Global Food Prices and Africa's Economic Famine

Anthony Faiola
Post Global Economics Reporter
Monday, April 28, 2008 10:00 AM

Post global economics reporter Anthony Faiola was online Monday, April 28 at 10 a.m. ET to discuss the scope and historical context of the worldwide crisis with rising food prices and shrinking supplies, and in particular its impact on Africa -- which is facing its first serious food shortages caused not by drought or war, but by soaring prices.

Video: On the Margins in Mauritania

The transcript follows.


Anthony Faiola: Welcome to the chat and thanks for coming. We're talking about The Post's Global Food Crisis series this morning. This is an important subject. I'll answer your questions as best I can, so fire away.


Manassas, Va.: The advantages in technology supposedly should allow the world's population to be fed amply. However, countries around the world are becoming more protectionist with their agricultural products through subsidies and higher tariffs, arguing that's the only way to protect their own food needs. Don't you think that type of policy makes the problem worse by giving less incentive to produce, causing even higher prices? I think this is a totally political problem.

Anthony Faiola: You're right, there are some troubling factors at play here. For one, productivity in agriculture is flagging after many years of solid increases. It seems subsidies have robbed some of the incentive to pushing for higher crop yields.


Rockville, Md.: Food shortages used to be regular events in history -- and not that many years ago. The "green revolution" eased the problem, but population always tries to stay ahead of the problem. But to be selfish, is it better for the U.S. to have something to sell for oil? We may be one of the last five exporting countries. How much can we grow our exports? At what cost to the environment? If great, what can we do to have both a big harvest and be kind to the environment?

Anthony Faiola: All very good questions. Again, one of the problems we're facing is that the "green revolution" actually is slipping away, with crop growth slowing considerably. It does benefit the U.S. to be a net exporter, but as you've noticed, food prices at home have gone up too.


Munich, Germany: I often had heard the criticism that subsidized farming in Europe and the the U.S. had pushed world prices of wheat, for instance, to such low levels that small farmers in third-world countries no longer could complete with imported goods. While not alleviating the current crisis, and while it's perhaps not applicable to arid countries like Mauritania, do you think that there's merit in letting small farmers in countries like Sri Lanka and Haiti gain income and viability from higher food prices? Won't slightly higher prices be an inducement for small, third-world farmers to start farming again?

Anthony Faiola: Thanks for joining us from Munich. The big problem here is that small farmers often don't benefit from higher food prices. Most subsistence farmers only can grow a portion of their food needs, and consume everything they grow, and don't benefit from higher prices at market. Even slightly larger-scale farmers are facing soaring costs for seeds, fertilizers, etc., that tend to cancel out potential gains.


Hampton, Va.: Food crisis? Crisis? In America? You're out of your gourd. They're rationing specific kinds of rice -- you only can buy four 50-pound bags. Uhhh ... if you need five 50-pound bags, starvation is not in your near future. Isn't this a manufactured issue in America?

Anthony Faiola: Thanks for the skepticism. You are right, this isn't a crisis in America. But if you look just to our south, Haiti's government has been destabilized; 100 million in Africa are slipping deeper into hunger; riots have broken out in more than 14 countries. So in a global context, this is indeed a crisis.


Arlington, Va.: Thanks to you and the Post for this important series. I appreciate your including opportunities to donate to help, but money only addresses the symptoms, not the root causes of the problems. Will the series address any of the hard issues we Americans should face regarding how our consumption uses too many resources? For example, yesterday's article noted an increase in demand because of grain being fed to livestock in Asia, but what about the high percent of meat we eat in the U.S.? What about the impacts we have with big homes, gas guzzling cars, etc.? I say this not to point the finger at others, but because the series really is thought-provoking for me regarding how each of us lives.

Anthony Faiola: Many thanks for your comments. Glad to know the stories engaged you. There are three more to come, and I think they will continue to address many of the issues you raise here. Thanks.


Arlington, Mass,: To what degree is the use of food crops for biofuel (corn for ethanol and oil crops for biodiesel) responsible for the shortage of supply and the rise in prices?

Anthony Faiola: Thanks for the good question. One of the big problems is crop substitution. As corn prices increased because of biofuel demand, some farmers shifted production from consumption crops such as wheat, soy beans, etc., to capitalize on the high prices for corn. It has helped link prices for these grains together, one reason they are shooting up at the same time.


Port-au-Prince, Haiti: Good morning, Mr Faiola. To my modest understanding, there are conjunctural and structural reasons for such high global food prices. On the structural level, don't you think that the "clash of civilizations" issue ( as Samuel Huntington stressed) is the fundamental problem: namely, a fierce conflict between the Islamic community and the West? Don't you think that very short-term negotiations between both parties could contribute to reduce world oil prices, and as a consequence world food prices?

On the conjunctural level, serious public sector reform, as well reform within nongovernmental organizations and international institutions' branches should take place. There are local and international bureaucracies in those poorest countries (in Africa and in Haiti) that represents an obstacle for any constructive change or productive results in the struggle against hunger. Should such actions not take place, we may run out of time; the recent appointment of a new prime minister in Haiti (Ericq Pierre), although a good move, may be useless to prevent further violent riots in this country and elsewhere.

Anthony Faiola: Thanks for joining in from Haiti. You raise some complex issues here, and thanks for that. We do know that rising oil prices absolutely have contributed to the food shock. If those prices eased, clearly it would ease some the pressures on food.


Washington: Thank you for doing this story -- it is so troubling. Your reporting is right on. I served in Mauritania as a Peace Corps Volunteer a few years ago, and I could see the writing on the wall then. With so much dependence on food imports, these people always have lived on the edge, and now they are starting to fall off of it. Lots of people are going to die of starvation. It is so sad.

Anthony Faiola: Thanks for the kind words. And yes, you're right, they never had it easy in Mauritania -- but this is a new and troubling phase. It is very sad indeed.


Norfolk, Va.: Isn't American food aid to Africa partly to blame? After all, if African farmers have to compete with free American grain, they're screwed. So they don't grow crops, and perpetuate the cycle of famine. It sounds callous, but shouldn't we stop sending planeloads of American rice to Africa? Wouldn't it be more effective to spend the money improving their infrastructure? Of course, American farmers, fat on government subsidies, wouldn't like that at all...

Anthony Faiola: Thanks for the smart question Norfolk. There is a somewhat belated push in Africa now to try to do that.


Baltimore: There seem to be several factors causing the problem -- drought, high oil prices, and biofuels. What can an individual do to assist those in need of food.

Anthony Faiola: Thank you for joining us Baltimore. You will notice several links with our stories online that may be of some help, including one for the U.N. World Food Program, which is in the middle of launching a major effort to help those suffering from the food price shock.


Vienna, Va.: I had no idea this was even going on until very recently. Thank you for discussing this issue. My question is, what can we do? I recently sent a large check (well, large for my family -- I'm no Bill Gates) to Doctors Without Borders. Are there other groups that are helping with the crisis? Is there anything Americans can do beyond sending money? Thank you.

Anthony Faiola: Thanks Vienna -- please see above answer.


Washington: The US has decreased the amount of farmland meant to grow grain for food and increased the amount meant for conversion to biofuels. Also, it takes about 20 tons of grain to produce 1 ton of beef -- 19 tons lost that could be used to feed human beings. Is it that food prices have increased mainly because of exporting countries increasing tariffs? What is the level of impact from other factors, like biofuel production and increased demand in rich nations for meat?

Anthony Faiola: There is a cluster of problems causing this as well, including factors we can control, like biofuel production, and factors we can't, like bad weather. But food prices are not increasing because of higher import tariffs -- that is just a response by net-food importer countries to pre-existing high prices. The bigger problem is that export countries are banning or limiting the sale of grain abroad, and often hiking export taxes.


Washington: Given that it's all based on oil, why doesn't the president release some of the 700 million barrels of oil in the strategic petroleum reserve? That's an 80-day supply for all U.S. needs. Isn't this an emergency? Get real, W.

Anthony Faiola: Thanks for the comment -- here it is for all to see.


Washington: If the U.S. would drop subsidies for corn-based ethanol, by what percent would world corn prices drop?

Anthony Faiola: That is the $64 million question. The best answer I can give you is that it would probably drop by a lot.


Ashland, Mo.: To what extent are high food prices the result of a speculative bubble in the futures market? Is it time to seriously consider that the futures market is something that only makes sense in a theoretical world where human greed can be ignored by assuming rational behavior?

Anthony Faiola: This has been a topic of hot debate. Farmers have claimed that investors are distorting prices by pumping hundreds of millions into grain futures, but others have insisted the role of this new flow of investment cash is actually playing only a small role.


Cape Town, South Africa: Africa should be the breadbasket of the world. Look at the Nile Delta! Instead of donating food, which is used for political leverage by the receiving nation's politicians, or money, which is siphoned off and stolen by greedy and corrupt African politician, why don't the donor countries provide African nations with farming implements, seeds, fertilizer and -- most important -- training and education in the field of agriculture?

Anthony Faiola: Great point, Cape Town. As I said earlier, there is a push now to try to improve production in Africa, particularly sub-Saharan Africa. Should it have come much earlier? Yes.


New Baltimore, Mich.: Has this shortage caused any countries to reconsider tariffs (usually the counterpart to subsidized crops)? For instance, doesn't the U.S. put high tariffs on Brazilian sugar, which in turn makes corn-based ethanol competitive, which causes it to be diverted for biofuels rather than used as food or feed?

Anthony Faiola: Good question. There is in fact a strong debate now raging in Europe between those who feel subsidies should be abandoned, and those who feel they are more important than ever to ensuring domestic food supplies. It is hard to say who will win. This is an emotional question.


Virginia: Wherever there is a food crisis, what can the respective governments do to alleviate that problem so that the populations do not starve?

Anthony Faiola: Some nations in Africa are reaching out for help from the United Nation's World Food Program, but also taking domestic measures. There is talk now, for instance, of issuing something akin to food stamps for the poorest people. They are also pushing to increase agricultural production at home.


Washington: The World Bank spent the 1980s and 1990s talking about "getting prices right." The idea was that producer prices had to be high enough to send the signal to farmers and other agricultural producers to increase their production. The implication was that increased prices (which were not co-opted by marketing boards) ultimately would lead to increased supplies. From reading the press for the past few weeks, I don't get any sense that there has been any boon to farmers, or that supplies will increase given time to re-establish the economic equilibrium that will bring prices back down. What's going on here? Are increased prices good news in some sense, or is this another indictment of World Bank policy from the past 15 years?

Anthony Faiola: Very good comments here.


Burbank, Calif.: I find one of the most important statistics that few understand is that, of all the people who have existed over the past 2,000 years, half of them are alive today. Isn't it really a daunting task to provide food and sustenance for this historically large population?

Anthony Faiola: Yes; but if food production levels had kept increasing (they no longer are) and new competition hadn't emerged from biofuels, you might be able to make the argument that the world may have been able to cope, or at least cope better.


Burke, Va.: Negotiating with the Middle East to lower oil prices might help -- for a time -- but what happens when the oil runs out? We need renewable alternatives that don't jack up food prices and are economically feasible, and we need them fast! It should be noted that countries without ready access to birth control and without options for women beyond childbearing and rearing as careers tend to be poorer, by far. High populations correlate with high poverty and hunger, simple as that -- and it's far, far kinder to ease poverty and hunger by limiting births than it is to see the population self-limit by increased deaths from famine, disease and warfare to control resources.

And not just abroad -- each child born here consumes more resources than several children born in poorer nations, so our choices in childbearing do have an effect on whether someone else's children will grow up or will die young, too. It's not PC to say that -- it's somehow okay to criticize people for driving unnecessary Hummers or living in McMansions, but it's not okay to question a far more potent and dangerous choice for the environment and for world resource consumption, the choice to have more than two children per couple. Understandable -- no one wants to tell someone their child shouldn't exist -- but the hard facts are that the more parents choose large families in the first world, the more parents have to watch their children slowly wither and painfully die in the third world. Shouldn't their children have a right to life, too?

Anthony Faiola: These kinds of thoughts on overpopulation have come in other questions too. Let me share them with you all.


Falls Church, Va.: What specific incident caused rice prices to skyrocket?

Anthony Faiola: There was not one specific incident. It's a combination of effects, including bad weather, a greater competition for food from rising demand in China and the biofuels industry, and others. The first part of our series, which ran Sunday, goes into that. Let me get that link for you.


Anthony Faiola: Here is the promised link...


University Park, Md.: Some argue that while multiple factors have contributed to the current food crisis (high fuel prices, drought, growing demand, corn for ethanol, etc.), in the final analysis trade barriers, subsidies and other forms of market interference are responsible for this staggering grain price inflation. Without these past and present distortions, we are told, markets would have adjusted to increased demand and other pressures -- at worst, we would have seen moderate increases in food prices. What do you think?

Anthony Faiola: I agree to a great extent. We lay out that theory in Part 1 of our series. See link above.


Burke, Va.: "Given that it's all based on oil, why doesn't the president release some of the 700 million barrels of oil in the strategic petroleum reserve? That's an 80-day supply for all U.S. needs. Isn't this an emergency?" So what do we do when the 80 days are up and the 700 million barrels of oil are gone, leaving us even more dependent on the Middle East for our oil addiction? What happens when all the oil runs out? Shouldn't we be focusing our efforts on renewable energy sources that don't jack up food prices and are economically feasible? Our civilization will desperately need them, quite soon. And that will be a global emergency that will make this one -- bad as it is -- pale in comparison.

Anthony Faiola: Big questions, and suggestions, for all to see.


Adana, Turkey: I hope you may discuss this according to developed and developing countries other than Africa. If possible, please use Turkey and the U.S. as examples.

Anthony Faiola: Thanks for joining us from Turkey. We picked Africa because it is the part of the world most heavily hit by food prices. But you are right, there are many other places in the world, including developed nations, where consumers are feeling the pinch. The Post will examine that specifically in the final part of this five-part series, which will run on Thursday. Please look for it.


Anonymous: From an article this morning: "The price gap should converge when futures contracts expire and deliveries are settled. Instead, the average premium for Chicago Board of Trade wheat has quadrupled in two years to 40 cents a bushel, compared with 10 cents the prior five years." Does this mean that speculation -- not supply and demand -- is driving up costs? Are these futures contracts leveraged by investors similar to to the leveraging that contributed to the collapse of investment bank Bear Stearns?

Anthony Faiola: I don't think there's any doubt that there is some level of speculation going on, but I also do not think it is the main factor driving up prices -- although it certainly would not be helping.


Woodbridge, Va.: You know, the suffering of these people makes me feel almost guilty for having a job. What is an individual supposed to do?

Anthony Faiola: Woodbridge, thanks for your kind response. You can check The Post's Web site when you click on today's story and find a list of several organizations helping the world's poor cope with higher food prices.


Miami: American farmers are to blame for African famine? That's insane. First of all, Zimbabwe was the bread basket of Africa until Mugabe threw out or killed the white farmers and gave their land to his cronies, who looted the farms but don't know a damn thing about growing crops. So even Zimbabwe is a net importer of food now, and the average life expectancy is in the 30s. That's America's fault? Corrupt, criminal regimes in Africa -- the same ones who control the distribution of our food aid! -- are the ones to blame, and we should not rescue them. That will just guarantee we get more Mugabes.

Anthony Faiola: No doubt there are domestic reasons behind rising food prices; Zimbabwe, as you point out, is a total basket case with runaway inflation. What we're saying is that new pressures on the food market -- including, but not limited to, U.S. farmers growing corn for biofuels -- have driven prices up worldwide.


Alexandria, Va.: The 500-pound gorillas are China and India, with their rapidly expanding middle classes. As incomes increase, the first thing families typically do is increase their levels of protein consumption. Meat requires large levels of feed grains. This trend will continue regardless of our biofuels policy, as long as emerging markets continue to create strong demand.

Anthony Faiola: Good observation, Virginia. Posted for all to see.


tiwaridwijendra: People now don't want to work in the remote crop fields -- that's why most of the nations are facing food crisis. Rapid urbanization, population increases and corruption in the administrative system are some of the reasons there is such a crisis in African and third-world countries. Those suffering in these countries will have to come forward themselves to fight these evil forces. Above all, population control is must for every country, but not the Chinese way. Something new has to come forth -- a new formula is required to control it. By stopping child birth, we will stop the life cycle of human race. One needs to think about this. The problem in Mauritania is going to continue for a long time, because this country is being eaten by desert.

Anthony Faiola: We've heard these kinds of thoughts all morning. Here's more...


Baltimore: We're the fattest country on the planet. Any chance we can run out of food here?

Anthony Faiola: Seems unlikely...

And on that note of dark humor, we'll sign off for now.

Thanks to all for joining today.


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