Will U.S. Congress take my food-for-education program away?

It’s hard to keep up with the give and take of U.S. politics in the fight over the Farm Bill, the approximately $300 billion, five-year plan covering all food and agriculture programs in the country. As the U.S. Congress continues to hammer out details on the bill, there is no guarantee that President Bush will sign it into law. He has consistently argued that Congress has failed to bring down the ceiling on many agriculture subsidies, especially in a time when U.S. farmers – and the agribusiness corporations that earn most of the payouts – are profiting from high world food prices.

In a recent move to cut the cost of the farm bill, the U.S. Congress lowered spending on the Dole-McGovern International Food for Education program to a mere $60 million for the coming year, a drastic drop from the $780 million five-year plan previously proposed by the House. As a story in the Washington Post points out, the program – named after Senators Robert Dole and George McGovern – spent $91 million in 2005 and provided 118,000 tons of food to 3.4 million children in developing countries around the world. In all, McGovern-Dole accounts for about 4 percent of all U.S. food aid funding.

But, is it a good program?

Dole and McGovern think so. In an Op-Ed in the Washington Post, they argue:

For just a few cents a day per child, the McGovern-Dole Program has made a critical difference in the lives of children and communities worldwide, promoted American values in the most positive terms, and helped achieve U.S. foreign policy and national security goals. By providing meals to children who attend school in the poorest countries, the program increases attendance rates and student productivity and gives hope to a new generation of impoverished children around the world. The impact on young girls is particularly important. As their school attendance increases, they marry later and birthrates are reduced.

What do others say? For the past five years, the McGovern-Dole program has spent $91 million annually, 85 percent of those funds for distributing food directly while the remaining 15 percent has been allowed for monetization, a program allowing certain U.S.-based NGOs to sell a portion of food aid in foreign markets to pay for development projects. In short, monetization is controversial. Europeans argue that it allows the U.S. government to circumvent export subsidy rules by allowing subsidized crops – wheat, corn, rice – to be sold abroad. More damning (in my mind, at least) is that monetization may work against local traders and producers, who must compete in the market with international development organizations. We don’t know for sure because monetization is very loosely managed by USAID and USDA, who do not track date on the revenues these NGOs make from selling commodities abroad. This, along with other bureaucratic shortcomings, has lead the Government Accounting Office to refer to it as “inherently inefficient use of resources” reducing the effectiveness of alleviating hunger.

As a food-for-education program, McGovern-Dole began in 2002 as an enticement for children to stay in school. It is estimated that 300 million children around the world face chronic malnourishment and many of those children do not attend school. In 2002, GAO analyzed the efficacy of these programs, and first noted the difficult environment they face to: 1) provide important nutrients (hand in hand with clean water and proper sanitation facilities) for children in poor areas; and, 2) create a facilitative learning environment for these kids, which means having adequately trained teachers, proper texts and learning materials and proper facilities which are near enough to most families.

Thus, GAO pointed out that these programs should target at-risk communities with a holistic approach, not attempt a blanket coverage of an entire country with low school enrollment, like, say, Burkina Faso.

The one problem facing food-for-education programs is sustainability. To be truly successful, they must have the buy-in from local communities, parents – who decide whether to send their children to school – and the governments, who must reflect on proper school reforms necessary to make education either more affordable or relevant to rural students. Problem #1: food-for-education programs are expensive, and don’t readily produce results, making governments leery of picking up the tab. The big question: Should education ministries pick up feeding students at the expense of educating others? Most would likely say no.

In the end, it appears the program was less sustainable in the United States than it was abroad. While everyone laments the problem of business interests and pork projects controlling the farm bill, no one has offered a practical solution. In the short term, the death-by-strangulation of McGovern-Dole may be bad for children in places like Burkina Faso. However, it may force the entire political establishment to re-think America’s funky attempts at modernizing food aid.

CSIS Africa Policy Forum just published a piece of mine regarding the U.S. international food aid budget. Short version: It’s an ancient, mostly crippled regime that definitely needs reform to continue to be relevant.

The longer, slightly less polemic version is here.

The effect of globalization on world food prices

Mauritania, a country that only produces 30 percent of the food necessary to feed it’s people, is feeling attacked on all sides. Sure, it’s not news that global food prices have risen, some say by 45 percent this year alone. But for Mauritanians months away from the nearest harvest, the Washington Post reports, the situation on the ground is worsening. The story noted a sharp increase in the sale of livestock, meaning farmers are selling wealth – and milk producers – to pay for food.

While poor weather has hurt crop production and the U.S. government’s decision to set aside corn for biofuels has adversely affected food prices, the story ponders what role has been played by globalization. First, globalization has tied food markets together, a mostly positive thing in places like West Africa. On the other hand, it has failed because of the mostly one-sided relationship between rich and poor countries.

Drive the money changers out of the Co-op
For instance, in a recent Spiegel article, questions are being raised about the role being played by commodities speculators. Some say financial investors have crashed the party of the once cloistered world of commodities buyers. They’ve begun taking advantage – and hugely profiting – from commodity pricing mechanisms by temporarily purchasing many futures of say, wheat or rice, at very low prices, driving demand (and prices) up, guarantying the seller a profit, but wreaking havoc in the real world. Their victories have brought other investors on board. With more people now betting on staple foods, even the Commodity Trading Commission has begun to recognize its possible effect on world food prices by driving up demand and (possibly) leading to the hoarding of foodstuffs. In their defense, investors claim that they arrived at the market not to artificially drive up prices but because they saw that world food stocks were not going to meet demand, so they merely “bet” that prices would increase.

Subsidies, anyone?
Another sticky issue remains subsidies, where rich countries continue to protect their farmers through expensive and complicated financial assistance schemes while demanding poorer nations pry open their markets to rich-world manufacturers. In the U.S., the tentatively agreed new five-year farm bill – quick caveat: it is by no means complete or ratified – appears to be retaining the $5.2 billion subsidy program intact along with $1.8 billion in tax cuts at a time that U.S. farmers (or U.S. farm companies who earn most subsidies) are milking big profits from higher food prices. In defense of farmers: The amount of their new profits is debatable: labor, equipment and transportation costs have all risen along with the price of crops.

Trade, the Mauritanian example
Trading mechanisms are also fraught with issues. The Mauritanian government recently signed a fishing deal with the European Union, which agreed to reduce catches in Mauritanian waters by more than 40 percent while dropping its royalty fee 10 percent to €86 million per year for five years. In the meantime, few are asking what will happen to the the country’s fishing stocks – especially octopus and coastal shrimp – which are nearly fully exploited, the legacy of poor resource management in the 1990s when 125 boats trolled the waters for fish. The new agreement sets aside 43 licenses for international trawlers.

As local artisan fishing boats have long played David to international Goliaths, they create a tremendous amount of employment – one estimate has local fishers responsible for creating at 30,000 jobs – and provide nearly €80 million in foreign currency.

Thus, the government of Mauritania is in a wicked predicament: earn much needed cash today while gambling against tomorrow’s fish stocks. At least one environmental group claimed the best way to conserve numbers of octopus is to make them only available for the local fleet, which still employs inefficient methods, but will increase demand for the fish, create many new jobs and bring in boatloads of cash for Mauritanians. Some of the fish could be put aside to better feed the population, which is now under food emergency. Of course, all this will mean tearing up the fishing treaty with the European Union and potentially destabilizing the government’s most profitable foreign export, worth 15 percent of its GDP.

With these issues in mind, the European Union agreed to push out the boundary where its boats can fish; set aside monies to develop the Mauritanian fishing industry. One EU commissioner claimed the treaty will continue to look at fish numbers to insure European boats do not continue to over fish; strengthen monitoring of catches, and help police pirate fishing; Finally, EU ship captains will promise to increase the number of Mauritanian locals employed on their boats.

More aid = less trade?
One economist – Ghana’s George Ayittey, argues that for decades foreign donor schemes hard-headily ignored the importance of agriculture even though roughly seven out of ten Africans earn at least some of their living in this sector. If development actors dealt with farmers at all it was to push them to produce cash crops for sale on the international market, an even more questionable action because between 1972 and 2002 most commodity values fell by 70 percent. Ayittey claims that if farmers are free to grow what they want, and they are given support to upgrade transportation and food processing infrastructure, not only will farming become more profitable, but it will lead to development.

Talking points on environment, food prices, natural agriculture and trade

GM Foods: From Simon Jenkins in the Guardian:

It is clear that modification, which is as old as botany, has side-effects. But increased food productivity is so patently a good thing that to ban GM from European imports, and thus from Africa, is beyond perverse. Increased Indian and Chinese consumption is sucking the world dry of grain at just the time when the GM ban is denying the developing world the swiftest path to higher productivity - and at a time when supply is curbed by biofuel substitution.

These various green policies have established a lethal pincer movement on world food production. As the Oxford economist Paul Collier points out in his book The Bottom Billion, Africa has been subjected by European governments to one form of "befuddled romanticism" after another, from campaigns against GM foods and low-wage produce to "save the peasant" farm reform. Africa, says Collier, has less commercial agriculture than it did at the end of the age of empire, half a century ago.

While antagonism to science merely impedes progress, antagonism to economics is regressive. American subsidies to ethanol fuel are not just causing "tortilla riots" but costing American taxpayers a staggering $5.5bn a year. Biofuel tankers are circling the globe, burning gasoline and chasing subsidies. They have joined carbon emissions certificates among the world's greatest trading scams.

Link between biofuels and higher food prices, from the World Bank:

Increased bio-fuel production has contributed to the rise in food prices. Concerns over oil prices, energy security and climate change have prompted governments to take a more proactive stance towards encouraging production and use of bio-fuels. This has led to increased demand for bio-fuel raw materials, such as wheat, soy, maize and palm oil, and increased competition for cropland. Almost all of the increase in global maize production from 2004 to 2007 (the period when grain prices rose sharply) went for bio-fuels production in the U.S., while existing stocks were depleted by an increase in global consumption for other uses. Other developments, such as droughts in Australia and poor crops in the E.U. and Ukraine in 2006 and 2007, were largely offset by good crops and increased exports in other countries and would not, on their own, have had a significant impact on prices. Only a relatively small share of the increase in food production prices (around 15%) is due directly to higher energy and fertilizer costs.

More on biofuels and food prices, via Center for Global Development:

The evidence is increasingly compelling that the current generation of biofuels is contributing to global hunger and worsening, not helping to address, climate change. They are also only economical as long as oil prices stay high. Investing in research and development of a new generation of biofuels that could be grown on marginal lands not useful for food or forests is a worthwhile endeavor. But in the midst of the current crisis, and given the new evidence on the perverse effects on the environment, continuing to subsidize and promote the use of food crops for fuel is simply unconscionable.

Decreasing poverty in rural areas, from the International Assessment of Agriculture Knowledge, Science and Technology for Development, a 1500-page report claiming that agriculture progress has been highly uneven and stressed the importance of "natural" agriculture programs like crop rotation and local fertilizers.

Important options for enhancing rural livelihoods include increasing access by small-scale farmers to land and economic resources and to remunerative local urban and export markets; and increasing local value added and value captured by small-scale farmers and rural laborers. A powerful tool for meeting development and sustainability goals resides in empowering farmers to innovatively manage soils, water, biological resources, pests, disease vectors, genetic diversity, and conserve natural resources in a culturally appropriate manner. Combining farmers’ and
external knowledge would require new partnerships among farmers, scientists and other stakeholders.

Repsonses to the report, via Guardian:

Responding to the report, a group of eight international environment and consumer groups, including Third World Network, Practical Action, Greenpeace and Friends of the Earth, said in a statement: "This is a sobering account of the failure of industrial farming. Small-scale farmers and ecological methods provide the way forward to avert the current food crisis and meet the needs of communities."

Lim Li Chung, of Third World Network in Malaysia, said: "It clearly shows that small-scale farmers and the environment lose under trade liberalisation. Developing countries must exercise their right to stop the flood of cheap subsidised products from the north."

Guilhem Calvo, an adviser with the ecological and earth sciences division of Unesco, one of the report's sponsors, said at a news conference in Paris: "We must develop agriculture that is less dependent on fossil fuels, favours the use of locally available resources and explores the use of natural processes such as crop rotation and use of organic fertilisers."

As the Doha Trade Round remains blocked and food prices have skyrocketed around the world, countries should try to work out bilateral trade deals, says former World Trade Organization head Supachai Panitchpakdi told the Wall Street Journal.

"You see governments going country to country negotiating” trade deals involving key commodies like rice, wheat and milk, said Mr. Supachai, who is now secretary general for the U.N. Conference on Trade and Development. “That is something that is necessary.”

Will GM foods keep a hungry continent better fed?

Image: FreeDigitalPhotos.net

World Agriculture output rose 25 percent between 1972 and 1982. But in Africa, it declined some 14 percent. Since then, the continent has been running to keep up with the rest of the world in terms of agriculture production. Its population keeps growing, putting strain on the environment. This is underlined by the fact that 16 of the 18 most undernourished countries hail from Africa. The major question we must ask: In these times of rising food prices, how will Africa provide affordable, healthy food for its people?

This story begins with a current event: Benin has decided to renew for five years its moratorium on marketing, import and use of genetically modified foods, Africquenligne reported.

The short article goes to state that Benin, like many other African countries, lacks the scientific skills and equipment to properly detect, monitor and control GMOs once they find their way into the country.

It has been said that on the whole Africans are very skeptical regarding genetically modified crops of any sort. Africans claim that GM products will harm the continent’s bounty of biodiversity. Governments also understand that a majority of the continent lives in rural areas and relies on the environment for their livelihoods, which most often involves growing crops on the small scale.

If I had to put my finger on it, I'd say the major complaints against GM foods is they have not been thoroughly tested – worries abound that Africa will become a testing ground – which will put the continent’s poorest at severe economic risk if these crops fail; (or, if they work too well, increasing yields will drive food prices down. African farmers only have to look at the U.S. and Europe to see cheap food and disenfranchised farmers.); also, GM seeds provides an upper hand to large international agri-conglomerates who will be able to profit from the work of African farmers. Finally, people could be put at risk for potential health risks from eating GM foods.

Here is a 2007 status report on GMO crops in Africa from the African Centre for Biosafety, from South Africa that I think provides a good window into the various debates regarding GMO.

The GM push in Africa has recorded several significant setbacks and failures, with Florence Wambugu’s GM sweet potato in Kenya and the Gates Foundation’s GM sorghum in South Africa being the most prominent. The rejection by South Africa’s GMO regulatory authority of the GM sorghum project is extremely significant, as this sets the boundaries that even pro-GM South Africa cannot cross: namely, that genetic engineering of a crop where Africa is the centre of origin will not be tolerated. Importantly, this rejection represents a huge set back for crucial components of the ‘New Green Revolution in Africa’ push, which is heavily funded by the Gates Foundation.

Indeed, 2007, has not been a good year for GE in South Africa. The first ever GM cassava field trials also faced the thumbs down from the South African regulatory authorities; a major retailer in South Africa, concerned about the possibility of GM potatoes still in field trials in South Africa having entered the food chain, publicly announced their decision not to stock GM potatoes until its safety had been proven. The South African sugar industry also strongly indicated their extreme reluctance to throw their weight behind GM sugarcane. The South African regulatory authorities also rejected out of hand, Syngenta’s application for commodity import of its GM maize for ethanol on food safety grounds.

Some Background
In 2006, more than 40 African countries received some form of food aid, which equaled about 5 million tons. At least three-quarters of the world’s food aid originates in the United States, where certain GM products can mix freely with others; a lack of labeling system has allowed these products to enter other food systems. Complaints by Zambia and Sudan (among others) lead to some changes in international food aid. The European Union, which favors donating money for food over sending food itself, stipulated in 2003 that its funds could not purchase GM foods.

In West Africa, a broad-based coalition against GMOs has been formed. At least 40 African countries are parties to the international environmental agreement regulating moving GMOs across borders. However, few countries have functioning systems to regulate GMOs, although several have imposed heavy restrictions on them.

Today, nine countries report field trials in various GMOs: Burkina Faso; Egypt; Kenya; Morocco; Senegal; Tanzania; Zambia, and Zimbabwe. A somewhat larger list of countries have the capacity to undergo tests.

In West Africa, Burkina Faso and Nigeria are probably the most pro-GMO countries. Burkina Faso, Africa’s biggest cotton producer, has allowed testing of genetically modified strands of cotton.

I’ll call it what I like
A side issue – in this specific post, but an important theme nonetheless – is the idea of “biofuels,” which has been renamed by some NGOs as “agrofuels” which, they say, is a better term to express what is really happening: Agribusiness producing fuel from plants as another commodity in a wasteful, destructive and unjust global economy.”

Whatever it is called, a variety of African crops have been earmarked for this new fuel tests: maize, soybeans, groundnuts, cassava, sugarcane, pumpkin seeds, and Jatropha.

The South African government attempted to propose to replace 4.5 percent of liquid-road-transport fuels with agrofuels by blending ethanol and biodiesel with conventional petroleum. Civil society organizations heavily criticized the draft strategy, claiming it would provide a chance to introduce different varieties of GM maize and soybeans into the country, which they claim already has a lax regulation system. As the report pointed out above, South Africa’s regulators denied an application by the firm Syngenta to import its genetically modified maize to be converted solely into ethanol.

Will this revolution be skipped?
The first Green Revolution of the 1970s largely failed in Africa, says GlobalChange at the University of Michigan, because its climate does not tolerate the projects preference for crops of high yield, needing bountiful amounts of irrigation and fertilizers. Thus, the world’s higher crop yields between 1972 and 1982 were completely lost in Africa.

The second Green Revolution, brought to you by the Gates and Rockefeller Foundations, is currently taking place and will concentrate on Africa’s small farmers who often cultivate without any machinery, fertilizer and irrigation. These farmers often live far from food markets, making selling their surplus expensive and wasteful. The underlying problem, says the Rockefeller Foundation, is that African farmers don’t grow high-yield crops.

They’d like to correct that with the Alliance for a Green Revolution in Africa that will provide African farmers with better seed varieties, which will help grow larger harvests; better fertilizer use, including training in soil and water management techniques, and developing a better delivery system to get new fertilizers far from city centers; finally, creating better developed storage systems, transportation facilities and markets to sell the products. Finally, where possible, install better irrigation systems.

Here’s just a few harsh words GRAIN saves for this plan, which they claim is ill-suited for small scale farming.

Whether it is the new Green Revolution or the old, the first losers are farmers, especially small farmers. [Alliance for a Green Revolution in Africa] sets out to replace the seeds that African farmers have carefully developed for their farms and cultures, with varieties suited to industrial monocultures. Such seeds will pave the way for the industrialisation of African food crops, opening the door to large agribusiness to come in and dominate.

West Africa, here we come
Continuing with the African Centre for Biosafety’s report, we can see the many international agencies attempting to persuade and enable West African governments to create more GMO-friendly legislation. The US Dept. of Agriculture currently trains scientists in biotechnology and a USAID program helps countries enhance bio policy and research. Another USAID-funded program provides support for expanding agriculture biotechnology, including genetic modification.

The report also has harsh words for the World Bank, which is attempting to get approval of a biosafety policy through the West African Economic and Monetary Union, WAEMU, although the proposal was only written in English, hardly any help for the French-speaking group. Some groups, such as GRAIN, have also claimed that the World Bank has attempted to undermine public debate on these programs.

ECOWAS, which is a grouping of all West African states, has also held meetings, sponsored by USAID, “in order to ease the way for GE industries in West Africa,” according to the report. Civil society groups across the region have stepped up pressure on ECOWAS to slow down the acceptance of GMO.

USAID’s Regional Biosafety Project, which counts Benin, Burkina Faso, Mali, Senegal and Togo as members – has been put in place to harmonize biosafety laws across the region. It also, the report asserts, acts as a method to establish Bt cotton into the region, one the few cash crops for these countries. The authors claim that Bt cotton in West Africa will distract attention from illegal U.S. cotton subsidies and provide a foot in the door for U.S. corporations into this lucrative commodity.

Countries
While Benin has extended its moratorium on GM foods, it continues to receive food aid from the United States, a probable source of GM foods.

• Burkina Faso is currently testing bio cotton, but there are no dates when it will (if ever) be released to consumers. Scientists are also currently researching various GM plants, including those with drought tolerance, insect and virus resistant cowpeas. Burkina also accepts U.S.-based food aid, including cornmeal, which has a high likelihood of being GM;
  
• Cote d’Ivoire does not currently have any trials on GM foods, but is of food aid. Same for Gambia and Guinea Bissau, Liberia, Mauritania, Sierra Leone and Togo;
• Ghana has a little GM testing going on today, but the clouds are gathering. The similar cowpea project as Burkina is going on in Ghana; cases have been made by Ghanaian scientists to test a tomato resistant to yellow leaf curl; also, proposals have been completed for eggplant, cabbage and cassava. The Statesman newspaper in Accra reported that international community began workshops and trainings to sensitize the population regarding genetically modified foods, code words for arm-twisting sessions;
  
• Guinea-Conakry has sent government agents to trainings regarding GMO foods. However, there is currently no R & D going on in the country. It is a recipient of food aid;
  
• Mali currently tests GM cotton, but the government halted plans to allow other tests. It is a recipient of food aid;
  
• Nigeria is currently focusing on research in palm oil and has announced plans to begin testing on maize, cassava and sweet potatoes. Universities have been testing cowpeas and cassava, which came under criticism by a consumer rights group. Also, tests have taken place in yam and banana;
  
• Niger is participating in the cowpeas tests and is a large beneficiary of food aid. Ditto for Senegal, which did test cotton, but scrapped it because the seeds failed.

What, me worry: Why are world food prices so high?

A couple weeks ago, I questioned how certain expanding African economies could be stepping up their export industry while maintaining sizable trade deficits. It seems that this recent food issue has shed a little light on the problem.

This food issue – because I refuse to call it a crisis – has cropped up in the past few weeks because of what a spokeswoman at the UN Food and Agriculture Organization termed the “perfect storm” of bad weather, tight food supplies and strong demand has lead to a 21 percent increase in the world’s food bill. Developing countries may end up paying even more.

The press has made much out of the worried reactions of consumers around the world. Food riots took place in Mauritania and the once-pacific Senegal; the Russian government freezes prices; Italians boycotted pasta, Argentineans turned their backs on tomatoes because they became more expensive than meat.

But are things really that bad? FAO claims that price volatility has always been distinctive characteristic of the world agriculture market. The Economist claims Russian President Vladimir Putin froze prices for political gain. The Mauritian government claims the food riots there were orchestrated.

Flat bread for a flat world?
Granted, these arguments don’t lend too much optimism. The defining factor of this year’s overcharged food market is that consumers have seen simultaneous price increases in nearly every commodity.

The big price gainers include the world’s most important staples:

• Wheat: Poor seasons due to bad weather in Europe, Pakistan, Morocco and Australia created a 50 to 65 percent increase compared to last year’s price. However, high prices may bring down demand, thus depressing prices;
• Rice: Even after reaching its highest price in 20 years in October, rice is still rising slower than other commodities. Experts predict this year’s large harvest will bring prices down;
• Maize: After an initial run due to an interest in biofuels, corn products hit a ten-year high in February before falling. Massive plantings have been reported around the world, making experts confident still-high prices will continue to fall;
• Sugar: After two years of processing setbacks, white gold posted 25-year highs last year, but has since drastically fallen.

Some may point out that simple supply and demand is at work here. Demand is up because food production has increased at 1.3 percent a year, below the 1.35 percent escalation to the world’s population.

FAO researchers point out that globalization is a culprit in these high prices. Where West African floods and Australian droughts used to be considered local events, food markets are now more tightly intertwined. With a limited amount of breathing space between production and consumption, consumers can literally feel these local shocks rippling through the world markets.

But globalization is only an effect. It’s not the cause of across-the-board high prices. For this, the Rome-based FAO has found many.

• High petroleum prices: Yes, oil remains an easy journalistic scapegoat to explain away a complicated issue, but petroleum does affect food prices in many subtle ways. Often an important ingredient in fertilizers, expensive petroleum drives up the price of crop inputs. It’s well known that near record oil prices have increased interest in biofuels and other natural energy sources, which divert agriculture crops reserved for feeding livestock, pushing up prices for cattle (and meat). Increased interest in biofuels will also raise the demand for other feed stocks like sugar, maize, rapeseed and soybean.

• Increased freight rates: Like higher petroleum prices, this is not a cut-and-dry issue. Yes, oil prices affect the cost of shipping goods, but not as much as you think. Increased value for petroleum has increased the demand for iron ore and coal. These products are transported in the same type of ships as foodstuffs. Ship makers introduced fewer new ships onto the market than expected this year, so competition for these boats became fierce. In some cases, foodstuffs stayed in port, lessening supplies and further increasing prices. Finally, as merchandise prices rise, shipping costs increase due to higher insurance rates. All these factors combined to drive up shipping freight rates 57 percent between June and October.

One overlooked feature of globalization is ocean shipping costs remain roughly the same rate as they were in the early 1970s. African nations, however, still pay higher shipping charges than the rest of the world. That’s because they don’t do a lot of trading with other nations, so pulling a ship off popular routes to stop in port in Lomé or Dakar or Tema is expensive. Also, West African countries have heavy trade imbalances. What this means in practical terms is that when containers are unloaded at African ports, not many exports are loaded back on. Half-full boats don’t help shipping firms, who must charge higher shipping costs.

• Weak dollar: FAO points out that currency issues affect all markets, but they have rarely wreaked so much havoc as the dollar has this year in agriculture markets. The U.S. dollar’s gradual decline against other currencies has boosted demand for American exports. High demand eventually turns into higher prices, which we have seen in the wheat market. It’s a real-life version of Whac a Mole: If the price of one commodity increases, more farmers will rush to plant that product, driving up the prices for the commodities farmers ignore.

• Border decisions: Most West African governments collect a great amount of revenue through import taxes. In a decision to help local rice growers, the government of Senegal decided to institute a 20 percent surtax on imported rice, which increases the cost of a sack of rice in the local markets. At the beginning of next year, all ECOWAS countries will harmonize rice duties at five percent for paddy rice and 10 percent for milled or broken rice. This does not help consumers in the short term, however.

Drilling for food
If we take another step deeper into West African food supplies, it is best to examine the imports of Senegal and Mauritania, two counties which have already faced riots against high prices.

Like many African states, Senegal is a net food importer. The interesting fact is this country, where millet was once a dietary staple, now ranks rice as its primary import. In fact, the country imported more than 536,000 metric tons of milled patty rice in 2000, roughly twice as much as the second most popular product, Wheat. By 2004, the last year statistics are available, broken rice became the number one import (oddly, it wasn’t on the top 20 before) with 799,863 metric tons. Wheat stays number two with 313,777 metric tons.

Let’s return to the above discussion regarding the country’s surtax on imported rice: It was a classic solution to protect a fledgling domestic industry. However, domestic rice can’t be grown fast enough to satisfy Senegal’s population, and the FAO admits the industry most likely won’t survive without the protection.

There’s something else at play here: purchasing power. Most Senegalese won’t buy products they feel are socially beneath them. If you can afford fish in your rice, you don’t procure pounded dried fish that’s used to feed the poor. The same goes for rice. Those who can find the money for Thai rice don’t purchase local rice. (That’s a truth in Burkina Faso, also.) There’s a large caveat with this argument: For one, it’s a pretty large generalization, but one that I’ve heard elsewhere.

Since I am at it, I’ll paint another generality. More people eat rice because they are busier. What I mean is more of their time is spent working or being economically occupied. This may be a good thing, for working women have less time to sit around and cook millet, which often takes longer to prepare than rice. (Generalizations aplenty today!) Urbanization may also play a part in falling millet stocks. Families might feel the need to put down some of the village traditions in lieu of becoming more modern, urbanized. There’s also the fact that perhaps millet – or the right millet, because it varies by region – may not be found in all urban markets throughout the city.

Moving on from broad strokes, let’s look at Mauritania, a country where I’ve been able to collect far less information. In 2000, the country’s number one import was raw sugar, when these hard-core tea drinkers brought in 112,327 metric tons. Tea must have something to do with it, because refined sugar ranked fourth: 93,458 metric tons. Wheat also played a big role in the market with 72,991 metric tons.

2004 is when things get a little weird. Wheat still remains high with 148,509 metric tons. Refined sugar still takes home number two with 189,840 metric tons. But, there’s no raw sugar to be found. Instead, the number one import goes to….Cigarettes: $66,325,000 worth of puffy treats. (I knew I liked this country.)

I can’t tell you where raw sugar went; nor can I tell you were Joe Camel came from. (Cigarettes may always have been immensely popular, but perhaps the cigarette importers knew a way to, um, “sidestep” import duties.) Going back to the food imports, I will say they may be skewed because the country receives quite a bit of food aid from the World Food Program. In fact, between 2003 and 2006, Mauritania averaged more than 33,000 tons of donated food, compared to roughly 11,000 tons for Senegal. How this affects a country’s grocery list, I don’t know.

Nor do I really know about what these lists say about these two countries. These countries happen to import a lot of food – and a lot of food that now happens to be expensive. But you could say that about any commodity right now. You may also say they import more food because they have more money to pay for it…Well, at least until this year. That’s why, West Africa for the most part, these high food prices remain a pocketbook issue and don’t have to become a food security issue.

It’s on you, Nigeria
Here we should mention Nigeria, by far the region’s largest food market. If Nigeria doesn’t prove to have a good harvest, they’ll be looking to purchase food stocks elsewhere in West Africa. Not a bad thing, if you don’t remember 2005 when food from less bountiful Niger was bought up to relieve Nigerian demand, creating a food crisis. We term 2005 a crisis because not enough food was available in Niger; this year's issue is presently due to expensive food. Countries have learned from the issue in Niger. In Burkina Faso, at least, safeguards have been put in place to make sure local markets are not needlessly losing food stocks to foreign consumers.

The prognosis for Nigeria is so-so. Droughts ruined a lot of crops in the northern part of the country, but Fewsnet hopes this could be made up from the higher than expected rains in the south. Of course, if it goes like the rest of the world, we could be in for a long dry season.

What is food aid?

Because I don't know how to make sidebar boxes in Blogger, I'll add this to a different post.

Two basic types exist:

Food assistance, according to the UK’s Overseas Development Institute, describes the response to a chronic, but mostly short-term, problem. This aid may involve financial interventions and it could be funded internally (in countries like India) or internally financed, such as countries like Bangladesh or Ethiopia.

On the other hand, food aid can be direct food assistance, using agriculture surplus in one country and sending the food (or selling it, sometimes at a reduced price) to another country. Sometimes this aid comes in the form of money – such as food stamps for a country – where food can be purchased on the local or international market. As you can see, the definition of food aid is vague and ambiguous.

The dark side of biofuels?

Rich counties should think twice about turning food crops into biofuels, says UN food expert Jean Ziegler. In fact, he proposes a five year moratorium on the process.

With two agriculture powerhouses, the U.S. and Brazil, among rich nations searching for alternative fuels and other methods to cut greenhouse gases, using crops for biofuels are creating dangerous unintended consequences: driving up food prices and sparking food shortages, which increasingly harm the world’s poor.

The story points out that Zeigler claims “it takes 232 kilograms of maize to produce 50 liters of ethanol. That maize could feed a child in Zambia or Mexico, where maize is the staple crop, for a year, he said.”

The five-year moratorium will allow technology to catch up and increase the possibility of making biofuels from agriculture waste.

Can I quote you?
With the characteristic subtleness you may find in your average university undergrad, this UN expert connected the dots and labeled the continued use of cereals and sugars to produce fuels an atrocity.

"So it's a crime against humanity — it's a crime against humanity to convert agricultural productive soil into soil ... which will be burned into biofuel," The Associated Press quoted Ziegler at a news conference. "What has to be stopped is ... the growing catastrophe of the massacre (by) hunger in the world."

(An atrocity, yes, but only for the reporters present at the news conference if they wouldn’t take that quote and run with it.)

The UN goal of reducing extreme poverty by half by 2015 will not be met because of growing world hunger due to increasing prices, he said. With more than 100,000 people dying everyday due to the consequences of malnutrition and another 800 million chronically undernourished, now is not the time to engage in wasteful and expensive biofuel projects.

He has a point. At least on prices. According to this website by Corn Products International, the price of corn, a major ingredient in the biofuel ethanol, has increased from $15 in 2002 to $23 in 2005 and $40 in 2007. Prices for wheat in the U.S., the world’s largest exporter, are also hitting all-time highs. According to USA Today:

Wheat for December delivery closed at $9.33 a bushel in Chicago, more than double the price from a year ago. Drought in Australia and poor crops in other nations helped drive U.S. and world supplies to the lowest levels in decades. U.S. wheat stocks are pegged at 362 million bushels in 2007-08, the tightest since 1973-74.

The reason for the high price? Domestic harvest is down from its 1981 peak because farmers have moved to other cereals that produce higher yields and the U.S. government’s ethanol-friendly tax breaks. (Don’t, don’t call them subsidies.)

"We've placed so much demand on … feed grain to turn into fuel, we can't play catch-up quite as fast globally," USA Today quotes Joe Victor, vice president of Allendale, a commodity research advisory firm.

The real culprit?
The search for biofuels is certainly driving up world prices. However, how much would falling cereal prices help those who already face malnutrition? In 1990, FAO counted 823 million malnourished people. One year ago, the organization estimated 820 million remain malnourished, still far off from the UN Millennium Development Goal of reducing the total 412 million by 2015.

According to FAO, three out of every four hungry people live in rural areas, where infrastructure is poor (good roads often provide better food security) and education rates remain low.

Thus, for the world’s undernourished, isn't the real issue the availability of food and not its price?

Reforming the $2 billion a year food aid budget has certainly become an issue for the Food and Agriculture Organization. Much of the problem, FAO asserts, rests with in-kind food aid, which means the aid is tied to special conditions. For example, countries receiving the aid must purchase the food from the donating country instead of purchasing food from regional or local stocks. Researchers argue that this in-kind aid, which makes up one-third of all food aid, unfairly hurts local merchants and farmers by introducing foreign food into the market, driving down prices. This has been a sticking point since 2001 in the Doha trade talks, says TIME.

Secondly, this food aid can be sold on the domestic market, which is called “monetization.” For example, American NGOs such as Catholic Relief Services (and until 2009 CARE) monetize U.S. rice (or corn or wheat) by shipping it to countries (using U.S.-based carriers) and selling this rice on its domestic market. The profits these organizations then make can put to funding development programs.

Main recommendations of the report include (I quote):

• Eliminate programme, or government-to-government food aid, which, by definition, is not specifically targeted to needy groups. Stop the “monetization” of aid, whereby one out of every four tonnes of food aid is sold in local markets of recipient countries to generate funds for development;
  
• Deliver aid in the form of cash or food coupons where possible, and use in-kind food aid only where food insecurity is due to a shortage of food rather than to such problems as access to food. Assistance aimed at improving markets – by repairing roads or improving rural infrastructure, for example – is liable to be more effective;
• Use local and regional food-aid procurement where appropriate, as this can be of great benefit to agricultural development in many low-income developing countries. Such purchases are not always desirable, however, as they can increase local prices.

The U.S. and Brazilian governments’ policies on biofuels do not constitute perfect solutions to climate and fuel concerns, but these problems are no where near the extent of worries envisioned here. However, world prices should be closely monitored going forward. In my mind, the inability to reform food aid from the prospective of donors and donor agencies will only do more to hurt those in need.