WHEAT OR WITHOUT IT

Little fuss has been made of the loss of a significant part of the crops in Russia due to the weather conditions which led to an especially virulent fire season. Not much has been heard of the ban imposed on exports of grain for the time being. Even when wheat prices started to climb and Pakistan felt the first symptoms of the scarce, hardly any notice has been taken. And yet, the current financial crisis was partially triggered by the rise in the price of food following a devious calculus which is also a prime example of globalization. Fuel prices begun to rise a little less than a decade ago as demand soared in nations like China, whose economy swallowed fuel as a thirsty camel drinks water after a long journey. Higher prices led some to think that the time was ripe for bio -fuels. Thousands of hectares were bought in places like Ethiopia or Madagascar in order to grow the crops at the lowest possible cost. Riots took place in several places, notably in Madagascar, when a South Korean corporation attempted to use half of the island¶s arable land for these purposes. Greedy companies and radical environmentalists switched from producing food to producing oil. The end -state was a much reduced cereal crop for that year and a significant rise in food prices. Oil prices, on the other hand, remained unaffected.

Russia was one of the biggest winners. Petro - and gas dollars travelled to wards them along the pipelines. Big plans were drawn to modernize the Armed Forces, the infrastructures,« Naughty Georgia was taught a lesson they are not

likely to forget, Ukraine heard the roar of the bear through the empty pipelines coming from the East. Somehow, to the great relief of China, oil prices begun to descend two years ago. Russian plans froze a s much as Eastern Europe did when they cut gas supply. But high food and gas prices for a few months was all that took for foreclosure notices to flourish everywhere in the US. The financial crisis was so shocking that few took notice of the former ones. In the global economy, significant changes in prices of basic commodities can be really harmful. Are we heading for another food crisis now? How will that affect those countries still recovering? Food for thought.

Sign up to vote on this title
UsefulNot useful