Whats new about the food crisis?

Rising food prices are nothing new – this has been happening for seven years now. According to a World Bank composite index, today those prices are again reaching highs not seen since 1984. The steady decline in agricultural prices began in the mid-1970s and has damaged agriculture in poor countries and whittled down their export earnings. Higher agricultural prices are therefore not only a bad thing. They have contributed for example to the robust economic upswing under way in Africa and Latin America for the past few years now.

Nor is it news that hundreds of millions of people in Asia are now consuming a richer diet than formerly. Until not so long ago this had been hailed as a developmental success. Today, German Chancellor Merkel remarks, almost with censure, that food is in short supply because these people are having more than one meal per day.

Again, there is nothing new about the fact that the growing of plants for biofuels is competing with food cultivation. International development circles have been voicing this criticism for at least one year now.

What is new on the contrary is the food rioting already seen and still to come. The riots are bringing home to governments of developing countries and citizens in rich countries just how unacceptable it is that at least 2 billion people continue to live on less than or just above a dollar a day. These people can afford no price hikes at all, as they must spend the bulk of their limited resources on food. Their income is simply not enough. Any price movement, even if it is good for the economy, represents a danger to their physical survival.

This is why the current discussion of measures to boost agriculture should not overlook the introduction of simple social safety nets for the poorest, along the lines of those in place to some extent in Mexico, Brazil or Vietnam. Today, many developing countries are wealthy enough to introduce such systems, and the industrialised countries should support them where this is not yet the case.

Peter Niggli, Director of Alliance Sud