Food doesn’t cause crises, governments do

Reuters: Food don't cause crises, governments do

It will be interesting to watch food prices next year. Although fluctuations will still be determined largely by crises such as natural disasters, another potential cause of trouble will most certainly come from speculation fears of major food producers. John Foley is correct to point out that the governments of India, China and the United States will have a major influence.

From a national perspective, most of their market policies have been intuitive and internally interest-driven, although it would be more correct to classify them as "top-down crisis management reactions". Political stability is still the strongest prediction factor as to how strongly implementations are applied and closely adhered to, but it also reveals the direction that governments take when exerting control over food prices.

As a commercialized necessity, governments are least likely to compromise on food prices. After all, their political interests depends very much on voter support, especially in democracies such as the United States and India. Any demonstration of the lack of ability to respond to food crises such as famine can cause parties to lose their popularity (and consequently power). On the other end, incorrect speculations lead to tremendous wastage of both food and energy supplies.

From a global perspective, producers who do not have strong governments and policies in place to manage food price fluctuations are subjected to market demands. The volatility of these markets mean that local small-scale producers who engage in charitable or altruistic efforts are displaced from the market inevitably, and pressures the rest of them to divert whatever profit they have into market expansion through land acquisition and political advantages instead of environmental conscious measures and technology. This only encourages the already terrible political infighting within the political systems of these smaller producers, and may even breed other political groups aimed at grabbing power via unconventional means.

This brings up a very difficult problem to solve. With the current political structures in place, any international organization's attempts to manage food price controls will only be met with resistance and/or noncooperation. Like the present climate change situation, rich countries will also fight hard to have their way, even if it is clear that they will suffer less on all key life indicators. However, it would be ideal to create a measuring tool that primarily analyzes the negative effects to each country in the event of price fluctuations, and that projects a clear picture with recommended measures to take for each governments. Whether or not governments take up the recommendations is a secondary issue, what's more important is that such key statistics should be created, easy to understand, and made accessible for big picture policy making. The presence and emphasis of such information is key to the mentalities of future generations who will eventually take over the reins of their own national economies.