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Hoarding Nations Drive Food Costs Ever Higher

Lately, every day has felt like the harbinger of record high prices at the pump, and now the same can be said about our food. I suppose the news shouldn’t hit so hard, after all, it’s only expected that food prices rise as the cost of planting rise with it. But according to a recent article published by the New York Times, prices of fertilizer, diesel and other farm expenses aren’t the only reason for skyward prices.

At least 29 countries have sharply curbed food exports in recent months, to ensure that their own people have enough to eat, at affordable prices. The food hoarding comes as increasing perceptions of shortages scare countries into a panic that has inadvertently made a real food crisis entirely possible.

Now, with food protests and ill climate changes, the world is increasingly dependant on a handful of food exporting countries like Brazil and the United States whose produce is protected by large subsidies that drown other countries with a tsunami of exports, which is another reason why trade barriers have risen and food prices have gone up. The result is what United States trade representative Susan C. Schwab noted as “Once country’s act to promote food security is another country’s food insecurity.”

With powerful lobbies from Japan to Western Europe to the United States protecting farmers in ways factory workers in Detroit could only dream of, the current dispute over food trade touches on an age-old question for civilizations everywhere:

“Is it best to specialize in whatever food grows best in a country’s soil, and trade it for all other food needs—or even, perhaps, specialize in services or manufacturing, and trade those for food?

Or is it best to seek self-sufficiency in every type of food that will, weather permitting, grow within a country’s borders?”

The usual answer within an ever globalizing world is that everyone benefits most if every country specializes what it can most efficiently make, and trade for the rest.

One way of looking at it is if Egypt had to be self-sufficient in food, there would be no water left in the Nile. But specialization only works if countries are willing to trade in what has become a globalized market.

In many ways, the price stand-off is like the tension felt in a high-stake game of poker. The food and gas connection are the jokers in a deck of cards that are sorted from the pile. Meanwhile, all the aces are held by food exporting countries like us, while the food hoarders make a go at a believable bluff.

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