Government-Induced Food Insecurity

The recent food crisis and rising global food prices are short-term problems, said CATO Institute Research Fellow for India and Asia Swaminathan S. Anklesaria Aiyar last week.

“I firmly believe the current food crisis will soon blow over and we are going to be back very soon to the issues of overproduction through subsidies,” said Aiyar in a discussion about trade and food security at the Heritage Foundation. “I do believe that the current phase is a temporary one.”

Aiyar blamed export caps, which forty countries currently impose on grain, for driving up the prices of food by “artificially shrinking” the world trade market. He cited International Food Policy Research Institute statistics on rice in India to suggest global trading of rice has declined significantly.

“India used to provide almost one-fifth to one-sixth of the total rice trade, it exported 5.5 million tons of rice in 2007. Because of the crack-down, it will just be 1 to 2 million tons this year,” said Aiyar. “So three million tons are off the market from India alone and it’s like one-tenth of world trade has disappeared just because of India’s actions.”

He added, “A relaxation of trade curbs can cut world prices by 30 percent and in the case of rice, I think it would cut world prices by more than 50 percent.”

Export caps are intended to “protect the domestic consumer,” yet Aiyar called it the “starve your neighbor policy” because rice is not able to leave India, thus leaving neighboring countries, like China, bereft of food imports they depend on.

To address the issue of export caps on rice and other grains, Aiyar called for an international meeting of rice exporters to stop the “panic going on here, panic when one country bans it, another country bans it, another country bans it” resulting in higher prices.

“We really do need a world meeting of the rice exporters to say, how do we provide another extra two million or three million tons to the world market. How do we apportion it, apportion this extra rice quota to each country,” Aiyar said. “I think just an announcement that you can do that, would bring prices of rice coming down by $200-300 a ton.”

Aiyar also noted biofuels trigger high food prices and said they accounted for 30 percent of food price increases between 2000 and 2007.
Biofuels have become a popular scapegoat, especially given the recent attention at the June 3-5 UN-hosted World Food Summit in Rome, but Aiyar emphasized biofuels are not the sole problem responsible for pushing up food prices. He said, “Anyone who tries to pin this simply on biofuels is missing the bigger picture.”

The fellow also blamed the stigma associated with equal fundamentalism, specifically in regards to genetically modified foods, for further agitating the food crisis by not allowing countries like Africa to export genetically modified corn to Europe. “Africans are deathly frightened of growing genetically modified corn for fear that anything they produce will be banned for export to Europe,” said Aiyar.

Like the Europeans, NGOs such as Green Peace also are hesitant to embrace genetically modified foods, according to Aiyar, and they consider any genetically modified food to be “monster food.” To counter this mindset, Aiyar said India and the US need to be against the NGOs or at least there needs to be “sensible NGOs against the Green Peace, which is called Green Peace of the Grave in this particular case.”

Genetically modified food like “Golden Rice,” rice injected with Vitamin A, could be useful, Aiyar argued, because it both alleviates malnutrition concerns and increases the rice trade.

Aiyar said he believed Golden Rice could be a successful endeavor because genetically modified goods have been successful in the past, including genetically modified cotton in India. “There was a similar idea that genetically modified cotton was going to be disastrous in India. In fact, it’s one of the biggest successes of recent times,” explained Aiyar who noted that production of cotton has increased 100 percent. “Genetically modified stuff has achieved this, it can achieve another thing.”

Emily Miller is an intern at the American Journalism Center, a training program run by Accuracy in Media and Accuracy in Academia.