Free Trade in Food Is `On the Ropes' Amid Shortages, Price Rise

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Free Trade in Food Is `On the Ropes' Amid Shortages, Price Rise

By Alison Fitzgerald and Mark Drajem

June 19 (Bloomberg) -- Free-trade policies long advanced by World Bank President Robert Zoellick and U.S. President George W. Bush are losing favor as countries in Africa, Asia and Latin America find they can't buy enough food to feed their people.

Global food prices have spiked 60 percent since the beginning of 2007, sparking riots in more than 30 countries that depend on imported food, including Cameroon and Egypt. The surge in prices threatens to push the number of malnourished people in the world from 860 million to almost 1 billion, according to the World Food Programme in Rome.

Leaders of developing nations including the Philippines, Gambia and El Salvador now say the only way to nourish their people is to grow more food themselves rather than rely on cheap imports. The backlash may sink global trade talks, reduce the almost $1 trillion in annual food trade and lead to the return of high agricultural tariffs and subsidies around the world.

``Trade as the route to food security, that idea is on the ropes,'' said Arvind Subramanian, a senior fellow at the Peterson Institute for International Economics in Washington. ``If the guy who is selling it doesn't want to sell it overseas, then the guy at the other end is terribly exposed.''

In dozens of interviews and speeches at the United Nations Food and Agriculture Organization's Rome conference on the food crisis this month, officials from developing countries, farmers and leaders of non-governmental organizations said food self- sufficiency is the new goal for many poor nations.

Grain exporters such as Argentina and Vietnam have restricted shipments, driving global prices higher and leaving nations that depend on imports searching for adequate supplies.

Worldwide Search

``The idea of trade liberalization was that you could count on global markets, but they're not proving reliable,'' said David Orden, a fellow at the International Food Policy Research Institute in Washington.

The Philippines has embarked on a worldwide search for additional food supplies to build stockpiles and ensure it can feed its people amid record prices. The surging costs of rice, other grains and fuels have stoked inflation and triggered concern of civil unrest, according to the International Monetary Fund. Philippines President Gloria Macapagal-Arroyo said her country will try to become self-sufficient in food by 2010. .....(more)

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