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Bullit Marquez/AP
Workers repack imported rice to be sold to poor residents at a government warehouse at
Manila's Quezon city, Philippines, Wednesday April 16, 2008. (AP)
Workers repack imported rice to be sold to poor residents at a government warehouse at
Manila's Quezon city, Philippines, Wednesday April 16, 2008. (AP)
Food Shortages Exacerbated by Hoarding, Trade Barriers
July 02, 2008 11:23 AM
Many countries have restricted food exports, leaving citizens impoverished and import-heavy countries struggling to procure food.
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According to a report in The New York Times, at least 28 countries have restricted or banned the export of rice or wheat in response to a worldwide food shortage. The restrictions have created an increase in food prices, which were already high due to the food shortage and high oil prices.
“It’s obvious that these export restrictions fuel the fire of price increases,” says World Trade Organization director general Pascal Lamy.
For many, the export restrictions represent a larger problem of international food trade. Many countries have strict trade barriers on food that make it difficult for countries to secure what they need.
In early June, the UN Food and Agriculture Organization held an emergency summit in Rome to discuss the food crisis. Many countries called for reductions in trade barriers and biofuel subsidies, but small groups of countries objected. In the end, the summit produced a watered-down and virtually meaningless declaration.
The issues will be discussed again on July 21, as part of the Doha round talks on trade barriers. Japan and Switzerland, both nations that rely on food imports, have petitioned the World Trade Organization to prohibit large-scale restrictions on food exports, but it may be too late to include that specific issue on the agenda.
“It’s obvious that these export restrictions fuel the fire of price increases,” says World Trade Organization director general Pascal Lamy.
For many, the export restrictions represent a larger problem of international food trade. Many countries have strict trade barriers on food that make it difficult for countries to secure what they need.
In early June, the UN Food and Agriculture Organization held an emergency summit in Rome to discuss the food crisis. Many countries called for reductions in trade barriers and biofuel subsidies, but small groups of countries objected. In the end, the summit produced a watered-down and virtually meaningless declaration.
The issues will be discussed again on July 21, as part of the Doha round talks on trade barriers. Japan and Switzerland, both nations that rely on food imports, have petitioned the World Trade Organization to prohibit large-scale restrictions on food exports, but it may be too late to include that specific issue on the agenda.
Headline Link: Many countries restricting food exports
With more and more countries, such as India and China, restricting their exports of key staples like rice and wheat, prices and panic continue to rise. But it is unclear whether it’s the restrictions themselves or the underlying conditions that are the root cause of the price increases. Pascal Lamy, director general of the World Trade Organization, says, “It’s obvious that these export restrictions fuel the fire of price increases,” but others reject the notion that restricting exports has pushed up prices, instead pointing to the higher costs of fertilizer, diesel and other farm expenses. Nevertheless, import-reliant countries are left scrambling for food.
Source: The New York Times (free registration may be required)
Background: Global food shortage
The current food shortage can be traced to rising oil prices, which increases the costs of farming and shipping.
Source: findingDulcinea
The food shortage has worsened due to a combination of ecological and economic issues. Droughts have reduced the wheat production in Australia—the world’s second largest wheat exporter—and decimated crops in impoverished African countries. And due to rising demands for meat and biofuels, more crops are being produced to feed fewer people.
Source: The New York Times (free registration may be required)
A UN Summit in June addressed the issue of trade barriers for food. A majority of countries believed it was essential to open up food trade, but Latin American countries—Argentina, in particular—objected and no meaningful agreement could be reached.
Source: Bloomberg.com
The World Trade Organization’s Doha trade round has been negotiating world trade policies since 2001 and met again in late June, in Geneva. Pascal Lamy, director general of the WTO, hoped the organization would reach an agreement that allows for greater foreign trade.
Source: International Herald Tribune
Opinion & Analysis: How does trade affect food shortages?
George Mason University economics professor Tyler Cowen writes that global rice production increased 1 percent last year, but—due to export restrictions—trade has dropped three percent. “Restrictions on the rice trade run the risk of making shortages and high prices permanent,” Cowen argues. “Export restrictions treat rice trade and production as a zero- or negative-sum game where one country’s gain comes at the expense of another. That’s hardly the best way to move forward in a rapidly growing world economy.”
Source: The New York Times (free registration may be required)
Danish author Bjorn Lomborg says that the reduction of trade barriers proposed in the Doha rounds would have a widespread positive effect on the world. “Eliminating subsidies and trade barriers would mean that resources could be used more efficiently, so there would be more scope to reduce inequality and poverty, social tensions, environmental degradation, malnutrition and diseases,” he writes. “Per capita income would grow, enabling more people in developing countries to take care of some of these problems for themselves.”
Source: Newsweek
Related Topics: Biofuels and food waste
The use of biofuels is a controversial subject that many think is contributing to the food shortage. It has increased demand for corn, soybeans and sugarcane, raising prices worldwide. Critics also assert that it puts crops that could be used for food into car engines. Many at the UN FAO Summit wanted to implement restrictions on biofuel use, but the United States and Brazil objected.
Source: findingDulcinea
In spite of the food shortage, the waste of food had not been curbed in industrialized countries.
Source: findingDulcinea
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