Food For Thought
by Alvaro Vargas Llosa, from The New Republic [here]
Our only hope for solving the looming food crisis is to end protectionist trade policies.
WASHINGTON-In the 1830s, Richard Cobden and John Bright started a campaign against the protectionist laws that were keeping food prices high in Britain. After sustaining abuse for many years, they persuaded the government in 1846 to repeal the infamous Corn Laws, a move that helped usher in a long period of prosperity. I have been thinking intensely about these 19th-century heroes lately. The world needs a new Anti-Corn Law League, the movement they founded, if it wants to put a stop to the madness of escalating food prices and save millions of people, from Haiti to Bangladesh and from Cameroon to the Philippines, from starvation.
Prices have increased steadily in the last three years, but matters really came to a crunch this year. Since January, the price of rice has gone up by 141 percent, while the price of wheat has almost doubled in one year. In a world in which the poor spend three-quarters of their budget on food, that means potentially a life-or-death situation for the 1 billion human beings who live on the equivalent of $1 dollar a day.
When the price of something shoots up, one can infer that the supply is not keeping up with the demand. In the wake of today’s food shock, many people have focused on the causes of the rise in the demand for food. All of them-from the growing wealth of China and India to the explosion of grain-derived biofuels in rich nations-sound very plausible. Less attention has been paid to why, in the era of globalization, in which products can move quickly from manufacture to market, and with the advances in biotechnology, the supply of food is not meeting the demand.
Many governments, multilateral bodies, nongovernmental organizations and pundits are failing to answer that basic question. Instead, they postulate solutions that would either compound the problem or constitute at best a short-term palliative. The real solution will be the removal of the causes of the shortfall. Those causes have little to do with economics or demographics, and everything to do with the politics of governments and those who use governments to serve their interests-to the detriment of the general public.
Few areas of the economy are more strewn with protectionist laws than agriculture-in rich and poor countries alike. A panoply of quotas, subsidies, tariffs and prohibitions designed to win votes and, essentially, bribes has discouraged the much-needed increase in food production. In normal free-market circumstances, the slightest signal that prices were going up would have been enough to ensure that masses of capital were invested in farming for food. In the current mess, it is not surprising that investors are not pouring money into food production: Farmers in Europe are paid to keep their land fallow because of a scheme called the Common Agricultural Policy; farmers in Argentina are being asked to give up 75 percent of their earnings through various taxes; farmers in the United States are more interested in feeding SUVs than in feeding people because the U.S. Congress has mandated a fivefold increase in the use of biofuels; and farmers in Africa are not experimenting with genetically modified crops because they are banned in many of the countries to which they might be able to export them.
British economist and African expert Paul Collier wrote recently that “the most realistic way is to replicate the Brazilian model of large, technologically sophisticated agrocompanies that supply the world market. … To contain the rise in food prices we need more globalization, not less.”
I would add that small farmers in developing countries would also team up and create economies of scale if they were not hampered by domestic laws designed to protect consumers and by international commercial laws designed to protect producers-or if peasants in, say, China were allowed to fully own their land.
According to The Economist magazine, of the 58 countries whose reaction to the crisis has been researched by the World Bank, 48 have imposed price controls, consumer subsidies and export restrictions. A problem that was originated by protectionism has elicited a protectionist response from most countries. A century and a half after Cobden and Bright defeated protectionism in Britain, their ideas are more powerfully relevant than ever.
Alvaro Vargas Llosa, author of Liberty for Latin America, is the director of the Center on Global Prosperity at the Independent Institute.
by Mary Macnab
I say let it all come back home. Local sustainable use of resources is by far the most stable economy on the planet. Local use best survives economic, political or any other potential instability. It does not require a long chain of middlemen and profiteers, shipping containers traveling vast distances at great loss of fuel and nutrition, and added cost for an often inferior product.
The world wide campaign by those who would control all the basic resources necessary for life leads to starvation by politics. Removing all local ability or incentive to harvest trees for shelter, crops for food, and streams for water for life is an elite insanity designed for the most ultimate control of all resources including human ‘capital’.
I think that’s the way the big guys see it. Control the food and $, control the people, for profit. Haiti and Mexico didn’t ask to have their local staff of life production destroyed. This was orchestrated by those who stood to profit by financial gain and control of an ever larger piece of the pie. Those lands were intentionally flooded with inferior grade grains sorely undercutting local production to its death.
If a human landscape no longer suits the big guys needs for ever more resources, they now have a very effective tool for changing that landscape - engineered starvation. It’s happening all over the world, yet still seems so far away to most of the distracted ones in our country - but it is all in place here as well.
Those who have been ‘removed’ from local solutions to the very necessities of life become helpless and hopeless. We in this country have been almost totally removed from any remedy should the soulless wonders of the morally degenerate ‘elite’ decide its time for us to go as they find a more personally profitable use for the landscape.
Local production by and for local people trumps all others in every way that’s good for the land and the people. A plan without morals is not sustainable.
First eliminate God. Then eliminate morality. Then enslave the masses and rob them of their means to survive. Same old story, same old perpetrators.
Vargas Llosa is absolutely correct. Subsidies and tariffs have destroyed the family farm in the U.S. and led to social and environmental degradation, as well as artificially high food prices. Agriculture is the original source of human innovation and entrepreneurship. Government interference has stymied those in agriculture, just as it has corrupted other economic sectors. Let the market determine the highest and best use of land, not collectivist socio-political movements. Cobden and Bright acted in the tradition of Adam Smith and David Hume, whose philosophies have stood the test of time.
Collectivist and authoritarian interference in agriculture has caused mass starvation again and again throughout history, from the Irish Potato Famine, to Stalin’s genocide in the Ukraine, to modern day starvation in sub-Saharan Africa.
The current global warming insanity is resulting in mass starvation in the poorest countries in the world. That “unintended consequence” of political hysteria in the developed countries is unconscionable. Extortionist international energy policies are much to blame, but the protectionist reaction is equally culpable. Open all doors, and let innovation in. We will all be better off for it.