Sunday, February 13, 2011


The Egyptian pro-democracy revolt going on currently was able to topple the dictatorial regime there but it has also focused light on the potential danger of spiraling food prices that can engulf the whole world into chaos, if adequate remedial measures are not taken immediately. If market forces are responsible for this tragedy, corrective steps can always be considered through concerted policy orchestration. Unfortunately the price rise is not driven by the classical demand-supply equilibrium normally seen during production shortage due to natural causes like drought, floods etc and many economists are of the view that one country in this world is responsible for the distorted price situation. That is the United States of America which is pursuing a reckless policy of subsidizing its petroleum oil industry for using corn derived alcohol for blending with fossil fuel, thus diverting almost 40% of its corn crops for alcohol fermentation. The dramatic chain effect of the above policy is being felt world over, especially in African countries where wheat and corn prices have hit the roof! Here is commentary on this vexed issue.

"Higher commodity prices are "leading to riots, demonstrations and political instability," Nouriel Roubini, the New York University economics professor who predicted the financial crisis, said on a Davos panel. "It's really something that can topple regimes, as we have seen in the Middle East.""This protest won't end in North Africa; it will spread in many countries because of high unemployment and increasing food prices," Hamza Alkholi, chairman and chief executive of Saudi Alkholi Group, said in an interviewduring Davos. The price of corn has surged 88 percent over the past year. That in turn has pushed wheat up - 114 percent - and Egypt is the world's largest importer of wheat. And as the Technology Review pointed out in 2007, just before the first price spike you can see in that graph, "The situation will only get worse, says David Pimentel, a professor in the department of entomology at Cornell University. "We have over a hundred different ethanol plants under construction now, so the situation is going to get desperate," he says. Adding to the worries about corn-related food prices is President Bush's ambitious goal, announced in his last State of the Union address, that the United States will produce 35 billion gallons of ethanol by 2017".

Is it not a tragedy of Himalayan proportion that valuable food is being diverted for non-food purpose for the enjoyment of super rich people lucky to be in the USA for driving their automobiles? Of course USA is a sovereign country and it has the right to do whatever it feels right to favor its citizens but can human beings be so inconsiderate towards their fellow cohabitants on this earth and it is inconceivable as to how they can live in luxury while those less fortunate brethren living in the poor and impoverished countries of Africa die of starvation and malnutrition. Unless the above policy is halted immediately for which international pressure will have to be exerted, there is real danger of the whole world plunging into anarchy sooner or later. There are many other sources from which alcohol can be made without affecting the food supply dynamics and commercial biotechnology routes are now available to make alcohol using carbon sources like agricultural wastes generated during harvesting and processing. Talking about economic aid has no meaning unless sustainable development models of perennial nature are provided to the poor farmers of the third world..


Food fight? Enjoy some healthy debate
in the Yahoo! Answers Food & Drink Q&A.

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