Americans may fret that Wheat Thins cost 15 percent more than a year ago but in poor nations, such price hikes aren’t taken lightly. In Ivory Coast last week, women rioted against higher food costs, leaving one person dead.
In Haiti, four people were killed in protests last week over a 50 percent rise in the cost of food staples in the past year. From Egypt to Vietnam, price rises of 40 percent or more for rice, wheat, and corn are stirring unrest and forcing governments to take drastic steps, such as blocking grain exports and arresting farmers who hoard surpluses.
The UN International Fund for Agriculture predicts food riots will become common on the world scene for at least a year. The World Bank says 33 countries face unrest from higher prices in both food and energy.
Even in grain-rich America, wholesale food prices are rising at a rate not seen in 27 years. The most acute “ag-flation,” however, is in Asia and Africa, where food costs take up a higher proportion of family income. And the face of hunger is now seen more in cities as a historic shift takes place with more than half of the world’s population soon to be living in or near urban areas.
While we ache for the poor in the midst of this, those of us who live well in the developed world may benefit in the long run from the dramatic increases in the prices of fuel and food. We may finally learn how to live in sustainable ways that wean us from our lifestyle idolatry.
[blockquote] Indeed, a government’s attempt to control food markets, either for farmers or for urban dwellers, often creates the kind of distortions that contribute to higher prices. [/blockquote]
This is such a complex of such complexity that it can be dangerous to make a simple assumption that higher prices = a bad thing. A couple of years ago the Economist had an article about the way that third-world governments keep agricultural prices artificially low. Why wouldn’t they want to, since there are more voters in the cities and (as mentioned in this article) they’ll riot over prices? But the result of these policies is grinding poverty in the countryside among the farmers. With the artificial impoverishment of farmers, they nation as a whole is susceptible to cycles of starvation. Food-aid can help an immediate crisis, but the free food further drives down prices for the farmers impeding progress in self-sufficiency and in the worst-case prolonging the crisis.
For all we know, these price rises may be a good thing in the long-run for the nations that are experiencing them.