The U.S. baking industry’s trade association, representing firms such as Kellogg Co., Sara Lee Corp. and Interstate Bakeries Corp., plans a march on Washington by the firms’ employees later this month to press for a reduction in U.S. wheat exports.
I wonder what Dani Rodrik would make of that. My feeling is that it would be at best ineffective and at worst counterproductive. Cutting wheat exports would reduce a key driver of demand for the crop, making it more likely that US farmers would grow something else instead. And that’s not even including the effects on, say, Mexico’s poor, who rely on US wheat for their cheap flour tortillas and whose suffering would surely be much greater than any suffering of US consumers having to pay a few more cents for their Sara Lee cookies.