May 17th, 2008
LONDON – Finally, a voice from the UN is saying something sensible about the world food crisis. John Holmes, the UN’s humanitarian aid chief, is asking UN agencies to cool some of their dire rhetoric about the impact of high food prices. By the yardstick of the last big food crisis in 1974, that had U.S. Secretary of State Henry Kissinger running to an emergency UN conference in Rome to pledge that “within a decade no child should go to bed hungry”, it is not such a severe event.
In terms of real prices the price hike is not so high as it seems; in terms of the rise of consumer buying power over the last 34 years it is not biting so deeply. Moreover, take wheat and rice out of the equation and many food prices have not risen so significantly – millet and barley among grains and most root staples – potatoes, yams, cassava. Not least, the crisis’s immediate solution, as it was in 1974, is only a harvest away. The sharp price rises of 1974 encouraged farmers to plant more and sell more and very soon the price of food was at historic lows.
Most of the Third World’s poor – almost 75% – live on the land, farming in small villagers. For them the food crisis could be a great opportunity. At last they can get a decent price for their produce – but only if governments allow the local market to pass along the price increases of the international market. Alas, many governments, fearful of alienating their more vocal urban electorates, are introducing policies that, as always in most developing countries, protect the urban dweller at the expense of the farmer.
The “world food crisis” of 2008 is an historic opportunity to allow the terms of trade to shift in favour of the rural poor. Food prices will fall of their own accord within six months to a year, but they are unlikely to fall as fast and far as they did in 1974 because the demand for food is increasing thanks to the pace of development not just in China and India but in Africa and Latin America too.
If governments can help the process along by stepping up the pace of building small rural feeder roads so crops can be moved to market, encouraging the use of fertilizer, even with subsidies, and allowing the introduction of genetically improved crops despite the Luddite policies of the European Union, then enormous steps can be taken in improving the lives of the rural poor. One has only to look at Nigeria and Malawi, two countries which in the last few years have engineered a revolution in agriculture by doing some of this. In Nigeria, according to the International Monetary Fund, agricultural growth is now 8% a year, almost as good as the growth in the oil sector. (However, this figure is regarded as somewhat too high by others) Malawi’s maize harvest has increased by a third in a single year.
When the great Irish famine got under way 170 years ago, Charles Trevelyan, the British Treasury official responsible for famine policy, refused to allow the procurement of home cereals for relief because it would “disturb the market”. In Bernard Shaw’s “Man and Superman”, the returned Irish American Malone, insists on calling the famine “the starvation”.
“Me father died of starvation in the black ’47. Maybe you’ve heard of it?”
“The famine?”
“No, the starvation. When a country is full of food and exporting it, there can be no famine. Me father was starved dead and I was starved out to America in me mother’s arms.”
Those governments who insist on imposing a status quo in their local rural market place are condemned to have their poorest people suffering or even dying because of it.
A professor of economics at Oxford, Paul Collier, who is well known for his exploration of what makes people poor, has recently written that “the most realistic way to raise global food supply is to replicate the Brazilian model of large technologically sophisticated agro-companies supplying for the world market”. This is nonsense.
In some sparsely inhabited countries this might make sense. But where peasants are thick on the ground the most productive policy is to give peasants their head. The countries that pioneered the East Asian miracle, Japan, Taiwan and South Korea, were the countries that had vigorous land reform and split up their feudal estates in favour of the peasant. More recently, it was done in West Bengal, India. As long ago as the 1970s the World Bank found in study after study that a smaller average size of holding and a low concentration of ownership produced an increase in output per hectare.
The solution to the current “world food crisis” is right under most developing countries’ noses. They should trust and help the peasant to respond to market forces. If some very poor people remain hungry then governments can buy locally and feed them at special low price shops.
