This week, people have been rioting in Haiti over food prices. The Associated Press gives a good idea of why: “Food prices, which have risen 40 percent on average since mid-2007, are causing unrest around the world. But nowhere do they pose a greater threat to democracy than in Haiti, one of the world’s poorest countries where in the best of times most people struggle to fill their bellies.”
Why is this happening now? Paul Krugman, a columnist for the New York Times, offered some insight: The rising wealth of China, which has more people wanting to eat more and better than ever before; and along with China’s increasing food demands, that country’s rising need for oil, that pushes up prices; bad harvests, especially in Australia where a drought continues (and could be related to climate change); the switch to biofuels, like ethanol, that takes food out of mouths and puts it in gas tanks; and governments failing to stockpile grains like they have in the past.
What might all of it mean?
“Cheap food, like cheap oil, could be a thing of the past,” Mr. Krugman wrote.
In the Federation, the government is aware of what’s going on and has acted. A release from the Communications Unit of the Office the Prime Minister includes the following:
“Minister of State for Information, Sen. the Hon. Nigel Carty said Cabinet removed the consumption tax on chicken, cheese, pasta, canned corn beef, Raisin bran corn flakes, sardines, soybean oil, tinned tuna, Vienna sausage, margarine, tomato ketchup and diapers for babies and adults.
“’The consumption tax usually applied to these products ranges from 15% to 22.5%, hence the removal of the consumption tax will yield significant savings for consumers. Some of these items will also very shortly be subjected to a further reduction in price through the removal of another tax called the CET or the Common External Tariff,’ said Minister Carty.”
This move is going to give much-needed relief to consumers, at least in the short run. In the longer term, it’s unclear how much impact this will have on government revenues, but as it has been said before: people don’t eat it the long run, they eat every day.
The best solution to the question of food for the Federation cannot be implemented overnight. That solution is food self-sufficiency, or at the minimum, maximizing food domestic production to minimize costly imports. Some steps have been made toward this, like increasing crop acres and building up the fishing industry. All of these steps are incremental.
We urge the private and public agricultural sectors to become even more active in food production. High-yield farming methods, food processing plants and storage facilities do not become reality with the wave of a magic wand. It will take long-range planning, investment and a work force willing to produce food to make this a reality.
But every day lost increases the vulnerability of the Federation in a world where cheap food may be on the way out.
