This commodity supercycle has led to an increase in the prices of wheat and rice. Governments have predictably undertaken a perverse policy of raising prices on the exports of crops to ensure their own supply (and take advantage of higher prices for revenue), removing incentives for farmers to cultivate more land or increase their productivity. Argentinian farmers on the pampas are now milchcows for Kirchner.
The reinforcing inflation of higher prices and bad policy leads inexorably to unrest amongst the poor. Was this not the overriding concerns of all elites in a subsistence economy? Now that age-old conundrum has returned?
Sir John [Sir John Holmes, the undersecretary general for humanitarian affairs and the UN’s emergency relief co-ordinator] said: “The security implications should also not be underestimated as food riots are already being reported across the globe.
“Current food price trends are likely to increase sharply both the incidence and depth of food insecurity.”
As well as the riots in Egypt, rising food costs have been blamed for violent unrest in Haiti, Ivory Coast, Cameroon, Mauritania, Mozambique and Senegal. Protests have also occurred in Uzbekistan, Yemen, Bolivia and Indonesia.
China, India, Pakistan, Cambodia and Vietnam have curbed rice exports to ensure there is enough for their own people.
The phenomenon has even acquired its own term, ‘food insecurity’, though I prefer older and simpler terms: famine and starvation. Since the United Nations has stated the obvious, there is the unspoken assumption of “somthing must be done”. When one looks at the speech, the outstretched hand appears:
But I fear we are also going to need more global resources to tackle these challenges, to find innovative ways of raising these vitally-needed additional funds, and to make sure that these extra resources are spread evenly across the sectors. Allocations must not be devoted exclusively to the most visible aspect of this new demand i.e. meeting immediate food needs, but also to health, emergency education, etc. So the UN, NGOs and donors – both public and private – must continue to work together to increase the level of resources coming from both new and broader sources of funding, not least from the private sector, and to set appropriate priorities. We also need to continue to work on the diversity of funding mechanisms, in addition to core contributions to agencies and NGOs.
Holmes was talking at a conference in Dubai and, despite the denial of scaremongering, painted a picture of crisis (including the usual bogeyman, climate change) to demand more resources co-ordinated and spent by the UN, presumably.
UN spots crisis and pleads cash is not such a good headline, though more truthful.
Considering how the diversion of land from food production to biofuel/ethanol production has had a no small part in causing all this, the UN now complaining about the effects caused by the work of its own IPCC group seems to me a bit hypocritical… to put it mildly.
to add to worries, there has been an outbreak of a nasty wheat virus in some parts of Pakistan, etc. Worrying.
Of course, the free market should be left to let rip. It makes a nonsense of EU and other attempts to guide production via subsidies, production limits, and the like. Record wheat prices should trigger a rapid increase in planting. My parents’ old farm in Suffolk has shot up in value. I expect the same is happening across the North American plains, etc. A lot of investment firms are rolling out agriculture funds to play to this theme.
Part of the problem is down to a run of bad harvests, the ethanol issue. Speculative froth accounts for some of this, but a slowing global economy should cool things down. If Chinese GDP growth slows a bit, expect quite a sharp correction.
When one excuse for totalitarianism loses its public lustre in the modern era, another will be created.
Imperialism failed and along came fascism. Fascism failed, so the self-anointed embraced socialism. That failed, too, in its turn, so they moved on to man-made global warming, but nature is currently exposing this latest fraud and, like all experienced Ponzi-scheme operators, the perpetrators know enough to get out ahead of the crash.
Ladies and gentlemen, we give you food shortages. Meet the new boss.
Actually, the driver for price increases in these crops is at least as much due the price of fertilizer. One of the main source of fertilizing nitrates is natural gas, which has risen precipitously in price along with oil. I’m not arguing FOR biofuels from foodstock, just noting that even if we stopped using arable land for biofuels tomorrow, staple crop prices would not decrease as much as the demand curve alone would indicate.
Brett,
But I thought we could all go wholly organic now without reducing yields to the starvation point! Who needs fertilizer?
Good point above.
UN Attacks IPPC policies.
The one good thing about all this is that it will put a bad taste in people’s mouths for command and control.
In places where votes actually count we can keep the elites at bay for a while longer.
I expect the dollar slide will start reversing around harvest time. In Sept and possibly as early as June/July when winter wheat crops start coming in.
For those who can withstand reverses now might be a good time to go long on the dollar.
The one good thing about all this is that it will put a bad taste in people’s mouths for command and control.
… to the extent that they know about it, and its causes and sources, yes. However, if that were easy, c & c wouldda vanished from the earth centuries ago.
But its roots are deep because they are part of the human psyche, the narcissistic, blame-someone-else side. As long as as we fail to identify the amoral posers in our midst, they can and will mislead and condemn us at the same time, cuz that’s what they like to do. It ain’t about the issues; it’s about them. The rest is facade.
the guardian claims the land allocated to biofuels could have produced food to feed 250 million people.
http://www.guardian.co.uk/environment/2008/apr/05/food.biofuels
the guardian also criticizes the UN’s claim 2 years ago that biofuels would increase our food security.
One thing governments could do is end their farm products for fuel subsidies (the John McCain position – even when he was in Iowa).
That would give the people who want the farm land to be used for FOOD a chance.
If eth and so are economic they do not need subsidies – and if they are not economic they should not be used.
“But what about when the oil runs out” – use hydrogen from sea water.
Of course one would need electricity to “split” the sea water – and then one runs into the anti nuclear fanatics.