As a graduate of economics, I unreasonably assume that everybody knows basic economic ideas like supply and demand and comparative advantage. Perhaps, it is time for me to throw away that assumption and assume the opposite. Explanation on comparative advantage is crucial in effort to discredit the idea of food sovereignty; food sovereignty is merely another name for protectionism.
The idea of food sovereignty is well-stated in the Ninth Malaysia Plan. See Chapter 3 of the Plan if you prefer not to take my words for it. Given that the current administration is stressing on agriculture, perhaps it is not too astounding to see food sovereignty being part of the administration’s economic game plan.
The idea of food sovereignty basically states that a nation should be able to produce enough food for its population and not dependent on others. It should be self-sufficient in food production.
In order to do that, resources would need to be allocated in a way that prioritizes the food production sector. Such prioritization if done as rigidly as possible would deprive other sectors of resources. And indeed, the idea of food sovereignty might contradict the concept of comparative advantage and ignore the possibility of trade.
Comparative advantage is a basic economic principle first proposed by David Ricardo approximately two centuries ago. It states that an entity, be it a whole economy or a person, should concentrate on what it does best. In order word, the entity should specialize in what it could produce most efficiently. From there on, trade away in order to obtain other goods that the entity does not produce. Whenever trade is impossible, the idea does not apply for the obvious reason. There is more to gain from trade than autarky, nonetheless.
When it comes down to the issue of food sovereignty, the question that needs to be answered is this: does Malaysia have a comparative advantage in food production?
Even if Malaysia has comparative advantage in food production — which I think it does to some extent due to favorable climate — the concept of food sovereignty is not as helpful as comparative advantage in creating a more prosperous society.
5 replies on “[1099] Of food sovereignty and comparative advantage”
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I am not saying we quit food production. I am suggesting that we should base our decision to keep or even increase food production on comparative advantage, not on jingoistic idea of food sovereignty.
Besides, if we didn’t have comparative advantage on food production and moved away from food production because of that, our demand would cause price increase for food product world wide. Which means, better deal for farmers whom have comparative advantage.
In this case, it’s a win-win situation. We get to have cheaper food, they get higher price.
The idea of food sovereignty is more about politics than economics. It is no different from the US and the EU supporting their farmers through subsidy, at the expense of other countries (most of which are poor compared to the US and EU) that have comparative advantage in farming.
It’s a bargaining chip. Its there and I see no reason it should not continue or to stop supporting its existence.
The real problem lies with the consumer who wants everything cheap which ofcourse translate to cheap labor, and that ofcourse means.. someone outhere in the world is busting their ass for a penny a day so you can Nasi lemak for RM1. Think about it.
Food sovereignty might not be the best business idea but it certainly will help the farmers life easier.
Fair Trade?
The main premise behind food sovereignty is that “just in case”, there still would be food. However, that “just in case” may never happen simply because countries freely trading with each other don’t have war with each other.
Quite in case, if that “just in case” happens – the billions of dollars spent on the agriculture sector would not secure the food supply of the country. Think about it, if war broke out or sanctions slapped on Malaysia – do you think there would be much of an agriculture sector?
Especially since it is depending on the government?
The problem with Malaysia isn’t that we focus too much on agriculture. Quite in fact, I think Tun M’s forced-industrialization was pretty stupid – Chile’s richer than us without a national car, tall twin towers, a steel company, etc.
But the government goals in “food sovereignty” meant that instead of focusing on our strengths, whatever that may be, we grow things like rice (under some faulty assumption our paddy fields can be anywhere near as productive as Thailand’s or Vietnam’s – after all, the deltas in those countries are probably larger than Kedah).