[Pleasant FTA] Food Is Different from Oil

Agricultural issues have been the biggest stumbling block to FTAs. If we were to name the two main reasons agriculture is said to need protection from FTAs, they would be the food security argument and the issue of protecting farmers.

A major pillar of the food security argument is the prediction that if cheap foreign agricultural products flood in, domestic agricultural production will rapidly shrink, and foreign food majors will then take advantage of the situation by reducing food supplies and raising prices. But this is not a very realistic concern. Food is not as easy to weaponize as oil.

To weaponize food, production must be easy to control. With oil, that is relatively easy. Not only can output be adjusted on a daily basis, but because producers are large corporations and not very numerous, coordination among them is also comparatively easy. Food, however, is far removed from such conditions. First, there is at least a several-month gap between the time seeds are sown and the time crops are harvested, making production difficult to adjust.

An even bigger problem is the enormous number of food producers. The number of farmers producing rice alone probably reaches into the hundreds of millions worldwide. It is virtually impossible for them to collude with one another to control rice production. By the same token, it is difficult for them to conspire to raise prices. That is why Hong Kong and Singapore, which do not even have enough land to farm, have been able to secure stable food supplies over the past several decades.

Even if food were weaponized, prices would not likely rise above the current domestic price of rice. If the cost of procuring food from abroad rose that high, people in Korea would begin farming again. Agriculture is easier to start anew than almost any other industry.

One might also have wartime conditions in mind. But if war breaks out, no one will be peacefully farming anyway. It is necessary to stockpile food for emergencies such as war, but there is no reason to maintain agriculture at the cost of giving up the benefits of free trade. Above all, if we properly fulfill our role as a sound global citizen, there is no reason for us to have to fight a war. War becomes more likely, rather, when a country chooses isolationism, as North Korea has.

Meanwhile, the hardships faced by farmers should be dealt with separately from agriculture itself. Farmers put in difficulty by free trade should be supported through welfare policy measures, such as income compensation. Blocking free trade itself in order to protect agriculture and farmers is not a wise choice.

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Original title: [유쾌한 FTA ] 식량은 석유와 다르다

Author: Center for Free Enterprise (CFE)

Date: 2007-06-20

Source: https://www.cfe.org/bbs/bbsDetail.php?cid=column&pn=20&idx=10693