Jerusalem Post
Apr 24, 2008 12:27 | Updated Apr 27, 2008 11:20
Middle Israel: How to avoid a global food fight
By AMOTZ ASA-EL [Recent columns]

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.

Continued

On Apr 27, 9:50 pm, jgarbuz <jgar...@netzero.com> wrote:



Jerusalem Post
Apr 24, 2008 12:27 | Updated Apr 27, 2008 11:20
Middle Israel: How to avoid a global food fight
By AMOTZ ASA-EL [Recent columns]

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.

Continued

(Continued from page 1 of 2 )

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.