9 - Agricultural exports and the international economy

Summary

The growth of the international economy during the nineteenth century presented farmers with the possibility of specialising for the export market, thus avoiding the limitations imposed by low per capita incomes, or weak infrastructure of the domestic market. It allowed Spanish farmers to dedicate resources to the production of those goods where Spain enjoyed a comparative advantage in international trade which, in the half century prior to the Civil War, included wines, olive oil and oranges.

In the first part of the chapter I survey recent research on foreign trade which shows that a large share of Spanish trade was of agricultural produce, and that the size of the export sector in Spain was small by European standards. The main part then discusses the limitations to export growth for wine, olive oil and oranges. In the case of the first two products, foreign markets were limited by both foreign governments' tax discrimination and consumer preference. On the supply side, where low entry costs allowed quick responses to short-term upswings in demand, the longevity of both crops discouraged the uprooting of plants at times of weak prices, thereby delaying a return to more stable prices. Finally, both the vine and olive appear to have shared similar characteristics as tropical food products, namely relatively inelastic supplies of cheap labour and suitable land, which had a tendency to depress long-term prices.