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Weekly message - Food prices, Visit to Pittsburgh, Traceability of explosives
John Bruton - Wednesday, April 16, 2008

Food prices up by 40% in the last year.


I had the privilege of taking part in a seminar on rising food prices in the State Department this week. Among the participants were Josette Sheeran, Executive Director of the UN World Food Programme, Erastus Mwencha of the African Union Commission and Joachim von Braun of the International Food Policy Research Institute.

Rising food and oil prices are linked to one another, and both are problems caused in part by economic success. As people in India and China have become more prosperous as a result of access to the global market place, their demand for food and oil has risen.

In particular, demand for meat has risen, and meat requires more land to produce a given amount of nourishment than do either grains or vegetables. Meat consumption in China has increased from 20kg per head in 1980 to 50 kg last year. But 1 kg of beef requires ten times as much water to produce as 1 kg of wheat.

Higher petroleum prices mean that biofuels have become competitive with oil, and using land to produce biofuels reduces the amount of land available for food production. In developed countries, urban sprawl has also taken over some of the best food producing land.

The casualties of this trend are found in countries like Eritrea, Sierra Leone, Niger, and Haiti which are net importers of both food and fuel, and who are seeing their costs of living rise dramatically.

World agricultural production is also set to decrease because global warming is causing drought. Africa is particularly vulnerable because a high proportion of its food comes from low input rain-fed agriculture.

The rise in food prices is a severe test for fragile democracies. Last year the average Afghan household had to spend 45% of its entire income on (more expensive) food, as against only 11% the year before – a dramatic change.

Many of the hungriest people are found in land locked countries with poor transport links. Getting goods in and out of such countries costs twice as much as it does in a developed country.

The upward trend in food prices comes at the end of a long period when food prices, and the incomes of farmers, had been falling in real terms. Food prices have until recently been about half, in real terms, what they were when they last peaked in the mid 1970s.

The present rise in prices reminds us of the need to invest in long-term agricultural capacity in developing countries – in water conservation, roads, seeds and education of farmers – and also to ensure that commercial agriculture is maintained on a self supporting basis in the US and the EU.

But it should also remind us of a drastic short-term threat of famine. 150 million who are already living on less than 50 cents a day cannot feed themselves at these prices without immediate help from the World Food Programme – whose budget needs urgent replenishment. We are talking here about many deaths in coming months, and many more instances of long-term retardation because of malnutrition. And all of this is happening because of the success of globalisation in lifting the living standards of the rest of the world and thereby increasing the demands they are placing on a limited amount of land.

Visit to Pittsburgh

This week, the Ambassador of Slovenia, Samuel Žbogar, and I spent two days visiting Pittsburgh in Pennsylvania.

We spoke to students in the Southside High School in Hookstown, Pennsylvania, a rural school district about 30 miles from Pittsburgh. We also spoke to students and faculty in the University of Pittsburgh and Duquesne University in Pittsburgh itself.

I told my audiences in Pittsburgh that almost 70% of all foreign investment in the State of Pennsylvania comes from the European Union. I reminded them that Pennsylvania exports four times as much to the EU as it exports to China. Between investment and exports, Pennsylvania economic relationship with the EU supports 228,000 jobs in the State.

I also pointed out that the EU was investing heavily in R&D. Of the world's top fifty companies ranked according to R&D investment, 18 are from the EU, 17 from the US and 12 from Japan. Of government spending on R&D, 56% of the United States R&D spending goes on defence, as against only 13.5% in the European Union. A priority for European R&D is environmental sustainability. The rise in energy and food prices underlines the urgency of this.

One of the purposes of our visit to Pittsburgh was to officially mark the handing over to the University of Pittsburgh of the archives of the European Commission Delegation here in Washington. These go back to the Delegation’s foundation in 1954. The University of Pittsburgh is digitising the documents and making them available to scholars worldwide.

Ambassador Žbogar and I also took the opportunity of taking the temperature of the hotly contested presidential primary campaign currently underway in Pennsylvania. We visited the campaign offices of both Senator Hillary Clinton and Senator Barack Obama. We had a meeting with representatives of the Republican Party in Pittsburgh, Matt Drozd and Vince Gastgeb.

I found the discussions about the primary campaign very interesting. The use of published data to target tailor-made messages on behalf of candidates to individual voters based on the voters’ age, status, occupation etc. is much more sophisticated here than anything with which I would have been familiar in Ireland. The people involved in the campaigns all were young, very well-informed and very enthusiastic.

Franklin Roosevelt and William Jennings Bryan

Speaking of presidential campaigns, I read two very interesting biographies of US politicians while on holiday in Ireland over Easter.

James McGregor Burns’ biography of Franklin D. Roosevelt, “The Lion and the Fox” was first published in 1956, only eleven years after his death, but it remains highly topical today. It shows that Roosevelt did not enter office with a grand plan to cope with the Depression. Indeed some of his plans, like balancing the budget, might have made things worse. Instead he was an energetic experimenter, and a consummate political tactician. The book shows how much all US Presidents are constrained by Congress and the courts, something not all Europeans realise.

William Jennings Bryan ran for President as a Democrat three times, in 1896, 1900 and 1908. He is remembered for his rôle in the Scopes Trial, in the 1920’s when he opposed the teaching of evolution. He made a living as a paid public speaker dealing with political and religious themes. He based his politics on the Bible.

Michael Kazin’s excellent biography of Bryan, “The Godly Hero”, shows that he was a strong fighter for federal income tax, for direct election of Senators, for votes for women, for federal funding of election campaigns, for national ownership of the railways and against military occupation of the Philippines and corporate abuses. But he tolerated segregation, favoured the inflation of the currency, and promoted Prohibition of all sales of alcohol.

Reading these two biographies shows that there are many constants in US politics.

Improved traceability of explosives in EU

As one of a series of measures to help combat terrorism, the European Commission has this week adopted measures to strengthen the control of explosives for civil use, for instance in the mining industry. To prevent theft and to ensure that any thefts or losses are quickly detected, the new EU Regulation requires unique labelling of explosives everywhere in the EU. In addition, manufacturers, traders and users will be required to tighten recordkeeping and stock management. This will make it easier to trace the origin of lost or stolen explosives and quickly to establish whether persons holding explosives are doing so legally.

At present diverging labelling requirements in different Member States mean that it can take up to two days in order to identify the origin of explosives. With this new regulation, this time lag will be much reduced.

This is an important example of how EU-wide measures can assist in the battle against crime and terrorism.

 

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John Bruton: Food prices up by 40% in the last year.
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