Monday, April 21, 2008

High food prices - an opportunity for reform

Almost all the press about rising food prices has been focused on the negative aspects. It is obviously right to focus on those who are unfortunate enough to be in the situation where rising food prices are adversely affecting their standard of living.

There are some positives. In many countries (China, to name but one), a huge wealth gap has opened up between the rural poor and the more economically prosperous urban workers. In simple terms, to date the latter have participated in recent economic growth to a much greater extent than their rural neighbours.

With food prices rising, it can be hoped that we will see a more even distribution of the benefits of economic progress than has been the case to date. Equally, I would hope to see much greater attention and resources devoted to issues which directly affect the world's ability to produce food on a sustainable basis: water quality and quantity, greater acceptance of genetically modified crops (with the caveat that more work is done on addressing the health issues), less money and land wasted on organic foods and more investment in farming infrastructure. In effect, the best way to improve food production on a sustainable basis is to do more to protect and improve the environment.

My fear is that, among other risks, food (and water) becomes a political football with every lobby group, special interest group an politician around attempting to use the issue for personal gain (economic or political) at the expense of everyone else. Tariffs, subsidies, quotas, price controls and hypocritical trade rules (often based on non-existent health issues) are the enemies of cheaper and more plentiful food. In the longer term, the risk of soil depletion and destruction of forests, wetlands and other land types in a short sighted effort to boost short term production is a huge risk factor for sustainable food production.

Somehow, I just do not trust the politicians and government administrators not to make a serious situation worse.

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