AGRICULTURE IN THE TRADE HISTORY

During several centuries people evolved from hunting and gathering to growing produce in a single location; this was the beginning of the agricultural age. Agriculture spread from the fertile crescent area westward into Europe and North Africa. Intensive food production allowed for greater population density and, as food surpluses were produced, the opportunity arose for trade among the settlements in which different types of agricultural surpluses were produced. As agricultural settlements expanded in number and size, trade in agricultural goods expanded as well.

AGRICULTURAL TRADE THROUGH THE NINETEENTH CENTURY

Early trade followed water routes because it was easier to float people and goods on water than it was to haul them over land, where few if any roads existed. Shipments of grain, fruits, and vegetables were among the first items in recorded trade among countries. The Egyptians traded grain and vegetables with the Romans and others in the Mediterranean region, and trade flourished in the Indian Ocean and China Sea area as well. Germans, French, English, and, to a lesser extent, Italians built canals in the fifteenth and sixteenth centuries to complement existing rivers in the formation of water routes to connect interior agricultural areas with cities and seaports. Once the technology of sailing progressed to where it allowed explorers to venture forth in search of new land to settle, agricultural goods were exchanged between the explorers and those they encountered.
Beginning in the seventeenth century, trade between Western European countries and the New World began to prosper. Spanish explorers searched for and found silver in Central and South America. They also found a thriving agricultural system that produced products such as maize, tobacco, and sugar. The Portuguese established a colony in Brazil that produced and exported agricultural goods. Unlike the Spanish, the English and Dutch explorers developed settlements and colonized North America and the Caribbean islands.
These colonies produced agricultural goods that were shipped to Europe in exchange for manufactured goods. The British colonies in North America became major producers of wheat and corn as well as rice, tobacco, and cotton. Sugar was produced in the Caribbean colonies. Tobacco was the major export product for the colonies (and later the United States) until the early nineteenth century, when exports of cotton exceeded exports of any other single product.

Eli Whitney’s cotton gin (1793) made it feasible to profitably grow cotton in a much larger geographic region of the United States, and technological improvements in British textile mills created a strong demand for this cotton. The Napoleonic Wars made international trade very risky, as both the British and French navies seized ships and cargo thought to be destined for “enemy” ports.
The Jeffersonian Embargo in 1807, which was a reaction to foreign harassment of United States ships, was a major disruption to trans-Atlantic trade, and this disruption was continued by the War of 1812 and the British blockade of the United States. The war ended in 1815, and trade resumed. However, United States trade volume did not return to pre-1808 levels until the 1830s. Britain imported large quantities of grain from Australia and Canada and, during the last half of the nineteenth century, Argentina began exporting grain and meat products to Europe. The opening of the Suez Canal in 1869 shortened the voyage from India and Australia to Britain and allowed producers there to compete more directly with farmers in the United States and Canada for the European markets.
Between 1870 and 1910, four of the top five exports from the United States were agricultural goods (the top five U.S. exports to Britain were all agricultural goods). By the 1890s refrigeration aboard oceangoing ships allowed for the export of chilled beef to Europe, especially Britain, which was also a large market for pork and live cattle exports from the United States during the last half of the nineteenth century. Wheat, wheat flour, and corn were among the top five United States exports to Europe.
Europeans also purchased large quantities of oil-seed cake and vegetable oil, both of which were derivatives from processing cotton, along with lard and tallow from the United States. Agricultural exports from the United States to East Asia were also growing during the last half of the nineteenth century. Central and Eastern Europe produced large quantities of various grains and pulses, but little of this was traded across national borders due to their remoteness and the lack of an exportable surplus. It was not until the turn of the century that United States exports of agricultural goods were less than exports of manufactured goods, but even then agricultural exports continued to expand in the twentieth century.

WORLD AGRICULTURE SINCE THE TWENTIETH CENTURY

Opening of the Panama Canal in 1914 reduced costs for Midwestern U.S. farmers to ship to Pacific and East Asian countries. It also allowed Australia to ship raw wool directly to the United States, instead of through London. U.S. West Coast producers of wheat and other agricultural goods could compete more effectively in the European market.
The mechanization of agriculture, along with a persistent search for better and more disease-resistant seeds, accounted for the productivity advantage enjoyed by farmers in the United States and Canada relative to most other countries before World War I. Horse-drawn harvesters and combines were common before the Civil War, but they increased in size, efficiency, and availability in the post–Civil War period.
Wheat seeds imported from Europe, including winter wheat and hard red wheat, were resistant to disease and the harsh climate of the upper Midwest. Farmers saved seed from those plants that did well, and in the process created seed lines that were resistant to many diseases. There was also selective breeding in cattle as well as swine and sheep during the post–Civil War era, resulting in increased productivity in dairy, meat, and wool production. World War I interrupted the flow of world trade in all types of goods. The interwar years were marked by slow growth in international trade in all products as countries became increasingly protectionist.
In the aftermath of World War II, both the political and the economic structure of the world was radically different. Five-year plans announced by the Soviet Union (first announced in 1928) advertised large increases in agricultural productivity and reduced dependence on imports. China began announcing five-year plans in 1953; besides having a heavy-industry component, these aimed to reduce China’s reliance on trade for agriculture goods. The United States realized even greater mechanization of agriculture with the adoption of tractors and tractor-drawn machinery, which replaced horse-drawn machinery and increased the optimal size for the average farm.
New developments of hybrid seeds and selective breeding further increased the productivity advantage of United States agriculture. Rubber-tired tractors were adopted in the 1930s and 1940s and became commonplace in the 1950s as tractors replaced horses on most farms. Horse-drawn combines were replaced by tractor drawn versions, then self-propelled combines. Moreover, disease-resistant hybrid corn that grew to uniform height became common after World War II, making it possible to further mechanize corn harvesting. Hybrid corn also improved the yield per acre and increased the surplus available for export.
Exports of agricultural goods from the United States threatened the agricultural sectors in many other countries, which responded by erecting protective barriers against imports. During the first two decades after World War II, Japan, South Korea, members of the European Common Market, and most Latin American countries created tariff or non tariff barriers to protect their domestic agriculture sector. The consequent decline in the world price of agricultural goods forced the United States and other countries to subsidize their domestic agricultural sectors to prevent them from shrinking.
Price-support schemes produced substantial surpluses or stockpiles of agricultural goods in the United States and Europe which often were donated to less-developed countries as aid, and this destroyed the domestic agricultural sectors in many of those countries. South Korean and Japanese agricultural sectors have such a high rate of protection that the effective rate of protection on manufactured food products is negative—that is, it is as if the manufactured food companies in these two countries are paying a tax in the form of higher prices for unprocessed agricultural goods, which are the inputs to their production process. As a result of all of this protection for domestic agriculture by various countries, the volume of international trade in agricultural goods is considerably lower than it would otherwise be.
The effect of the Common Agricultural Policy (CAP) of the European Union, which was meant to protect European agriculture, has been production of surpluses that require export subsidies to create trade. For example, people jokingly refer to Europe’s “mountains of butter” when discussing the outcome of European agricultural policies that protect dairy farmers. In Asia, Japan and Korea both protect domestic agriculture to an even greater extent than the European Union does. The United States also protects its agriculture sector, but not the degree that these other countries do so.

Various rounds of multilateral trade negotiations under the General Agreement on Tariffs and Trade (GATT) generally excluded agriculture from the negotiations. Finally, in the Uruguay Round of negotiations that ended in 1995, all of the countries agreed to discuss the issue of agricultural protection and to act upon it at the next round. The World Trade Organization (WTO) was created as a result of the Uruguay Round, and its dispute settlement board has ruled that subsidies provided by the United States for cotton farmers are in violation of the WTO rules. If this ruling stands, it could mark the beginning of the dismantling of protection for agriculture, because many other countries use similar types of methods to protect domestic agriculture.
What would removal of all of this protection for agriculture mean for world trade in agricultural goods? The volume of trade in agricultural goods would increase rather significantly as agricultural output in some countries decreased and in others expanded. The optimal scale for most types of agriculture is quite large, especially when growing grains, pulses, and beef cattle. Even dairy farming, which is protected in Europe and the United States, would be forced to remove price supports that allow high-cost producers to remain in operation. Thus, many smaller, higher-cost producers would cease to produce due to the low profits, but consumers would pay far less for agricultural products than they currently do. The result would be a readjustment of resources within the countries where protective barriers have sustained unprofitable agricultural producers.
Trade liberalization has already expanded the rice trade considerably as new exports have entered markets. Japan imports rice from the United States for industrial uses, as domestic Japanese rice is preferred for human consumption. Vietnam has also benefited from trade liberalization in rice, as the well-being of its rice growers has improved significantly. China has reduced its efforts to be agriculturally self-sufficient, and imports increasing amounts of agricultural goods.
Chile, in moving toward freer trade with the United States, has exploited the reversed seasons of the Southern Hemisphere and expanded its exports of fruits and vegetables to the United States and other markets. And as a result of the North American Free Trade Agreement, Mexico exports fruits and vegetables to the United States and Canada and imports grains.
As is the case with all products, there are particular countries that possess comparative advantages in producing agricultural goods. Multilateral reductions in trade barriers will allow people worldwide to realize the benefits of less expensive agricultural products, not only in lower food costs, but lower costs for many manufactured goods that are produced from agricultural goods.


BIBLIOGRAPHY

Atack, Jeremy, and Passell, Peter. A New Economic View of American History, 2nd edition. New York: W. W. Norton, 1994.
Curtin, Philip D. Cross-Cultural Trade in World History. Cambridge, U.K.: Cambridge University Press, 1984.
Diamond, Jared. Guns, Germs, and Steel. New York: W. W. Norton, 1999.
Rosegrant, Mark W., and Hazell, Peter B. R. Transforming the Rural Asian Economy: The Unfinished Revolution.
Oxford, U.K.: Oxford University Press, 2000.
United States Treasury. Commerce and Navigation Reports. Washington, DC: Government Printing Office, 1870–1910.

By William K. Hutchinson in the book 'History of Trade since 1450', John J. McCusker, Editor in Chief, Thomson Gale, Farmington Hills, U.S.A, 2006, p. 6-12. Edited to be posted by Leopoldo Costa.

JETHRO TULL

In 1701 Jethro Tull (1674–1741) created the first modern seed drill. Prior to Tull’s invention, English farmers had scattered seed by hand on the surface of the soil.Many seeds were thus lost to devouring birds, and the germination rate was low. Tull’s device incorporated mechanisms for furrowing the soil and evenly distributing the seeds in orderly rows.Modern sowing machines still use the rotating cylinder design that Tull pioneered.
Born in Basildon, England, Tull strove to be a politician until poor health compelled him to abandon that aspiration.He became a farmer-inventor instead, and his innovations improved agriculture’s efficiency and yield. Tull went on to advocate a method of farming without manure that depended on aeration of the soil. He published a controversial book about the method, New Horse-Houghing Husbandry (1731), which he revised and expanded in subsequent years.  (By Justin Crawford)