BLOG: Political Hot Potatoes
Food is international and, hopefully, non-political, writes Andre Erasmus. After all, potatoes are grown in nations as far apart as Peru and China, South Africa and Germany, or India and the United States of America – countries with differing political ideals. French fries can be bought in Australia or Iceland, Norway or New Zealand, probably anywhere.
The potato’s markets, research and popularity transcends international boundaries and political persuasions.
Or do they? The world is wondering what effect the United Kingdom’s ‘Brexit’ vote will have on Europe and even wider afield. It could change the way we farm, the way imports and exports in the European community work. It could see the UK forging trade agreements with other countries besides or in place of those in the European Union. Or, some say, it could even see other countries leaving the European Union.
Then there’s the current situation in the United States where Donald Trump has gone from TV reality star and billionaire who people poked fun at to President of one of the world’s most powerful nations.
His penchant for issuing ‘executive orders’ without consulting Congress or his other cohorts could be a source of worry for many as no-one seems to be sure exactly how he will behave in the coming weeks and months. Already, it appears, dealings with Mexico will be virtually non-existent – unless Trump uses Mexican laborers to build his wall.
Could his decisions impact on the potato market?
Well, it would not be the first time. Less than 17 years ago the States banned the import of potatoes from Canada’s Prince Edward Island, citing concern about a fungal disease called Potato Wart. It is harmless to humans but causes deformities that make the potatoes impossible to sell.
It was found in a single field in Prince Edward Island, and PEI Agricultural Minister Mitch Murphy suggested at the time that closing the border was an over-reaction and was more political and market related than a concern about Potato Wart as markets were generally sluggish at the time.
But now in 2017 there is also concern over rising nationalism with others inclined to follow Trump’s ‘America first’ which could see nations like Germany, The Netherlands and others following suit.
Political commentator George Friedman wrote in May last year that the re-emergence of the nation state (which is what nationalism is all about) is the new primary vehicle of political life with the result that multinational organizations like the EU and multi-lateral trade treaties were being challenged as they are not seen as being in the national interest.
Markets around the world, from financial to agricultural, must be watching political development with trepidation and some concern as new political leaders in France, Germany, Holland and other countries can bring about major changes and shifts in both internal and external policies.
We are living in interesting times, indeed, and already there have been moves that are different. This month the Brazilian government will impose anti-dumping duties on frozen potato products imported from Europe, following an investigation started in 2015 after a complaint from Brazilian processor Bem do Brasil.
Spare a thought, too, for the people at the other end of the chain – the farmer and the processor. They might have contracts in place now but for how much longer?
Current trends show that frozen potato exports from major players like Belgium, Holland and the United States are up over the previous three years. Many are hoping that trend will continue. Time and politics will tell…