Food, glorious food . . .

I've got a new Bloggingheads up with Raj Patel, the author of Stuffed and Starved, a book on world food policy. All of my Bloggingheads are, of course, must-see TV, but there's something a little extra special about watching the libertarian vegan debate the left-wing anti-globalization economist on trade, obesity, and public health.

One thing that I sort of whiffed was in explaining the debate over the role of developed nation farm policy in world poverty. There has been an argument for a while that farm subsidies are actually good for poor countries, because it provides them cheap food. The problem with this argument is that within poor countries, the farmers are almost always the poorest of the poor; almost all of the people living below $1 a day are subsistence farmers.

Suddenly we're seeing a reversal of the problem: rising world food prices are probably helping rural farmers (though it's not totally clear how much those farmers participate in the cash economy); urban workers, who are now getting hurt, are suffering and in some cases, rioting. There rarely seem to be unalloyed positive developments in the poorest countries.

Comments

Two minutes into the video, Mr. Patel mentions Via Campesina and how it inspired him during the Seattle protests. That right there should be a MAJOR red flag. In Brazil, at least, Via Campesina is a very far left organization that promotes land invasions and vandalism. It's basically one of those organtization still living in thr 1930's, trying to promote the Communist Revolution through peasant revolt.

Posted by Cisco | May 13, 2008 2:27 PM

Well, it's a bit misleading to say that almost all people living below $1 a day are subsistence farmers and therefore will benefit from higher food prices. The key distinction is between people who are net food sellers and net food buyers. Plenty of the rural poor are net food buyers, for example landless laborers and farmers who own or rent only very small bits of land. (The urban poor are of course nearly all net food buyers). As a result of these kinds of factors, the World Bank calculates that in Indonesia, for example, 76% of the poor are net rice buyers, including 72% of the rural poor. Here higher rice prices definitely increase poverty.

There's no hard and fast rule. It all depends on country circumstances and the precise balance between net buyers and sellers among the poor. There are probably a lot more net sellers among the poor in Thailand, who will do well out of higher rice prices. I don't know if anyone has done the overall numbers for the poor in developing countries. If I had to guess I would say there are more net buyers than sellers. So poverty will get worse.

Posted by mnbr | May 13, 2008 2:41 PM

Patel brings up this Bush quote from the weekend: "When you start getting wealth, you start demanding better nutrition and better food, and so demand is high, and that causes the price to go up."

I don't really think there's anything surprising about this statement. Why are Indians offended by this?

I'm guessing they don't feel good about being singled out, although I'm sure both the President and Indian citizens would agree that rising demand from developing countries is adding to the price of grain.

I think it's people looking to be offended.

Posted by Klug | May 13, 2008 2:49 PM

People seem fascinated by this idea of fast food demand growth in India and China causing food price increases. It could be true in theory and perhaps at some at other time. But as a matter of fact it is simply not there in the data now or in the last few years. If anything, food demand growth in China and India has been pretty sluggish of late. The real big increase in world demand in the last few years is pretty clear: biofuels. As a result of US/European energy policies, we have now taken to setting food prices in the world oil market.

Posted by mnbr | May 13, 2008 3:44 PM