Grain trade

Source: Wikipedia, the free encyclopedia.

The grain trade refers to the local and international

animal agriculture
.

The grain trade is as old as agricultural settlement, identified in many of the early cultures that adopted sedentary farming. Major societal changes have been directly connected to the grain trade, such as the fall of the Roman Empire. From the early modern period onward, grain trade has been an important part of colonial expansion and international power dynamics. The geopolitical dominance of countries like Australia, the United States, Canada and the Soviet Union during the 20th century was connected with their status as grain surplus countries.

More recently,

agriculture caused by climate change are expected to have cascading effects on global grain markets.[1][2][3][4]

History

Ancient Egyptian art depicting a worker filling a grain silo
commercial agriculture
), does a major grain trade become possible.

Classical world

In the ancient world, grain regularly flowed from the

cores of great empires: maize in ancient Mexico, rice in ancient China, and wheat and barley in the ancient Near East. With this came improving technologies for storing and transporting grains; the Hebrew Bible makes frequent mention of ancient Egypt's massive grain silos
.

Merchant shipping was important for the carriage of grain in the classical period (and continues to be so). A Roman merchant ship could carry a cargo of grain the length of the Mediterranean for the cost of moving the same amount 15 miles by land. The large cities of the time could not exist without the supplies delivered. For example, in the first three centuries AD, Rome consumed about 150,000 tons of Egyptian grain each year.[5]: 297 

During the classical age, the unification of

grain supply to the city of Rome
was considered to be of the utmost strategic importance to Roman generals and politicians.

The American Elevator and Grain Trade periodical front cover of 1904

In Europe, with the fall of the Roman Empire and the rise of feudalism, many farmers were reduced to a subsistence level, producing only enough to fulfill their obligation to their lord and the Church, with little for themselves, and even less for trading. The little that was traded was moved around locally at regular fairs.

Early modern and modern expansion

A massive expansion in the grain trade occurred when Europeans were able to bring millions of square kilometers of new land under cultivation in

railways and the steamship
shifted trade from local to more international patterns.

During this time, debate over tariffs and free trade in grain was fierce. Poor industrial workers relied on cheap bread for sustenance, but farmers wanted their government to create a higher local price to protect them from cheap foreign imports, resulting in legislation such as Britain's Corn Laws.[6]

A grain elevator in Indiana, United States

As Britain and other European countries industrialized and urbanized, they became net importers of grain from the various

Homestead Act and the Dominion Lands Act allowed pioneers on the western plains to gain tracts of 160 acres (0.65 km2) (1/4 of a square mile) or more for little or no fee. This moved grain growing, and hence trading, to a much more massive scale. Huge grain elevators
were built to take in farmers' produce and move it out via the railways to port. Transportation costs were a major concern for farmers in remote regions, however, and any technology that allowed the easier movement of grain was of great assistance; meanwhile, farmers in Europe struggled to remain competitive while operating on a much smaller scale.

Illustration of a Grain market in Tehran in 1893 from Harpers Magazine. Grain markets have been important centers of commerce in many parts of the world for the last 500 years.

20th century changes

Bidders at the Minneapolis Grain Exchange in 1939

In the 1920s and 1930s, farmers in Australia and Canada reacted against the

wheat pools
became a popular alternative to the major grain companies.

At the same time in the

collectivization
programs effectively turned the world's largest farming nations into net importers of grain.

Concrete-Central Elevator of Buffalo, New York with a 4,500,000 bushel capacity built by Monarch Engineering Company before January 1919

By the second half of the 20th century, the grain trade was divided between a few state-owned and privately owned giants. The state giants were

André Maggi Group
from Brazil.

In 1972, the Soviet Union's wheat crop failed. To prevent shortages in their country, Soviet authorities were able to buy most of the surplus American harvest through private companies without the knowledge of the United States government. This drove up prices across the world, and was dubbed the "

great grain robbery
" by critics, leading to greater public attention being paid by Americans to the large trading companies.

By contrast, in 1980, the US government attempted to use its food power to punish the Soviet Union for its invasion of Afghanistan with an embargo on grain exports. This was seen as a failure in terms of foreign policy (the Soviets made up the deficit on the international market), and negatively impacted American farmers.

Modern trade

While once grain was sold by the sack, it is now moved in bulk in huge ships like this.

Since the Second World War, the trend in North America has been toward further consolidation of already vast farms. Transportation infrastructure has also promoted more economies of scale. Railways have switched from coal to diesel fuel, and introduced hopper car to carry more mass with less effort. The old wooden grain elevators have been replaced by massive concrete inland terminals, and rail transportation has retreated in the face of ever larger trucks.

biofuels, the controversy over how to properly store and separate genetically modified and organic crops, the local food movement, the desire of developing countries to achieve market access in industrialized economies, climate change and drought
shifting agricultural patterns, and the development of new crops.

Price volatility and protections

Price volatility greatly effects countries that are dependent on grain imports, such as certain countries in the

2022 food crises, have had major negative effects on grain prices globally. Climate change is expected to create major agricultural failures, that will continue to create volatile food price markets especially for bulk goods like grains.[2]

A politician, Manish Tewari, visiting a grain market in the important Punjab region of India, frequently described as the breadbasket of India. India's relation to the international grain market, was an important part of the 2020–2021 Indian farmers' protest -- with many of the more active protests in the Punjab region.

Protection against international market prices has been an important part of how some countries have responded to the volitility of market prices. For example, farmers in the

agricultural subsidies. The European Union's programs are organized under the Common Agricultural Policy. The agricultural policy of the United States is demonstrated through the "farm bill", while rice production in Japan is also protected and subsidized. Farmers in other countries has attempted to have these policies disallowed by the World Trade Organization, or attempted to negotiate them away though the Cairns Group, at the same time the wheat boards have been reformed and many tariffs have been greatly reduced, leading to a further globalization of the industry. For example, in 2008 Mexico was required by the North American Free Trade Agreement (NAFTA) to remove its tariffs on US and Canadian maize
.

Similarly, protections in other contexts, such as guaranteed prices for grains in India, have been an important lifeline for small farmers in the context of further industrialization of agriculture. When the BJP Party government of Narendra Modi attempted to repeal guaranteed prices for farmers on key grains like wheat, farmers throughout the country rose in protest.[8][9][10]

See also

References

  1. S2CID 8045747. {{cite book}}: |journal= ignored (help
    )
  2. ^ a b "Climate Change Is Likely to Devastate the Global Food Supply". Time. Retrieved 2 April 2022.
  3. ^ "CLIMATE CHANGE LINKED TO GLOBAL RISE IN FOOD PRICES – Climate Change". Archived from the original on 18 October 2022. Retrieved 2 April 2022.
  4. ISSN 0362-4331
    . Retrieved 2 April 2022.
  5. ISBN 0-8018-5130-0
    .
  6. ^  One or more of the preceding sentences incorporates text from a publication now in the public domain: Chisholm, Hugh, ed. (1911). "Grain Trade". Encyclopædia Britannica. Vol. 12 (11th ed.). Cambridge University Press. pp. 322–325.
  7. ^ Food price spikes put the spotlight on the need for sustained commitment to agriculture Archived 10 February 2014 at the Wayback Machine, International Centre for Trade and Sustainable Development, 1 June 2010.
  8. ^ Singh, Prashasti, ed. (28 September 2020). "Farmers across India protest against farm bills. In photos". Hindustan Times. Archived from the original on 5 October 2020. Retrieved 7 October 2020.
  9. ^ "PM Modi reaches out to farmers amid anger". Hindustan Times. 28 September 2020. Archived from the original on 8 October 2020. Retrieved 7 October 2020.
  10. ^ Mathur, Swati (28 September 2020). "Farm bills 2020: President Kovind gives assent to controversial farm bills, laws come into force immediately". The Times of India. Archived from the original on 3 October 2020. Retrieved 7 October 2020.

Works cited

  • W. Broehl, Cargill Going Global, University of New England Press, 1998.
  • W. Broehl, Cargill Trading the World's Grain, University of New England Press, 1992.
  • Chad J. Mitcham, China's Economic Relations with the West and Japan, 1949-79: Grain, Trade and Diplomacy, Routledge, 2005.
  • Dan Morgan, Merchants of Grain, Viking, 1997.
  • W.E. Morriss, Chosen Instrument: A History of the Canadian Wheat Board, the McIvor Years, Canadian Wheat Board, 1987
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