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April 10, 2008

Food price riots

The UN’s most senior emergency relief co-ordinator has given warning that spectacular food price rises will trigger riots throughout the developing world. A year ago his remarks might have been prescient. Now they are a statement of fact: in Haiti, five people have died in the past week and thousands more have been reduced to eating biscuits made of soil and cooking oil as food riots drag the western hemisphere’s most fragile and impoverished democracy back to the brink of collapse. In Egypt, where wholesale rice prices have more than doubled since October, food price inflation has triggered the worst urban unrest for a generation. From Yemen to Uzbekistan, simple hunger has emboldened citizens to protest against regimes more used to cowed docility.

Public order is at risk in at least 33 countries, according to the World Bank. But the high food prices bringing misery to poor consumers offer the chance of transformative change to poor producers. These are, principally, the rice growers of India, China and South-East Asia, whose output would fetch twice what it commanded just six months ago if they had free access to world markets. Securing this access, and the investment in agricultural infrastructure that would follow, is the only long-term solution to an accelerating global crisis.

The factors bringing the age of cheap food to such a shuddering halt are well understood. Devastating droughts wrecked last year’s grain harvests in Australia and sub-Saharan Africa. The breakneck – and ill-advised – replanting of farmland for biofuels in the Americas helped to double world wheat and livestock feed prices between 2006 and 2007 alone, while high oil prices are transmitted to agriculture via the rising cost of planting, harvesting and distribution. Above all, soaring Indian and Chinese demand for land-intensive meat and dairy products are fuelling food price inflation with global impact and little sign of slowing.

The emerging economic superpowers account for more than a third of the world’s population but less than a quarter of global food output. India and China must, therefore, take urgent steps to modernise their farming sectors as fast as their export-led manufacturing. But no amount of investment in irrigation or high-yield crops will ease the current crisis unless developed as well as developing economies can agree to lift trade barriers instead of impose them.

The EU, on paper at least, has led the way with an undertaking to scrap large-scale food subsidies provided it can keep smaller ones for as-yet undefined “sensitive” commodities. The Philippines has followed by lifting rice import tariffs out of an urgent need to buy more on world markets. But the same emergency has led Vietnam, one of the world’s largest rice producers, to introduce new export tariffs.

Vietnam’s dilemma is acute and repeated across the developing world. Its people cannot go hungry for the sake of its exports, and its Government’s first duty is to craft safety nets for the most vulnerable. But beyond that, the solution is not to hoard food but to grow more of it, and to sell it on open markets that reward the most efficient farmers. That will take political courage and an unsqueamish approach to GM foods. Affordable food and social stability will require a greater openness to science and trade.

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