Africa: Whipped by the Oil and Food Crises

Remember the way a whip works. You start a wave at the handle, and as it travels down the whip it moves faster and faster until at the end it snaps. Well, an article in The Atlantic suggests that something of the kind is working in the current food crisis, and that Africa is getting whipped.

The oil crisis by increasing the price of gasoline is making the production and distribution of food more expensive. It has also stimulated policies that promote the use of biofuels, especially in the countries that use fuel most intensively -- subsidies for their production or mandates that they be used. That is resulting in diversion of agricultural activity from food production to biofuel feedstock production. As, for example, corn prices are driven up by the reduction in corn supplies, demand is shifted to ther food and feed grains, which in turn drives up their prices.

A few countries have responded by putting export limitations on the food that they produce. By doing so they seek to assure adequate supplies within their borders, and thus also to keep price increases smaller than they would otherwise be. That of course has secondary impacts. Not only does it tend to decrease the income of farmers within the country, but it tends to further exacerbate the price rises in other countries. The countries that have put up these export limitations, including China, India and Indonesia, have huge populations and so can have an impact on world food prices.

African nations, which have inefficient agriculture, are prone to weather caused falls in food production, and low per capita incomes are disproportionately affected by the food price increases. The Atlantic cites a figure of 100 million people who might be driven below the poverty line by the ultimate whiplash of this process, with the effect being felt in much of East Africa.

The impact has been exacerbated by years of neglect for agricultural research. It will be more years, even if international funding for such research is increased now, before the benefits reach the poor consumer (or farmer) in the worst affected areas.