more expensive due to the commercial barriers erected to protect precisely him. With 4tm/ha he can hardly survive, much less save.
The deaths caused by famine in Nicaragua and Honduras, in 2004, were fostered by policies aimed at achieving that rare form of food security. In liberty, the farmer is much smarter than 100 politicians put together, to a great extent, because he is indeed interested in the peasant's well-being; that is to say, in his own.
By Dr. Rigorbeto Stewart
Institute for Liberty and Policy Analysis (INLAP)
Dr. Rigorbeto Stewart is a well known author of many books articles and monographs particularly in the fields of agricultural policy and economic development. He is also a consultant and founder of Institute for Liberty and Policy Analysis (INLAP).
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