Middle Israel: How to avoid a global food fight

With wheat, corn and rice prices soaring, it's clear that the world is facing an alarming food shortage.

amotz asa el 88 (photo credit: )
amotz asa el 88
(photo credit: )
Having just reaped a good crop while everyone else had a barren harvest, the farm manager's conclusion was unequivocal: "This is a time to sell," he told its owner, the Marquise de Lafayette. The marquise, who would later earn fame as a hero of both the American and French revolutions, disagreed. "This is a time to give," he said, and - as if anticipating the approaching French Revolution - opened his barns to the nearby villages' starving peasants. Now is also a time to sell. With prices of wheat, corn and rice soaring from Southeast Asia to Central America and provoking riots in some three dozen lands from Yemen to Burkina Faso, it is clear that the world is facing an alarming food shortage. In the past year, average food prices rose more than 40 percent worldwide; rice appreciated more than 100% in the past four months alone, from $360 to $795 per metric ton; and the World Bank says it will take at least seven years until food prices return to where they were in 2004. And since there was no Joseph to warn us in time about these impending seven bad years, myriad market players are now engaged in the kind of shooting from the hip that often follows the failure to plan. Vietnam, Cambodia and others with surplus rice have moved to curtail exports and those suffering shortages, like the Philippines and Egypt, had their armies distribute food, while Washington ordered rice shipments to Manila redoubled. Panicky shoppers in Hong Kong and Macao stormed rice stores, while the government in Beijing issued an equally panicked promise to secure rice shipments to the two wealthy provinces that only recently returned to the motherland's bosom. For the growers all this, of course, constitutes manna from heaven. Across the American Midwest farmers say they don't know what to grow first, as every week another type of grain appreciates even more steeply than all others. The US government now finds it difficult to find ranchers who will take money for resting their fields on a rotational basis, a policy that in more financially balanced times helped preserve the environment. Now it seems no government can compete with the cash returns of a plot's freshly harvested corn, wheat, barley, potatoes, beets, beans, peas or anything else human bowels will digest. And so, the question arises: Are we in for history's first-ever global famine? FAMINE IS not the same thing as hunger. Hunger is what we feel when we skip a meal and, in the more appalling case, it is what Nobel Laureate Knut Hamsun depicted in his masterpiece Hunger, where a professional writer's clash with an alienating metropolis leaves him constantly fighting for bread. Famine, by contrast, is neither a physiological nor a literary term, but an economic phenomenon referring to wholesale food shortages. And those, in turn, involve government, whether by commission or by omission. Such were last century's Ukrainian, Chinese, Ethiopian and North Korean famines over which presided despots like Stalin, Mao, Mengistu Haile Mariam and Kim Il Sung, and such were the famines of Biafra, Sudan and Somalia. In all these tragedies, food was actually available elsewhere, and often also nearby; the challenge was simply in getting assorted bad guys out of the way, which often proved absurdly frustrating, like when US troops brought bags upon bags of flour, rice and sugar to Somalia only to see them vanish in the bosoms of assorted warlords. There is no such wickedness factor at play in what the world now faces; on the contrary. Not only is there no despot today plotting to starve the Philippines, Haiti or Burkina Faso, the current shortages come against the backdrop of a globalized economic hyperactivity that has industrialized millions, from Indonesia to Brazil. Paradoxically, this process - besides momentary problems like a drought in Australia - came at the expense of food production, because it led people from village to town, acres from farms to factories, and cash from the First World to the Third, which meant people could suddenly buy more food. And so, while globalization made Westerners eat more variety, from sushi and chow mein to aloo paratha, billions outside the West were getting used to eating more quantity, even while they were gradually producing less food. It follows that the current food crunch is not about economic cycles, nor is it about a political event, like the oil embargo of the '70s. Instead, this one is about a historic rise in demand, and the question is therefore how to make food more available and less expensive. THE DILEMMA world leaders now face is twofold: First, should they interfere in the markets' operation, and second, if they should interfere, should they do so individually or collectively? Back in the Depression, the worst mistake president Herbert Hoover made was to allow the US Congress to impose tariffs. The result was that America's trade partners also imposed tariffs, which in turn made it even more difficult for America's already depressed manufacturers to export goods. Historians consider this one of the worst mistakes the Republican administration made following the Great Crash. It follows that Asian food producers who currently obstruct exports, thinking they are defending their economies, are actually exposing them because they are creating a bad atmosphere in the global marketplace which might soon make it more expensive for them to import, just like they are making it more expensive for others to buy their own exports. Worse yet, the new protectionists are destabilizing the international system. It follows that the international community had better stop them in their tracks if it doesn't want to see food violence escalate, topple regimes and create new international conflicts. The economic powers must therefore coordinate among themselves some sort of a surveying and planning mechanism that will help the world raise its food production faster than the markets are now expected to do in response to the current shortages. This also means giving. What the US has just done in expanding rice shipments to the Philippines must temporarily also be done with volatile centers of shortage elsewhere, most notably Egypt, where the Muslim Brotherhood is already feasting on the local food violence. A food-emergency forum governed by the economic powers will sit with a government like Egypt's and see how that country can expand short-term supply, and then see what should be done there in the longer run, like de-urbanizing fertile lands and redesigning the national budget, so that Egyptian taxpayers buy fewer F-16s and more loaves of bread. True, this would momentarily compromise the spirit of laissez-faire that has become the post-Cold War era's main buzzword, but the New Deal that ended the Great Depression also involved harsh interference in the markets' operation. Back then, policy makers understood - like the Marquise de Lafayette in his time - that theirs was not just a time to sell, but also a time to give. So is ours.