Food prices & protest

The Economist has a good article on some of the issues being faced as countries seek to grapple with the food price crisis, both the good steps taken and the bad ones. It notes the need to avoid confused and patchwork responses.

WHEN Haiti’s prime minister resigned last month after a week of food riots, it seemed to confirm a warning that Bob Zoellick, the president of the World Bank, had given ten days before. He said 100m people were being pushed into hunger and malnutrition—and 30-odd countries faced social upheaval unless food policy improved and the rich world got its act together to help. A month on, policy has not improved, and the rich world’s response has mostly been muddled—yet surprisingly, poor countries have been able to contain the unrest, albeit at heavy cost.

Simon Maxwell, head of Britain’s Overseas Development Institute, a think-tank, says one problem is that donors need a single, simple guide on how and where to help, not a clamour of competing United Nations bureaucracies with different plans. There are moves in this direction. The first priority has been to finance the World Food Programme (WFP), the world’s largest distributor of food aid. The WFP asked for $750m this year and has so far got about two-thirds of that.

Then later:

Rich countries are already managing to be fairly incoherent without any UN infighting. The hope, at least among economists, was that higher prices would induce rich countries to cut state aid to farmers and—says Paul Collier, a development expert at Oxford University—“lead people to question their pleasant fantasies about GM [genetically-modified] food in Europe and biofuels in America.” So far, there are few signs of that.

The current American farm bill proposes only modest cuts in ethanol subsidies. The EU has not changed its biofuels target (10% of all fuel by 2020); it continues to bully developing countries not to plant GM crops and this week refused permission to grow varieties of GM maize and GM potatoes in Europe.

As usual the EU and the USA cannot avoid listening to special pleadings and mis-information. One wonders what the US re-action will be under a President Obama or President McCain.

The article points out the issues faced by poorer countries and how the actions taken are often of a beggar thy neighbour variety, or very short term in nature and economically not sustainable. In this regard attention is drawn to Adam’s post of 8th May 2008 on the issues faced by oil rich states for example.

The article concludes with this:-

These policies are inflationary and expensive. Oil exporters, or countries like Egypt that benefit from big remittances from them may be able to afford them for a while. Others are not so lucky. In Indonesia, where half the population lives on less than $2 a day, inflation is 9% and food prices are soaring (the price of subsidised rice to the poor was jacked up 60% in April). The government is planning to fuel subsidies, which would make social protection and subsidised rice more affordable. The response: more protests

There is a need for the mass of competing interests to sort themselves out.

Rich countries must face up to their responsibilities and untangle the web of protectionism and subsidy which is a major factor in this problem.

To that end the Doha Round must be completed.

The issues of food supply must be addressed in conjunction with the issues of climate change.

An integrated strategy needs to be developed and actioned rapidly, not at the glacially slow pace we see now in the Doha Round, at a time when many developed countries are rapidly adopting Climate Change policies that may well cause more food price and security problems.

Clearly this is arrant nonsense.

Oh, for politicians who will lead rather than pander to special interests and sector pleadings.

Consequently, Adam has rather low expectations for the outcome, yet as he noted on 8th May, the political implications of not resolving the food and water issues may make Climate Change a secondary issue. In one sense it should be, for we cannot in all conscience adopt policies to mitigate climate change that in themselves massive harm to our fellow human beings.