A miserable domestic agriculture harvest in 2007 due to heavy floods in August is being fingered for the spike in the price of food and severe food shortages. ‘’Based on the most recent government estimates, total cereal production in 2007 is about three million tonnes, a significant reduction from the four million tonnes of the previous year,’’ states the Food and Agriculture Organisation (FAO).
The country saw a drastic drop in maize—650,000 tonnes less, 33 percent down from the previous year—and rice—400,000 tonnes less, or 25 percent down from the previous year, adds the Rome-based U.N. agency. ‘’With this low 2007 production, the cereal deficit for the 2007/2008 marketing year is estimated at 1.6 million tonnes.’’
Note that biofuels is conspicuously absent as a cause.
This may be a year in which many things change. The governments of the worlds insistence in tampering with markets to artificially increase the demand for biofuels plus massive subsidies to farmers has no doubt caused harm. However, that harm is often overstated:
Ethanol is an easy target for the sensationalists. The pun is more accurate than the accusation: A maze of interrelated factors affect the price of maize and most other foodstuffs. The growing economies of India and China require energy, and demand from these two Asian giants as well as sustained demand from other advanced economies has spurred a long-term rise in oil prices. Higher oil prices bump food prices; it takes energy to raise and transport food.
And that does mention weather and the effects that this has had.
Finally, Angela Merkel ways in, Bad policy, not biofuel, drive food prices
Bad agricultural policies and changing eating habits in developing nations are primarily to blame for rising food prices, not biofuel production as some critics claim, German Chancellor Angela Merkel said on Thursday.
Environmentalists and humanitarian groups have stepped up campaigning against biofuels, arguing they divert production away from food and animal feed while contributing to sharp rises in the price of cereals and milk products.
But Merkel, whose country is Europe’s largest biofuel producer, said the rise in food prices was not mainly due to biofuels but to “inadequate agricultural policies in developing countries” as well as “insufficient forecasts of changes in nutritional habits” in emerging markets.
“If you travel to India these days, then a main part of the debate is about the ‘second meal’,” Merkel said.
“People are eating twice a day, and if a third of one billion people in India do that, it adds up to 300 million people. That’s a large part of the European Union,” she said.
“And if they suddenly consume twice as much food as before and if 100 million Chinese start drinking milk too, then of course our milk quotas become skewed, and much else too,” she said
The truth is the primary causes of rising food and oil prices are systemic in origin. There is no quick fix.
The best we can do is reduce government interference with the market, rather than mandate (as our Democratic candidates want) more government interference.