Wednesday, May 14, 2008

Four ways to ease global food crisis

Bob Davis lists four ways to ease a global food crisis over the next year: (i) Stop hoarding, (ii) Buy locally, (iii) Target subsidies, and (iv)Press Japan

Stop hoarding. The current crisis represents a breakdown of the global agricultural market. Skyrocketing prices should boost production of grain, which can be shipped around the world. But not if countries hoard supplies and restrict exports, which is happening in about 40 countries, including China, India, Vietnam, Kazakhstan and Russia.

Buy locally. The U.S. generally ships sacks of food as its food aid. Europe, on the other hand, ships cash so that food can be purchased locally. Sacks of grain are important in feeding starving masses in the Darfur region of Sudan, where there are few locally grown alternatives. But shipping food can undermine local farmers elsewhere.

Target subsidies.About 30 countries have adopted what are called "conditional cash transfer" programs. Poor families are paid to send their kids to school, have them vaccinated and meet other requirements, depending on the country. Begun in Mexico and Brazil, these programs depend on communities to identify families that are poor by local standards.These programs can be used to get more food to the poor. In Jamaica, a new World Bank loan would be used to boost family benefits by one-fourth and expand the program so it includes about 14% of the population -- roughly the proportion of people below Jamaica's poverty line. The bank also wants to boost programs such as one in Ethiopia in which locals are paid in cash and food to build irrigation ditches. While the Ethiopian program sounds like something out of a John Steinbeck novel, it reaches people in need

Press Japan. The price of rice has leapt about 85% since mid-March mostly due to panic buying and hoarding. Japan could do a lot to relieve the pressure. It has a stockpile of 1.5 million tons of rice, mostly imported from the U.S., which it keeps off the market to boost the income of local farmers. Some of the stored rice is several years old, and some of it is fed to animals, says a U.S. Agriculture Department report.