How the Government is Causing the Global Food Crisis
July 26, 2008
Thirty countries have already experienced food riots this year. Tens of millions of people are being pushed into abject poverty and starvation. And to a large degree, this crisis is man-made -- the result of misguided energy and farm policies.
Perhaps the most wrongheaded policies are the tangle of subsidies, mandates and tariffs that encourage the production of biofuels from crops in the United States and the European Union. According to the World Bank, almost all of the growth in global corn production from 2004 to 2007 was devoted to American ethanol production. This increased corn and animal feed prices, and prompted farmers to switch from other crops to corn.
Long-standing farm subsidies in the industrialized world have also contributed, ruining farmers in poor countries and depressing agricultural investment.
But the industrialized nations are not the only culprit. At least 30 developing countries have imposed restrictions or bans on the export of foodstuffs, taking more food from global markets, reducing farmers’ profits, and discouraging them from investing in more production.
So far there is no sign that world leaders are ready to do what is needed. The United States and Europe have refused to curtail their bio-fuel subsidies or their lavish farm subsidies. They are also falling far short of their aid commitments to the developing world.