Food prices are rising, yes. But it really does annoy me when everything and the kitchen sink gets thrown in there as an explanation and the real causes get missed….or just mentioned alongside the nonsense.
But other analysts highlight the food riots in Mozambique that killed 12 people last month and claim that spiralling prices could promote further political turmoil.
For example, those riots were not triggered by any market change in the price of food. They were triggered by a reduction in the government subsidies for the consumption of food: specifically, a reduction in bread subsidies.
But look, those riots get used twice as an example of the danger of rising market prices of food:
\”The food riots in Mozambique can be repeated anywhere in the coming years,\” said Devinder Sharma, a leading Indian food analyst.
\”Unless the world encourages developing countries to become self-sufficient in food grains, the threat of impending food riots will remain hanging over nations.
And what the hell is the link between self-sufficiency and the reduction in subsidies?
Quite, it\’s simply some nutter with an axe to grind grasping at any example to bolster his point. As happens here:
But the World Development Movement (WDM) in London warned that food speculation by hedge funds, pension funds and investment banks was likely to prompt further inflation.
We dealt with the WDM report here earlier. What it actually shows, by pointing to greater volatility in rice prices, rice having less futures and derivatives speculation surrounding it than other soft commodities, is that derivatives speculation reduces, not increases, price volatility. That is, that as Adam Smith pointed out, speculation smooths price changes, not exacerbates them.
And by allowing the nutters their place on the stage we get an ignoring of the two major points which the adults are trying to make:
UN special rapporteur on the right to food, Olivier de Schutter, says a combination of environmental degradation, urbanisation and large-scale land acquisitions by foreign investors for biofuels is squeezing land suitable for agriculture.
\”Worldwide, 5m to 10m hectares of agricultural land are being lost annually due to severe degradation and another 19.5m are lost for industrial uses and urbanisation,\” he says in a new report.
\”But the pressure on land resulting from these factors has been boosted in recent years by policies favouring large-scale industrial plantations.
\”According to the World Bank, more than one-third of large-scale land acquisitions are intended to produce agrofuels.\”
Yup, biofuels and, from the special UN report:
The report identifies ways to confer legal security of tenure upon farmers, fishermen and indigenous people affected by the current pressure on land.
It\’s governments causing the problems: partly rich world governments driven by the more absurd of the Greens, insisting that food be put into cars not people, and poor world governments insistent that the State, not the individual people, not even the traditional communal forms of landholding, should own the land (Ethiopia being a poster child for this sort of idiocy).
Yes, I know, markets really aren\’t perfect, but just to remind you, to really fuck things up you need governments.