Wednesday, May 7, 2008

Food Crisis: Doubts on food aid

Arvind Subramanian argues that though commitment to increase food aid is laudable, some hinges on that commitment like mandatory purchase and shipping from suppliers in the US limits the scope and reach of food aid. He also lays out some immediate and long term measures to avert this kind of crisis in the future.

...Starting now and over the next couple of years, the U.S. and other countries need to work together to ensure that world trade in agriculture is supportive of agriculture, as Nancy Birdsall and I argued in a recent Wall Street Journal op-ed, Food and Free Trade. That includes getting rid of inefficient biofuel subsidies; ensuring that countries don’t impose export restrictions (as several have done in the recent episode) since these aggravate food shortages; and injecting some rationality into the genetically modified organisms (GMO) debate, where the EU in particular has taken an extreme position that could be impeding the spread of agricultural productivity, especially in Africa.

In the long run, the international community needs to devote much more energy to figuring out how to spark a Green Revolution in Africa—the part of the world that is most vulnerable to food price increases.

...For example, between 2004 and 2007, when prices rose sharply, almost all the increase in maize production in the world—about 50 million tons—went into U.S. biofuel production. The fuel versus food conflict is suggested by the following statistic: the grain required to fill the tank of a sports utility vehicle with ethanol (240 kilograms of maize for 100 liters of ethanol) could feed one person for a year. So, if all the U.S. biofuel production had gone into feeding mouths rather than Hummers, you are talking about a lot less hungry people. Africa expert Paul Collier calls the U.S. ethanol mandate and subsidies program “grotesquely inefficient” in today’s Financial Times