Strange fruit

Vishal was the 2014 winner of the Adam Smith Institute’s Young Writer on Liberty competition.  The free trade of all goods and services seems likely to be optimal—however, given that there are countless lobbies and political pressures that make this situation currently infeasible, I will argue for the abolition of tariffs and restrictions on the trade of fruits and vegetables.

A global abolition of import tariffs and restrictions on fruits and vegetables would, on a static analysis, reduce tax revenue derived from them and increase demand for fruits and vegetables as their prices decreased. But dynamically, reducing the revenue derived from tariffs on fruits and vegetables may well be more than offset from the gains in labour productivity and the increase in national income (and tax revenues) that may result.

David Blanchflower, Andrew Oswald & Sarah Stewart-Brown (2012) found that, after controlling for various other factors, individuals who eat 7 fruits and vegetables a day are found to be significantly happier than those who do not. They further found that this improvement in psychological well-being is nearly as much as the increase in happiness from being employed versus being unemployed!

On top of psychological well-being, greater fruit and veg consumption may also improve general health—itself a benefit—and potentially freeing up healthcare funds. Furthermore, Andrew Oswald, Eugenio Proto and Daniel Sgroi (2009) found that there is evidence to suggest that happiness does raise productivity.

An increase in happiness would also be amplified by the dynamic, contagious effect of happiness: it would spread through the population, further amplifying the economic gains from the easing of import tariffs and restrictions. This phenomenon has been well documented, including in James Fowler & Nicholas A. Christakis (2008).

Some countries already have low import tariffs on fruits and vegetables (in the US tariffs on fruits and vegetables average less than 5% according to Renée Johnson (2014)). But there are several economies where the tariffs are substantially higher; more than three fifths of EU and Japanese tariffs on fruit and veg are between 5-25% and nearly a fifth exceed 25%. Other countries with relatively high import tariffs on fruits and vegetables include China, Egypt, India, South Korea and Thailand.

Perhaps most importantly, the abolition of tariffs and import restrictions on fruits and vegetables would be a big boost to society's least fortunate, a group particularly hard up during an economic crisis like that from which we are only just recovering.

The abolition of tariffs on fruits and vegetables would reduce their price and increase their consumption. The initial drop in tax revenue would be offset by both the direct improvement in psychological well-being and its contagion that would work to enhance labour productivity, national income, health and happiness. Let's pick the low-hanging fruit!