The drought hitting parts of North America illustrates why it’s never a good idea for any region to become dependent on a hundred-mile diet — or protectionist trade policy.
The hot, dry weather is affecting about 61 per cent of the contiguous United States, which means staple crops such as corn and soybeans are suffering. Here in Canada, many farmers are also worrying over their fields, but the damage so far isn’t as widespread.
Indeed, some Canadian farms — and related industries, such as potash — are likely to benefit from the U.S. drought, as it creates higher world demand and higher prices. The prices will trickle up through the food chain, so the world prices for meat and dairy will likely rise, too.
Nobody likes to pay higher prices at the grocery store, but the scenario would be much worse if there were no trade — if a “hundred-mile diet” were enforced on everyone. If consumers in the U.S. had no access to imported food, a drought there would be even more disastrous, and the costs of food there would go even higher — while having no effect on food prices here in Canada, and thus creating no reward for our farmers or incentive for them to grow more food.
This is why trade works. It helps consumers in one country access products they otherwise couldn’t access at all, or at least not without paying exorbitant prices. …
From a food-security perspective, policies that aim to “protect” local farmers from international competition are a double-edged sword. Isolation makes regions vulnerable to drought, flood and disease. There is no protectionism strong enough to protect against nature. Well-designed risk management programs can and should reduce the damage for farmers, but consumers need some consideration too. The global food system is more resilient when it has more sources of supply, and more avenues of trade.
Ottawa Citizen (July 20)