Export Bans and Restrictions
When faced with domestic crop shortages, governments sometimes respond by banning or restricting exports in an effort to conserve supplies and help constrain local food prices. However, such trade-restricting practices often create more problems than they solve.
Bans, embargoes and other trade restrictions often trigger food hoarding and consumer panic in countries that rely on food imports, which further constrains supplies and pushes up prices. Farmers in food-exporting countries also suffer under trade restrictions because they limit their ability to sell products in international markets. Such measures discourage farmers from investing in productivity improvements or increasing the size of future harvests.
- To meet the needs of a global population that is expected to reach at least 9 billion by 2050, Cargill believes food needs to be grown as efficiently and sustainably as possible. The world produces the most food when farmers plant the crops that are best suited to their local climates and soils, using the right technology, and countries trade with each other for the benefit of all.
- Cargill believes export bans and restrictions limit access to food, artificially raise prices for consumers, divert food from markets in need, send mixed signals to farmers as they make planting decisions, and misdirect agricultural investment.
- Even in times of stress, we urge governments to refrain from implementing export taxes, restrictions or bans that distort trade and cause unintended consequences.
- Artificial trade barriers can cause price increases and commodity stockpiling, as happened in many countries after Russia’s ban on grain exports in 2010. This further distorts already tight markets.
- Export bans and restrictions are ineffective and can have long-lasting negative effects on global food security. Many countries rely on imports because they have less than ideal agricultural conditions to grow food domestically in an affordable, efficient or sustainable way. But if bans cause importing countries to lose confidence in their ability to access international food supplies, they may decide to pursue costly, inefficient and unsustainable production.
- Cargill’s global reach allows us to source grains from many origins and maintain extensive supply chain networks that connect areas of surplus to areas of need. Cargill also provides insight into global supply and demand, markets, logistics, and transportation networks to carry out this work as efficiently as possible, bringing maximum value to farmers and consumers on both sides of the supply chain.