Previously, in What Causes Food Insecurity: Part I, I started with one of the factors that contributes to low food stocks: natural disasters.
Today, I’d like to point out another common argument for low food stocks: Government Policy.
One such policy is an import or export bans. In order protect their national interests, governments often place bans on importing or exporting certain commodities. For example, in April of 2008, the government of Kazakhstan banned the export of wheat in order to curtail domestic inflation and prevent bread shortages that had occurred the previous year, essentially in an effort to “assure the country’s food security.” Here it’s important to note that Kazakhstan is a large producer of wheat in the region. While intending to protect their own population, this action potentially hurts neighboring nations that depend on purchase of Kazakhstan’s exports for their food consumption. See article quoted here.
Other policies that affects the supply of food are import or export tariffs. In 2008, the government of Argentina increased export taxes on crops in order to keep food prices down. The idea was that a tariff on exports would make that exported crop more expensive in other parts of the world as compared to Argentina since consumers generally incur the cost of tariffs. Thus the supply of food would remain high and the price lower within the country. Argentina’s tariff increase was followed by a wave of farmer protests. You can read more about it in this NY Times article from 2008.
These policies can promote hoarding of food and can exacerbate a food insecurity problem.
For this reason, the US, EU, WTO and others promote the removal of trade barriers (i.e. tariffs) to ensure the easy flow of food (and other goods) across national borders.
Coming up: Part III, the final section of low food stocks/more government policy, the current hot topic: corn production/subsidies and biofuels/food for fuel debate.