Subsidizing Hunger

How to feed the world's 815 million hungry people is the topic of the under-attended World Food Summit beginning today in Rome. The New York Times reports that only two leaders from rich nations are attending the summit. In 1996, U.N.'s Food and Agriculture Organization set the goal of cutting the number of hungry from 840 million to 400 million by 2015. Progress toward this goal is being stymied by two activities: corrupt governments in poor countries and vast subsidies in rich countries.

One of the worst cases of corruption leading to famine is occurring in Zimbabwe, where Robert Mugabe devastated farming by seizing white-owned farms and giving them to political cronies. Mugabe made the situation even worse when he turned back a food aid shipment from the United States because it might have contained genetically modified corn. Of course, Americans have been eating such perfectly safe corn for 6 years.

How do subsidies affect famine? The United States and Europe are subsidizing their farmers to the tune of about $300 billion a year. In 1999, European farmers got 49 percent of their income as government handouts while American farmers received 24 percent of theirs as federal giveaways.

This means that developed country food markets are effectively closed to exports from farmers in poor countries. The result is that poor farmers who could produce food more cheaply have no chance to improve their lot and consumers in rich countries pay more for food in the form of taxes and higher prices. Out-competed by rich subsidized farmers, farmers in poor countries (who often make up more than half the population) are stuck on a subsistence-farming treadmill–never able to afford better seeds, equipment, or fertilizer that would help them compete and improve their families' lives.

Sadly, while truly free trade is a key to reducing hunger in the world, it will likely go relatively undiscussed at the World Food Summit.