by Asinus Asinum Fricat
Tue Apr 29th, 2008 at 05:24:53 PM EST
You better get used to this sort of headline. It's going to get a lot tougher for most of us on this planet. You heard about poor Haitians having to eat mudcakes as "food" of the last resort. Let me give you an account of another country on the brink of disaster: Egypt's government is now struggling to contain a political crisis as violent clashes have broken out at long lines for subsidized bread, and the president, worried about unrest, has ordered the army to step in to provide more. The president himself had to intervene. You might say, that's his job. Well, yes, but he is unable to control soaring food prices, none of us can. The Egyptian authorities are fearful that this could be a prelude to a chronic shortage of wheat worldwide and a return to lawlessness.
Nearly 40 percent Egypt's 76 million people live below or near the poverty line of $2 a day and quite a few on less than a dollar a day. The prices of staples such as cooking oil and rice have nearly doubled in recent months forcing them to ban rice export for a period of six months.
Cross-posted from PolitiCook & DKos
Diary rescue by Migeru
People have turned to eat more bread because they can afford little else. Official figures show the price of food has increased by an average of 25% in the past year. The price of both cereals and bread had soared to a whopping 50%, vegetables by over 15% and dairy goods by 21%. The price hikes mean rice and pasta - staple foods for the poor, are now out of reach for millions of Egyptians. Efforts by the government's subsidies has kept the price of one loaf to one cent. It needs to. For decades Egypt has been one of the world's largest importer of wheat and has provided subsidized flour to bakers to produce a cheap country bread called baladi, a puffy disc weighing roughly 400 grams. This bread enables millions of Egyptians to survive on meager salaries as well as staving off discontent and possible uprisings.
It is a costly policy for the government and one that may imperil its fragile economic fabric as it spent an extra $850m on wheat for the subsidized bread. The total bill is expected to reach $2.67bn for the last year alone.
Last month, the Egyptian government waived duties on imported rice, dairy goods, food oils, steel and cement to fight inflation, the official MENA news agency reported. "Rice is a staple food in Egypt and the main substitute for flour, whose price has gone up following wheat price rises on the international market", said Sayyed Abul-Komsan, advisor to Commerce Minister Mohammad Rashid.
Egypt produces around 4.5 million tons of rice a year, of which 3.5 million is allocated to the local market, said Komsan. Most exports go to Turkey, Lebanon, Syria and Jordan.
In recent weeks the government has been hit by growing unrest, including deadly clashes that police said left at least seven people killed, outside bakeries as huge queues form to buy bread. Despite having an official growth rate of 7 percent, Egypt suffers from rampant unemployment. Everyone in Egypt remembers the food riots of 1977, when the government foolishly decided to lift subsidies on bread, triggering the only mass popular uprising in the last 50 years. This global food crisis has prompted warnings from the IMF and the World Bank, and the UN's World Food Program.
Now is the time to act, no more words, action is what's needed. Or it will get much worse.
"We have seen riots around the world and there's risk that these will spread because of rising prices in countries where 50-60 percent of incomes go to food", Jacques Diouf, the director general of the United Nations Food and Agriculture Organization, said in India today.
This does not augur well. Tomorrow I have a piece on the factors that have contributed to this wheat crisis.
