01 May Question: QUESTION CONTEXT: Kenya’s flying vegetables (and flowers) GlobalPost September 07, 2009 · 1:26 PM…
QUESTION CONTEXT:
Kenya’s flying vegetables (and flowers)
GlobalPost
September 07, 2009 · 1:26 PM UTC
By Katrina Manson
LONDON — Kenya’s exports of 450,000 tons of vegetables, fruit and flowers to Britain and European markets have become the East African country’s fastest growing economic sector.
“Kenyan horticulture will bring in $1.3 billion this year. It’s come from nowhere in 20 years and receives absolutely no subsidy of any kind and yet it’s bigger already than banking, tourism and even telecommunication,” said Mark Ashurst, director of the Africa Research Institute, a British think tank which produced a provocative new report on Kenya’s horticulture industry.
The report, “Kenya’s Flying Vegetables,” charts the experiences of James Gikunju Muuru, a smallholder farmer in central Kenya. One of 33 siblings, his four acres of farmland — devoted to green beans, tomatoes, cabbage, sweet potato and baby corn — support his wife and six children.
Muuru says he earns seven times as much money from growing green beans and other export crops as he would from growing the nation’s staple crop, maize. The money he earns is used to feed his family, as well as for medicine and schooling. His is a common story: Muuru is one of 4.5 million Kenyans who are supported by horticulture, according to the report.
Some detractors claim food security is so pressing it harms Africa to export cash crops, something the Africa Research Institute counters, saying only 10 percent of the total weight of food grown in Kenya is exported and yet it brings in 50 percent of its value. The remaining 90 percent is traded within the region for local consumption.
“Food insecurity isn’t about self-sufficiency; it’s about having enough money to buy food,” said the ARI’s Jonathan Bhalla, who researched the report. “Green beans bring in seven to 10 times more money than maize. Africa has been trying for self-sufficiency for years and it’s never worked.” The report’s most controversial point, however, is the argument that buying Kenyan horticulture not only supports the country’s developing economy, but it is environmentally more sound than buying locally grown British food. In recent years, the climate change lobby has claimed that the carbon burned up by jetting produce to market uses far too many “food miles.” They argue it is much more sound ecologically to buy locally grown produce.
But Ashurst and others argued that it is good for the environment to export Kenyan vegetables by jet. It didn’t hurt that they made this controversial assertion to an audience that was dining on sweet potato blinis topped with smoked aubergine caviar, tempura okra and soya bean and chilli cassoulet, all made of produce air-freighted from Kenya.
“Even with air freight, production in Africa is four times greener than produce elsewhere,” said Stephen Mbithi, chief executive of the Fresh Produce Exporters Association of Kenya, to guests as they tucked into Kenyan passion fruit brulee with litchi foam, washed down with
mango and prosecco cocktails. “Our temperatures are 20 to 25 degrees Celsius all year round; we use no hothouses unlike in Europe, and with two acres there’s no space to drive a tractor so we have to use manual means.”
African horticultural imports represent 0.1 percent of all of Britain’s carbon emissions. Horticultural imports to the U.S. — including Kenyan baby corn, baby carrots, shelled peas and flowers — represent 0.05 percent of carbon emissions. Besides that, more than 60 percent of Kenya’s produce is grown by the nation’s 1.5 million smallholder farmers, who also produce the high-quality crops thanks to their labor-intensive methods. At least two-thirds of exports are flown out in the hold of passenger flights, meaning they are merely riding on the back of largely tourist travel.
“If you want to reduce greenhouse gasses from planes, you don’t look at Africa,” said Mbithi. “Total flights from Nairobi are half a percent [of those] from Heathrow.”
While Africa’s carbon footprint works out at one to two tons of carbon per head, in the U.K. it’s 11 to 14 tons and in the U.S. it’s 22 tons. The U.K.’s government buildings emit more carbon than the whole of Kenya.
Advocates of air-freight argue the climate change lobby is looking in the wrong places.
“Seeing fruit and veg as the epitome of unsustainable consumption eclipses the truth about carbon emissions and sustainable development,” said James MacGregor of the International Institute for Environment and Development, a research body. “‘Food miles’ serves a lot of people very well — the people who use localism as a banner, such as farmers’ markets and those in favor of locally produced meat.”
While websites offer recipes for zero food-miles diets, much of the food-related carbon cost to the environment is hidden by focusing solely on flights, argues the report. Hothouses to recreate tropical temperatures and clearing Amazon forests to grow soy to feed “produced in U.K.” livestock
are among the less obvious but more environmentally detrimental factors. Air freight accounts for only 5 percent of emissions from U.K. air transport, asserts the report.
“The idea of food miles is easily understood and it makes people feel they are getting the environmental debate, but the real world is not so easily boiled down,” argued MacGregor. “The more the food miles issue gets re-stated, the more the developing country angle gets lost.”
A report to the British government last month stresses the need to consider African countries’ economies in the lead up to December’s U.N. conference on global climate change in Copenhagen. It suggested the British government could pay a “carbon tax” to offset the air freight emissions of horticultural products from developing countries and could provide better consumer information that includes accurate information about the way products have been grown in addition to information about how they have been transported.
- The characteristics / factors that give rise to comparative advantage (according to readings)
*Land, Labor and Capital
- “New trade theory” adds to the list of characteristics / factors that give a country a trade advantage. Add these to your list from (b).
*The new trade theory adds opportunity cost and absolute advantage
- “New” “new trade theory” is really not anything new. It’s just a re-assertion that comparative advantage works at small scale (i.e. very low levels of aggregation). However, it does add some additional insight into trade patterns. Outline these additions and add them to your list from (b) & (c).
*New trade theory identifies new patterns and characteristics as below:
- High economies of scale
- High network effects
- Differentiated products and hence Monopolistic competition structure
- Continuous innovation cycles
- High product growth cycle
**QUESTION TO SOLVE
Case studies. -For the following case, list factors from above that can account for the emergence of the trade patterns.
– there is critical development in this market that creates the ability for trade flows. What is it?
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