The recent dramatic rise of food prices reflects the worst agricultural crisis of the last 30 years, especially for developing countries whose citizens inevitably spend a larger portion of their incomes for basic needs. The list of countries facing social unrest as a result is long and growing: Cameroon, Egypt, Niger, Somalia, Ethiopia, Mauritania, Bangladesh, Burkina Faso, Haiti, Indonesia, Mexico, Argentina, and the Philippines.

Consequences of these price increases are also affecting the United States, where rice is beginning to be rationed, Europe, where the price of bread in the last six months has grown 17%, and Japan, where butter has disappeared from markets and inflation is appearing for the first time in 10 years.

Many people in the developed world know that the price of oil has risen from $88 to over $114 a barrel in the last six months. But the price of corn, wheat, rice, milk and soybeans have increased even more so; corn and wheat have shot up 70% and rice is up 141% compared to January 2007.

This global crisis is affecting approximately a billion people around the world and the World Bank estimates that it could lead 100 million people into poverty, not to mention starvation.

The causes of this phenomenon are multiple and inter-related. Most economic analysts and agricultural experts have highlighted six main root causes to this emergency:

  • In the United States subsidies given to farmers that grow corn used for the production of biofuel (ethanol). A quarter of the national crop production is now devoted to the bio-fuel industry.

  • In Europe, the Common Agriculture Policy (CAP) which pays farmers to restrict their output and locks out agricultural products from outside the European Union.
  • In Australia, a terrible draught that has lasted 2 years and compromised 60% of the agricultural production.
  • Increasing demand for rice, wheat, meat in China and India
  • Decrease of cultivated land especially in China and India, where agricultural districts are transformed in industrial areas.
  • Increase in the price of fuel which has resulted in an increase in the price of fertilizers.

The market perversions caused by government subsidies for bio-fuel production and the export restrictions mandated by governments in the name of “food security” are particularly damaging and add to what we already know about the law of unintended consequences.

It is interesting and perhaps even surprising to note how the Catholic Church is reacting to this issue, given the Church’s significant role in many developing countries and its presence in many international and humanitarian activities.

Despite heavy lobbying from environmental activists, the Church has given priority to the needs of the human person and his integral development. In practice, this has meant Vatican criticism of bio-fuel subsidies and Vatican support for biotechnology that increases agricultural yields such as the use of genetically modified organisms.

For example, at a recent FAO conference in Brazil, the Holy See’s representative, Msgr. Renato Volante, said “bio-fuel is a serious threat to the natural right of every individual to proper nutrition, causing food riots and an increase in worldwide poverty.” The bishop of San Marino, Luigi Negri, hosted an April 22 event that highlighted the potential of GMOs and new seed specimens that are already being used by 12 million farmers worldwide.And Archbishop Silvano Tomasi the Holy See’s Permanent Observer to the United Nations in Geneva, has blamed poor distribution, rather than the lack of food, for the crisis.

Curiously enough, Catholic non-governmental organizations (NGOs) such as Caritas Internationalis, Sant’Egidio and FOCSIV seem to be behind the curve when compared to the Church hierarchy. The NGOs have generally clamored for more foreign aid but have not addressed core issues as bio-fuels and biotechnology.

Even secular NGOs such as Oxfam and CARE are beating them to the punch and have even called for the elimination of trade-distorting subsidies, export restrictions and price controls.

It is difficult to generalize about such as complex international problem and about a Church of 1 billion people. But it is a shame that Catholic NGOs need to catch up not only with their fellow Catholics as well as their fellow humanitarians.

  • Clare Krishan

    My retort to Georgetown Prof Patrick Deneen “What I saw in America” hilites the fallacy of reasoning in many Catholic intellectual circles of recent years, most egregiously in life issues in utero, but no less momentous for those surviving to birth, in economics:

    http://patrickdeneen.blogspot.com/2008/04/confirmative-action.html

    The Western capitalist system is based on logical positivist denial of apriorism, so dangerous it causes regular starvation on a massive scale

    see expat American Catholic College Prof Joshua Snyder commenting in Korea:
    http://www.lewrockwell.com/snyder-joshua/snyder-joshua14.html “Don’t blame the market for the global food crisis”

    and EVERYONE (including sadly ACTON) omits the very true cause: usurious handling of irregular deposit money in the desperately dysfunctional banking system and system of international trade, that fails to adequately insure its participants from the moral hazards of the theory of value of the so-called “diamond-water paradox,” which economist Adam Smith pondered but was unable to solve.

    See translation into English of Jesús Huerta de Soto’s book ” Dinero, Crédito bancario y ciclos económicos” (Money, Bank Credit and economic Cycles) here,

    http://mises.org/books/desoto.pdf

    And lest some secularist wants to toot his horn on separation of Church and State, its not the Pope’s fault!

    Benedicts World Youth Day Palm Sunday homily just last month drew attention to the faithful on “the law corrupted” in his discourse on the fiduciary trust issues Jesus faced at the temple, the ‘spelunca latronum’ of populist political hissyfit fame:

    “Instead, commerce was prevailing – dealings legalized by the competent authority which, in its turn, profited from the merchants’ earnings. The merchants acted correctly, complying with the law in force, but the law itself was corrupt. “Covetousness… is idolatry”, the Letter to the Colossians says (3: 5). This was the idolatry Jesus came up against in the face of which he cites Isaiah: “My house shall be called a house of prayer” (Mt 21: 13; cf. Is 56: 7), and Jeremiah: “But you make it a den of robbers” (Mt 21: 13; cf. Jer 7: 11). Against the wrongly interpreted order, Jesus with his prophetic gesture defends the true order which is found in the Law and the Prophets.”

    http://www.vatican.va/holy_father/benedict_xvi/homilies/2008/documents/hf_ben-xvi_hom_20080316_palm-sunday_en.html

    Sadly too many wealthy and well meaning Catholics have compromised so completely with the system of spoils, as dutiful donor or supplicant NGO, they fail to see the wood for the trees…

    All the while Mr Bernanke threatens to shave another 25 basis points on the sub-inflation rate interest he subsidizes his client banks with as lender of last resort – sending capital flight into warp speed away from production assets into commodities, classic inflationary interventionism — a glut of currency competing for lean resources drives the prices ARTIFICIALLY sky high… if I wasn’t a reasonable post VaticanII baby, I’d say its a mortal sin, “our chickens are coming home to roost” but we “free traders” are hip and politically correct such jeremiads aren’t kosher, right? (or dare I say Rev. Wright?)

    We need

    virtuous OPEN and FAIR TRADE with a ‘caring hand’ not

    vicious free trade with the ‘invisible hand’

  • http://www.caritas.org.au Tim O’Connor

    thanks paola for this challenging post.

    i would like to draw to your attention a couple of interventions Caritas Australia has made in bringing the crisis to our attention here in Australia.

    http://www.caritas.org.au/AM/Template.cfm?Section=Media_releases&TEMPLATE=/CM/ContentDisplay.cfm&CONTENTID=3803

    http://www.ozspirit.info

    and some news article that generated from it;
    http://www.smh.com.au/news/world/we-fill-our-tanks-while-they-cant-fill-their-stomachs/2008/04/18/1208025479320.html and
    http://www.theage.com.au/news/in-depth/the-changing-face-of-hunger/2008/04/18/1208025469920.html

    we were also active in getting the australian government moving on this, they have donated $30 million today to the food crisis.

    regards

    tim

  • Paola Fantini

    Thank you Tim for your comment, it is great to know that Caritas in Australia is warning the government on this important topic. Sadly enough, I cannot say the same for Italy and most of Europe. However, Caritas Luxembourg has attempted to call for a review of European directive on bio-fuels, lets hope this may lead to a change soon!

    http://www.caritas-europa.org/code/en/hp.asp

    regards,
    Paola

  • http://www.Catholic-animals.org Jan Fredericks

    Just wanted to introduce Catholic Concern for Animals.
    As you know, factory farming contributes more than cars and trucks to pollution. Please watch “A Sacred Duty” and “Christian Concern for All God’s Creatures”.
    Jan

  • http://www.theactivistsonline.com/why-now-is-the-right-time-for-the-catholic-ngo-s-to-jump-onboard-67.html The Activists Online

    I was looking for pictures for this post and the only one that didn’t leave me completely speachless was this plain picture of long grain rice.
    Experiment for a moment. Go to Google images, write food crisis in the search window and see if the p…

  • http://www.theactivistsonline.com/ Constance

    Looking at pictures of starving children, all this seems like to little to late.
    But as they say – better late then never.