We make the poor better off not by holding back technical and economic progress, but by accelerating it.
As a small boy I was told I must clean my plate because there were children starving in Africa. I answered back, as small boys do: the children starving in Africa were welcome to the food I did not want to eat. I did not know that I would grow up to be an economist and conclude that my response was right. There is not much connection between the food profligacy of the rich and the shortages endemic among the poor.
Last week’s food summit in Rome should have been a forum for sophisticated analysis. But, even leaving aside the offensive presence of Robert Mugabe, president of Zimbabwe, the discussion seems to have been as muddled, and the conclusions as banal, as those dinner table exchanges of long ago. Delegates talked about speculative activity in commodity markets, the growth of biofuels, agricultural protectionism in the developed world, population pressures in some poor countries, growing consumption in India and China and trends in agricultural productivity. All were bundled together in generalised assertions about the gravity of the food crisis and the urgent need for action.
But each of these features of the world food market has different origins and different implications and raises different policy issues. The rises in food prices in the past year make agricultural policy topical. The proximate cause is that the caravan of prospectors for alternative investments, having bid up the prices of every other asset, has now arrived in the territory of oil and soft commodities. As in earlier booms and busts, the speculative interest is self-sustaining, as momentum traders follow fashion; and analysts and consultants are ready to explain why irrational gyrations are founded on changes in the fundamentals of supply and demand. These claims of changes in fundamentals, although much exaggerated, have some basis. Rising incomes in Asia do increase demand for food. But this is not the explanation for the higher price of basmati rice at Waitrose. European history shows how these early stages of modern economic development increase productivity within agriculture as well as outside it. Underemployed labourers leave the land, technology advances and better infrastructure enables food to be grown where it grows best and shipped to where it is most needed.
Nor has the cheaper – or any – rice gone to make biofuels. Green measures are implemented not when they benefit the environment, but when they meet the needs of powerful industry lobbies, and the farming interest is the most powerful of all. US and European ethanol subsidies are another means of agricultural protection but the principal damage done is to ourselves. As in all trade negotiations, the issues of the Doha round are not between north and south but between inefficient producers everywhere and efficient producers and consumers everywhere.
We make the poor better off not by holding back technical and economic progress, but by accelerating it. People suspicious of science and resistant to the expansion of markets, extensively represented at these global meetings, often damage the causes they espouse. The most important factors reducing world poverty in the past 50 years have been the green revolution and the opening of the Indian and Chinese economies. If advocates of the precautionary principle and anti-globalisers had been as influential then as now, these developments might never have occurred. But it is easier to engage in windy rhetoric than to accept the rough justice of economics. Perhaps Mr Mugabe’s contribution was useful, even if not in the way he intended: he reinforced the message that the causes of food shortages are usually political rather than economic, even if the politics are those he represents rather than those he assailed.
So the summit ended as such summits always do. The delegates agreed on the importance of the problem, the urgent requirement to spend more money: they emphasised the need for co-ordinated action, and resolved to meet again in future to reach the same conclusions. If you have no substantive analysis or common principles beyond acquiescence in platitude, that is the nature of your consensus.
