World Food Price Rise. Inevitable? Serious? Requires Social Contract?

[,Image c/o World Bank]

World food prices are rising. This graph shows current prices approaching the May 08 spike, which triggered disturbances in 30 countries.


So far, the present rises have caused trouble only in Mozambique, Bolivia and India. This is not due so much to philosophical resignation as to the fact that rice and wheat are relatively stable, and supply is boosted through good harvests in Asia and Africa.

The cause of the price rise is multi-factorial, Here is the Wikipedia list for the 07-08 spike:

• 1.1 World population growth
• 1.2 Increased demand for more resource intensive food
• 1.3 Effects of petroleum price increases
• 1.4 Declining world food stockpiles
• 1.5 Financial speculation
  • 1.5.1 Commodity Index Funds
• 1.6 Effects of trade liberalization
• 1.7 Effects of food for fuel
• 1.8 Biofuel subsidies in the US and the EU
• 1.9 Idled farmland
• 1.10 Agricultural subsidies
• 1.11 Distorted global rice market
• 1.12 Crop shortfalls from natural disasters
• 1.13 Soil and productivity losses
• 1.14 Rising levels of ozone

There may of course be other factors, but these 14 points are a reasonable start.

The FT has been covering the crisis in depth, as it should, given that hunger is the one thing that will cause people to riot. Pride of place goes to an op-ed by Robert Zoellick, President of the World Bank, who puts forward a number of useful solutions. Not found in his list is the notion that commodity market reform is indicated. (And in other news, we report on recent research into the Pope's religious affiliations). He does not mention that Goldman Sachs bought into long-term options on wheat futures, which necessarily pushed up prices. "Top World Bank Economist overlooks effect on demand on prices". Hmm.

Stable food prices are absolutely vital for the well-being of humanity. Not just because of the suffering caused by hunger, and the trouble caused by riots and resulting political instability, but also because nations may go to war to obtain fertile territory.

One interesting item is that in poorer countries, 80% of food is supplied locally from small farmers. Therefore the approach taken by Practical Action would be effective in boosting food production.

There are many factors to be addressed, but one is absolutely vital: population growth. It is true that we presently produce enough food to feed everyone on the planet, and therefore current hunger is down to distribution and market failures, but it is also true that it is impossible to expand forever in a finite space. Even a human population with a 100% optimal ecological footprint must stop growing.

World population is an immense and emotionally charged topic.

Ultimately, population can be addressed politically by launching an explicit new Social Contract contract between Governments and people: Governments undertake to prevent starvation if people restrict their offspring to replacement levels - which means one per individual.

What is the role of Government? Clearly, it is protect the people from harm. Not just from invasion exploitation and crime, but also from thirst, hunger, homelessness, cold and disease. That is the irreducible core of government responsibility.

Ever-increasing population growth will result in lack of resources to fulfill basic human needs. This means that governments will fail and fall. Therefore it is in the interests of both people and governments that food is affordable. Ultimately, food will only be affordable for all if population growth is halted. The Social Contract is the most effective lever that we have to initiate this process, because it makes a direct link between two human physiological imperatives - the need to eat, and the desire to reproduce.

The logic of this is, I claim, impeccable. Let us run through it again.

1. Axiom: it is impossible to expand forever into a finite space.
2. Axiom: food production requires space 
3. Food production must increase to meet the needs of a growing population
4. Even in the presence of efficiency measures, more people means that more land will be needed to feed an indefinitely growing population
5. There is a finite amount of land on the planet.
6. Therefore at some stage human population growth will stop.
7. This will either result from disaster, or from planning
8. In order for it to result from planning, education and understanding is required
9. The Social Contract is easily understood as the foundation of the transformation in human reproductive habits.

Logically impeccable. But emotionally unacceptable to strict and particular libertarians. Who will be obliged to attack the logic. I look forward to this.