When I first wrote about the Avaaz.org petition on food prices, there was an email with a list of references that were applicable this morning. Since I was running around and juggling real life as well as a discussion hosted by Cybergrrl Oh (presently unpublished), I didn't have the leisure to look them over.
I did this evening. I recently wrote about food prices in the context of Trinidad and Tobago recently, as well as mentioning my own possible dive into food production - but a glimpse of the bigger picture is interesting and thought provoking. More so than 'hydrophonic lettuce'...
Kaushik Basu, Professor of Economics (Cornell University) wrote How to solve the global food crisis for the BBC, and dispelled my own belief that this was an issue solely of supply and demand:
...Some commentators have remarked how this is all a matter of supply and demand and if governments do not interfere in trade, the price rise will bring a supply response, which will cause prices to level out.
Sure, demand and supply play a role, but there is much more to the current crisis. Understanding this is not easy since we have not seen a food-price surge like this in 30 years.
There is no doubt that demand for food is rising as the world's population increases and there is new prosperity in India and China. Moreover, as people switch to greater meat consumption this causes greater demand for grain, since rearing cattle and poultry is a particularly grain-intensive activity...
Professor Basu goes on to point out that there has been increased use of corn and rapeseed for biofuel production - causing 20% of the production of these in developed nations to be scooped from the barrel of food and unceremoniously dropped in someone's gas tank. He further goes on to point out that there has also been decreased production in Australia (drought) and decreased production of staples in Ukraine and Kazakhstan. That, he says, is still not enough to increase the inflation - but then he points out that food importing countries have enforced restrictions that, while understandable, have also increased the inflation.
An interesting note in there is that Pakistan's farmers bought 50% less fertilizer than they did last year.
On the solution, Professor Basu wrote:
...Many economists will tell you that the ideal intervention to help the poor is to simply give them money (a negative income tax) - that shores up their income - rather than directly controlling prices. In general, this is correct advice; but not in this case.
Suppose we collect $1000 from the rich and hand this out to the poor. Since the rich spend a tiny fraction of their money on food and the poor a large fraction, this transfer will cause food prices to rise.
In general, this would not matter since the price was being driven up by the greater purchasing power of the poor. But in the present precarious situation, the risk is that if the negative income tax does not reach all the poor, then the ones who are left out will see their position deteriorating as prices rise further...
...there is no escape from holding consumer prices down. Ideally, we should drive a wedge between the price that producers get and the price that consumers pay.
None of this can be a long-run policy, since it will cause food production to decline and governments to go bankrupt. Long-run policy has to be more market-oriented, creating incentives for producers to increase output and boosting the incomes of the poor.
In essence, Professor Basu says that the answer is making the poor less poor in the long term, and in the short term that the poor must be buffered from the food prices. ]
The Washington Post's The New Economics of Hunger has a color by numbers approach to the present situation that rings of the truth, and ends with French Agriculture Minister Michel Barnier being quoted as he spoke to E.U. officials:
"We must not leave the vital issue of feeding people to the mercy of market laws and international speculation."
Say what you will about the French - but he has a point. I haven't seen a single starving economist or lawyer in my life.
Meanwhile, Brazil seems to have a plan:
...Brazil's Agriculture Minister said the country grew more rice than it consumed and had a reserve that would safeguard supply.
He said sales abroad would be blocked to make sure the country had enough of the grain for the next six to eight months. "Brazil's greatest concern is having problems importing rice in the future, even though we are self-sufficient. For this reason, we are going to try to maintain an internal stock," said Brazil's Agriculture Minister...
Of course, that reminds me of this rocket scientist in Trinidad and Tobago saying that food prices are lower in Latin America. Clearly, we may not know how long this will hold true.
Meanwhile, this Chatham House Briefing Paper on 'Rising Food Prices: Drivers and Implications for Development' is sobering, to say the very least. Published this month (April, 2008), the ending is interesting and a peek into another world:
...development advocates may find that the emergence of food as a top-rank political issue provides them with an opportunity to form new alliances, new coalitions and new drivers for change. Stressing the reality that we have the power to make choices about
the kind of food system we want is a good starting point. In that light, we may find that ‘food democracy’ is a more useful frame than ‘food security’ – both in the kind of thinking that it engenders, and in the policy options and approaches that it implies...
That is a mouthful right now, coming from a paper destined for the hallways of power. 'Food Security'. 'Food Democracy'. The power of words, revealed.
The International Assessment of Agricultural Science and Technology for Development (IAASTD)'s last report is mentioned in the BBC article, 'Global Food System 'Must Change' also highlights some interesting things:
...The study found that access to food was taken for granted in many nations, and farmers and farm workers were poorly rewarded for acting as stewards of almost one-third of the Earth's land.
It recommended a fundamental rethink of agricultural knowledge, science and technology, in order to achieve a sustainable global food system.
The experts said that efforts should focus on the needs of small-scale farmers in diverse ecosystems, and areas with the greatest needs.
Measures would include giving farmers better access to knowledge, technology and credit. It would also require investment to bring the necessary information and infrastructure to rural areas...
While I didn't quote the parts related to mankind's effect on the environment, it certainly is in there and is seen as one of the contributing factors to decreased production.
And George Monbiot writes at the end of his article:
...Re-reading this article, I see that there is something surreal about it. While half the world wonders whether it will eat at all, I am pondering which of our endless choices we should take. Here the price of food barely registers. Our shops are better stocked than ever before. We perceive the global food crisis dimly, if at all. It is hard to understand how two such different food economies could occupy the same planet, until you realise that they feed off each other.
Two different food economies? Maybe it is the merging of the two economies that presents the challenge being seen.
And after all of that reading, I still don't know exactly what the solution is. Is it more production? Maybe yes, to a point - one says that farmers should enjoy better support, while another says that the poor need to become less poor so that they can afford food. Likely, the two are one and the same.
Some of us may remember an adult in our childhood reminding us to eat all of our food because of a child starving somewhere else. That reality, it seems, is much more likely. With the global population in 1900 booming to over 6.2 billion in this century, it seems like food production or our ability to manage our food production hasn't scaled as well as our ability to... eat.
The answer, of course, varies from one place to another. Larger food importers are putting restrictions in place; large food exporters are doing the same for similar reasons. Meanwhile, food prices scale according to all of this and income levels do not. Creating biofuels robs the world of food but so does the pollution of the environment.
What can you do? Maybe starting to think about it might be a good start.
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