World Trade - February 2009 - (Page 50)

Great Moments IN WORLD TRADE ‘Natural’ Agricultural Monopolies No More BY JEREMY N. SMITH N athaniel Bagshaw Ward was a physician by trade, a botanist by passion, and an inventor by accident. He collected plant species by the tens of thousands, his favorite were ferns, which proved especially vulnerable to the intense air pollution of Ward’s native early-nineteenth-century London. Then, one day in 1829, the doctor discovered stray fern spores germinating at the bottom of a glass bottle in which he had placed the chrysalis of a moth. Curious, Ward designed a rectangular wooden box, topped with sloping glass, sealed airtight with putty at the joints. In it his ferns thrived. “Air plus moisture enclosed in the sealed case [produced] vapor and carbon dioxide during the day, and oxygen…by night,” explains historian Henry Hobhouse. “No foreign diseases, fungi, or viruses could attack…and the nutrients in the soil, if enough were provided in the ﬁrst place, would allow the plant to grow.” Within a decade, the ‘Wardian case,’ what we now call the terrarium, would transform world trade. Since at least the sixteenth century, British botanists had traveled the world for new and useful species, be they trees, shrubs, herbs, grasses, ferns, flowers, fruits, or vegetables. Yet few discoveries survived the return trip except as roots or seeds. “Plants, seedlings, and young trees shipped from foreign parts— China, South America, India, the Cape— mostly died before reaching England, because the changes in temperature and the variations in humidity were so extreme, as the ships carrying the young plants crossed and re-crossed the Equator, and passed from cold to torrid, and torrid to cold regions,” writes Christopher Thacker. “Fresh water was always scarce, and cabin-boys paid to water the plants were known to have used sea-water to avoid ‘wasting’ the ships’ precious supplies.” Equipped with a terrarium, however, shippers could shrug off weather and water alike. In June of 1833, Ward sent two of his cases of ferns and grasses on an experimental six-month voyage to Sydney, Australia. There, the captain reported, “All the plants have grown a great deal, particularly the grasses which have been attempting to push the top of the box off.” The return trip was even more successful. Exam- ining his invention, he found plant after plant “never before introduced alive into this country.” Subsequent terrarium users celebrated. “Whereas we used to lose 19 out of 20 cases during the voyage,” said one shipper, “19 out of 20 is now the average that survive.” So began worldwide transport of valuable plants previously subject to natural “geographic monopolies.” In 1848, for example, the British East India Company employed Scottish botanist Robert Fortune to smuggle 20,000 terrariumprotected tea plants from Shanghai, China to Assam, India (if caught and convicted, Fortune knew, the penalty for such smuggling was death by decapitation). Likewise, British officials used Nathaniel Ward’s invention to ship Brazilian rubber tree seedlings to the Royal Botanic Gardens in Kew, England, and thence to new imperial territories in Malaya, starting rubber plantations. Today, logistics infrastructure as much as site of species origin determines the production of ﬂowers, fruits, vegetables, and other plants for world trade. Case in point: tea originates in Asia, but Germany, the United States, Canada, and Belgium are all top ten tea exporters, and former British Colony Kenya each year exports over $100 million more tea than China, according to the International Trade Centre. Brazil, from which rubber seedlings were ﬁrst shipped, now exports a mere $332,000 annually of natural rubber latex. By contrast, Malaysia, which received the fateful shipment, exports almost $950 million. If natural geographic monopolies persist in agricultural products, they do so now almost only because of reputation, be it for Florida orange juice or French champagne. “In historical times, those monopolies were really set up in terms of quantities: without widespread production, you could control the worldwide quantity and therefore price,” says Bruce Babcock, a professor of economics and the director of the Center for Agricultural and Rural Development at Iowa State University. These days, by contrast, consumers have choice. “As long as the world has sparkling wine from the central valley of California,” Babcock says, “it hurts nobody to allow grapes produced in the Champagne region of France a monopoly on the Champagne name.” WT 50 WORLD TRADE FEBRUARY 2009

Table of Contents Feed for the Digital Edition of World Trade - February 2009

World Trade - February 2009 Contents Taking Stock in America Confronting Corruption in Latin America Supply Chain Watch Tradewinds Where's the Goods? Where's the Money? Hope on the Horizon Managing Fleets in Turbulent Times The Impact of China's Economic Slowdown on U.S. Supply Chains The Fuel Volatile Supply Chain Getting the Most from On-the-Fly Transactions Managing Supply Chain Risk by Managing China Sourcing Capacity OECD Global Economic Outlook for 2009 'Natural' Agricultural Monopolies No More

World Trade - February 2009

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