OTTAWA — Some of the world's biggest grain exporters barred their farmers from selling in global markets yesterday, exacerbating the food price crisis for poorer nations that import their food and highlighting the failure of governments to nurture stronger rules for agricultural trade.
Rice and corn prices soared to records on U.S. markets and wheat jumped to its highest in a week after Kazakhstan, the world's fifth-largest wheat exporter, and Indonesia, a major rice producer, became the latest nations to impose export bans. The price increases further inflated global food costs that already had surged 48 per cent since the end of 2006.
The latest moves highlight the difficulty of solving a problem that has its roots in years of trade policy indecision, the push by richer nations to produce more fuel from food crops, growing demand from developing countries such as China, and Wall Street investors who see a money-making opportunity in surging commodity demand.
“Business as usual is no longer an option,” Paris-based UNESCO says in a sweeping report on the world agriculture system that was three years in the making and released yesterday. “There is a recognition that the mounting crisis in food security is of a different complexity and potentially different magnitude than the one of the 1960s.”
Kazakhstan and Indonesia are trying to put a lid on food inflation to avoid the riots that have beset countries such as Egypt and Haiti.
While their policies may ease tensions at home, they threaten to make things worse for poorer countries that don't have the luxury of good agricultural land and temperate climates to feed their populations.
“If a country is a net food exporter, or has sufficient production, and puts up restrictions, it could lead to lower prices in that country, but it takes food off the international market,” Jennifer Clapp, an expert in international governance at the University of Waterloo, said yesterday in an e-mail from a conference in Kansas City, Mo., dealing with international food aid.
Kazakhstan and Indonesia are hardly alone in seeking to prevent their farmers from trying to profit from sky-high international prices rather selling in local markets. Russia, Ukraine and Argentina are among other nations that have taken similar steps.
Higher costs for oil and food burst the budget of the United Nation's World Food Program, forcing the UN to ask for an extra $500-million by May 1 to maintain programs that will feed 73 million people in 78 countries this year.
Policy makers representing the 185 nations that make up the IMF and the World Bank pledged to do something about the crisis and weekend meetings, but left Washington with no definitive responses.
U.S. President George W. Bush on Monday offered $200-million (U.S.) in emergency food aid, following a challenge by World Bank president Robert Zoellick on the weekend for donor nations to put “our money where our mouth is.”
Canada, too, plans to meet the call to help alleviate the pain of higher food prices on the world's poor, Beverly Oda, Minister of International Co-operation, said yesterday.
The complexity of the issue is slowing Canada's response.
Ms. Oda said her Conservative government is still unsure how much it will commit to the UN's call for food aid. Canada came through on emergency calls for food assistance in Afghanistan and Haiti earlier this year, Ms. Oda said.
“Our intent is to be aware that the May 1 deadline is there and so we're working towards trying to reflect that deadline set out,” Ms. Oda, who represented Canada at the World Bank meeting Sunday, said in an interview.
“When we make commitments, we want to make sure we've done the work behind the commitments so that the commitment will be truly funded and fulfilled.”
