Opinions Mon, 12 May 2008

Free Market Food Stupidity

I am yet to find Free Market Ideologues, who will dispute that using thousands of acres of food land for growing ethanol, does not rank as one of the craziest things that anyone can do except of course the free market. Yet this is exactly what is happening. Just think of it! You have land-producing food and you switch it to produce biofuel when you cannot feed yourself; who in their right mind will do this except the lunatic free market.

Of all the most stupid and alarming things that the free market can do including the violation of human rights, the concern it has caused food experts must surely rank as one of the worst.

Harry Wallop reported, “Food experts are particularly alarmed at the trend for biofuels - a supposedly environmentally friendly alternative to petrol - which is seeing thousands of acres of corn fields in America being grown for ethanol, instead of for food.”

Yet, only recently, it was reported that a Brazilian energy Company officially intends to build a plant to produce ethanol from sugar cane in central Ghana. If Brazilians think it is so wonderful to use agricultural land to produce ethanol, why do they not do it in Brazil?

All over the world, the prices of wheat, rice and corn have all jumped to an all-time high at varying degrees. The reasons given for these price rises are numerous and complex.

The price rises of these agricultural products are said to be the result of high demand for food and animal feed, poor harvests, low stockpiles of food, high incomes, the biofuel industry, increase in fuel prices, global warming, deforestation, loss of soil fertility, land degradation and the list goes on.

The predictions of what will happen to increasing prices are coming in from all angles of the globe including the FAO in Accra, the US Department of Agriculture, the World Food Programme, UN and Morgan Stanley. Others claim that the era of cheap food is over.

What we know for a fact for Ghana is that like all other developing countries we now have to spend a lot more on food imports. There are estimates developing countries spend up to 80% of their budget on food imports.

This rise in food imports has gone hand in hand with the rise in the global trade in foodstuffs to almost 60% from 1970-2001, after Nkrumah’s overthrow in 1966. The 115 percent growth in food imports by developing countries was therefore not an accident but a well-orchestrated strategic aim to ensure our food dependency.

Any black policy-maker should not find it difficult to understand that a country that depends so much on free market rice imports like Ghana will be hard hit by these developments.

The solution for these developments must fraudulently lie in the private sector if the private sector is the engine of economic growth, which of course it can never be. It never has been anywhere in the world.

The private sector will only be interested in solving our food problem if there is higher normal or supernormal profit compared to other avenues and food (rice) imports.

The costs of solving our rice (and food) import problem will include long-term (50-100 years) strategic planning, development of irrigation systems, funding agricultural research institutions, development of pragmatic and goal-oriented agricultural practices and a deep interest in citizens of Ghana.

However, the free market private sector has little interest in feeding Ghana by meeting the costs of this required investment.

Left to the Free Market, private sector ideologues and practitioners, whether indigenous or foreign, will rather continue playing their games by constructing amongst others psychotic multi-product quadratic programming models to investigate impacts of more trade liberalisation.

They will then continue to say that price rises are a short-term disequilibrium and that more trade liberalisation will lead to increased rice production, increase in trade volumes, increase in prices for all types of rice and, you bet, a significant welfare gain for most rice exporters and importers.

Nevertheless, in Ghana, trade liberalisation including the rice trade has led to the Majority of Ghanaians living in poverty. Many in former rice growing areas in the Northern Parts of Ghana reduced to beasts of burden in Accra and Kumasi especially.

The Ghana Government must now go back to the drawing board and take a second look at agriculture in Ghana as a whole if it has any interest in rescuing our food security from free market stupidity.

In the face of misplaced and stupid Free Market food policies in Ghana the diversion of land for food to ethanol is the least of the problems. Other more serious complementary problems are biofuel production causing homelessness, further food shortages and serious water shortage in Ghana.

Let us face it; if there is not enough food to feed the world, rich countries with money will be able to buy thousands of tons. The poor Ghanaian Majority will die from hunger and starvation.

If there are any Ghanaian farmers that believe that energy crops hold the key to a more profitable future, they had better realise that it is more efficient to make fuel out of straw and green waste than from sugar cane, jatropha, neem seed oil, soya beans, palm oil, coconut oil, palm kennel and cocoa “sweatings”.

Until a country such as Ghana is sufficient in food production, scarce agricultural land should never be used for the production of non-food crops. The most lunatic part of the Brazilian scheme is that the 150 million litres of expected ethanol production is destined for the Swedish Market. Why? So that others can be rich and some collaborating unpatriotic, Ghanaian Venture capitalist will be able to buy a house in London’s Kensington or a Hotel near Kotoka International Airport.

In Ghana, we have our equivalent of US’s Bill Lapp of Advanced Economic Solutions in the person of Dr. Kofi Dartey of the Crop Research Institute. He told Will Ross of the BBC that Ghana only produces 30% of its rice needs; that Ghana can produce hybrid and better yield variety; and that the only way forward is for Ghana to produce its own rice.

This is the anti-free market food policy that will ensure our strategic food security. If implemented, it will be sound economic governance.

Views expressed by the author(s) do not necessarily reflect those of GhanaHomePage.

Columnist: Agbodza, Kwami

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