This article, The New Economics of Hunger, is both fascinating and sobering, showing just how interconnected the world’s economy has become and how good environmentalist intentions and arcane investments are translating into actual human beings starving to death. Killer quote: “food was becoming the new gold.”
Here is how the current food crisis happened: The wheat harvest worldwide was mediocre, making for tight though sufficient supplies. But Argentina and Russia decided to ban exports so they could keep their crops for themselves. That meant less wheat on the world market, sending prices up.
Meanwhile, in the U.S., our farmers–who account for half of the world’s grain exports!–had shifted a significant amount of their production from wheat to corn to take advantage of the federally-subsidized ethanol market , which consumes nearly 25% of the current corn supply. So less American wheat meant still higher prices. Foreign buyers, facing the prospect of hunger at home, bid it still higher. Because of the falling value of the dollar, foreigners bought more and more, stockpiling supplies. In the meantime, the collapse of the mortgage markets sent investors into grain markets! Bidding prices even higher!
Now, food shortages and high prices are destabilizing governments in Haiti, Bangladesh, and a dozen other countries. And, after years of progress in fighting hunger in these countries, starvation is back.