Wednesday, April 30, 2008

Picky Feeders

Guardian Comment is Free, full text

29 April 2008
Ian Williams

According the aphorism, in foxholes and shipwrecks we all become believers in divine intervention. I consider this unproven, but it is certainly true that in a worldwide crisis some of the most unlikely people start looking to the United Nations.

Ban Ki-moon's speeches on the food crisis have had widespread coverage in media more accustomed to overlooking his pronouncements than broadcasting them, and the organisation and its associated agencies are working hard on the problem.

He has rung the alarm bell, and it has resonated across the world. But just as provable divine intervention in firefights and storms is rare, sadly, one cannot help but wonder about the likelihood of successful multilateral intervention.

Secretary general Ban says "we are familiar with the causes: rising oil prices, growing global demand, bad trade policies, bad weather, panic buying and speculation, the new craze for biofuels". However, we have been familiar with these causes and their effects for a long time. Thomas Malthus has had a bad press, but what he said was true. Too many people chasing too few resources leads to shortages and possible famines. The small print that Malthus overlooked - that technological advances could increase supply - has saved us so far.

For some years now the world has teetered a few weeks from famine, but only eschatological and apocalyptic futurists took much notice. The markets would deliver.
After the world wars, Europe set the pace for food autarky, an example followed by China, India and other major developing nations. Feeding your own people was too important to leave to the kindness of strangers. Under pressure from neoliberal economics, these governments have been moving out of the food security business, but it may have been throwing the loaf out with the cupcake.

It is true that some subsidies and some tariffs may have had a deleterious effect, but after all, most people will look to their government to ensure essential food supplies. Leaving it to the markets produces potato famines and speculation. If you rely on hedge funds for lunch, you eat thorns.

The green revolution that boosted Asia's food production is running out of steam, and it depended on heavy inputs of fertilisers and fuel, both in turn dependent on oil and other hydrocarbon inputs.

At the same time, the North American grains that used to be the backstop against the world's famines and the supplier for the World Food Programme (WFP) have been diverted into highly subsidised and fuel-inefficient production of corn syrup and gasohol.

Even Fidel Castro, who has, after all, engineered a few shortages himself, saw this one coming a year ago and warned what would happen. In fact, so did we in Comment is Free.

Ban's agenda is frankly interventionist, at both national and global levels. Apart from getting his own agencies and the World Bank together on the issue, he wants world leaders to address the issue at the forthcoming food security conference in Rome. Now that they can see the running horses, it is possible that there will be a rush to close the stable doors.

The first issue is that the WFP, the main emergency supplier for poor countries, is broke. Originally set up at US instigation to distribute food surpluses, it now has to buy its supplies on the world market, where prices are soaring, and the UN is asking for $755m to refill its granaries. Will governments happy to pour money into weaponry or banks shy at "discretionary" expenditure like this in the face of a recession?

Ban wants the world "to address trade distortions that weigh so heavily on the poorest nations," which means an end to subsidised exports to developing countries that destroy their local agricultural sector. Ironically the WFP was beginning to use local supplies instead of dumping American surpluses to ruin local farmers - but politically it was only feasible because gasohol production had burnt up the surpluses. It will be interesting to see, however, if his call for the elimination of biofuel subsidy will get past Archer Daniels Midland's sentries on Capitol Hill.

That is the real test. As Harry Hotspur responded to Glendower, who could "call up spirits from the vasty deep", "why so can I, but will they come when you do call?"

Ban Ki-moon can call on governments to act, but will they put aside their short-term national interests for long-term global goods? Between soaring food and fuel prices, and panic reactions around the world, it is possible that the mild-mannered and quietly spoken Korean may have their attention.

Whether we have the wit to postpone proof of Malthus's theory is still an experiment in progress.

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