Ripple Effect: Democracy and agriculture, Part 1

Democracy is not just about people. Knowing the etymology of the word, this may seem a bizarre statement. Democracy literally means “rule of people.” But democracy, in its most common form — the representative republic — is also spatial. Geography matters. And since many of the world’s richest and most powerful countries are representative democracies, the quirks of their political geography can have global implications. The overrepresentation of rural areas in most liberal democracies profoundly influences these nation’s policies and, in turn, the global economy itself.

Take the plight of Haiti’s rice farmers, for example. In 1995, under pressure from the World Bank and the IMF, Haiti, the poorest country in the Western Hemisphere, cut its import tariffs on rice from 50 percent to three percent. The result? Disaster. The nation, once an exporter of the staple crop, soon became dependent on imports as cheap U.S. rice swamped the country. Haitian rice farmers could no longer compete. The collapse of the rice industry paired with the 2010 earthquake have left Haiti dangerously food-insecure. Despite rice making up about 25 percent of the average Haitian’s diet, it is no longer a significant crop there.

All this brings up something of a puzzle. America is a developed nation, characterized by expensive labor, land and capital, while Haiti has cheap labor, land and capital. The economic story of the last four decades has, supposedly, been one of liberalization and globalization: industry shifting from expensive, developed nations, to cheap, developing ones. So how could American rice be cheaper than Haitian rice? Why has agriculture not gone the way of T-shirts? The answer: subsidies.

Every five years or so, the U.S. Congress passes a Farm Bill. This multibillion-dollar legislative juggernaut funds a surprisingly broad array of programs, from food stamps to farmer’s market advertising and agricultural subsidies. These subsidies make production cheaper for farmers and lead to more output than market logic would otherwise allow.

For example, even as cotton prices cratered in the late '90s and early '00s, massive subsidies allowed U.S. cotton growers to boost production by 42 percent. This dumping of agricultural commodities onto the global market at prices below the cost of production means that farmers without access to subsidies cannot compete.

In 2001, Burkina Faso lost an estimated one percent of its GDP and saw a 12 percent decrease in export earnings due to competition with U.S. subsidized cotton. This is a country where 85 percent of the population relies on the cotton industry directly or indirectly for survival. It is much cheaper to produce cotton in Burkina Faso than in the U.S., but subsidies more than make up the difference.

Rich nations can afford lavish subsidies, but poorer nations, like Burkina Faso and Haiti, cannot. Globally, this means farmers in poor countries have remained poor because their exports cannot compete. Equally important, nearly all the world’s poorest countries are dependent on food imports, even though much larger percentages of their workforce are engaged in agriculture.

The subsidies that perpetuate this imbalance are not a direct result of skewed political geography — they would exist anyway. However, their outsized influence probably is. In just about every representative democracy, rural interests are overrepresented because of geography.