In recent months, there has been a small buzz in the news regarding food crisis around the world. But most people in the west still don’t understand the magnitude of the problem; in fact, they barely feel it. For them it is annoying that food prices have gone up, but it just means some adjustments to their personal budgets and consumption habits. They have the options of choosing to eat out less and buy less snack foods. In the developing world, there are no such choices, particularly in the so-called, bottom billion, or poorest population centers in the world. People in these countries spend a majority of their financial resources on food; moreover, their diets consist of elementary grains like rice and barley, supplemented by a few vegetables. When prices on these food products rise, poor people have few choices. If prices increase enough, they are simply unable to buy enough food to survive.
How big is the problem? The UN World Food Program (WFP) stated last month that, “high food prices are creating the biggest challenge that WFP has faced in its 45-year history, a silent tsunami threatening to plunge more than 100 million people on every continent into hunger.” While Americans express dissatisfaction with rising food prices, the response in less well-to-do countries is has been fierce. There are already protests and riots springing up all over the world, in countries like Mexico, Pakistan, Haiti, Egypt, Burkina Faso, South Africa, Senegal, Maritania, Cameroon, and India to name a few, with the portent of greater chaos to come if solutions aren’t forthcoming. The New York Times (NYT) passed on a warning from the president of the World Bank, Robert Zoellick: “33 nations are at risk of social unrest because of the rising price of food.” Some hungry people in the world, just give up and die, many others get angry and fight. They know their fate if they don’t, and they know that there is a slim chance of something better if they do; so they risk their lives in bloody combat, hoping to force change to something better. In the US, rising food prices may stop people from getting an extra slice of cake after their full course meal. In the developing world, it is forcing some to just one meal a day, and we are not talking steak.
Why is this happening? Analysts cite a number of causes behind world food price increases. One of the main causes is the constant increases in oil prices. Oil (or gasoline) is necessary to transport food; it is also necessary in production, from running farm equipment to making fertilizer. As oil prices climb, farmers must either raise prices, or eventually go out of business.
Another cause of rising world food prices is, simply put, rising demand. Analysts typically note China and India because of their huge populations and rapidly rising standards of living; however, people in successfully developing coutries the world over are using their hard earned currency to buy more food. They want to eat apetizers and deserts too, not just the small portions of rice and vegetables that they’ve grown up on. They are also changing their preference from grains to meats. Increase demand for meats is significant because cows, chickens, pigs, and other “meats” require lots of grain as feed, which then cannot be used for human consumption. Increased demand (without increased supply) equals increased prices.
To make things worse, world food supply has not stayed the same, but has actually been constricted. In recent years, developed countries like the US, have poured subsidies into the development of biofuels, which are produced from crops like corn. This has made less agricultural products available for consumption as food. Also adding to the problem: severe weather in key crop raising areas. One of these is Australia, where the NYT reports that six years of unusually severe drought have led to a 98 percent loss in Australia’s rice crop. The drought has of course damaged other sectors of Australia’s agricultural industry as well. Australia is a key food exporter, so the decrease in its input surely affects world food prices.
There’s more. A substantial number of the world’s food producing countries have initiated food export controls in an effort to keep food prices down on the domestic front. Argentina, Vietnam, India, China, Egypt, and Russia, are among countries that have enacted special export bans or quotas . To make things worse, many farmers, expecting prices to rise even more in the future, are holding back on delivering their products to the market. Export controls and hording constrict the supply that is available to the world market. (US News and World Report)
Is there a solution? The first and most obvious thing that can be done, is that rich countries can step forward with aid to the hardest hit areas. We must remember that this is not a solution, it’s just a temporary mitigator that allows time for action. The bad news is that, as hard as it is to get countries to donate substantial amounts of aid (in addition to the aid that has already been donated in the wake of such monumental disasters as the typhoon that hit Myanmar and the earthquake in China), this may be one of the easiest actions to take, among those needed. Second, countries should get rid of export countrols, and prevent farmers from holding their stockpiles back from the market. Some attention is being given to this, but it will be hard to talk some countries (and more importantly, vulnerable political leaders) out of protectionism. Also, rich countries like the US, can stop pouring subsidies into biofuels (but that could mean less development of renewable energy). Beyond the above mentioned actions, there are few short term options. In the long run, actions should be taken in lesser developed countries to improve their economies, so that poor peoples’ purchasing power rises. Sadly, the world’s best economists have been working on this for a long time, with far too little success (this is mostly due to the fact that politicians don’t want to implement strategies that destabilize their hold on power).
What does the future look like? This is just a bad year right? Things will go back to normal next year. Right? While I like to be optimistic; NO! especially if we don’t give attention to the problem because we think it will solve itself. The biggest reason I say no, is the demand for oil; barring some amazing discovery of a substitute source of energy (or a substantial amount of rich oil consumers contracting a virulent and deadly form of bird flu), demand will rise yet again next year; and with it, price will rise. Another reason: developing countries like China are still developing, and their demand for meats, deserts, and apetizers is still increasing. While there may be some slowdown, there’s no sign of them slamming on the breaks in the near future.
Is there anything that you and I can do? We can donate to aid groups like the WFP; it’s easy, you can do it with a credit card or even a paypal acount. We can also push for change (in our respective countries) in domestic laws and practices that hurt developing nations. Does the US really need a high sugar tariff for security reasons? We can also consume less resources, and tell a significant amount of our friends to consume less resources. I know it’s overly idealistic, but if enough people consume less (particularly oil and food) it will constitute a decrease in demand. One more suggestion: food storage, and again, tell your friends. If enough people store food gradually, then during abnormally bad times, they can fall back on their reserves, taking pressure off the market (effectively, this will be like an increase in supply that keeps the market price from rising). Perhaps the last two suggestions would be better accomplished by governments–which ought to have programs in place to discourage wasteful consumption, and also to build up substantial food reserves for lean times–but they never will be without sufficient demand from the masses.