Chapter 3


By the late nineteenth century, certain patterns in the flows of international trade were
becoming established, which still linger on today. The colonising powers of Western Europe
were developing markets for their industrial exports in third world countries, which were
paid for through the export of cash crops such as coffee, tea, rubber and palm oil. Many of
the Western European countries had reduced their tariffs on imported grain, following the
lead of Britain, who had repealed the Corn Laws in 1846, to enable cheap imports of grain
from North America and later Australia. Thus at the turn of the century, Europe was
exporting primarily industrial goods to pay for imports of grain and livestock from the New
World and cash crops from Africa and Asia. This pattern was to change during the
Depression of the 1920s and 1930s as all the developed countries became more protectionist,
and the USA became more industrialized and reduced its imports of manufactures from
Europe. Overall trade levels fell dramatically, and many of the colonies were badly affected
by plummeting world prices. This period marks the institution of marketing boards in
countries like South Africa and the then Rhodesia, to support farmers who were badly hit by
the world recession.

Since World War II, exports of cash crops are still the major source of foreign exchange for
many developing countries, but many African countries are now importing food crops direct
from Europe and the USA, as well as manufactured goods. Some Asian countries now
export manufactured goods as well as cash crops and import food crops. North America is
responsible for about 80% of cereal exports. Cereals make up about 40% in value of the
developing countries' total food imports, a change from the 1930s when all the major
developing regions, Africa, Asia and Latin America, were self-sufficient in cereals.

Cereal imports have grown to all continents, except Europe, in the last three decades. The
average annual rate of growth of cereal imports in the world as a whole was 3.8%, roughly
the same as for total food imports. The extent to which cereals are traded across
international borders varies by category. Overall, about 12% of cereal production was traded
in 1993. However, this varied from 4% for rice, through 13% for maize to a high of 22% for
wheat. For comparison, 99% of coffee production was traded in 1993.


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