4/14/2008

One Result of Environmental Regulations: Food Riots?

For those who claim that something must be done about global warming and who push things such as ethanol, here is one consequence of how this effects the world. Remember that there is a world market for food. If the price of food goes up someplace, it will go up in others. Not only does the higher price for corn directly raise the prices of animals raised on corn, but it causes some farmers to switch from growing other crops into growing corn, thus reducing the supply of those other products and raising their prices also. Here is a piece from the WSJ:

Surging commodity prices have pushed up global food prices 83% in the past three years, according to the World Bank -- putting huge stress on some of the world's poorest nations. Even as the ministers met, Haiti's Prime Minister Jacques Edouard Alexis was resigning after a week in which that tiny country's capital was racked by rioting over higher prices for staples like rice and beans.

Rioting in response to soaring food prices recently has broken out in Egypt, Cameroon, Ivory Coast, Senegal and Ethiopia. In Pakistan and Thailand, army troops have been deployed to deter food theft from fields and warehouses. World Bank President Robert Zoellick warned in a recent speech that 33 countries are at risk of social upheaval because of rising food prices. Those could include Indonesia, Yemen, Ghana, Uzbekistan and the Philippines. In countries where buying food requires half to three-quarters of a poor person's income, "there is no margin for survival," he said.

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1 Comments:

Anonymous Keith said...

There's nothing like food riots for costing leaders their lives...

from the king of France to the emperor of Ethiopia.

Unfortunately markets tend not to give steady changes, but never the less, I think that the price of food has been unrealistically low for too long.

Even in the 1950's in Britain, around 40% of average household income went on food.

I'm not suggesting a return to that, but for several years, food prices have been below the cost of production. In the short term that is compensated for by reduced inputs and maintenance, but the time arrives when yields decline and machines must be replaced.

Also people who were able to get by without finding work may have to rethink their choices.

The last thing that's needed is more regulation.

4/14/2008 12:53 PM  

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