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Arab Revolt underlines the need for action to remedy high food prices

By Mike Stones , 21-Feb-2011

When Tunisian street vegetable vendor Mohamed Bouazizi chose to end his life in fiery suicide, no one could have foreseen the firestorm his death would unleash across the Arab world. But, two months later, as the Arab Revolt shows no sign of fading, the lessons to be drawn about food security are becoming abundantly clear.

Food prices are too important to be left to the free market. Unless governments and international agencies act promptly to regulate both food supplies and their prices, the world will pay a high price.

Bloodshed

That price will include political instability in the Arab world and beyond, bloodshed resulting from continuing street violence, political and religious extremism and perhaps even the spectre of mass economic migration from the Maghreb into Europe.

While the unrest sweeping the Arab world cannot be attributed solely to high food prices, they have undeniably played a significant part. Bouazizi’s suicide became the focal point for a growing numbers of ordinary Arabs who find it increasingly difficult to feed their families.

Food prices have also played a key role in the unrest witnessed in other Arab countries such as Algeria and Egypt.

In Algeria, last month food prices focused on price hikes in sugar, milk and flour, which had risen by up to 30 per cent in the first week of January. Protestors, shouting ‘bring us sugar’ broke into warehouses to steal sacks of flour, reported the Arab news service Al Jazeera.

In response, the Algerian government cut import duties and taxes in an attempt to reduce food prices and subsequently claimed it had “turned the page” on food riots.

In Egypt, the world’s biggest wheat importer, popular concern about the spiraling price of basic food commodities such as bread and tomatoes added to growing frustration with the repressive regime of Hosni Mubarak.

Meanwhile the dissent has spread to other Arab states including Jordan, Yemen, Bahrain and now Libya. This week, the son of Libyan leader Muammar Gaddafi, Saif al-Islam, delivered the chilling warning that the civil unrest in his country could lead to civil war.

Meanwhile, a recent report from UN Food and Agriculture Organisation (FOA) reported that global average food prices had reached their highest level since 2008, when millions were pushed to the brink of starvation.

These are not one-off events but a pattern of long term change linked to the inherent imbalance between food demand and supply.

Casting a long shadow is the threat of climate change and its impact on food prices. Food consultant Gwynne Dyer writing for Arab News pointed out: “The rule of thumb is that we lose about 10 percent of world food production for every rise of one degree C in average global temperature.”

Those food shortages, aggravated by the drive towards energy crops and increasing urbanization, will drive the price of food inexorably upward.

That means we can no longer trust Adam Smith’s “the invisible hand” of free market forces to regulate food markets. In the 21st century, the consequences of failure are simply too great to tolerate.

Turning Point

For that reason this Arab Revolt could mark a turning point in food policy: The universal acceptance of the need for government intervention in global food markets.

Already, commodity traders are noting that governments worldwide are increasing their role in global food markets and are boosting stockpiles and subsidies or imposing trade curbs. After witnessing regime change in Tunisia and Egypt, with Libya on the brink, which government wants to risk a similar fate?

Perhaps the legacy of Bouazizi’s ultimate protest will be global recognition that food market management is not an expensive luxury but vital for world stability.

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