Monday, August 11, 2008

Food Aid, Security, and Production

Here is an interesting article on food production patterns, development, and humanitarian food aid, courtesy of BBC: Just a brief commentary, below.

It's an interesting article, though it could be organized a little better (his metaphor with the second law is a bit forced). I think it should be pretty obvious that we should be using cash to purchase food locally to the greatest extent possible, so as to build local supply links - the problem is identifying the "greatest extent possible". At a certain point, either approach can radically distort supply/demand. Shipping in too much food gluts supply and creates informal markets for food aid, harming producers. By the same token, purchasing too much food decreases supply, and while it helps local producers with the surplus to sell (typically better-off anyway), it can spike the cost of purchasing food for consumers - even as some of that food is distributed to the "worst off". In a country where most of the population is fairly destitute, that can be a problem in itself.

My personal take is that these problems are really only solved by diversifying the labor base and moving up the value chain - which includes industrialization, though it would be nice if it was in a more eco-friendly and not debt-financed manner. That type of diversification is needed to generate the type of demand necessary for farmers to be financially sustainable - at least in the current environment. The rest is just an attempted band-aid on a structural problem: it can alleviate suffering, but doesn't address the root causes. Another thing that would be interesting to see is what would happen to global food chains if most/all countries were industrialized and diversified - would production diversify or become increasingly concentrated (probably depends on legal/political factors as much as economic, but still interesting).