When the leaders of the G8 sit down to dinner in Muskoka this week, it will be to a menu largely composed of local, Ontario produce, Canadian beef and trout pulled from the waters Georgian Bay. While no doubt delicious, it's ironic that they'll be eating food that's produced within driving distance of their resort's golf course. That's because when the G8 bigwigs discuss the vital question of food security, they'll utter sober pronouncements on the efficacy of the global marketplace, and on the power of international agricultural exports to stamp out poverty in the developing world.
On May 20th, the White House unveiled an initiative called "Feed the Future," promising, among other good deeds, to help save the 3.5 million children who die each year of malnutrition. President Obama pledged $3.5 billion for the crusade. But instead of frittering away the cash on the customary panacea of US grain shipments-and so fueling the developing world's addiction to Western aid-the plan is inspired by the old Chinese saw about teaching starving men how to fish instead of handing out free herrings. So the initiative hits all the right keywords about "empowerment," "partnership," and "sustainability." If its promises are kept, the program will fund landscapes tilled by independent women farmers with secure credit lines and well-schooled children.
To achieve this dream, though, Feed the Future is relying on the marketplace. The policy's foremost goal is of "accelerating inclusive agricultural sector growth," which means it expects private industry to help lift the fortunes of the world's hungriest people. To do this, information flow and transparency between buyers and sellers would be crucial, and Feed the Future trusts "producer organization" and "commercial commodity exchanges" to keep everyone honest about costs and prices. The idea is for a humming private sector to improve the "nutritional status" of the poor.
It's a wonderful goal. One of the darkest blots on the developed world's conscience is the coexistence of world hunger with an obesity pandemic, of rotting grain surpluses with starved corpses in an African ditch. And Feed the Future has correctly targeted economics, not insufficient crops, as the source of the problem. There's enough food in the world to feed everyone. The problem is that the poor can't afford it.
In theory, a transparent market bolstered by fast communications and transportation should keep food prices low and wages respectable. When harvests are plentiful, a phone line and a solid road are all you need to sell a surplus, enrich a farmer, feed a buyer, and prove Adam Smith right. But when harvests fail, this theory wilts.
For example, political scientist Mike Davis tells us that, in British-ruled India in the 19th-century, Lord Elgin (he of the marbles), helped "famine proof" poor regions by building telegraph and railway lines so that news of hunger could quickly reach commercial centers and food could be shuttled into the blighted regions. But when a drought actually struck, this modern infrastructure actually made things worse. Telegraph lines informed grain traders where to sell for the highest price, but this turned out to be in the wealthiest markets, not in the neediest. Trains then delivered food away from the poor to the rich. During an 1896 famine, one official in the Godavari region wrote that, despite a fine harvest, grain was unaffordable because prices "depend almost entirely on the conditions in other parts of India."
Our telegraph lines are now fiberoptics, but marketplace behavior is eternal. Unless restraints are in place, food will go to the highest bidder. During the 2008 food crisis, a dangerous combination of financial speculation, high demand from the emerging biofuel industry, and a drought in Australia caused food prices to skyrocket. The planet added 75 million people to the roster of the undernourished.
Another failure of market solutions is ecological. An agricultural economy flourishes when farmers specialize in producing the crop they can raise best. This means that good wheat-growing land will often only grow wheat; a good natural vineyard will only make wine. While this is sound economics, it's terrible ecology. Ecosystems are most robust when they're diverse. When you cram too many members of the same species into a small space, they're more liable to succumb to an unlucky bug, fungus or weather pattern. The food trade creates landscapes that are vulnerable to environmental ills. In the face of climate change, this could prove disastrous.
Feed the Future is a laudable, ambitious program whose goals are impeccably worthy. But the mechanism of the marketplace isn't reliable enough to feed the world's one billion hungry people. Far from creating a happy outcome of vibrant, local economies and empowered small farmers, the unthinking resort to free trade principles could make the situation worse. In the face of starvation, dogma should yield to reality.