Monday, April 14, 2008



U.S. policy is on a diet, stay tuned.



BY Terry Bankert 4/14//08
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The head of the International Monetary Fund is warning that spikes in food costs around the world could lead to starvation and the crumbling of governments.[I] you think people are not bitter...heres what we fear is coming..and we are bitter about it..we will pray for help and grab our guns.[trb]

The rapid rise in food prices could push 100 million people in poor countries deeper into poverty, World Bank head, Robert Zoellick, has said. [b]

DOUBLING OF FOOD PRICES "Based on a rough analysis, we estimate that a doubling of food prices over the last three years could potentially push 100 million people in low-income countries deeper into poverty," Mr Zoellick said.[b]

RESULTING STARVATION His warning follows that from the leader of the International Monetary Fund, who said hundreds of thousands of people were at risk of starvation. [b]

OUR NEXT PRESIDENT WILL HAVE TO DEAL WITH INTERNATIONAL FOOD RIOTS Finance ministers gathered this weekend to grapple with the global financial crisis also struggled with a problem that has plagued the world periodically since before the time of the Pharaohs: food shortages.[w]

POLITICAL TURMOIL COMING The world’s economic ministers declared on Sunday that shortages and skyrocketing prices for food posed a potentially greater threat to economic and political stability than the turmoil in capital markets.[ny]

GLOBAL SOCIAL UNREST TO RESULT "It is becoming starker by the day that unless we act fast for a global consensus on the price spiral, the social unrest induced by food prices in several countries will conflagrate into a global contagion, leaving no country -- developed or otherwise -- unscathed," he said.[r]

83% INCREASE PUSHED BY COMMODITY PRICES Surging commodity prices have pushed up global food prices 83% in the past three years, according to the World Bank -- putting huge stress on some of the world's poorest nations. Even as the ministers met, Haiti's Prime Minister Jacques Edouard Alexis was resigning after a week in which that tiny country's capital was racked by rioting over higher prices for staples like rice and beans.[w]

FAULT PARTIUALLY GIVEN TO US ECONOMY AND BIO FUEL POLICY The ministers, conferring in the shadow of a slumping American economy that threatens to pull down the economies of other countries, turned their attention to the food crisis and called on the wealthiest countries to fulfill pledges to help prevent starvation and disorder in Asia, Africa and Latin America.[ny] Prices of wheat and rice have more than doubled in the past year, with rice — a staple in Asian diets — surging by 75 percent in the past two months, according to the World Bank, the IMF's sister organization.[I] Food prices have risen sharply in recent months, driven by increased demand, poor weather in some countries that has ruined crops and an increase in the use of land to grow crops for transport fuels. [b] In just two months, rice prices have closed in on historic highs, rising by around 75 percent globally and by even more in some markets. Meanwhile, the cost of wheat has climbed by 120 percent over the past year, more than doubling the price of a loaf of bread in most poor countries, the World Bank said.[r]

POLITICAL INSTABILITY..WHEN WILL IT HIT HOME? World Bank and I.M.F. officials noted that political instability had already hit countries as disparate as Haiti, Egypt, the Philippines and Indonesia because of food shortages, forcing some countries to limit food exports.[NY] The IMF is often the lender of last resort for countries in trouble.[I]

HATI VIOLENCE In Haiti, protests last week turned violent, leading to the deaths of five people and the fall of the government. [b]

FOOD EXPORT RESTRICTION IN INDIA AND OTHERS Restrictions on rice exports have been put in place in major producing countries such as India, China, Vietnam and Egypt. [b] Importers such as Bangladesh, the Philippines and Afghanistan have been hit hard. [b]

AGRICULTURE PRICES ARE UP-RIOTS A RESULT? com·mod·i·ty - Pronunciation: \kə?-ˈ'mä-də?-tēe\ Function: noun Inflected Form(s): plural com·mod·i·ties Etymology: Middle English commoditee, from Anglo-French commoditee, from Latin commoditat-, commoditas, from commodus Date: 15th century [m] 1: an economic good: as a: a product of agriculture or mining b: an article of commerce especially when delivered for shipment c: a mass-produced unspecialized product [m]

RIOTING STARTING Rioting in response to soaring food prices recently has broken out in Egypt, Cameroon, Ivory Coast, Senegal and Ethiopia. In Pakistan and Thailand, army troops have been deployed to deter food theft from fields and warehouses. World Bank President Robert Zoellick warned in a recent speech that 33 countries are at risk of social upheaval because of rising food prices. Those could include Indonesia, Yemen, Ghana, Uzbekistan and the Philippines. In countries where buying food requires half to three-quarters of a poor person's income, "there is no margin for survival," he said.[w]

RIOT-2 a: public violence, tumult, or disorder b: a violent public disorder; specifically : a tumultuous disturbance of the public peace by three or more persons assembled together and acting with a common intent[M2]

PEOPLE RIOT COUNTRIES GO TO WAR Dominique Strauss-Kahn, the managing director of the International Monetary Fund, said the food crisis posed questions about the survivability of democracy and political regimes. “As we know in the past, sometimes those questions lead to war,” he said. “We now need to devote 100 percent of our time to these questions.”[NY]

U.S. POLICY AT FAULT. “ Pushing fuel alternative” or we get fuel you starve![trb] Many policy makers at the weekend meetings of the International Monetary Fund and World Bank agreed that the problem is severe. Among other targets, they singled out U.S. policies pushing corn-based ethanol and other biofuels as deepening the woes.[w]

STOP GLOBAL WARMING STARVE A CHILD Some ministers from poor countries, for example, are growing impatient with the way the West is addressing global warming by subsidizing and encouraging conversion of corn, sugar cane and other food products into substitutes for oil. The shift is helping to drive up prices, they say.[NY]

FUEL POLICY CRIMES AGAINST HUMANITY Mr. Strauss-Kahn said he had heard from many financial officials this weekend that the West’s focus on fuel, at the expense of food, was a “crime against humanity.” Though he noted that the I.M.F. is primarily a monetary and financial agency, he said it would try to “review its tools” to help countries pay for food imports.[NY]

DIVERTING FOOD TO BIO FUEL IS A CRIME ITS EVEN APPALLING SAY THEIR TURKS WHO HAVE MASSACRED MILLION OF PEOPLE IN THE LAST 200 YEARS "When millions of people are going hungry, it's a crime against humanity that food should be diverted to biofuels," said India's finance minister, Palaniappan Chidambaram, in an interview. Turkey's finance minister, Mehmet Simsek, said the use of food for biofuels is "appalling."[w]

THE WORLD IS WARNING U.S. The World Bank has warned that the rise in food prices is not a temporary phenomenon and has said prices are likely to remain elevated this year and next before moving lower, and that they will likely remain above 2004 levels through 2015.[R] One of the biggest factors behind the sharp rise in food prices is the increased use of crops for biofuels as an alternative energy source. Almost all of the increase in global corn production from 2004 to 2007 went to biofuels in the United States, where farmers are heavily subsidized.[R]

WE HAVE A COUNCIL ON ENVIRONMENTAL QUALITY? IN THE BUSH ADMINISTRATION? ....DARN! OH...THESE GUYS BLAME IT ON CHINA...THERE GOES THAT DALA AGAIN. James Connaughton, chairman of the White House's council on environmental quality, said biofuels are only one contributor to rising food prices. Rising prices for energy and electricity also contribute, as does strong demand for food from big developing countries like China.[w]

HALF YOUR DAILY INCOME TO FEED YOU FAMILY But beyond taking shots at the U.S., there was little agreement this weekend on what should be done. Mr. Zoellick pushed the ministers to focus on the food issue in a dramatic Thursday news conference at which he held up a 2-kilogram (4.4-pound) bag of rice, which he said would now cost poor families in Bangladesh half their daily income. He kept up the pressure over the weekend. In a Sunday news briefing, he said, "We have to put our money where our mouth is now -- so that we can put food into hungry mouths."[w]

THEY TALK THE TALK BUT DO NOT WALK THE WALK But the weekend's meeting produced few concrete results. Mr. Zoellick recently urged rich nations to contribute another $500 million to the United Nation's World Food Program, but he said that the U.N. has received commitments for only about half the money.[w] Integrated Response [w] Meanwhile, the IMF's board of governors -- basically, the world's finance ministers, who run both the IMF and World Bank -- urged the IMF to work with the World Bank for "an integrated response through policy advice and financial support."[w]

RICH COUNTRIES CALLED TO ACTION. DOES THAT STILL INCLUDE THE U.S.? On Sunday, the committee that oversees the World Bank noted that "large groups of poor people are severely affected by high food and energy prices across the developing world." The committee echoed the IMF committee's call for "timely policy and financial support to vulnerable countries" and urged rich countries to be more generous in "immediate support for countries most affected by the high food prices."[w]

WORLD BANK: LEND,RAMP, CUT US SUBSIDIES, BOOST PRICES FOR POOR COUNTRIES! The World Bank plans to nearly double its agricultural lending to Africa next year to $800 million, and is urging members to ramp up relief for hard-pressed nations. The World Bank, IMF and big industrialized nations also are pushing for the completion of the Doha global trade talks, though cutting food subsidies in the U.S. and Europe under a trade deal would boost prices of food for impoverished importing nations.[w]

G7:NEED POLICY Last week, British Prime Minister Gordon Brown urged the G7 nations -- the U.S., Britain, Canada, France, Germany, Italy and Japan -- to develop a comprehensive strategy for the food problem, encompassing trade, agricultural productivity, technology, biofuels and short-term aid for poor countries. In the past, Britain has taken the lead in pushing the G7 to write off the debts of the world's poorest nations.[w]

HUNGRY PEOPLE SEE FOOD THEY CANNOT AFFORD The situation in Haiti underscored some of the problems afflicting the world's poorest countries. Haiti has enough food in the marketplace to feed its populace, but prices have increased beyond the means of many of the urban poor to pay for it, said Michael Hess, an administrator in the U.S. Agency for International Development's Bureau for Democracy, Conflict and Humanitarian Assistance. "People are making two bucks a day," he said. "And we're seeing food prices go up around the world."[w] Wave of Protectionism[W]

HERE A UNIQUE THOUGHT: STOP COMMERCIALLY AND RESIDENTIALLY CONVERTING FARM LAND In the Philippines, the world's biggest importer of rice, a shortage of the grain has become acute. The government is considering a moratorium on converting agricultural land to construction of housing developments and golf courses. [W] STOP SUPER SIZING The government also is urging fast-food restaurants to offer half-portions of rice to slash the country's rice bill.[w]

HERE WE GO THE LIB’S AND THEIR PROTECTIONISM SAY THE REPUB’S Aggravating the problem, in some countries food inflation has prompted a wave of protectionism. Countries usually impose trade barriers to imports to protect local industries and try to boost exports. But food-trade protectionism works the opposite way. Recently at least a dozen of 58 countries surveyed by the World Bank have reduced tariffs to food imports and erected barriers to exports in hopes of restraining food prices domestically and moving toward "self-sufficiency."[w]

WHY IS THIS NOT JUST AN INDIA PROBLEM? India, home to more than half the world's hungry, is restricting grain exports, including a ban on the export of non-basmati rice. Taxes on edible oils, corn and butter have been decreased or eliminated.[w] Indian Finance Minister Palaniappan Chidambaram said rising food and energy costs threatened to stir more social unrest.[r]

WELL INCLUDE EGYPT ALSO... DID YOU KNOW THEY HAVE BREAD LINES Egypt similarly halted rice exports for six months as of April 1. The price of cereals and bread there has climbed by nearly 50% over the past 12 months. Eleven people have died in the past two months in incidents related to lengthening bread lines. The shortage compelled President Hosni Mubarak to order the army to bake additional loaves.[w]

RESTRICT FREE TRADE AND PRICES GO UP The global effect of export barriers, however, is to drive food prices even higher than they would be otherwise. Such policies "distort global prices," said Mr. Simsek, the Turkish finance minister, in an interview. Rather than erect barriers, he said, Turkey plans to pick up the pace of constructing irrigation canals near dams in Anatolia, in southeastern Turkey.[w] JUST INCREASE SUPPLY Arvind Subramanian, a former senior IMF researcher, said that when countries adopt restrictive trade policies regarding food, "it becomes a bizarre kind of beggar-thy-neighbor. You're not trying to sell more to the other guy; you're trying to keep more in your own country."[w]

WHAT LAND FOR GAS DEALS -UKRAINIAN LEADERSHIP With the international financial institutions working on a slow track, countries have been cutting their own deals. Ukrainian President Viktor Yushchenko said on Tuesday that he had agreed to let Libya grow wheat on 247,000 acres of land in the Ukraine. In exchange, Libya promised to include the former Soviet republic in construction and gas deals.[w]

DEALS BEING CUT. WITHOUT U.S. Brazil recently invited Egypt's minister of commerce to discuss a possible trade deal which would have a strong agriculture component. China also cut its first free-trade deal with a rich country, picking New Zealand, a major food exporter, and is talking about a pact with Australia, another big agricultural producer.[w]

UGANDA HAS TOO MUCH FOOD..HEY ...CALL HAITI Meanwhile, Uganda plans to sell more coffee, milk and bananas to India. "Our problem is too much food and little market," Uganda President Yoweri Kaguta Museveni told reporters, according to news reports,[w]

NO TO CONSUMER (YOU) SUBSIDIES SAYS THE BUSH ADMINISTRATION About 18 of the countries sampled by the World Bank also are boosting consumer subsidies and instituting price controls. That prompted a warning from U.S. Treasury Secretary Henry Paulson to "resist the temptation of price controls and consumption subsidies that are generally not effective and efficient methods of protecting vulnerable groups." He said, "They tend to create fiscal burdens and economic distortions while often providing aid to higher-income consumers or commercial interests other than the intended beneficiaries."[w] Better-Targeted Subsidies[W]

FOOD THE NEW MONEY Instead, the World Bank's Mr. Zoellick urged countries to look at better-targeted subsidies -- such as providing food in exchange for work, or increasing school-lunch programs for poor families, so that children can take food home to their families.[w]

U.S. POLICY ON BIO FUELS HURTS THE HUNGRY During informal conversations and interviews, ministers mainly agreed that the U.S. policies on biofuels were especially harmful. U.S. ethanol is made from corn, which, ministers said, could be exported to feed the hungry, and benefitted from tariffs that block Brazilian ethanol, which is produced much more efficiently from sugar cane.[w]

GRASS ANYONE- PUT THAT IN YOUR TANK AND LET YOUR ENGINE SMOKE IT! The White House's Mr. Connaughton said the U.S. is working on developing "second generation" biofuels that would use varieties of grass or agricultural wastes -- not food -- as source material. "That's where we need to get to go," he said.[w]

SUGAR IS THE ANSWER The World Bank also has blamed the boom in biofuels for the rise in global food prices. That has put Mr. Zoellick in a ticklish position. Before taking his job at the World Bank, he was U.S. Trade Representative, and defended U.S. agricultural positions. In his Thursday news briefing, he didn't mention the U.S. by name, but he praised sugar-based ethanol of the sort made in Brazil and questioned whether tariffs to block the fuel -- such as the U.S. uses -- make "economic sense."[w]

START YOUR HUMMER AND STARVE A CHILD! “Every country sitting around the table was focused on it,” [FOOD POLICY] Mr. Paulson said of the Group of Seven’s concern about food, adding that Mr. Zoellick “made an impassioned plea.” But Treasury officials said they had no details of what aid the United States was prepared to commit.[NY]

STARVATION, WAR “,PESTILENCE ?”...JUST WHEN WILL THIS GET OUR ATTENTION On Saturday, the head of the IMF, Dominique Strauss-Kahn, warned of mass starvation and other dire consequences if food prices continue to rise sharply. [b] "As we know, learning from the past, those kind of questions sometimes end in war," he said.[b] Despite heavy security precautions around the IMF and World Bank headquarters in downtown Washington, near the White House, there were few demonstrations.[I] This time![trb]

Posted here by Terry Bankert ...
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[w] Wall Street Journal
[M] Merriam- Webster-
[b] BBC
[NY] The New York Times
[TRB] Comments of Terry Bankert to include block headlines
[I] International Herald Tribune
[r] Reuters-Africa


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