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.