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Everywhere I go, whether to church or to cocktail parties, people are talking about the global food crisis. It’s about time. While food prices have been rising for more than a year, it is only in the last few months, as food riots rippled through the developing world and the World Food Program began to warn of acute food shortages and budgetary shortfalls, that they began to attract the attention of policy makers in the West.

The Financial Times and The New York Times began writing about the food crisis last year, but the articles attracted little attention. Food banks and community organizations across the U.S. used higher food prices in their 2007 year end appeals, but then the problem seemed limited to the poor. Sharp increases in the price of eggs, milk, bread and meat in the U.S. have brought the problem home in the U.S. Food prices are now an economic and political issue, both a local and a global issue.

This week The Washington Post began a magnificently detailed five-part series on the global food crisis. Today’s story attributes the problem to glitches in global markets. Rather than let markets function freely, several rice and grain exporting countries have stopped exports in order to keep domestic prices low.

As Refugees International reports on its website, rising food prices will have a particularly harmful impact on displaced people, such as the more than two million people in camps in Darfur or the nearly five million displaced Iraqis, because they often can’t work and are removed from their fields and farms. Rations for many displaced people have been cut.

Higher prices already are leading to increases in planted acreage for harvests later this year, but that won’t be enough, particularly, as some analysts fear, if global warming makes crop disasters in some parts of the world more common in the future. The U.S. and other countries have to start making a number of changes, both to deal with the current crisis and to head off future food shortages.

First, the U.S. should stop subsidizing the use of food to make fuel, such as ethanol. By some estimates 25% of our corn crop is being turned into ethanol, a policy that is starving the poor to gas up SUVs. It makes much more sense to cut gasoline demand through conservation than to boost gas supply by burning food products in cars. Plus, improved conservation will have the added benefit of reducing upward pressure on oil prices, which is one of the forces behind rising food prices.

Second, we need a renewed push to bring the “green revolution” to Africa, which was largely bypassed by the improvements in rice and other crops that have helped cut starvation in Asia in Latin America over the last 50 years. Moreover, crop yields in developing countries have been rising at a slower rate since the 1960s, so a new push toward agricultural productivity is necessary. A number of foundations are working on this, but this needs to become a world-wide push, boosted by new infusions of government funds.

Third, trade rules for agriculture need to be streamlined. A combination of crop subsidies and export controls distort market forces, often at the expense of poorer countries. While markets aren’t always friendly to everybody, over time they will lead to a better allocation of resources to meet world food needs.

Josette Sheeran, who heads the World Food Program, has described the impact of high food prices in graphic terms. “For the middle classes, it means cutting out medical care. For those on $2 a day, it means cutting out meat and taking the children out of school. For those on $1 a day, it means cutting out meat and vegetables and eating only cereals. For those on 50 cents a day, it means total disaster,” she said in a recent issue of The Economist. In the U.S. rising food prices are a matter of economics and politics, but in much of the world rising food prices are a matter of life and death.

--Ken Bacon

Labels: President's Corner