Information about my work as a Labour Councillor for East Finchley in the London Borough of Barnet

Saturday, 18 August 2012

Food Prices

I was alarmed to read that the US corn crop was poor this year.

International food prices can be volatile, and the US corn crop is quite important to the price of food, particularly in Africa, which consumes large quantities of US corn exports. The failing crop will probably push up the prices, and this could be disastrous for the African poor. It's astonishing how globalisation has such an big everyday effect in the poorest part of the world, with CAP subsidised vegetables undercutting local farmers on the one hand (directly causing suicide in some tragic cases. This is a link to one case involving cross border tomato trade). Or, with the failure of crops on the far side of the world, serious hunger because scarcity has forced prices up.

Price flexibility is one of the biggest issues for farmers. Food is a commodity, and a serious business. It's trade is legendarily cut throat, even for stock exchange standards. In fact some stockbrokers have started becoming semi professional in efforts to understand food production, and to make the right investments at the right time. They are now having to understand weather and climate patterns more, and rely less on when the final reports are produced by the Government. Perhaps they have seen the great 80's film Trading Places, where the bad guys are ruined by their dodgy dealings with the frozen orange juice report. That is less likely these days, because the brokers are more specialist and have developed such an in depth understanding of food commodities that the official reports often confirm what they already know.

You can't entirely blame the market either, markets are as markets do. As we have learnt from history, there is hunger no matter how resources are distributed. In fact speaking of history, it is becoming clearer how food price fluctuations were a serious threat to the Roman empire as well, and how big a part to play they had in the revolts and revolutions of the period.

In my personal opinion, for what it's worth, there could be more international co-ordination on food production, and a body that can fairly arbitrate on food production issues. That role is currently done by the WTO, but never satisfactorily, as the WTO is politics heavy, with big voting blocks that prevent serious resolution. When I spoke to a diplomat about this during my university days, he said the US block vote was a bit like the Union vote at the 1980's Labour Party conferences. I recall in 2005 the BBC did a helpful programme about various food problems around the world, like the African farmers who are being undercut by subsidised European food, Cotton producers being undercut and American fishermen complaining about Vietnamese fish, which is cheaper than American catfish; they wanted the Vietnamese fish reclassified as not being catfish.

International politics is failing the worlds hungriest and poorest. It would be useful if it was taken seriously.