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Globalization's Unanswered Questions

Kumar Venkat

During the run-up to the World Trade Organization's failed meeting in Cancun, most editorial writers around the world called for an end to unfair farm subsidies and tariffs in rich countries. After all, who could be against an open global market in agricultural products that might offer farmers in poor countries a way out of poverty?

The New York Times went so far as to say that few things could improve the lives of more people -- including the more than one billion people living on a dollar a day or less -- than a positive outcome in Cancun.

With so much focus on a superficial leveling of the playing field, a more fundamental question has received scant attention: Can small farmers -- who make up the bulk of the agricultural sector in poor countries -- survive a global competition with large agribusinesses?

Large farmers and corporations seem to be in the best position to take advantage of any openness in the agricultural markets of rich countries. With their economic and political clout, as well as advanced technologies, they can aggressively expand in developing countries, grow large monocultures of cash crops for export, negotiate agreements with distant buyers, transport their products long distances, and deliver large quantities of mass-produced food. They can also easily move up the value chain by setting up factories to process the raw produce into packaged, canned, and frozen foods.

Small farmers have neither the technology nor the sophistication to easily and reliably sell to distant consumers. They also have relatively small amounts of produce to sell, often the surplus left over after feeding their families. Unless they can somehow pool their products and resources to form large cooperatives, many of them are likely to be displaced by the globalization of agriculture. The tendency of governments in developing countries to represent the interests of powerful trade groups, coupled with lack of social safety nets for those living on the borders of poverty, puts small farmers in a precarious position.

As for the more than one billion who live on a dollar a day or less, most of them are subsistence farmers, landless farmworkers, and other low-wage workers. Even if developing countries as a whole benefit from improved agricultural trade, it is almost certain that these poorest people in the world will see none of the benefits.

Globalization inherently favors large-scale operations that are centralized, highly automated, and dependent on long-distance transport. Small farmers and businesses are immediately at a disadvantage -- their scale of operation is incompatible with the competitive demands of global trade. This basic feature of globalization raises another crucial question.

While global trade itself is not new, what is different about today's large-scale globalization is that it is no longer limited to specialized goods. Basic necessities like food and clothing already travel thousands of miles to reach American consumers. If the global economy becomes seamlessly integrated, most agricultural and manufactured products are likely to be transported many thousands of miles throughout the world. These distances are unprecedented.

What will be the environmental costs of inserting so much distance between producers and consumers of almost everything?

Just one of the effects of increased transportation is climate change. The transportation sector was already contributing 22 percent of the global energy-related carbon-dioxide emissions in 1995, with a projected increase of 2.5 percent a year since then. The Intergovernmental Panel on Climate Change has stated that, due to increasing demand for transportation, improved technologies alone will not be enough to avoid a growth in greenhouse gas emissions.

If long-distance trade were to increase exponentially over the next few decades, there would be a corresponding surge in carbon-dioxide emissions from transportation, not to mention other kinds of pollution and resource depletion.

These are just some of the vital questions about the social and environmental consequences of globalization that remain largely unexamined and unanswered by the promoters and managers of global trade. Unless these issues are rigorously addressed and incorporated into a reformed trade regime, widespread skepticism will remain about the possibility of an economically sound and environmentally sustainable future for everyone.

Our work is licensed under Creative Commons (CC BY-NC-ND 3.0). Feel free to republish and share widely.
Kumar Venkat

Kumar Venkat

Kumar Venkat is a technologist and carbon footprint analyst based in Portland, Oregon. As the founder of CleanMetrics Corp., he helped companies quantify and reduce greenhouse gas emissions.  @kumarvenkat

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