From: glevy@PRATT.EDU
Date: Sun Oct 02 2005 - 18:26:55 EDT
---------------------------- Original Message ---------------------- Subject: The globalisation of Western Europe's vegetables From: "Jurriaan Bendien" <adsl675281@tiscali.nl> Date: Sun, October 2, 2005 5:48 pm --------------------------------------------------------------------- Jerry, While clearing out some papers, I found an issue of the Dutch Foreign Affairs ministry's "International Cooperation" journal (Internationale Samenwerking, May 2005 issue, p. 19) which contains some stats that might still be of interest to readers. The stats concern the market share of developing countries in the imports of vegetables into the current EU and Norway, and the source cited is http://www.cbi.nl/. The figures are as follows: bananas - 23% from Guatemala, 23% from Ecuador avocado's - 55% from South Africa papaya's - 72% from Brazil lemons - 58% from Argentina tamarinde - 75% from Madagascar cherries - 85% from Turkey dates - 66% from Tunesia passion fruit - 51% from Malaysia figs - 71% from Turkey peas & beans - 37% from Kenya capers - 96% from Turkey aubergines - 72% from Turkey artichokes - 95% from Egypt corn/maize - 72% from Thailand tomatoes - 85% from Morocco courgettes - 66% from Morocco truffles - 88% from China However, the fraction of vegetables imported from developing countries in total vegetables imported by the EU countries is generally a little over 10% on average, except for for Spain where it's one-third, and France (a quarter). Germany imports very little vegetables and fruit from developing countries. Most of the export and import of vegetables by value occurs within the EU itself. You might wonder, what is the proportion of imported fruits sourced from developing countries in total fruit imports? For Holland, it's 55%, Italy 47%, Britain 45%, Spain 45%, Norway 42%, France 26% and Germany 16%. In Northern Europe, except Germany and France, close to half of imported fruit is sourced from developing countries. Data is also provided on the same page for the average cost structure for the final market price of a kilogram of commercially produced bananas imported into Western Europe: Producers income 7% Export costs 6% International transport costs 13% 20% gross profit 13% tax levy 41% distribution costs The cost structure of "third world friendly" bananas is not really all that different, except that the producers get 14% (i.e. their share of the final price doubles), the profit margin to others is reduced, and the tax levy rises to 17%. As you can see from the data, there must be a massive difference between the producer's production price, and the final production price. Transport and distribution costs (wholesale and retail) represent about half of the final selling price. The true "physical" production, transport, packaging and storage cost is likely to be perhaps a quarter of the final selling price (for more references, see e.g. the FAO document at http://www.fao.org/documents/show_cdr.asp?url_file=/docrep/007/y5102e/y5102e0a.htm ) . In Britain, consumption of bananas grew by 87% over the period 1990 to 2000 ( http://www.igd.com/CIR.asp?menuid=35&cirid=122The general trend though is for the average consumption of fresh vegetables per person to decline. I do not know exactly how the figures cited above are computed, but as you can see, the "Marxian surplus-value" obtained with respect to a kilogram of commercially exported bananas must be somewhere around a third (or possibly even half) of the final selling price, i.e. a final unit profit rate on a bunch of bananas of at least 33% or so, shared out between producers, rentiers, transporters, creditors, distributors and government. So at least as important as, or more important than who "produces" the bananas, is who "owns" the bananas. This unit profit rate should, of course, not be confused with the return on capital invested in the banana industry, or the profit margin on total sales, which will be less (you can see that in the financial statements of Chiquita, Fyffes etc). All of this though illustrates, how "globalisation" implies greater market intermediation between producers and consumers, the effect being that the proportion of profit income realised by that market intermediation (in contrast to direct production income) increases. Von Bohm Bawerk talked about the "roundabout way of production", but we have to consider also the "roundabout way of circulation". Unsurprisingly, then, the total value of goods traded in the world market rises much faster than GDP (although this obviously has also many other causes). This intermediation (circulation costs) itself feeds into the value-added calculation, to the extent that e.g. distributors gross profit & wage income statistically "adds value" to the bananas. From the point of view of an ecologist, the whole story might of course seem like a bit of a nightmare, to the extent that increasing amounts of energy are used to bring vegetables to the final consumer, the vegetables are in many cases less fresh, and even then the consumer actually consumes less of them, with its effect on the long-term health of the population. To finish, a quote from President Bush: "...Americans should... eat a nutritious diet. That means at least five fruits or vegetables a day. I've got a little work in my family. We've been working on the old - well, been working on number 41 to eat broccoli for all these years. (Laughter.) But it's good advice." http://www.whitehouse.gov/news/releases/2002/06/20020620-2.html Regards Jurriaan
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