World Food Summit Failures: "Everyone complained about other people's protectionism — and defended their own."

Ronald Bailey | June 10, 2008

Last week, leaders from 181 countries met at the World Food Summit in Rome under the auspices of the U.N. Food and Agriculture Organization (FAO).

The summit, called to address the world food crisis, nearly fell apart as countries spent most of the meeting justifying their stupid trade and biofuels policies. As the New York Times reported, "Everyone complained about other people’s protectionism — and defended their own." For example, Brazil produces a great deal of ethanol from cropland devoted to sugar cane. Brazil's President Luiz Inacio Lula da Silva, declared:

"It is frightening to see attempts to draw a cause-and-effect relationship between biofuels and the rise of food prices. It offends me to see fingers pointed against clean energy from biofuels, fingers soiled with oil and coal."

Not be outdone, U.S. Secretary of Agriculture Ed Schafer argued that converting food into fuel accounts for only 3 percent of the recent spike in food prices.

In addition, the spreading of panicky bans on exporting food by countries such as India, Egypt and Vietnam are also pushing prices up.

The International Food Policy Research Institute (IFPRI) issued a press release diplomatically outlining the failures of the food summit:

• Trade: Export bans and other trade distorting measures only exacerbate the crisis. Unfortunately, the summit barely came to a consensus for recognizing the problem, let alone taking action. IFPRI research found that the elimination of export bans would stabilize grain price fluctuations, reduce price levels by as much as 30 percent, and enhance the efficiency of agricultural production. The G-8 summit and international meetings should take a stronger stance on this issue.
• Biofuels: Biofuels that use grains and oilseeds contribute significantly to food price inflation. IFPRI analysis shows that these types of biofuels accounted for 30 percent of the rise in grain prices between 2000 and 2007. Corn-based ethanol accounted for 40 percent of the increase in maize prices during this period. Nevertheless, the summit shied away from distinguishing between beneficial and risky types of biofuels. Ultimately, the declaration dodged the issue by calling for “in-depth studies.”

What is most disheartening is that a world food crisis--when crop prices are high and farmers are flush with cash--is the perfect time to tear down agricultural trade barriers and eliminate subsidies. If not now, when?

Whole IFPRI press release here.

Comments

TallDave|6.10.08 @ 1:01PM|#

Is that the cover from "Cropacalypse: MegaWheat, Destroyer Of Worlds"

|6.10.08 @ 1:04PM|#

What is most disheartening is that a world food crisis--when crop prices are high and farmers are flush with cash--is the perfect time to tear down agricultural trade barriers and eliminate subsidies. If not now, when?

Fortunately Naomi Klein was able to warn us to your opportunistic exploitation of the food crisis in the service of your evil free market ways. We're on to you! We're not going to let you poison the starving people of the developing world with your DDT laden Frankenfoods.

Nigel Watt|6.10.08 @ 1:07PM|#

Is that the sound of the whole world raping itself I hear? Strangely musical.

EJM|6.10.08 @ 1:10PM|#

Just curious: Did the Cairns Group have any sort of official presence at the FAO meeting?

|6.10.08 @ 1:11PM|#

Warren -
Good job, but you forgot the quotation marks around "free market." :)

Naga Sadow|6.10.08 @ 1:27PM|#

(sigh) . . . everyone always thinks an exception for their own benefit is justifiable.

|6.10.08 @ 1:38PM|#

If not now, when?

a) Never.
b) During the Revolution.

|6.10.08 @ 1:41PM|#

Humanity, stupid, evil or both?

|6.10.08 @ 1:45PM|#

both

|6.10.08 @ 1:56PM|#

So, does that mean that Robert Mugabe addressing the summit was appropriate rather than ironic?

T|6.10.08 @ 2:00PM|#

If not now, when?

When diffuse costs and concentrated benefits fall out of favor among those controlling the government. Or more simply, never.

|6.10.08 @ 2:55PM|#

Why would any of these guys (and gals) want to solve the food crisis? They get to meet in nice places like Rome and call for more "in depth studies" that they can review and restudy again and again in other cool cities.

TallDave|6.10.08 @ 3:16PM|#

Humanity, stupid, evil or both?

Definitely both. That's why our Constitution is chock full of "Congress shall pass no law..."

|6.10.08 @ 6:21PM|#

What is most disheartening is that a world food crisis--when crop prices are high and farmers are flush with cash--is the perfect time to tear down agricultural trade barriers and eliminate subsidies. If not now, when?

When farmers are so broke they can't afford to pay their lobbyists and politicians?

GSI|6.11.08 @ 2:42AM|#

What most people do not realize, and something that was not understood by journalists reporting at the recent Rome summit, is that when IFPRI or any other reputable research institutes have looked at the effects of biofuel policies on food prices, they have measured the effects on basic commodity prices. That understates the percentage effect on consumer (i.e., retail prices) slightly, but not by much in developing countries, which is where most of the poorest people -- the ones we should be most concerned about -- live, and where the food being consumed is a basic product, like corn flour for tortillas or corn meal, not a highly processed product like Corn Flakes.

By contrast, when the U.S. Government talks about the effects of its corn-ethanol promotion program, it measures the increase in farm-gate prices for corn (ignorring the increases in the prices of crops displaced by increased corn acreage) and relates it to the rise in the concumer price index (CPI) for food. The CPI is based on total household expenditure on food, and includes expenditure on food eaten outside the home (in restaurants, cafeterias, etc.), which has a 45% weight in the tally. So the approximately $17 billion increase in annual expenditure on corn (and dried distillers grains) for food or feed in the United States, divided by total consumer expenditure on food (including "Food away from home") of around $1,100 billion per year, comes to "only" 1.5%.