Why oh why is all the value-add in the distribution chain and so little at the production level?. That does not need to be. Look at Iceland, Denmark, or New Zealand--all small states that have somehow gotten very prosperous on agricultural production.
And New Zealand has its New Zealand Milk Board. I'd sure like to see a compare and contrast between the COCOBOD and NZMB. Surely milk demand is far from inelastic except for a fairly small amount.
If you want a Danish analogue, they'd be Hersheys. Buying cheap feed, processing it into butter with cows and steam centrifuges, and marketing it to rich consumers in Britain.
I was thinking pork rather than dairy. But as you suggest, it still involves buying cheap feed. Is there any upstream marketing of pork by Denmark, or does it go out as a commodity?
Oh, I was talking second half of the 19th century when they were getting rich. IIRC agriculture is a very small percent of GDP now (though I would suspect the food processing and services up the supply chain are classified in other industries.)
I would've long ignored the Burke writings, nodded my head for a second or two and then moved on hoping that he may seek education in the discipline he is writing on. In grad school, after Paul Krugman had written Trade and Geography, I audited some courses in the Geography department. I recall explaining demand and supply elasticity to the class, that was debating, to my dismay, weighty economic issues in just the type of language you quote in Burke's first piece (though not everything, mind you, was over the top in that class; I learnt much, too). Regardless, your smackdown of Burke's curry was utterly delectable. Brilliant. All in, just when coming here feels like a mere habit, you remind me why that habit has formed.
I don't have the time or energy to respond to the lengthy chocolate exegesis. However, there is an obvious strawman argument in the durian argument. " Producing carbon-neutral biofuels in order to reduce global warming is supposed to be a bad thing?" Nobody is arguing that reducing global warming is a bad thing. Rather, the argument is that eliminating rainforests is a bad thing. It may be that the benefits of producing biofuels outweigh the detriments of eliminating rainforests, but that would have be shown, rather than assumed. The making of and lack of attention to the assumption seems....neoliberal.
I do not eat chocolate very much anymore. It started to give me canker sores in my mouth, and very painful now to even brush my teeth, with so much mouth sensitivity. Milk chocolate may be ok, I can eat devil's food cake also.
No semi-sweet, very dark chocolates.
If this becomes more common, the future for chocolate business could be less.
The economist’s solution of economic development may prove difficult for some of these cocoa producing countries simply because market-forces lock them into an economy heavily dependent on a single export commodity. This leads to economic instability and in turn political instability – the whole banana republic syndrome.
Let me take a swing at a leftish structural solution -admittedly one that it unlikely to be carried out in the currently existing world.
As you intimate, OPEC is a producer’s union at the international level the way COCOBOD is a producer’s union at the national level. They exist to give producers bargaining leverage in the world market. In this they are the national and international analogue of a sectoral union within a domestic economy. They all exist to improve bargaining power and get a better deal for the producers/workers of a given product.
For the reasons you point out, an OPEC-like cartel would be hard for cocoa-producing countries to organize unilaterally. However, just as some countries support the formation of sectoral unions by legislation, and wages are thus set by negotiations between a sectoral worker’s union and a sectoral employer’s organization, the same could, in principle, be done at the international level. Let’s say all the OECD countries agree to negotiate cocoa prices with, and exclusively buy from, an organization called the Organization of Cocoa Exporting Countries (OCEC).
Obviously, this is pie-in-the-sky given the huge amount of international solidarity this would require among both producing and consuming nations, and the huge (if just) economic sacrifice it would require from the consuming nations. Nor does it guarantee a fair distribution of the wealth within the producing nations, or prevent a kleptocratic government, any more than OPEC does for its member nations. It may even make the lock-in to a single commodity even worse. Also, there would be knock on effects – would not every commodity want a similar deal? Would the result be a kind of de facto world economic union? Would this not be tantamount to world socialism – or at least a world system that resembled the domestic German system? However impossible or unlikely it is in the currently existing world, I think it might count as a kind of leftish structural solution of the Fabian sort. And when you think about it, maintaining free trade at the international level requires a great deal of international negotiation, organization, legislation, and adjudication -- often against stiff domestic resistance. If you think unions are justified on grounds of equity and political stability within a domestic economy despite the economic costs, then should you not support such a proposal, at least in principle?
Burke is just pointing out what happens when new products move from artisanal to industrial production. Industrial scale production requires bigger businesses to be involved for capital and organizational reasons. It requires standardization which minimizes local connections and variations. When possible, it replaces skilled labor and small businesses with less skilled labor under control of managers. Large scale producers are much more likely to trade off higher production against externalities like clean water, clean air, community support, safe roads and the like.
With regards to food, industrial scale production is one of the reasons we can produce as much food as we can at relatively modest cost. The down side, for some, is a standardized product, a more managed work force, and a variety of externalities. At one point, coffee was a small scale commodity. In Ethiopia, every family had a tree or two. It was grown and processed at a small scale by farmers on their own land and sold to various factors who exported it. Now, coffee is grown on large plantations, harvested by relatively unskilled workers, and the trade is managed by large corporations. As Burke notes, the coffee is standardized, lacking regional or seasonal variation. The workers have no stake in the operation and are likely poorer for it. Large scale cultivation does more damage to local forests. Is this likely to happen for durians? Possibly, if they get popular enough.
Anthropologists point out that we don't eat food just for nutrients. We also eat food for meaning. There's a whole commercial iconography linking food to icons of its production and consumption. For beef, it might be a cow or a steak at a cookout. For spaghetti sauce, an idealized Italian grandmother. For a pineapple, something tropical. For a bag of bread, a silhouette of a wheat awn. We fill our bellies, but we also feed our minds and souls.
You can buy small scale, fair trade coffee or chocolate or any number of other food products, if one is willing to pay more and make an effort to seek them out. We use artisanal chocolate for our own consumption, but we buy brand name commodity chocolate for trick or treaters. We buy coffee from small scale coffee farms with local appellations. We just had a lovely pork roast from a pig our farmer friends were raising until rather recently. We are the kind of people who might seek out a small farm, artisanal, fair trade durian if we hadn't tried one some years back and been rather unimpressed.
It is possible to take the artisanal thing too far. Some years back, Maya Weinstein blogged about making her own artisanal high fructose corn syrup. She even sold a kit. It was rather expensive since she had to buy glucose isomerase among other things. I bought a distillation rig to extract lavender oil, but I was not tempted to try making HFCS. I'll stick with Karo, pun intended.
This post was more pleasurable than 2 handfuls of N'Joy vegan chocolate mini-chips. If I spent 5 years in grad school so I could understand the fun you are having it was not a wasted five years.
And what share of the use-value of your substack do I get as a consumer? Probably a greater percentage than I do from the chocolate chips. Yet BDL is not poor.
Cocoa production can be reduced involuntarily. Global heating and diseases are quite likely to severely impact co coa production. Supply might become less and more inelastic, helping some growers. In the short term I gather there is now some use of the discarded pods as a sugar substitute that may increase the growers' income. The impact of global heating is having adverse on a number of once-plentiful commodities, as the loss of olive production in Southern Europe is so obviously steeply raising prices of olive oil in US grovery stores. Use it less and substiture other oils where possible. What impact has this had on growers' incomes?
I seem to recall that in teh US, grain prices were largely controlled by a few large companies like ADM and Cargill. They controlled access to their grain silos and were able to keep the farm prices low and teh markup high to food companies and thence consumers. Wasn't this just oligopoly control of the market? haven't we seen this industry concentration play out in international food markets, where a few players gain control of a market? If these market player concentrations were broken up to ensure more competitive behavior, would that not upset the way prices were set and who benefits? There are examples after examples in the US, from poultry and livestock, to fruits and grains. Farmers' markets for fruits and vegetables are one mechanism to bypass the middlemen to sell directly to consumers and presumably to get better margins for the produce.
Why oh why is all the value-add in the distribution chain and so little at the production level?. That does not need to be. Look at Iceland, Denmark, or New Zealand--all small states that have somehow gotten very prosperous on agricultural production.
And New Zealand has its New Zealand Milk Board. I'd sure like to see a compare and contrast between the COCOBOD and NZMB. Surely milk demand is far from inelastic except for a fairly small amount.
If you want a Danish analogue, they'd be Hersheys. Buying cheap feed, processing it into butter with cows and steam centrifuges, and marketing it to rich consumers in Britain.
I was thinking pork rather than dairy. But as you suggest, it still involves buying cheap feed. Is there any upstream marketing of pork by Denmark, or does it go out as a commodity?
Oh, I was talking second half of the 19th century when they were getting rich. IIRC agriculture is a very small percent of GDP now (though I would suspect the food processing and services up the supply chain are classified in other industries.)
I would've long ignored the Burke writings, nodded my head for a second or two and then moved on hoping that he may seek education in the discipline he is writing on. In grad school, after Paul Krugman had written Trade and Geography, I audited some courses in the Geography department. I recall explaining demand and supply elasticity to the class, that was debating, to my dismay, weighty economic issues in just the type of language you quote in Burke's first piece (though not everything, mind you, was over the top in that class; I learnt much, too). Regardless, your smackdown of Burke's curry was utterly delectable. Brilliant. All in, just when coming here feels like a mere habit, you remind me why that habit has formed.
I don't have the time or energy to respond to the lengthy chocolate exegesis. However, there is an obvious strawman argument in the durian argument. " Producing carbon-neutral biofuels in order to reduce global warming is supposed to be a bad thing?" Nobody is arguing that reducing global warming is a bad thing. Rather, the argument is that eliminating rainforests is a bad thing. It may be that the benefits of producing biofuels outweigh the detriments of eliminating rainforests, but that would have be shown, rather than assumed. The making of and lack of attention to the assumption seems....neoliberal.
I do not eat chocolate very much anymore. It started to give me canker sores in my mouth, and very painful now to even brush my teeth, with so much mouth sensitivity. Milk chocolate may be ok, I can eat devil's food cake also.
No semi-sweet, very dark chocolates.
If this becomes more common, the future for chocolate business could be less.
The economist’s solution of economic development may prove difficult for some of these cocoa producing countries simply because market-forces lock them into an economy heavily dependent on a single export commodity. This leads to economic instability and in turn political instability – the whole banana republic syndrome.
Let me take a swing at a leftish structural solution -admittedly one that it unlikely to be carried out in the currently existing world.
As you intimate, OPEC is a producer’s union at the international level the way COCOBOD is a producer’s union at the national level. They exist to give producers bargaining leverage in the world market. In this they are the national and international analogue of a sectoral union within a domestic economy. They all exist to improve bargaining power and get a better deal for the producers/workers of a given product.
For the reasons you point out, an OPEC-like cartel would be hard for cocoa-producing countries to organize unilaterally. However, just as some countries support the formation of sectoral unions by legislation, and wages are thus set by negotiations between a sectoral worker’s union and a sectoral employer’s organization, the same could, in principle, be done at the international level. Let’s say all the OECD countries agree to negotiate cocoa prices with, and exclusively buy from, an organization called the Organization of Cocoa Exporting Countries (OCEC).
Obviously, this is pie-in-the-sky given the huge amount of international solidarity this would require among both producing and consuming nations, and the huge (if just) economic sacrifice it would require from the consuming nations. Nor does it guarantee a fair distribution of the wealth within the producing nations, or prevent a kleptocratic government, any more than OPEC does for its member nations. It may even make the lock-in to a single commodity even worse. Also, there would be knock on effects – would not every commodity want a similar deal? Would the result be a kind of de facto world economic union? Would this not be tantamount to world socialism – or at least a world system that resembled the domestic German system? However impossible or unlikely it is in the currently existing world, I think it might count as a kind of leftish structural solution of the Fabian sort. And when you think about it, maintaining free trade at the international level requires a great deal of international negotiation, organization, legislation, and adjudication -- often against stiff domestic resistance. If you think unions are justified on grounds of equity and political stability within a domestic economy despite the economic costs, then should you not support such a proposal, at least in principle?
We do have a feeling that surplus from production and trade ought to be split "fairly"—yet in a market economy, it rarely is... Brad
Burke is just pointing out what happens when new products move from artisanal to industrial production. Industrial scale production requires bigger businesses to be involved for capital and organizational reasons. It requires standardization which minimizes local connections and variations. When possible, it replaces skilled labor and small businesses with less skilled labor under control of managers. Large scale producers are much more likely to trade off higher production against externalities like clean water, clean air, community support, safe roads and the like.
With regards to food, industrial scale production is one of the reasons we can produce as much food as we can at relatively modest cost. The down side, for some, is a standardized product, a more managed work force, and a variety of externalities. At one point, coffee was a small scale commodity. In Ethiopia, every family had a tree or two. It was grown and processed at a small scale by farmers on their own land and sold to various factors who exported it. Now, coffee is grown on large plantations, harvested by relatively unskilled workers, and the trade is managed by large corporations. As Burke notes, the coffee is standardized, lacking regional or seasonal variation. The workers have no stake in the operation and are likely poorer for it. Large scale cultivation does more damage to local forests. Is this likely to happen for durians? Possibly, if they get popular enough.
Anthropologists point out that we don't eat food just for nutrients. We also eat food for meaning. There's a whole commercial iconography linking food to icons of its production and consumption. For beef, it might be a cow or a steak at a cookout. For spaghetti sauce, an idealized Italian grandmother. For a pineapple, something tropical. For a bag of bread, a silhouette of a wheat awn. We fill our bellies, but we also feed our minds and souls.
You can buy small scale, fair trade coffee or chocolate or any number of other food products, if one is willing to pay more and make an effort to seek them out. We use artisanal chocolate for our own consumption, but we buy brand name commodity chocolate for trick or treaters. We buy coffee from small scale coffee farms with local appellations. We just had a lovely pork roast from a pig our farmer friends were raising until rather recently. We are the kind of people who might seek out a small farm, artisanal, fair trade durian if we hadn't tried one some years back and been rather unimpressed.
It is possible to take the artisanal thing too far. Some years back, Maya Weinstein blogged about making her own artisanal high fructose corn syrup. She even sold a kit. It was rather expensive since she had to buy glucose isomerase among other things. I bought a distillation rig to extract lavender oil, but I was not tempted to try making HFCS. I'll stick with Karo, pun intended.
I do think that love of artisan production is an upper-class luxury belief in the world today... Brad
This post was more pleasurable than 2 handfuls of N'Joy vegan chocolate mini-chips. If I spent 5 years in grad school so I could understand the fun you are having it was not a wasted five years.
And what share of the use-value of your substack do I get as a consumer? Probably a greater percentage than I do from the chocolate chips. Yet BDL is not poor.
Cocoa production can be reduced involuntarily. Global heating and diseases are quite likely to severely impact co coa production. Supply might become less and more inelastic, helping some growers. In the short term I gather there is now some use of the discarded pods as a sugar substitute that may increase the growers' income. The impact of global heating is having adverse on a number of once-plentiful commodities, as the loss of olive production in Southern Europe is so obviously steeply raising prices of olive oil in US grovery stores. Use it less and substiture other oils where possible. What impact has this had on growers' incomes?
In the short term, more middleman margin expansion than rising farmgate price. In the medium run, we do not yet know...
I seem to recall that in teh US, grain prices were largely controlled by a few large companies like ADM and Cargill. They controlled access to their grain silos and were able to keep the farm prices low and teh markup high to food companies and thence consumers. Wasn't this just oligopoly control of the market? haven't we seen this industry concentration play out in international food markets, where a few players gain control of a market? If these market player concentrations were broken up to ensure more competitive behavior, would that not upset the way prices were set and who benefits? There are examples after examples in the US, from poultry and livestock, to fruits and grains. Farmers' markets for fruits and vegetables are one mechanism to bypass the middlemen to sell directly to consumers and presumably to get better margins for the produce.