Tuesday, July 08, 2008

The World Bank and the Food Crisis

Apparently, the World Bank believes that our favorite “green” strategy of converting farmland from food to fuel production has raised food prices by 75%.

Given the entire western worlds emphasis on subsidizing “big agriculture”, in addition to the biofuel boondoggle, it’s no surprise that there are market disclocations, shortages, and price increases.

We might well do better to phase out our farm subsidies, lower our trade barriers to imported food, and generate additional markets for poor countries.

Without having read the study or done any analysis on the topic whatsoever, 75% strikes me as too high. I’d expect the impact to be significant, but not in that class.

Certainly, this bit calls the article into question:

“Senior development sources believe the report, completed in April, has not been published to avoid embarrassing President George Bush.

‘It would put the World Bank in a political hot-spot with the White House,’ said one yesterday.”

After the Wolfowitz business, I find it hard to believe that anybody at the World Bank has any concern over embarrassing George Bush. More likely that there would be a stampede to do so, with several being injured in the crush.