TOPICS > Economy

Supply, Price of Food Increase Hardship for World’s Poor

April 29, 2008 at 6:35 PM EDT
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Food shortages and price spikes have combined to wreak havoc within the world's poorest nations. Ray Suarez examines the causes and effects of the food crises and speaks with the Washington Post's Anthony Faiola about his recent trip to Mauritania.

JUDY WOODRUFF: Now, the causes and effects of the growing global food crisis. Ray Suarez has our conversation.

RAY SUAREZ: The food shortages and huge rise in prices gripping the world’s poorest countries are among the worst seen in a generation.

The problems are so serious that U.N. Secretary-General Ban Ki-Moon warned today it could spark a cascade of international crises affecting trade, growth, even political security.

For a closer look at the causes and impact, we check in with Anthony Faiola of the Washington Post. He’s part of a team of reporters writing a series of articles on the food crisis. He recently visited Mauritania in northwest Africa to see the impact there.

And let’s begin right there in Mauritania. Is this a country that produces enough food to feed its own people?

ANTHONY FAIOLA, Washington Post: Absolutely not. It’s a country that, on the edge of the Sahara, straddling the worlds of black and Arab Africa, is forced to import approximately 70 percent of its food supply.

It has only .2 percent arable land in the entire country. And with desertification, the Sahara is encroaching more and more every day on the few places that it does have that are fertile.

So this is a country that’s clearly dependent on the global marketplace for its food.

Climate, high demand push prices up

RAY SUAREZ: Can the rank-and-file people of the country afford to buy the food that's available to eat?

ANTHONY FAIOLA: That's the great problem they're having now. They can't.

In rural areas, in particular, you're talking about people that are living on $1 a day often. These are people on the margins of society already, people who, even in the best of times, are having a hard time feeding themselves with that kind of income.

But when you take a situation like they have now, where food prices have surged to, in some cases, record levels, in a very short period of time, over the last eight months in particular, you know, you see a situation growing where these people are simply unable to reach the food, unable to pay for the food.

It is in the markets; they just can't afford it.

RAY SUAREZ: Well, what's pushing up the prices? What is it that's causing this one marketplace that we saw pictures of in the paper to now post higher prices for the same food?

ANTHONY FAIOLA: It's a complex converging of events. It's a mixture of issues ranging from bad weather -- climate change plays a role. In Australia, for instance, there's a multi-year drought that has really eaten into the global food supply.

But beyond that, you're also seeing new demand from the biofuel industry, for instance, that is taking up more and more of the U.S. corn production, for instance. That also affects wheat prices, because farmers are inclined to plant less wheat and more corn.

At the same time, you see countries like India and China importing more and more of some grains, for instance, soybeans. Those are being driven up by the demand there.

Again, what happens is you have a convergence of all of these. The grains start moving up prices in tandem, and that's what effectively generates the crisis that we're in now.

Impact of a global food economy

RAY SUAREZ: So you draw a line all the way from a wheat, corn or soybean farm in the American Midwest all the way to Mauritania in West Africa, but wasn't globalization supposed to make food cheaper for poor people?

ANTHONY FAIOLA: You're absolutely right. For the last 15 years or so, there has been this assumption that countries like Mauritania could effectively abandon these government-fixed price systems that they had and give up this idea of having to stockpile food for a rainy day, the idea being that the global marketplace would, of course, provide.

But the problem is -- unlike, for instance, manufactured goods, like a car or a personal computer, where the price is increasingly similar from Paris to Mauritania to Beijing -- food never really globalized.

You had a situation where the United States, Europe, Japan, they're protecting their farmers. They are artificially affecting the prices through these subsidies.

As a result, when a market increases in demand, for instance, when we see rising demand from China or India, the prices are not adjusting the way they should be, because there's an inhibitor in the market. You see the subsidies acting as an inhibitor.

Adjustments to everyday life

RAY SUAREZ: So prices aren't adjusting, but people have to adjust. What were the people you met doing to cope to handle these much higher food prices?

ANTHONY FAIOLA: They're eating less and poorer quality food. There was a family that we spent a great deal of time with at a marketplace in the capital of Mauritania where they were selling their last goat.

They had had five goats last year, but because prices have soared as they have, these people have been forced to either sell their goats or to eat them. So what they're doing at the moment is trying to hang on to what little they have.

They're skipping meals. They're eating less food. They're eating poor quality food. They used to have rice puddings, for instance, that had rich milk, as well as cooking oil and sugar. And they've dwindled that down to recipes including rice and water.

So children, for instance, in this family, two very adorable children, the parents were telling us how they cry in the morning because they're unable to have the morning milk that they're used to. It's really a sad situation.

RAY SUAREZ: But when you're right down there at family level, they're trying to sell a goat. Are the other people who might have bought that goat less able to buy it because they're spending more money for food, as well?

ANTHONY FAIOLA: It's a fascinating point. Not only that, not only that, but as you see more and more families struggling to get money in order to pay for these rising prices, there are more and more families that are selling their livestock, so the prices for livestock are going way down.

So, for instance, when this gentleman was trying to sell his goat in the marketplace for approximately $20, he was unable to find any takers at that price, basically because there are so many other goats available that nobody wants to pay the price for it.

Government intervention

RAY SUAREZ: You illustrate a country that would appear to be in a pretty tough spot. It's getting hotter and dryer. A lot of its land can't be farmed.

And so while globalization is making its food more expensive, if you took away all those things that you were talking about, biofuels and inflation and global, this sounds like a place that still would have a hard time feeding itself.

ANTHONY FAIOLA: It's a place that has had challenging years for most of its recent history. Drought has affected Mauritania. It's also been affected by floods. This is not an ideal geographically situated country. They've had challenges in the past.

But the difference now is that, before when they've encountered situations like this, it's always been for reasons of sort of natural disaster that they've had problems feeding themselves. But this is the first time that a country like Mauritania has been facing these problems based on market forces.

RAY SUAREZ: So it can't do internal things to change its circumstances?

ANTHONY FAIOLA: They're trying. They're trying. For instance, the government has declared this year their year of agriculture. They're attempting to double production there.

Some people feel that perhaps is an overly ambitious goal, especially for a country that is sort of girdled by the Sahara and has limited resources in order to increase its production. But they are trying to do that.

They're also, interestingly enough, moving to increase the role of the state in buying grains, in a way that it was prior to the 1990s when they adopted free market reforms, the idea being that government perhaps does need to have a greater role in sorting out the food market.

RAY SUAREZ: Anthony Faiola of the Washington Post, thanks for joining us.