More on food prices, shortages, and riots

Sorry for the lack of posts, folks. I’m in orientation for the new position, which just swallows whole days – useful, but a bit exhausting.
So, a quick post following up on my previous comments about food prices. The Guardian has a good piece on this issue at http://www.guardian.co.uk/commentisfree/2010/sep/05/mozambique-food-riots-patel
This piece is much better than reporting from US sources, but it does have a significant flaw driven by the political goal of the author – highlighting the failures of economic/development policy and practice, and how this led to our current situation. While I agree that these are major issues, I am concerned with the way the author downplays the fact that there has been simmering discontent with the government in Mozambique for some time. The riots are locally-specific: tied to food markets, development policy and other geopolitical processes, but crystallized into action through a local lens. This is why we have riots in some places, but not others. It’s just too hard to generalize . . . and we don’t learn much when we do, I fear.

Not to say I told you so . . .

but I told you so.  Remember this post?  Well, the New York Times has finally caught up to the story, and its not good news. The UN is finally starting to make official their concerns for global food prices.  Now, you can argue that it is in the UN’s interest to raise this issue and make it a big deal, as the organization’s funding relies on donor countries who often are reticent to contribute except in times of crisis.  However, the main person downplaying this potential crisis in the NYT story is Food and Agriculture Organization of the UN (FAO) economist Abdolreza Abbassian:

“If you look at the numbers globally, the Americans, the Europeans and the Australians can make up the supply,” Mr. Abbassian said of the wheat harvest, playing down the chances of repeating the 2008 crisis. “There is no reason for this hype, but once the psychological thing sets in it is hard to change that perception, especially if Russia keeps sending bad news.”

There are a few important things to note here.  First, while Abbassian downplays the idea of real shortages driving market prices, he is acknowledging that the uncertainty in the market is likely to drive price instability – the end result being unpredictable, and likely rising, food prices.  Second, Abbassian must not be looking at the data that is trickling in from around the world.  For example, I have firsthand information from Southern Malawi about the failure of the maize crop there – not as bad as a few years ago, but bad enough that it might compromise Malawi’s status as a maize exporter.  Without wheat, people will start to press other grains, which are now themselves starting to get tight.
This is problematic globally, but I am very, very concerned for the situation in Southern Africa.  Mozambique is already starting to see significant civil unrest related, at least in part, to rising food prices.  Basically, this seems to have been the match that finally set off significant civil discontent with a problematic government.  The last time Mozambique fell apart, refugees flooded places like southern Malawi, stressing land availability and people’s livelihoods – sort of exporting the problems to surrounding countries.  The convergence of climatic variability and a highly interlinked global food market could be setting this region up for a really serious disaster in the immediate future . . . and we will feel the disaster here at the supermarket.  Not good.  Not good at all.