LETTER FROM ONTARIO
Shouldn’t the market serve us, instead of
the other way around?
Why can’t society chose fairness and food access over speculation?

By John Clement

editor's NOTE


John Clement

The Christian Farming Federation of Ontario (CFFO), Guelph, Ontario, produces a weekly radio commentary which we occasionally carry under the column title “Letters from Ontario.” John Clement, the group’s general manager, writes most often, with others from the group taking their turns. With the group’s permission, we continue use of the CFFO columns as they seem useful for our international readership.

Posted June 15, 2007: One of the main discussion items amongst farm organizations is how to help the majority of farmers in their quest to obtain adequate income. In this regard, much of the debate lately has centered on things like expanding farm operations, cutting costs, adding value to products, improving marketing skills or increasing exports. In and of themselves, all of these things are good, but they miss the main point.

Underlying many discussions about farm income are some conflicting values and assumptions about how markets should function.

Consider the following: Today’s market rhetoric makes the assumption that a willing seller and buyer are really all it takes to make markets work. However, this assumption totally ignores the fact that market exchanges between buyers and sellers are always accompanied by institutional arrangements set up by the larger society. Even the most ardent supporters of free enterprise generally admit that their view of markets would not work without courts to enforce contracts, a stable supply of currency and a host of regulations and laws. These arrangements are all institutional in nature and embedded in a view of how society and markets should function.

Author Linda McQuaig, in a book entitled “All You Can Eat,” spends some time chronicling how economies of the past structured their markets. In one example, she shows how English regulations from the sixteenth and seventeenth centuries severely restricted the role of middlemen in the economy.

For example, farmers were required to bring their grain to the local market as soon as it was harvested, were not allowed to sell to a middleman prior to harvest and couldn’t store the grain in hopes of obtaining a higher price. Once at the market, common people could purchase grain or flour in any quantities they wanted, under careful supervision of weights and measures. After the common people had made their purchases, middlemen were allowed to buy strictly limited quantities of grain but weren’t allowed to store it in hopes of obtaining a higher price in a later market.

McQuaig points out that the overriding concern of those older British markets was to ensure that people didn’t use leverage to advance their own interests over the interests of other people. And they established regulations and market arrangements accordingly.

In essence, markets are never free of institutional arrangements. We make rules and establish arrangements according to which values we think are important. Getting back to the question of helping farmers to obtain adequate income, the larger question may simply be: Do we have the right rules and regulations in place to help the majority of farmers obtain adequate income from farming?