The pain of rising food prices is being inflicted on hundreds of millions in the world today. Rice, which is a staple food in many parts of the world, has more than tripled in prices since January this year - and we are still in the first half of the year. Besides rice, other staples such as corn and wheat have also surged to record highs recently. It’s almost impossible to avoid wheat in our diet; wheat is a key ingredient used in pasta, noodles and pizza. Flour manufacturers are finding their supply tight, and many have passed on the higher cost of raw ingredients onto consumers. You may find that the bread or fried rice you are eating may be costing more now. Food riots and protests have broken out in countries including Haiti, Thailand, Philippines, Egypt and dozens more.

Where did cheap food go? The economics of this is so complex that there can be no singular cause. Feel free to attribute the cause(s) to any or all of the following: soaring oil prices, government policies which encourage the growing of crops such as corn for biofuels instead of for food, growing demand for food from the Chinese and Indian markets, drought weather conditions, speculation of these commodities in the financial markets. Because of attractive subsidies, farmers, particularly those in the US, are compelled to shift crop planting from wheat to corn and soybeans to take advantage of demand for biofuels. The US and Eurozone should relook and restructure their biofuels policies and cut down their annual production targets substantially so that crops like corn is better and more productively used as food rather than to produce ethanol, a process which has been shown to be both energy- and land -inefficient.

Even if these programs may have been carried out with good intentions to cut down on human reliance on fossil fuels which are non-renewable, they generated enormous negative consequences: millions of people in poverty could no longer afford proper meals and not only that, vast areas of virgin rainforest are destroyed in Indonesia and Brazil to make way for palm oil and soy plantations. Deforestation in the Amazon rainforest has spiked up higher in recent months. A few days ago, the World Bank issued a warning, saying that countries cannot continue to support biofuels the way it is currently supported. So far, the Bush administration has defended its corn-based ethanol program, saying it accounts for 2-3% of the overall increase in global food prices.

In the meantime, export bans and heavy export duties recently imposed by certain producer countries will only make the situation worse. They may protect their domestic interests, but that is a very short-sighted move. By blocking market forces, they will only push global prices higher and increase the cost of producing food worldwide.

As a matter of fact, even the UN Secretary-General has said that the only long-term solution is to improve agricultural techniques and technology. Countries which impose export duties, bans or price controls are actually further aggravating the problem by preventing investments by farmers and agricultural producers, and in some cases, may actually push farmers out of business as their profits become squeezed by high energy and fertilizer costs and lower profits. Instead of this, governments should be looking at helping farmers invest in more efficient practices and helping move smaller farmers into other businesses and combining small farms into larger, more productive ones.

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