↳ Price+drops

April 13th, 2020

↳ Price+drops

Swallow Cave

BREAK POINT

Complications in globalized food supply

Scholars of the global food system unravel a vast web linking trade policy, public health, economic development, labor issues, supply chain logistics, and so on. The pandemic has already prompted states to break with the implicit rules underpinning global food governance, and changes in supply and prices have the potential to trigger a long term food-born crisis.

It wouldn't be the first of its kind. Less known than the 1973 oil crisis, but perhaps equally important, is the 1972 food price shock which fundamentally altered the structure of global markets. In a fantastically detailed 1995 article, HARRIET FRIEDMANN recounts the origins of the post-war "surplus food regime," and its disintegration in the early 70s.

From the article:

"As the dominant economic power after World War II, the United States insisted on international rules consistent with its own national farm support programs. New Deal farm programs of the 1930s were retained despite widespread awareness that they generated chronic surpluses. U.S. commitment to mercantile agricultural trade practices led to the sacrifice of multilateral institutions which were central to the larger U.S. agenda for liberal trade: the World Food Board Proposal, which provided for global supply management and food aid through the Food and Agriculture Organization, was rejected by the U.S. in 1947; the Havana Treaty creating an International Trade Organization was never formally submitted to Congress because it contradicted mercantile clauses in U.S. domestic farm laws; even the GATT excluded agriculture from its ban on import controls and export subsidies. Postwar rules did not liberalize national agricultural policy, but created a new pattern of intensely national regulation.

After two decades, the replication of surpluses led to competitive dumping and potential trade wars, particularly between the European Economic Community and the United States. But the real catalyst of the 1973-74 food crisis was the massive Soviet-American grain deals of 1972 and 1973, which permanently broke the dam separating the capitalist and socialist blocs which had contained the 'surplus food regime.'"

Link to the piece.

  • "The sharp rise in prices of agricultural commodities in 1972-73 traces to five principal causes: a decline in world production of grains; rapid growth in the demand for meats in all developed countries; U.S. farm policies that discouraged expansion of soybean production; administrative lags and errors regarding export subsidies; and devaluation of the dollar." Another look at the 1972-73 Food Price Spiral, by John A. Schnittker. Link. For greater context: Alan Blinder catalogues the food price spiral alongside energy and decontrol as the sources of '70s inflation. Link.
  • An FAO report on global food price inflation from 2006-2008. Link. And another FAO report on the causes and prevention of food waste. Link.
  • "This article explores how the far-reaching plans of a World Food Board, advocated by the UN Food and Agriculture Organization under John Boyd Orr, were abandoned and supplanted by a new approach that focused on technical aid and the distribution of surpluses." Ruth Jachertz and Alexander Nützenadel on the multiple "visions of a global food system" developed between 1930-60. Link.
  • Forthcoming from the University of Washington Press, Thomas Fleischman's Communist Pigs analyzes the trajectory of East German agricultural policy through the lens of the country's pork industry. Link.
⤷ Full Article