Food Prices

by hilzoy

Paul Krugman in today's NYT:

"These days you hear a lot about the world financial crisis. But there’s another world crisis under way — and it’s hurting a lot more people.

I’m talking about the food crisis. Over the past few years the prices of wheat, corn, rice and other basic foodstuffs have doubled or tripled, with much of the increase taking place just in the last few months. High food prices dismay even relatively well-off Americans — but they’re truly devastating in poor countries, where food often accounts for more than half a family’s spending.

There have already been food riots around the world. Food-supplying countries, from Ukraine to Argentina, have been limiting exports in an attempt to protect domestic consumers, leading to angry protests from farmers — and making things even worse in countries that need to import food."

Krugman has a good rundown on the causes of the shortage. (I'd add the Iowa caucuses to the list of culprits -- read his article to see why. Yet another reason to actually rotate the first primaries and caucuses away from Iowa and New Hampshire.) But just to provide an illustration that's all over the papers here in Karachi, but not that widely covered in the US:

" Nearly half of Pakistan's 160 million people are at risk of going short of food due to a surge in prices, the World Food Programme said on Friday.

The WFP survey covering the year to March showed the number of people deemed "food insecure" had risen 28 percent to 77 million from 60 million in the previous year.

The WFP estimates that anyone consuming less than 2,350 calories per day is below the food security line.

Sahib Haq, an official with the WFP's Vulnerability Analysis & Mapping Unit in Pakistan, said food prices rose at least 35 percent in the past year compared with an 18 percent rise in minimum wages.

"There is a very big gap between the increase in prices and increase in wages ... the purchasing power of the poor has gone down by almost 50 percent," Haq said. (...)

The price of wheat flour in January was between 24-25 rupees (38 U.S. cents) per kg in three of Pakistan's four provinces, compared with 15 rupees per kg in January 2007, the WFP said.

Prices have since moderated to around 17 rupees but are expected to shoot up 40 percent or more in the coming months, according to grain industry officials.

"There will be a big crisis," Haq said. (...)

Prices for rice, vegetables and cooking oil have also risen sharply, and the economic hardships faced by ordinary people played a big part in an election in February that resulted in President Pervez Musharraf's political allies being thrown out of government.

The new coalition government, which took power last month, raised the support price it pays farmers to buy wheat to ensure adequate supplies, but Haq said the move would result in sharply higher flour prices in months ahead.

The consumer price index, a key indicator of inflation, rose 11.25 percent in February from a year ago, mainly due to food prices.

Due to the previous administration's reluctance to reduce subsidies for food and fuel, the government is saddled with a widening fiscal deficit. While wanting to alleviate the hardship of the poor, the new government will face some painful economic choices. ($1 = 62.85 Pakistani rupees) (Editing by Simon Cameron-Moore and Alex Richardson)"

Pakistan was not particularly well off before food prices shot up. Its GDP per capita was well below $1,000/year. But half the population facing food insecurity is another thing entirely. Likewise, a decline in purchasing power of 50%. The poor here didn't have much purchasing power to start with.

And Pakistan is not alone. This is happening all over the developing world. It's worth keeping an eye on, and making a donation if you have the money.

PS: On a lighter Pakistani note:

"An ousted ally of President Pervez Musharraf has been hit with a shoe in a Pakistani provincial assembly dominated by supporters of slain ex-leader Benazir Bhutto.

Monday's assault in the Sindh provincial assembly is a sign of the political tension in Pakistan since the opposition trounced Musharraf's supporters in February elections."

And on an even lighter note: where I eat lunch these days, there's a sign that says: Beware Lest Crows and Eagles Snatch Your Lunch! Regrettably, by "eagles" they mean Black Kites, which are very common hereabouts, and not actual eagles, which are a lot less so.

Comments

[gwangung]

Ugh. Food crisis. Fertile ground for terrorism.

[Ugh]

Ugh. Food crisis. Fertile ground for terrorism.

I wondered why my desk just exploded. ;-)

[Slartibartfast]

they mean Black Kites

Which are mostly employed when there's not enough gas to put the Black Helicopters up.

Stay safe, hilzoy.

Krugman:

subsidies to biofuels are a major factor in the food crisis

This has been coming for a while, BTW. There's here, for instance, published several months after this.

[Sebastian]

Unintended consequences from the stupid stupid stupid biofuels subsidies.

[Ugh]

And I have to disagree with the post. If rich, midwestern Dr.'s like my father can't profit from the biofuel subsidies by buying up farmland, charging tenant farmers an arm and a leg, and thereby causing massive starvation and food riots in the third world, well, then the terrorists have won.

[Neil the Ethical Werewolf]

I'm wondering how to integrate this with things I heard before about rich-country farm subsidies impoverishing poor farmers by dumping too much cheap food into their countries so they couldn't make a living. The situation described here definitely makes more sense, but enough people had told me about the other thing to leave me confused.

[Gus]

This is another reminder that we can either adjust our lifestyles or support fewer people on this planet. I would actually prefer both.

[Slartibartfast]

Engineer-Poet once wrote a post exploring the question of whether it might be energetically more efficient to simply burn the corn for heat, rather than convert it to ethanol.

I believe he showed that it's better to burn it.

[Turbulence]

Neil,

My hunch is that when people complain about trade barriers harming developing nations by limiting exports, they're mostly talking about agricultural products that are not subsistence crops. It is very very hard to outproduce the midwest on grains or corn, but other countries can compete when it comes to fruits, nuts, and sugar. Or, they could compete if we didn't have tons of trade barriers in place to prevent such competition.

Those products aren't terribly useful for feeding a population (you can't live on strawberries and sugar).

[Morat20]

Only reason corn even MADE the "Let's make a biofuel" list is because of Iowa. Same reason everything has all that corn-based crud in it instead of sugar from sugar-canes.

I'm pretty sure if corn's not cutting it, American farmers CAN grow other things.

In terms of biofuels, it can be made out of practically anything organic. However, what it can be made out of at a reasonable efficiency is a much narrower group. Corn barely makes the cut -- there are better plants than corn, especially the ones that don't cut into farmland.

The problem has mostly been biochemistry related -- it's easy to prove that a given plant has better potential for biofuel, but not have an efficient process to turn plant into ethanol. There's been serious strides in the latter.

Biofuels are coming, but they're not going to be made out of corn -- more likely it'll be junk organics. Grasses from land that's not suitable for crops or ranching, discarded organic products, leftovers from food and crop processing, that sort of thing.

[russell]

you can't live on strawberries and sugar

Throw in a nice dry champagne and I'm willing to give it a try. :)

[Bernard Yomtov]

Unintended consequences from the stupid stupid stupid biofuels subsidies.

Agreed. Would like to hear what the candidates have to say about this. According to Krugman, all three are pretty bad on the issue.

[KathyF]

Here the biofuel of choice is rape, which is known as canola in the US and Canada. I've been noticing every year how much more is grown (I spend a lot of time driving in the countryside), and have read articles in the press here about how the rape crop has increased, pushing out other food crops.

Interestingly, today I noticed the first signs of rape blooming, early it seems to me. It's bright yellow, and the fields of flowering rape are very striking. I think it's lovely, but locals don't appreciate it, perhaps because it causes some to sneeze! (Here's what I wrote about it last year, if you're interested in seeing photos.)

I also heard on Farming Today this morning that consumers will have to choose between accepting so-called "supercows" or giving up meat altogether, a corollary to the "food or fuel" argument I suppose.

[Jesurgislac]

Krugman writes: You might put it this way: people are starving in Africa so that American politicians can court votes in farm states.

You might, but it's an awfully simplistic and unhelpful way of putting it. The US habit of calling it "food aid" when US dollars are paid to US farmers to buy tax-subsidised crops, and the food thus bought is dumped in poverty-stricken countries in Africa and elsewhere to wreck their economy and destroy the livelihood of small farmers, this never was very helpful to world hunger.

Neither is encouraging farmers all over the world to grow crops dependent on patented seeds, patented weedkiller, and oil-based fertilizer.

Forgiving Third World debt would be a start... as would making food aid be about growing crops in the countries that need food, not subsidising US farmers.

[Gary Farber]

"Beware Lest Crows and Eagles Snatch Your Lunch!"

I liked this:

[...] Finally we come to one Madame Benshaw, from whom Sennett once took a cooking class. An Iranian refugee, Madame Benshaw had poor English (stuffing the bird, she would hold up an ingredient she had found in the market, neither she nor her pupils knowing its name). Prevailed upon to write out a recipe for poulet à la d’Albufera, she took a month to produce the following:

“Your dead child. Prepare him for new life. Fill him with the earth. Be careful! He should not overeat. Put on his golden coat. You bathe him. Warm him but be careful! A child dies from too much sun. Put on his jewels. This is my recipe.”

Also:

1 Killed in Haiti Food Protests
By THE ASSOCIATED PRESS
Published: April 7, 2008

Filed at 3:52 p.m. ET

PORT-AU-PRINCE, Haiti (AP) -- Protesters angered by high food prices flooded the streets of Haiti's capital Monday, forcing businesses and schools to close as unrest spread from the countryside.

Witnesses said at least one person was killed by hotel security guards during a protest in the southern city of Les Cayes, where at least three people were killed Friday in food riots and clashes with U.N. peacekeepers. Police said they were investigating.

Thousands of people marched mostly peacefully past the National Palace in Port-au-Prince. ''We're hungry,'' some called out. Others carried posters reading ''Down with the expensive life!''

Haitians are particularly affected by food prices that are rising worldwide. Eighty percent of the population lives on less than US$2 (euro1.27) a day. The cost of staples such as rice, beans, fruit and condensed milk has gone up 50 percent in the past year, while the cost of pasta has doubled.

''Some can't take the hunger anymore,'' the Rev. Gerard Jean-Juste told The Associated Press. ''As a priest, I encourage all government officials to do their best to find ways to solve the near-famine situation.''

The U.N. World Food Program made an urgent appeal for donations Monday to support its operations in Haiti, the poorest nation in the Western Hemisphere. U.N. Secretary-General Ban Ki-moon warned last week that the food crisis could threaten Haiti's already fragile security.

In America:

Driven by a painful mix of layoffs and rising food and fuel prices, the number of Americans receiving food stamps is projected to reach 28 million in the coming year, the highest level since the aid program began in the 1960s.

The number of recipients, who must have near-poverty incomes to qualify for benefits averaging $100 a month per family member, has fluctuated over the years along with economic conditions, eligibility rules, enlistment drives and natural disasters like Hurricane Katrina, which led to a spike in the South.

But recent rises in many states appear to be resulting mainly from the economic slowdown, officials and experts say, as well as inflation in prices of basic goods that leave more families feeling pinched. Citing expected growth in unemployment, the Congressional Budget Office this month projected a continued increase in the monthly number of recipients in the next fiscal year, starting Oct. 1 — to 28 million, up from 27.8 million in 2008, and 26.5 million in 2007.

The percentage of Americans receiving food stamps was higher after a recession in the 1990s, but actual numbers are expected to be higher this year.

[...]

One example is Michigan, where one in eight residents now receives food stamps. “Our caseload has more than doubled since 2000, and we’re at an all-time record level,” said Maureen Sorbet, spokeswoman for the Michigan Department of Human Services.

The climb in food stamp recipients there has been relentless [....]

At the same time, average family incomes among the bottom fifth of the population have been stagnant or have declined in recent years at levels around $15,500, said Jared Bernstein, an economist at the Economic Policy Institute in Washington.

North Korea:

North Korea’s rising tensions with South Korea and the United States, along with soaring international grain prices and flood damage from last year, will probably take a heavy toll among famine-threatened people in North Korea, relief experts said Thursday.

The warnings followed a report on Thursday that North Korea’s government had suspended distribution of food rations for six months in Pyongyang, the capital and home to the country’s most well-off and loyal citizens, in what seems to be a move to save food [....]

And so on.

[Ben Alpers]

Just to raise a side point on this fine post: the parties shouldn't rotate the first primary/caucus. The problem is not simply that the wrong states (or the same states) are going first.

The problem is the long, drawn out electoral mess of our parties' primary systems.

Each party should have a single, national primary with the winner determined by a majority vote via a single-tranferable voting system (like Instant Runoff Voting) or a second round runoff.

[Gary Farber]

"Each party should have a single, national primary with the winner determined by a majority vote via a single-tranferable voting system (like Instant Runoff Voting) or a second round runoff."

It's certainly a reasonable proposal, but among its many drawbacks, it would give overwhelmingly strong incentives for the candidates to simply pander to the wishes of the dominant majority of their parties, or at least 51% of a majority, leaving them relatively free to ignore the political interests of every minority interest, in every meaning of the term, and equally free to ignore all but the populations of a number of the largest urban and suburban/sprawl population centers, and leaving the other states and regions to go to hell, with little political influence.

Many will reasonably point out, of course, that our present system is unfair in the other direction, and that small states and rural areas have political strength out of proportion to their numbers, and so on, but it's not clear to me that reversing the biases in the system is any kind of actual improvement overall, rather than a just a different, new, kind of problem.

Another obvious problem is that if a candidate looks great at one given date, and it's all or nothing, that leaves behind all the advantages of letting a candidate demonstrate how they appeal to more varied groups, over time, as new issues of the day present themselves, how they react to any fresh scandals, and so on.

Various other baby/bathwater aspects are left to the reader.

But it's certainly not a crazy idea.

[nabalzbbfr]

Count on bleeding heart liberals to complain about terrorists starving!

[Bernard Yomtov]

food thus bought is dumped in poverty-stricken countries in Africa and elsewhere to wreck their economy and destroy the livelihood of small farmers,

So we shouldn't give food to hungry, poverty-stricken people?

[Turbulence]

Bernard,

I think the argument is that if local markets can supply sufficient quantities of food, we should use our aid dollars to buy there rather than buying in the American midwest. That outcome is much better for the locals and their economy, but it comes at the expense of "helping" US agribusiness.

I suspect some of the underlying resentment here stems from a belief that US food aid policies are primarily designed to benefit US agribusiness at the expense of actual developing nations suffering from food insecurity.

[Gary Farber]

"I think the argument is that if local markets can supply sufficient quantities of food, we should use our aid dollars to buy there rather than buying in the American midwest."

Yes.

A few quick links. Here. Here. Here. For example.

[Bernard Yomtov]

Turbulence,

I don't know enough about African agriculture or American food aid programs to go into much detail on this topic. It may well be that are better ways to solve food problems than what the US does.

But so what? Sometimes there are political constraints on what a govt can do. Should we not provide aid because the motives are not pristine, because there are better aid schemes available than those we follow? I don't think so.

It's one thing to argue for different policy approaches, and quite another to describe an existing policy as inherently evil, as "dumping" food.

Agricultural policies inthe developed world are not pretty, but I doubt that US policies are any uglier than European ones. So I think jes might do well to direct her energies closer to home.

Meanwhile, I decline to apologize for programs, however motivated, that deliver food to hungry people.

[jwo]

This is clearly not a simple problem, just as our dependence on fossil fuels is not a simple problem. I think we all need to realize that this is the beginning of the changes that we will see taking place due to global warming, in addition to the poorly-thought-out policies that have all been mentioned. Drought and floods have played a part in this scenario, as well. I have a lot of thoughts/opinions on this topic, but because I have been looking at it over a long period of time, I have no sites, so I will leave it at that.

Morat 20, at 3.48 p.m., stated in his/her post that the ultimate biofuel would probably be based upon "junk organics." I agree in part with this idea, but he does not touch upon the major junk and totally renewable source we have for energy: our trash and our sewage sludge. There is considerable technology coming online now which will convert both of these anaerobically (no oxygen, no smokestack, no release of gases into the environment) to various forms of energy. It can be used to produce electricity, or hydrogen, or a syngas that can be burned (at a much cleaner rate than fossil fuels) in vehicles. Here is one example: http://www.magnagas.com. There are many others, and more coming online all the time. Our waste is certainly a renewable resource, and other than transporting it, does not burn additional energy. These systems are all self-supporting, energy-wise. This is what we should be advocating for, rather than corn or rape, or whatever. Switch grass would be fine, as long as it is raised on land not used primarily for food production. Sweden looks at their waste stream as a resource. We still just see something more to dispose of. Madness, really.

[Nathaniel]

@jwo: The energy-from-waste ideas you refer to are great, and we should definitely use them. But there isn't nearly enough waste to actually fulfill our energy needs. (Which isn't surprising, really; the reason the waste has potential energy in it in the first place is that we put it there when we created the junk in the first place. From an energy accounting standpoint, energy-from-waste is way to get more efficiency from our current energy sources, not a new energy source in its own right.)

We still need huge amounts of new solar (whether through photovoltaics or biofuels), or wind, or nuclear, to provide the energy in the first place.

[Jesurgislac]

Bernard: It's one thing to argue for different policy approaches, and quite another to describe an existing policy as inherently evil, as "dumping" food.

Well, Bernard, when there is local food available to be bought, and local farmers to support - and there usually is - deciding to ignore that food and dump US grain on the market to be sold at a cost that far undercuts the local food, is basically a means of using these people's hunger in order to destroy their economy and profit US farmers. Or as someone noted above, primarily US agri-business.

Yes, that's inherently evil. Excusing this as "well, at least the hungry get fed" is rather like excusing one of the Catholic Church's child-molester priests because, while he did use his work in the local children's charity to get access to children for sexual molestation, that work did a great deal of good for the community at large.

That the US government always claims that they're just not able to spend the money they've budgeted as "overseas aid" in ways which would actually benefit those countries, but are compelled to spend it in ways which primarily benefit US business and destroy those countries, just strikes me as a wonderful example of corporate spin.

[Sean M. Brooks]

I would like to offer to Hilzoy a few comments on her remarks about the jump in food prices. Ideally, that should ENCOURAGE farmers to grow more food--for both domestic use and for export. Because they would be getting more profits from doing so. In time, as the supply of food increases, prices will stabilize or drop. Because higher prices are SIGNALS that demand is increasing. And also, it is true, that supply is not keeping up with demand. Unfortunately, hamhanded or wrongheaded interference with the market by governments can worsen and prolong these spikes in food prices. Sincerely, Seam M. Brooks.

[now_what]

Welcome to today's game of "missing the point", Sean. You win.....a SINCERE NEW CAR!

[Sebastian]

"Unfortunately, hamhanded or wrongheaded interference with the market by governments can worsen and prolong these spikes in food prices."

And an example of such wrongheaded interference would be US farm subsidies, right?

[GNZ]

A classic example of how our system seems to allow stupid decisions to be made - worse yet even when everyone knows the decision was stupid they can't always get it changed. And its even worse at an international level than at a national one.

One could easily despair.

[tina]

Heifer International is a wonderful example of the kind of thing I wish we'd see more of. It puts the power to produce into the hands of the people who actually live in those struggling countries, AND it has a built in mechanism for spreading that productivity, keeping in in the local economies. "Stupid system" be damned.

[tina]

Excuse me, I'm newish here. Hilzoy's in Paki? Is there a particular post about that you could point me to so I can catch up? Thanks, and take care.

[OCSteve]

Jes: Well, Bernard, when there is local food available to be bought, and local farmers to support - and there usually is - deciding to ignore that food and dump US grain on the market to be sold at a cost that far undercuts the local food, is basically a means of using these people's hunger in order to destroy their economy and profit US farmers. Or as someone noted above, primarily US agri-business.

The intent is to “destroy their economy”? Really? If you’re really concerned about their economy then as Bernard sugested you may want to focus closer to home.

The governments of Lesotho, Malawi, Mozambique, Swaziland, Zambia, and Zimbabwe have expressed concern over the food and environmental safety of bio-engineered crops. U.S. food aid donations may contain bio-engineered corn and soybean products. The only whole grain in food aid donations would be corn. Their core concern revolves around fear of damaging their future agricultural trade with the European Union (EU). If U.S. donated maize kernels are planted by farmers accidentally or intentionally, the maize may pollinate local maize plants. This could lead to the new genetic material being introduced into the local maize varieties, including any crops grown for export or used in animal feed for livestock intended for export. These governments are concerned that once the current food deficit is overcome, and trade might resume, that European markets may bar their maize or maize-fed animal exports.

Now I realize that the question of GM food could be a whole discussion in itself. But if the real issue here is people starving to death right now then the obvious solution would seem to be putting food into their hands right now. And that’s really a question of distribution (and corruption) more than the availability of food. If the issue is their economy then the EU needs to take a hard look at their policies on GM food. The reason we have an overabundance of food to begin with is primarily due to GM after all. And in many of these places it’s going to take more GM to grow enough food to have a positive impact on their economy.

jwo: I think we all need to realize that this is the beginning of the changes that we will see taking place due to global warming…

It’s certainly the beginning of the changes we will see due to the unintended consequences of rushing to make sweeping policy decisions just to “do something”…

[Jesurgislac]

OCSteve: The intent is to “destroy their economy”? Really?

What, do you think they just naively go on doing it by accident?

But if the real issue here is people starving to death right now then the obvious solution would seem to be putting food into their hands right now.

Absolutely, OCSteve! So why not buy the food these people need that's available locally, and put that food into their hands right now?

If the intent is to help, that's a double or treble benefit: the people who are hungry are fed, and with food they are accustomed to and know how to store, prepare, and eat: and the farmers who are looking at financial ruin because no one can buy their food are saved to be able to grow food for next year: and the input of money into the economy both gives a real double value - buys the food to feed the hungry and keep the farmers going, and boosts the local economy.

Whereas taking grain grown in the US and stockpiled and dumping it on the market there, has a treble benefit in the US - gets rid of the grain, uses up dollars meant for overseas aid in the US, pays off agri-business. Yes, it feeds the hungry this year. It also ensures they stay hungry for next year.

If the issue is their economy then the EU needs to take a hard look at their policies on GM food.

Huh? Why should we look hard at our policies for keeping GM food out of Europe? Why shouldn't US agribusiness look hard at their policy of forcing farmers in Third World countries to buy GM grain that these agribusinesses know no one in Europe will buy?

The policies of GM agribusiness are against the small farmer. GM grain is often altered so that farmers can't - aren't allowed to! - save seed for next year, or trade seed with their neighbors. And GM seeds are designed to require specific kinds of pesticide or other expensive add-ons to grow at all. If you're concerned about the effects of GM food on small-time farmers in Third World countries, look to the corporations who "patent" GM crops.

[Jesurgislac]

Africa: Green Revolution or Rainbow Evolution?:

The key to ending hunger is sustaining Africa’s food biodiversity, not reducing it to industrial monoculture. Currently, food for African consumption comes from about 2,000 different plants, while the U.S. food base derives mainly from 12 plants. Any further narrowing of the food base makes us all vulnerable because it increases crop susceptibility to pathogens, reduces the variety of nutrients needed for human health, and minimizes the parent genetic material available for future breeding.

Seeds are a key element in the equation. One figure not often quoted among the depressing statistics from the continent is that African farmers still retain control over this major farming input: of the seed used for food crops, 80% is saved seed. Farmers do not have to buy seed every season, with cash they do not have. They possess a greater wealth -- their indigenous seeds, freely shared and developed over centuries. The proposed green revolution would shift the food base away from this treasure of seed. Instead, African farmers would have to purchase seed each season, thus putting cash into the hands of the corporations providing the seed. Is there a way of developing new varieties without further enriching Monsanto or DuPont by removing genetic wealth from African farmers?

Corporate development of new seed varieties, as promoted by the foundations, raises other questions. Will the new varieties be patented or protected by farmers’ rights? Who will own and control the seed? One major reason for the decline of the World Trade Organization (WTO) is the global South’s resistance to patenting life forms. In 1999, the African Union, representing all African governments, asked that its unanimous resolution rejecting any patenting on life be put on the agenda at the Seattle WTO meeting. The United States refused the request.

There were more links, but the comment got tagged as spam! I hope this one goes through. In summary, there's a factsheet about the problems of "food aid" which dumps US grain on local markets and undercuts local producers.

Specific example: in 2000, Guyanese rice exports to Jamaica were displaced by US food aid which suddenly doubled following a bumper crop in the USA.

[OCSteve]

Jes: So why not buy the food these people need that's available locally, and put that food into their hands right now?

So how do you implement that? I mean what’s the actual plan? Turn over gobs of cash so that local officials can by food locally to distribute locally? That sounds good on the surface but from years of experience we know that just results in enormous local corruption with little aid getting through to those who need it.

I’d prefer the “teach a man to fish” approach. But that would involve volunteers going there, teaching farmers new techniques, and yes probably more GM in terms of developing drought resistant crops etc. (and I’m in favor of removing any restrictions or patent related nonsense). So some of that aid money would do more good expanding organizations like the Peace Corps, and if taking existing farm subsidies to pay off GM patent owners makes sense I’d go for that too. But history has shown that just handing over bails of cash does little to help the folks actually starving.

[Jesurgislac]

So how do you implement that? I mean what’s the actual plan?

Do what every other country does. The US is the only country in the world that primarily gives "food aid" by dumping its own surplus crops to wreck the local economy. Every other country in the world that does food aid, does it by providing grant money locally to purchase food locally. So you tell me, OCSteve: if other countries can implement this, why does the US insist on "helping the starving" by dumping its own crops on their market to be sold at prices that undercut the local farmers?

But history has shown that just handing over bails of cash does little to help the folks actually starving.

Actually, the history of aid work in developing countries shows that implementing food aid in ways that help local farmers - by buying their produce, by helping them to grow more for next year - does a lot more to help the folks actually starving than by bankrupting the local farmers and letting agribusiness take over.

Sure, USAID will tell you that it's all about giving them food: USAID is tied up with US food industry so fast it's not even funny.

Here's what Oxfam has to say about the effects of the US dumping its own surplusage on to developing country's markets.

[hilzoy]

Tina: I'm in Pakistan for 3 weeks, of which about 10 days have passed. I'm helping to teach a course in bioethics in Karachi to a wonderful group of students (they are students now, but all of them are professionals, mostly doctors, the rest of the time.) The people here are also starting a bioethics master's program; I'm helping a bit with that.

Irl, I teach bioethics and moral philosophy.

[dutchmarbel]

Jes is right OCSteve. Except on the 'forgive them their debts' part, I used to think that but have read arguments that made me doubt. That's a seperate discussion though.

I still remember how shocked I was, years and years ago, when there were actions to feed the starving people in Ethiopia - and I noticed that the green beans in my groceryshop were from Ethiopia. The 3d world countries had to sell food (or grow crops for export, like coffee) to get the hard valuta to pay the Worldbank with - and usually coulnd't even make enough to pay for the intrest so the debt would only grow and grow.

GM crops are often engineered to create dependencies; once you accept you are stuck. Some people think that dumping the GM crops in Africa is a deliberate choice, to make acceptance of GM food unavoidable.

[hilzoy]

OCSteve: why would we have to turn over gobs of cash to local officials? Many NGOs have people on the ground in developing countries who could make the purchases themselves.

Sean M. Brooks: in the long run, higher prices will no doubt encourage people to grow more food. On the other hand, people are facing starvation in the short run. I would rather see direct cash payments or gifts of food to the poor than attempts to hold the price of grain down, since I think the latter would discourage more farming. But if you want to prevent starvation, something has to be done to help them.

[FDS]

The problem is the water. They also need to produce drugs (for AIDs cash pepefar) and get every person vitamins.

Obama went to Pakistan too!!!!

http://blogs.abcnews.com/politicalpunch/2008/04/obamas-college.html

[Sebastian]

"Here's what Oxfam has to say about the effects of the US dumping its own surplusage on to developing country's markets."

The only reason we have such a massive surplusage to dump is because our government is propping up a specific form of local agriculture for no good economic reason. (The political reason is obvious, which only illustrates how divorced politics can be from practical concerns).

[Jesurgislac]

Sebastian: The only reason we have such a massive surplusage to dump is because our government is propping up a specific form of local agriculture for no good economic reason.

That's right-wing government for you, Sebastian. Look at how the neocons "planned" for Iraq: it was on exactly the same kind of model as the "food aid".

US$ budgeted for Iraqi reconstruction were given to big corporations who spent that money mostly inside the US, or on hiring US contractors to go work in Iraq, not on promoting reconstruction and stimulating the Iraqi economy by paying Iraqi companies to do the work.

I admit that the stranglehold agribusiness has on the economy in so many countries is bad for everybody and that leftwing governments are almost as guilty as rightwing governments in paying attention to what agribusiness wants rather than what's good for consumers.

But the US is the only wealthy country in the world that uses its agribusiness problems to dump surplusage on other countries. And it's been doing that since 1954. This model of "food aid" is not a Democratic or a Republican problem - it's a specifically American problem, the notion that the US is entitled to "help" other countries in the way that will be most profitable to the US, regardless of how useful that profitable "help" actually is to the country receiving the "help".

The global gag rule, "abstinence education" as a requirement for family planning/AIDS programs receiving US funding, the Iraqi "reconstruction" - they're all on the same kind of model, though the first two are naked vote-grabbers rather than money-grabbers.

[OCSteve]

Jes: Here's what Oxfam has to say about the effects of the US dumping its own surplusage on to developing country's markets.

Good link and it makes a pretty good case. However stuff like this just makes me want to throw up my hands and say to heck with it all:

As the world’s largest food aid provider, supplying about half of all food aid, the USA has a special responsibility not to misuse this humanitarian tool for commercial aims. And yet it is the most problematic actor among food aid players. At the WTO, the USA has emerged as the primary opponent of new food aid disciplines, defending the status quo and successfully maneuvering to remove language from the July 2004 WTO framework agreement prohibiting surplus disposal via food aid. Because the USA is the largest donor of food aid, this paper largely focuses on the US food aid program.

Because you are the largest food aid provider supplying about half of all food aid in the world, you have a special responsibility to do it the way we want you to. Huh?

Now I agree that we should not use aid to attempt to open new markets, and aid is aid in my book - it should not be sold to recipient companies via loans or export credit guarantees. That should be changed.

But we produce a surplus of food. People are starving in other countries. Sending them our surplus certainly seems to make sense. Should we just plow that surplus under? Let it rot? (Certainly we should immediately stop subsidizing any surplus.) I supposed that Oxfam would say that given our “special responsibility” we should be responsible to monetize the surplus and hand over the cash. But nowhere do they address how to maintain accountability and minimize corruption if all this aid moves to a cash basis. As a starting point, maybe we need to clearly separate emergency food aid (sending starving people actual food) from other longer term agricultural development aid.

One comment on Oxfam: I really hadn’t heard of them so I did a quick google. After all their moralizing on our supposed ulterior motives, the first thing I find is this:

Oxfam has rejected plans to raise up to £2m in donations from British farmers to relieve poverty in Africa, because it would have involved taking money from UK supermarket chains.

The charity has refused to countenance any dealings with Tesco, Waitrose and Sainsbury's, saying it would compromise its lobbying and campaigns aimed at certain supermarkets.

A Cambridgeshire cereal farmer, Oliver Walston, who has been organising the donation scheme, called Oxfarm, said he was 'totally gobsmacked' it had been turned down because of 'political correctness gone completely crackers'.
…
An Oxfam spokesman said: 'We are very keen to work with Mr Walston, but had a problem with a specific issue, so cannot really work with him on this project. We feel it would be compromising that lobbying activity.' He said that Oxfam's policy was not to accept money from people, companies or organisations against which it was campaigning.

So even when it comes to cash – the politics (supermarkets bad) would seem to outweigh actually getting aid to people who need it.

[Sean M. Brooks]

I'm addressing this comment to two persons: Sebastian, and Hilzoy. Sebastian first: exactly! US farm policy is too often idiotic. The gov't is paying some farmers to grow certain crops and other farmers NOT to grow other crops. The absurdity of all this nonsense is PATENT. Far better to abolish all subsidies.

Hilzoy: in the kind of emergency you described, I agree with you. For that, I agree that direct gifts of cash or food makes sense. But we do need to make sure direct aid of this sort is only a TEMPORARY solution. One lasting only long enough for normal market forces of supply and demand to take over. It would be disastrous for short term, direct aid to become permanent. And you are correct to say attempts by governments to artificially hold down food prices simply won't work. Sincerely, Sean M. Brooks

[OCSteve]

marbel: Jes is right OCSteve

I think she is more right then I did when I started in this thread. She’s making a good case. Still, me being me and her being her… ;)

Here is where I would agree at this point:

-Any cash we now pay out in farm subsidies that are resulting in a surplus that there is no market for – redirect that cash as long term agricultural development grants.
-Any unintentional/accidental surplus: sorry but I can’t see plowing it under. Ship it where people are hungry, as a grant.

Hilzoy: Many NGOs have people on the ground in developing countries who could make the purchases themselves.

I’m afraid you have a lot more faith in NGOs than I do.

I could keep going but wanted to see if I could sneak even 3 links past the spam filter.

[OCSteve]

If the kitty gets a chance to free up a post…

I tried to respond to Hilzoy and Marbel but I had the gall to attempt to include 3 links.

[Jesurgislac]

OCSteve: The charity has refused to countenance any dealings with Tesco, Waitrose and Sainsbury's, saying it would compromise its lobbying and campaigns aimed at certain supermarkets.

Yes. You feel they should take the money regardless of how it compromises their lobbying and their campaigns? One of the big issues about food in developing countries is how the big supermarket chains treat their suppliers.

Let me explain to you how "donations" work in the world of political campaigning. If you are Oxfam, and you are campaigning against what Tesco (for example) do to farmers in the Third World, then if Tesco gives you large amounts of money, Tesco is doing so with ulterior motives. Tesco is in a position to change how they behave towards farmers in developing countries. If, rather than doing so, Tesco offers Oxfam money, Tesco is trying to buy a good impression with UK consumers rather than actually doing better in developing countries. I'm rather surprised this is news to you, OCSteve.

So even when it comes to cash – the politics (supermarkets bad) would seem to outweigh actually getting aid to people who need it.

Exactly right. The supermarkets want to prevent aid getting to people who need it. That's politics. Oxfam refuses their money. That's ethics - and politics. If you want to be effective, you don't take bribes from the opposition. This is news to you?

[Sebastian]

"That's right-wing government for you, Sebastian. Look at how the neocons "planned" for Iraq: it was on exactly the same kind of model as the "food aid"."

The origins of the farm subsidy and its initial foray into food aid were decidedly left wing (at least for the US) as one of the misguided responses to the Great Depression. The government intervention began a long history of farmers dramatically adjusting their crop selection to fit into the subsidies--causing problems just like this.

Its continuance has been decidedly bi-partisan in the worst sense of the word. Trying to transform it into largely a creation of the right-wing is confused. The right wing has contributed about 50% to its continuance and almost nothing to its initial disasterous creation.

[Felwith]

I still remember how shocked I was, years and years ago, when there were actions to feed the starving people in Ethiopia - and I noticed that the green beans in my groceryshop were from Ethiopia.

There's actually a good reason for this:

http://commentisfree.guardian.co.uk/daniel_davies/2006/07/dumping_dumping.html

If the goal is to promote the development of local agriculture as a means of raising the overall standard of living, then I think it would make sense to concentrate on the most profitable agricultural products.

[dutchmarbel]

Because you are the largest food aid provider supplying about half of all food aid in the world, you have a special responsibility to do it the way we want you to. Huh?

If a small country did it, the economic effect would be much smaller.

But we produce a surplus of food. People are starving in other countries. Sending them our surplus certainly seems to make sense. Should we just plow that surplus under? Let it rot?

You produce a surplus of food because that is stimulated and rewarded with money (subsidies). EU is bad too with agricultural subsidies btw, I am against those too. But they don't dump it in third-world countries anymore (they used to, in the past).

So even when it comes to cash – the politics (supermarkets bad) would seem to outweigh actually getting aid to people who need it.

Huh? No, you don't want to be dependent or in debted to parties you fight. What's bad about that?

[Felwith]

Hm, I'll bet no one's going to follow a link that looks like that. Let's try that again:

http://commentisfree.guardian.co.uk/daniel_davies/2006/07/dumping_dumping.html>Why cheap food is good.

[Bernard Yomtov]

I still remember how shocked I was, years and years ago, when there were actions to feed the starving people in Ethiopia - and I noticed that the green beans in my groceryshop were from Ethiopia. The 3d world countries had to sell food (or grow crops for export, like coffee)

But this makes perect sense, dutch. Ethiopian farmers are better off growing lucrative crops and selling them abroad than they are planing production solely to meet the country's domestic food needs. The problem here, if there is one, is the debt, not the decision to produce for export.

[Bernard Yomtov]

Thanks for the link, felwith. Davies' points are excellent.

[Jeff]

I'm pretty sure if corn's not cutting it, American farmers CAN grow other things.

Anyone remember when Dukakis was asked what small farmers should do to compete against the mega-farms? He said something like "Grow arugala" and was mocked for it. Today, go into any grocery and look at the pre-made salads -- they're raddichio, arugala, spinach, etc -- the very thing Dukakis was advising.

[DN]

PS: On a lighter Pakistani note:

"An ousted ally of President Pervez Musharraf has been hit with a shoe in a Pakistani provincial assembly dominated by supporters of slain ex-leader Benazir Bhutto.

Actually, this is probably more serious than it looks. Hitting someone with a sandal or shoe is a deep insult in other parts of South Asia; I assume it is in Pakistan too. I can't think of an equivalent in our culture: much stronger than a pie in the face, but a pie captures a bit of the same calculated insult and public humiliation.

Imagine, perhaps, pieing a judge in a courtroom. That strong.

[Turbulence]

As I understand it, we may not have to worry about the problem of producing too much corn in the coming years for several reasons. First, the midwest's regional climate is returning to a long term trend that has a lot less water and is thus incapable of supporting intensive agriculture. Second, soil erosion and salinization are huge problems and have only grown worse.

Salinization involves soil salt concentrations rising over time as farmers irrigate their fields using more water than strictly necessary. Since all water contains some salts, if you irrigate by flooding your crops with tons of water knowing that most of it will evaporate quickly, you're just adding lots of salt to soil. That salt cannot be removed, but once it reaches critical levels, crops won't grow. I think salinization problems actually demonstrate one of Seb's points above: stupid government subsidies (in this case, massive irrigation subsidies for agriculture) have very bad unexpected consequences. If water was sold to farmer's at market prices, we would see a lot less flood irrigation and a lot more targeted drip irrigation which would postpone salinization by a few decades.

Finally, since modern American agriculture is heavily dependent on petroleum, continuing high oil prices bode poorly for high midwestern yields: I expect that oil prices will remain high for the indefinite future because 1. peak oil is going to hit sooner or later, 2. rising demand from the third world will definitely hit, and 3. fossil fuel extraction, refinement, and transport are uniquely vulnerable to small terrorist groups international instability. Item 3 is particularly worrisome: pipelines are vulnerable over their entire length, surplus refinery capacity is essentially zero, the Straits of Hormuz are both vital and tiny, etc.

[dutchmarbel]

The problem here, if there is one, is the debt, not the decision to produce for export.

Oh, both I think. At that time I was young, so the fact that Ethiopians were dying from hunger whilst I ate their beans in wealthy Neterlands made the most impression.

Later the economic were more understandable, which why I thought that forgiving them their debt was the best policy.

These days I have more questions than answers, which means I probabely learned more ;). The image of those beans in juxtaposition to the images on the tv is still very vivid though.

[NewSunSEO]

Corn is not cutting it because all of the harmful substances are running out into the Gulf of Mexico and killing off the wild life. There has to be some other type of way to do this and make it efficient enough to stop using oil.

[Bernard Yomtov]

dutch,

It's good you recognize the economic issues.

There are always complications in these things, so simple theories may be deceptive, but Ethiopians exporting green beans despite widespread hunger in Ethiopia need not be unwise.

Of course this depends on where the proceeds go. Even leaving aside debt payments, if there is corruption so that a significant part of the money ends up in Swiss bank accounts that's a problem. If, OTOH, it's used to buy other foodstuffs, (or agricultural equipment perhaps) including those which provide more nutrition per dollar than green beans, the trade helps reduce hunger.

[Sebastian]

"Imagine, perhaps, pieing a judge in a courtroom. That strong."

Actually I think it would be the equivalent of pissing on a public officials head at a public appearance--that strong. Seriously.

[Gary Farber]

Bernard, I'm unclear and curious if you read the stuff I linked to here on April 07, 2008 at 10:14 PM.

I did figure people would read the links I was linking to, including, of course, the Oxfam report I linked to via this link, but I suppose that was over-optimistic, so it's nice that Jes repeated yet again. Ditto the other links repeating the same points that have subsequently been posted

I'm still quite curious if you have any comments; I didn't want to bug you, but I hope this isn't too soon to now ask, given the way conversation seems to be moving on, and repeating the same points over and over?

Ditto, OCSteve? Others?

[Gary Farber]

Jes: Here's what Oxfam has to say about the effects of the US dumping its own surplusage on to developing country's markets.

Good link and it makes a pretty good case.

?

Yeah, I thought so, too, when I posted it yesterday.

"One comment on Oxfam: I really hadn’t heard of them so I did a quick google."

!!!

Ok. I suggest doing a lot more reading on issues of food security and international agriculture for some weeks before you consider yourself prepared for a discussion of such issues on the most basic level, if I might make such a forward suggestion without causing more than my usual level of offense. Not having heard of Oxfam is a statement that, respectfully, you know absolutely zero about the topic.

Sorry.

[Bernard Yomtov]

gary,

I read the links. Did you read felwith's?

The conclusion I draw is that food aid programs use less than ideal methods, and are heavily influenced by domestic US politics, especially farm subsidies. I don't think I ever argued otherwise.

What I am not convinced of is that the programs are counterproductive, which seems to be the tone of the critics. Some of their economic arguments are a bit unclear to me, as indeed are the mechanisms by which food aid goes to countries that produce enough themselves.

As to the argument that we should donate money instead, so that food can be purchased locally, I can see that being OK sometimes, assuming the food is available, but I also believe it can create problems of its own, as indeed the Oxfam report concedes.

I can just hear the shrieks,

"You're driving food prices out of the reach of people and just creating a windfall for local politically connected farmers," etc.

Or,

"You're encouraging the growth of the wrong kind of crops. The farmers are growing wheat on unsuitable land because your subsidy guarantees them a high price, but they would do better to grow export crops for which the land is better suited. Then they wouldn't be dependent on the subsidy."

Fundamentally, I believe that the realities of domestic politics , not to mention the fact that it's a complex world, mean we're not going to have a perfect system. There will always be something to pick at.

So I think things could be improved, but reject the devil theory.

[OCSteve]

Jes: I'm rather surprised this is news to you, OCSteve.

It’s not news to me Jes. However, if an organization’s primary concern is real people starving to death right this moment then turning down $4M coming from farmers because it comes attached to matching funds from your political adversaries seems, well, rather more about the politics than the starving people. Hell, the ACLU accepted a donation from me. It didn’t seem to deter them from their political course. ;)

marbel: You produce a surplus of food because that is stimulated and rewarded with money (subsidies). EU is bad too with agricultural subsidies btw, I am against those too. But they don't dump it in third-world countries anymore (they used to, in the past).

Sorry - I responded to you and Hilzoy earlier but it got caught in the spam filter, so now things are out of sequence etc. Essentially I said I thought Jes was more right than I did when I started in this thread. Here is what I would agree with at this point:

-Any cash we now pay out in farm subsidies that are resulting in a surplus – redirect that cash as long term agricultural development grants.
-Any unintentional/accidental surplus: sorry but I can’t see plowing it under. Ship it where people are hungry, as a grant.

Hilzoy: Many NGOs have people on the ground in developing countries who could make the purchases themselves.

Repeating but without the links, I’m afraid you have a lot more faith in NGOs than I do. (I linked to 3 cases of NGO corruption in administering aid programs, and there are a lot more. I’m sure there are good ones, but they are certainly not all immune to corruption.)

[OCSteve]

marbel: You produce a surplus of food because that is stimulated and rewarded with money (subsidies). EU is bad too with agricultural subsidies btw, I am against those too. But they don't dump it in third-world countries anymore (they used to, in the past).

Sorry - I responded to you and Hilzoy earlier but it got caught in the spam filter, so now things are out of sequence etc. Essentially I said I thought Jes was more right than I did when I started in this thread. Here is what I would agree with at this point:

[OCSteve]

Sorry – I’ve tried to respond to everyone, but the spam filter is having none of it. Maybe the kitty will come along and help.

[OCSteve]

Gary: I suggest doing a lot more reading on issues of food security and international agriculture for some weeks before you consider yourself prepared for a discussion of such issues on the most basic level, if I might make such a forward suggestion without causing more than my usual level of offense.

Hmm. Usual level? A bit more, yes. If the usual level is say, around 4 - that was a 6. So excuse me while I pour a virtual beer over your head. ;)

Seriously though, what makes you think that I’m ever prepared for a discussion of any issue on even a basic level before I enter the fray here? Frankly, it would never occur to me that I should go off and study an issue for some weeks prior to engaging in a discussion on it. I don’t have “some weeks” to spare, and if I did, it wouldn’t be to prepare for a blog discussion (which would be some weeks in the past by the time my educatin’ was done).

IMO that kind of comment is exactly what tends to keep people lurking rather than participating here BTW. It’s intimidating enough to jump in here without a regular suggesting that one should be well versed on a topic before daring to enter the conversation. You seem to approach this sometimes as a challenge where there are winners and losers and someone is keeping score. I suggest treating it as a conversation where no one necessarily “wins”.

As it is, I learned a lot about the topic today in a relatively short time. I know more about it tonight than I did this morning. My opinion changed over the course of the day such that I am now more in agreement with Jes (and you and marbel) than I was this morning. I consider that a “win” for me if someone is keeping score. And all because I don’t mind letting my *ss hang out there for the world to see.

[OCSteve]

I’ve responded to others but it’s all hung up in the spam filter - sorry.

[Jesurgislac]

I consider that a “win” for me if someone is keeping score.

Someone should be awarding kitten-points.

;-)

[ThatLeftTurnInABQ]

I don’t mind letting my *ss hang out there for the world to see.

OCSteve,

Humility and an open mind rank very high on the list of virtues that I aspire to, but fall disappointingly short of all too often.

Don't change - you are setting a great example for a lot of people.

[jwo]

Nathanial: But we still need huge amounts of new solar.....

Agreed. I intended to suggest this as a replacement for the ethanol which sets up the competition between food and energy sources, not as the total answer to our energy problems. And I was not simply referring to solid waste, but to sewage sludge as well, which is my more personal concern.

OCSteve: Relating to "doing something," I am assuming you were referring to the choice of ethanol as a solution to the energy crisis, rather than blasting my mentioning global warming, right? ;-) If so, I absolutely agree.

My apologies for being slow getting back to this thread, and thus a bit late in responding.

Great discussion, All. I want to come back and read more when my eyes are not starting to blur.

[Turbulence]

However, if an organization’s primary concern is real people starving to death right this moment then turning down $4M coming from farmers because it comes attached to matching funds from your political adversaries seems, well, rather more about the politics than the starving people.

I don't think Oxfam's primary goal is to minimize the number of starving people in the world right now at this instant no matter what. If it was, then the rational thing to do would likely involve terrorism and mafia-style criminality. Rather, their goal is to sustainably reduce the number of starving people in the longterm. That occasionally requires that they spend money on things that might reduce hunger in the future while doing nothing to reduce hunger right now. This is exactly what Oxfam is doing by refusing the supermarket donations: they're spending cash to purchase independence on the theory that while independence may cost a few million pounds now, not having independence in the future will cost a great deal more. Most organizations are unwilling to sabotage their long term goals in order to realize short term gains.

-Any unintentional/accidental surplus: sorry but I can’t see plowing it under. Ship it where people are hungry, as a grant.

Why should the US government purchase surplus grain from farmers?

Repeating but without the links, I’m afraid you have a lot more faith in NGOs than I do. (I linked to 3 cases of NGO corruption in administering aid programs, and there are a lot more. I’m sure there are good ones, but they are certainly not all immune to corruption.)

There are no doubt many cases where NGOs or their surrogates have acted corruptly. The nature of the work (operating with excess cash and little protection from coercive elements in environments far from home and difficult to audit) makes some corruption inevitable. Nevertheless, do we really have any evidence that NGOs are more corrupt in practice than, say for example, DOD contractors? What about agribusiness like Archer Daniels Midland? What about a respectable upstanding institution like the US Army?

Also, I don't understand why the current system is any less prone to corruption than the proposed improvements. Could you explain please? If we ship tons of grain to a war torn famine-afflicted country, we're not going to send Federal Marshals with the grain to personally deliver it to those in need. Rather, we're going to rely on NGOs to help distribute the food, which means that corrupt NGOs have plenty of opportunity to siphon off some of the grain in exchange for cash. If a country has enough of a functioning grain market for NGOs to buy grain under the proposed system, then it has enough of a market for corrupt NGOs to sell grain under the current system.

[Hartmut]

I concur with the statement that the EU has not a very pretty record either. We also pay for "grow this" and "do not grow that". The main difference from my point of view is that the EU is mainly protectionist and keeping 3rd world stuff out by tariffs (with bananas being the best known case. Because the French want to sell us their inferior specimens they insist on high tariffs for non-EU bananas) and less "dropping food surplus elsewhere". To our eternal shame the EU is more likely to destroy the surplus instead.

[Jesurgislac]

Hartmut: I concur with the statement that the EU has not a very pretty record either.

Agreed to that. (Though I prefer Windward Isles bananas to South American. *shrug*)

To our eternal shame the EU is more likely to destroy the surplus instead.

Better destroyed than used to destroy another country's economy. One would hope that those were not the only two options, though.

[OCSteve]

Turb: Typepad was extremely obnoxious yesterday. Some of my comments were trapped the better part of the day, and were released overnight, appearing after some of my other comments and a change of mind on some issues, etc. So it’s all a bit hashed up in here now. Anyway to try to clarify a couple of points…

Why should the US government purchase surplus grain from farmers?

Again, we absolutely should not be subsidizing anyone to grow a surplus. And after reading up on it a bit I agree that we should not structure aid so as to serve our own interests more than the interests of those who really need it. If food is available locally then I agree it is a double win to procure it locally (assuming corruption can be minimized). But we are going to end up with a surplus on occasion. What do we do then? My thoughts on that are shaped strongly by my early life experiences and my upbringing.

Mother: Clean your plate! Finish your dinner! Don’t you know there are kids starving in China?

Me: [muttering darkly to myself] Well then, let’s box up these damned brussel sprouts and mail it to them!

Due to years of that, I really hate to see food go to waste. More recently, I live in a town with a lot of restaurants. If you’ve ever worked in a place that serves food to the public you know how much actually gets thrown out. One of my favorite charities works to gather any surplus from local restaurants to feed the homeless.

So the short version is that when we have a surplus there has to be a way to use it to alleviate hunger somewhere.

Also, I don't understand why the current system is any less prone to corruption than the proposed improvements. Could you explain please?

Cash is just more prone to disappear without a trace. Sure you can have corruption when dealing with goods, but it is harder not to leave a trail. (The oil for food scandals come to mind.) It’s a little tougher to disappear a ton of grain than a stack of greenbacks…

[dutchmarbel]

Any unintentional/accidental surplus: sorry but I can’t see plowing it under. Ship it where people are hungry, as a grant.

But there is not always an emergency going on - and the economic impact is much bigger for locals that you think. Your short term aid might mean their longer term disaster.

In thase case the corn is also GM, which is an additional complication if it can cross over to their own crops and thus ruin their changes to sell in the EU.

Food safety is an issue in the EU, which also has an economic impact since our producers often have to spend/invest more which has an impact on the price. It is not fair to lower the standards for non-EU competitors.

I agree that it is awfull to see things go to waste, I hate it too. But sometimes it IS better.

[Jesurgislac]

But we are going to end up with a surplus on occasion. What do we do then?

Just a thought: Give it to people who are hungry in the US. Charity begins at home, to quote another aphorism. A country that produces surpluses of food, should really not have children - or adults! - going hungry to bed at night because they can't get enough to eat.

[OCSteve]

Jes: I did actually think of that, and I was going to post something along the lines of “first of all we should not be sending anything (food or money) to another country as long as there remains one hungry American”. Then I thought it may not be received that well so I deleted it. ;)

Hey I’ve got it! Its biomass right? We just turn it into ethanol and cure all the world’s problems in one stroke. {/snark}

[Jesurgislac]

Hey I’ve got it! Its biomass right? We just turn it into ethanol and cure all the world’s problems in one stroke.

Hee! You know, we are sometimes more alike that we're different. I was thinking that.

Mother: Clean your plate! Finish your dinner! Don’t you know there are kids starving in China?

Me: [muttering darkly to myself] Well then, let’s box up these damned brussel sprouts and mail it to them!

Also, hee! again. Me too.

[Jesurgislac]

...gawd.

Fancy a Brussel Sprouts Martini??

[Slartibartfast]

I prefer the turnip greens martini, myself.

[Slartibartfast]

Speaking of which, I've got a whole bunch of turnips ready for harvest. Mmmm...turnips.

[Free Lunch]

The problem with sending food out that the West doesn't need is that it destabilizes the farm economies of the poor countries that randomly have large amounts of food dumped on them.

Food production is erratic enough in many areas that farmers cannot afford to see the prices for food drop in a year that has poor production. Providing food from the West to a country that needs it is a very good idea, but only if tied to processes that don't undermine the farmers.

Of course, screwing up the balance the other way, by encouraging biofuel production is also destabilizing. Life is like that already. We don't need public policy that makes price swings worse than they would be without active intervention.

[mod*mom]

this is so scarey. it may be the future for all of us