Newswise — The recent increase in food prices throughout the world has caused tremendous social upheaval, says UAB political scientist Nikolaos Zahariadis, Ph.D. Zahariadis is an expert on European public policy and foreign aid and is director of international studies at UAB. He also is author of the new book "State Subsidies in the Global Economy" (2008 Palgrave Macmillan).
"This is especially true in developing countries where people have to spend a larger proportion of their income to feed themselves," he said. "This has caused social and political unrest in places like Haiti."
Zahariadis says several factors have led to this crisis. One factor is the increased use of biofuels, which is taking some staples like corn out of the food market to produce ethanol and biofuels. The price of oil is another factor, Zahariadis says, since agricultural production today is largely mechanized and therefore dependent on oil and gas. Still another factor is climate.
The long term solutions will take bold steps primarily in multilateral environments, Zahariadis said.
"For example, currently there is the Doha Round of world trade talks, which is a series of meetings where countries are getting together to find ways to reduce barriers to trade which lowers prices. The major stumbling block right now is agricultural subsidies. They are practiced throughout the world, but the major culprits are the European Union and the United States and other major developed countries.
"We subsidize our farmers significantly for very good political and other reasons, and we need to lower those subsidies in order to more accurately reflect the price of food," he said. "By doing so, we will create the necessary environment when the prices go up because that is what happens.
"Then developing countries are going to be able to export more food to our markets and will give them an incentive to produce more food. And that is good for them and will also help solve their own food problems. That will jumpstart the current Doha Round and ultimately, in the long run, free trade will make things a lot easier and ease some of those food shortages because it will make food prices much more reflective of the true cost."
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