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It's Not the Price that Causes Hunger

Robert Paarlberg

WELLESLEY, Massachusetts: International prices of rice, wheat and corn have risen sharply, setting off violent urban protests in roughly a dozen countries in Asia, Africa and Latin America. But is this a "world food crisis?"

It is certainly a troubling instance of price instability in international commodity markets, leading to social unrest among urban food-buyers. But we must be careful not to equate high crop prices with hunger around the world. Most of the world's hungry people do not use international food markets, and most of those who use these markets are not hungry.

International food markets, like international markets for everything else, are used primarily by the prosperous and secure, not the poor and vulnerable. In world corn markets, the biggest importer by far is Japan. Next comes the European Union. Next comes South Korea. Citizens in these countries are not underfed.

In the poor countries of Asia, rice is the most important staple, yet most Asian countries import very little rice. As recently as March, India was keeping imported rice out of the country by imposing a 70 percent duty.

Data on the actual incidence of malnutrition reveal that the regions of the world where people are most hungry, in South Asia and Sub-Saharan Africa, are those that depend least on imports from the world market. Hunger is caused in these countries not by high international food prices, but by local conditions, especially rural poverty linked to low productivity in farming.

When international prices are go up, the disposable income of some import-dependent urban dwellers is squeezed. But most of the actual hunger takes place in the villages and in the countryside, and it persists even when international prices are low.

When hunger is measured as a balanced index of calorie deficiency, prevalence of underweight children and mortality rates for children under five, we find that South Asia and sub-Saharan Africa in 2007 had hunger levels two times as high as in the developing countries of East Asia, four times as high as in Latin America, North Africa or the Middle East, and five times as high as in Eastern Europe and Central Asia.

The poor in South Asia and sub-Saharan Africa are hungry even though their connections to high-priced international food markets are quite weak.

In the poorest developing countries of Asia, where nearly 400 million people are hungry, international grain prices are hardly a factor, since imports supply only 4 percent of total consumption - even when world prices are low.

Similarly in sub-Saharan Africa, only about 16 percent of grain supplies have recently been imported, going mostly into the more prosperous cities rather than the impoverished countryside, with part arriving in the form of donated food aid rather than commercial purchases at world prices.

The region in Africa that depends on world markets most heavily is North Africa, where 50 percent of grain supplies are imported. Yet food consumption in North Africa is so high (average per capita energy consumption there is about 3,000 calories per day, comparable to most rich countries) that increased import prices may cause economic stress for urban consumers (and perhaps even street demonstrations) but little real hunger.

Import dependence is also high in Latin America (50 percent for some countries) but again high world prices will not mean large numbers of hungry people, because per capita GDP in this region is five times higher than in sub-Saharan Africa.

There is a severe food crisis among the poor in South Asia and sub-Saharan Africa, but it does not come from high world prices. Even in 2005 in sub-Saharan Africa, a year of low international crop prices, 23 out of 37 countries in the region consumed less than their nutritional requirements.
Africa's food crisis grows primarily out of the low productivity, year in and year out, of the 60 percent of all Africans who plant crops and graze animals for a living. The average African smallholder farmer is a woman who has no improved seeds, no nitrogen fertilizers, no irrigation and no veterinary medicine for her animals. Her crop yields are only one third as high as in the developing countries of Asia, and her average income is only $1 a day.

One third of these poor African farmers are malnourished. In part because of the added burden of climate change, the number of undernourished people in Africa is now expected to triple by 2080, whatever the level of prices on the world market.

The long-term solution to such problems is not lower international prices or more food aid, but larger investments in the productivity of farmers in Africa.

African governments essentially stopped making these investments 25 years ago, when the international donor community pulled back from supporting agricultural modernization in the developing world.

Over the past two decades the U.S. Agency for International Development has cut its support for agricultural science in Africa by 75 percent.

World Bank lending for agriculture has dropped from 30 percent of bank lending in 1978 to just 8 percent. In 2005, the World Bank president at the time, Paul Wolfowitz, told a business forum: "My institution has largely gotten out of the business of agriculture."

This may be changing, and if high world food prices help speed the change, so much the better.
In a recent interview, the new World Bank president, Robert Zoellick, said he planned to raise agricultural lending to Africa next year from $450 million to $800 million. Since 2006, the Bill and Melinda Gates Foundation has also begun to focus more of its grant-making on the needs of poor smallholder farmers in Africa through an Alliance for a Green Revolution in Africa (AGRA) chaired by Kofi Annan.

These are encouraging initiatives, because the productivity of farms in Africa - not food prices on the world market - should be the long-term focus.


Robert Paarlberg, professor of political science at Wellesley College, is the author of "Starved for Science: How Biotechnology is Being Kept out of Africa."

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