Krugman on the World Food Crisis

I’ve been reading snippets about the international grain crisis here and there, but it hasn’t yet sunken in to the consciousness of American news consumers (probably because we’re too busy watching the Hillary and Barack show). It really should be a real concern to all of us as we think about our candidates, the policies they propose, our nation’s place in the world and our own lives.

Krugman has a great piece on the situation in today’s Times:

Over the past few years the prices of wheat, corn, rice and other basic foodstuffs have doubled or tripled, with much of the increase taking place just in the last few months. High food prices dismay even relatively well-off Americans — but they’re truly devastating in poor countries, where food often accounts for more than half a family’s spending.

There have already been food riots around the world. Food-supplying countries, from Ukraine to Argentina, have been limiting exports in an attempt to protect domestic consumers, leading to angry protests from farmers — and making things even worse in countries that need to import food.

I’m glad he brought up the situation in Argentina, as that’s a country that’s near and dear to me. Last week, I got an e-mail from my friend Marina in La Plata who wrote:

We Argentines are again living through some horrible things. Now, as a consequence of the agricultural strike, it’s difficult to get meat, milk, vegetables, and fruit. And what is available is very expensive. In discussions and marches, people are shouting that they’d rather go back to the dictatorship and that the president needs to get out of office. Last night, the farmers allowed trucks with food and buses with passengers to use their normal routes to travel, but the loss of goods in the supermarkets is something we still see. So, that’s how we’re living through it in La Plata, a small city in the interior of the country.

If a relatively developed country with plentiful food is feeling the crisis, it has to be really bad elsewhere. Marina, who grew up in political exile during the Argentine dictators is especially pained to hear people calling for a return to military government as she, her family, and many friends know first-hand the suffering that kind of authoritarian rule can cause.

Back to Krugman:

Where the effects of bad policy are clearest, however, is in the rise of demon ethanol and other biofuels.

The subsidized conversion of crops into fuel was supposed to promote energy independence and help limit global warming. But this promise was, as Time magazine bluntly put it, a “scam.”

This is especially true of corn ethanol: even on optimistic estimates, producing a gallon of ethanol from corn uses most of the energy the gallon contains. But it turns out that even seemingly “good” biofuel policies, like Brazil’s use of ethanol from sugar cane, accelerate the pace of climate change by promoting deforestation.

And meanwhile, land used to grow biofuel feedstock is land not available to grow food, so subsidies to biofuels are a major factor in the food crisis. You might put it this way: people are starving in Africa so that American politicians can court votes in farm states.

Biofuels really seemed like the way to go. I fell for it; who could be against producing cheap energy like ethanol made from corn? It seemed like a win/win as US farmers would benefit as would the rest of us as fuel costs were going to come down and the new fuel was supposed to be cleaner.

There are a lot of other reasons for the crisis that Krugman lays out: economic development in China is producing more meat-eaters in the world’s largest nation (thus producing a strain on the grain supply), high energy costs, and unfortunate weather conditions across the globe.

But it doesn’t appear that things will get much better any time soon, so expect the prices at your local Safeway or Kroger to continue to increase well into the future.

And one last line from Krugman:

Oh, and in case you’re wondering: all the remaining presidential contenders are terrible on this issue.


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