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No quick fix to the food price crisis

28-Apr-2008

The food crisis is neither new nor sudden. The several underlying causes have been independently, steadily gathering speed and have collided in a perfect storm not seen for generations. It is going to take a coordinated, long-term effort to untangle them.

At FoodNavigator.com we have been reporting on rising costs since 2003. Reducing costs and protecting margins has been a long-term battle for manufacturers.

 

 

 

But in recent weeks the situation has reached new shades of gloom, as governments around the world have taken steps to reduce the impact on their populations (and protect their own positions of power).

 

 

 

No-one wants to be the next Jacques-Edouard Alexis, the Haitian prime minister dismissed by the senate after wide-spread rioting over food prices.

 

 

 

Even so, the life sentence in prison faced by anyone found to be hoarding rice in the Philippines is extreme, at least by Western judicial systems.

 

 

 

And yet, the World Food Programme's stark warning that the world's poorest folk are facing starvation rather puts our grumbling about the upward creep of grocery bills in context.

 

 

 

Various solutions have been bandied about in the last week. In fact, finding the solution has become a battleground of ideologies.

 

 

 

US and European policy to increase use of biofuels - once seen as the great hope for reducing reliance on fossil fuels and environmental protection - could now be on course for a U-turn.

 

 

 

It is generally agreed that biofuels' demand on corn and other grain supplies is not the main or only cause of the current situation. Experts have estimated that their contribution to the current scenario is between 10 and 30 per cent.

 

 

 

The EU's target that 10 per cent of energy should come from biofuels by 2020 may well need to be put on ice, at least until second generation biofuels based on cellulose from waste materials are developed to an industrial level.

 

 

 

Elsewhere, an editorial in The Lancet criticised rich countries for "dumping subsidised produce into the markets of poor nations, wrecking the livelihoods of local farmers in those countries."

 

 

 

French agriculture minister Michel Barnier, meanwhile, said in an interview with The Financial Times that he would not allow European subsidies and trade barrier system to be blamed for high commodity prices.

 

 

 

Rather, he recommends that Africa and Latin America adopt their own versions of the European Common Agricultural Policy - and he believes the EU should be providing money and know-how to help them develop parallel policies.

 

 

 

The Economist said that, as a first step, rich countries should be bridging the $700m gap in the World Food Programme's funding this year that has emerged as a result of higher prices for the rice and other basics it distributes to famine-struck regions.

 

 

 

$700m is not a lot in the grand scheme of things. It's about one 148th of the annual turnover of Nestle, the world's largest food company.

 

 

 

The newspaper admitted that such funding would be a palliative and that a longer-term approach to stopping trade distortions. But The Lancet has said that hand-outs, however well-meaning, are ineffectual if the countries making them do not "stand up to their own farmers" and abolish subsidies.

 

 

 

Such debate, whether conduced through the media or at a world summit as proposed by UN secretary general Ban Ki-moon, is crucial.

 

 

 

But the problem is only going to be solved if political consensus can be reached and a multi-lateral, international strategy is put in place - and fast.

 

 

 

For almost a decade we (in the West, at least) have been growing fat and arrogant on low-cost food, believing that, at last, we have got food supply licked.

 

 

 

It's time to put arrogance aside and take the first steps down what looks to be a long road to a brand new model for global food supply.

 

 

 

Jess Halliday is editor of award-winning website FoodNavigator.com. Over the past decade she has worked in print, broadcast and online media in both Europe and the United States. If you would like to comment on this article, please email jess.halliday'at'decisionnews.com