The Electric Pencil

G8 eats their way through food crisis

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After disappearing from the frontpages of our newspapers, the food crisis – which never really went away – is making headlines again, if only because the bigwigs at the G8 are talking about it over eighteen course meals and driving around in fleets of hybrid cars during their latest summit in Japan. Whether or not anything truly relevant comes out of this meeting is yet to be seen. And anything short of revamping how international trade forces markets, allowing multinationals to devastate any semblance of a self-sustaining agricultural system probably won’t do much to change the long term impact.

But luckily there is more going on than the G8 meeting: A variety of culprits for the food crisis have been pointed to – rising oil prices and increasing levels of meat consumption are just two. But last week The Guardian revealed a World Trade Organization report that places the blame squarely on the explosion of the biofuel market. The report finds that 75 per cent of the increase in the prices of staples such as wheat and rice is directly (through the increasing use of grain for biofuels) or indirectly (due to heavy speculation in the grain markets, driving up prices, and the reduced amount of land being used to grow food crops) due to the growing use of biofuels. The article also claims that the reason the report was kept secret was to avoid embarassing the U.S. which has claimed that biofuels account for only three per cent of the increase.

On another note, it seems that whenever I talk with people about the food crisis there’s a question that keep comes up that we can’t seem to answer: if the price of crops is going up – especially if the increase is due to market specualtion – aren’t famers in devloping countries reaping the benefits and making more money themselves. Sarah McGregor looks at this issue over on Inter Press News, and the answer is astonishingly simple: increasing costs for fuel, machinery parts and to buy food for themselves are essentially eating away any additional profits. Some are worrying that farmers may actually be making less than they were before food prices soared.

So who’s actually winning out on these high prices? According to the Wall Street Journal, that bastion of pinko-commie conspiracy theorists: large agribusiness.

Written by Tim McSorley

July 9, 2008 at 10:00 am

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