generalspeaking

Food Scarcity, Political Instability

Poor harvests resulting from disastrous weather conditions in various parts of the world have been contributing to certain food shortages. Russia's wheat crop has been the victim of adverse weather conditions; India and Pakistan have found themselves short of root vegetables and all three have halted exports as a result.

Australia has suffered years of drought impacting deleteriously on their agriculture. Growing middle-class wealth in China has contributed to an abnormal call on meat products. China has been renting land in Africa to grow crops for home consumption. And the West's preoccupation with biofuels production has caused a shortage of corn and other agriproducts on the food market.

Recent riots in countries like Algeria, Tunisia, Yemen and Egypt have reflected those in European countries like Greece and Portugal, and African countries like Zimbabwe, Somalia and Mozambique and with people protesting scarcity and higher food prices in economies already hard pressed with people living constrained lives due to endemic poverty.

The escalating price of oil added to the equation ensures that rising production and delivery costs will also increase food prices.

The geographic and national manipulation of agricultural production by many countries from North America to the European Union and beyond also does its bit to maintain high food prices.

And while Europeans and North Americans complain at the steady rise in food prices on the grocery shelves, they can still afford those prices far better than those living impoverished lives in developing countries. In wealthy countries, capitalism and free enterprise trump everything.

The European Parliament has proposed massive stockpiling of food for the purpose of avoiding price and supply crises; making hoarding of food stockpiles a safety net for the EU, ensuring less exports to those countries whose populations are in dire need of food supplies.

Financial subsidies and regulatory interventions are to be maintained and expanded in a EU-launched we're-all-right-Jack kind of food security proactive initiative.

What is needed is the installation of initiatives that persuade producers to increase production of agricultural products, not stifle them to maintain a steady and increasing commodity issue to disrupt markets, leading to "food price shock", shortages, and an inability of people to pay for the foods that are available.

Less conversion of grains and corn to biofuels and ethanol should be another positive issue to be addressed.

"The reality is that the same speculators that caused the global economic meltdown through their illustrious trade in subprime mortgages, are betting on our food system now too." D. Doane, world Development Movement

This is a reflection on food commodities suffering inflation as a monetary phenomenon through deliberate market manipulation rather than a supply and demand problem caused by climate forces alone. The energy-intensive nature of large-scale agriculture, inclusive of the total cost of production, from fuelling farm machinery to transportation costs to fertilizer costs all relate to the rising costs of food.

A serious problem continues to be the determination to increase annual ethanol production, diverting important food grains from the food-consuming market for people, exacerbates the problem. Along with dire weather conditions now impacting major food-exporting countries across the globe, complicated by the steadily rising demand from a steadily emerging middle class from newly-emerging economies.

Rising food prices are set to continue, and they will be led also by monetary inflation with commodity prices steadily rising and various countries' currency peg policies. Unless there is a general agreement for countries to understand that full co-operation is required to ensure that steadily rising food prices do not end up pricing themselves out of the reach of the world's poor, the situation will become more desperate.

Speculators interested in rising food prices and gambling that they will continue to rise so they can continue to make a killing, and the spectre of food hoarding to help prices rise even more steeply will add to an already volatile situation world-wide. This is something the world cannot afford.

Leading inevitably to more impoverished countries, many with corrupt, inept and autocratic governments seeing their social and political stability threatened through a rising tide of hungry people and outraged sensibilities demanding their human rights.

Labels: Economy, Environment, Political Realities, World Crises

posted by Pieface @ Sunday, January 30, 2011