Monday, 14 April 2008

Early morning economics/free-market rant

There is an economist on sabc who is arguing that sky-rocketing international food prices (that are causing violence in poor countries and likely to be fatal to thousands and thousands) can be attributed to rising demand because of the fall of the Berlin wall and a focus on bio-fuels which is using up all the food-growing farms. Hmm... unconvinced. His solution also seemed to be food gardens. I would love to see the data on which he's basing that analysis.

His major point, unsurprisingly, seemed to be that any interefence in prices will simply push prices up. Egypt and Haiti have had food-price riots. South Africans are groaning and creaking under the weight of rising food prices. Surely we've reached the point where a deeper, more open-minded analysis is warranted, where a knee-jerk free-market, 'government-interference-in-market-bad' is insufficient? Isn't it perhaps time to look around the world at which economic systems *do* created food security?

In the US, they pay farmers to throw away milk and maize that could keep developing nations alive, because they need to keep supply available while keeping prices high enough that farmers can survive. The CAP in the EU ensures food supply by protectionism - farmer security means there is always someone still growing food (even if numbers are slipping).

South Africa's farming sector has had a major shock in the last 14 years as the broad range of subsidies, etc. were removed and the market opened up. I'm not for a closed or cenrtally-planned system but I do think the touching faith capitalists have in the market should be tempered with pragmatism when crises loom. I also think that food security it perhaps important enough to compromise some principles for the sake of people's survival. Especially when there are successful, well-established systems we can learn from.

Not that I have anything against food gardens. Or reducing oil-dependence. I'm just not sure it's enough.

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