University of Chicago
Type of paper: Thesis/Dissertation Chapter
The New Face of Hunger
The world is facing a new food crisis. Agricultural countries are experiencing the major shift in demand, and need time to reach the new economic equilibrium. There are several possible solutions to that, but none of them can improve the situation in the short run.
“The New Face of Hunger” discusses the food problems the world currently faces (The Economist, 2008). As the world is entering the “new unsustainable and politically risky period”, agricultural countries are unable to increase food production (The Economist, 2008). Equatorial countries experience persistent food riots. Haiti, Cameroon, Egypt, and Philippines have already turned food scarcity into an international political issue. The basic food products have experienced price increase in 2007: “last year wheat prices rose 77% and rice 16%” (The Economist, 2008). The majority of the smaller farmers do not know the reasons of such dramatic economic changes.
To economic professionals, the reasons of food crisis are more than evident. First, the price increase reflects the changes in demand. Indian and Chinese populations consume more food as they are becoming richer. The demand is seriously impacted by “western biofuels programmes, which convert cereals into fuel” (The Economist, 2008). Second, the current market situation also impacts the major export quotas, and promotes panic-buying economic behavior (The Economist, 2008). Third, the farmers cannot immediately react to the changes in market demand and export quotas. Food production requires time.
As governments were trying to soften the impact of rising good price on domestic markets, farmers did not receive economic signals from external markets, and did not have any opportunity to adjust their production to the new market requirements. Moreover, to produce more food, farmers need time to grow it. They need more land, which should be suitable for agricultural needs. Undoubtedly, farmers will be able to cope with the food crisis in future, and will increase their production scales to fit the new demand, but is clear that “the transition to the new equilibrium is proving costlier, more prolonged, and much more painful than anyone had expected” (The Economist, 2008).
Ideally, the 450 million of small farmers would be able to resolve the food crisis. Those who live in developing countries and own no more than several acres, could supply the world with food products, reducing their own poverty, improving environment, and promoting economic efficiency of food production: “in terms of returns on investment, it would be easier to boost grain yields in Africa from two tones per hectare to four than it would be to raise yields in Europe from eight tonnes to ten” (The Economist, 2008).
However, small farmers seem pessimistic about these plans. The planted areas are cut back as their owners cannot afford purchasing fertilizers (The Economist, 2008). In addition, agricultural production cannot immediately respond to the changing demand. Higher yields need better irrigation and fancier seeds, which cannot be produced or found overnight (The Economist, 2008). “The time lag between dreaming up a new seed and growing it commercially in the field is ten to 15 years” (The Economist, 2008). This is why none of the proposed solutions would help resolving the food issue in the short run.
I personally think that we should prepare ourselves to the long period of reaching a new economic equilibrium. It is true that the era of cheap products is over. Even when farmers finally manage to produce more, the price will hardly go down. As the average farm size has fallen from 1.5 to 0.5 hectares, small farmers are facing more difficulties in responding to higher food prices. We can only rely on the two factors: the growing food supply, which will slowly increase with time, and technologies and research, which will hopefully promote better yields without increasing the average farm size. In any case, agricultural production requires time. As there are no possible solutions which could help resolve the issue in the short run, we have nothing but to wait until the situation is improved.
The Economist. (2008). The new face of hunger. The Economist.com. Retrieved April 28,
2008, from http://www.economist.com/world/international/displaystory.cfm?story_id=11049284