The Causes of Poverty (64): Rising Food Prices

It seems that harvests are bad this year and that food prices have gone up. The effect of high food prices on poverty is not straightforward. Poor people do indeed spend a large proportion of their income on food, which means that increases in prices have a direct effect on their financial situation and can even cause hunger. On the other hand, many poor people make their living in agriculture. Higher prices can mean higher incomes for them. The poor are, however, increasingly urban poor, and for them higher food prices are entirely bad news. So it’s not crazy to blame poverty on rising food prices. According to the World Bank, food prices have pushed 44 million people into poverty in 2010-11.

The question is then: what’s causing these prices to rise? The weather is partly to blame – there has been an unprecedented drought in the United States and extremely dry weather conditions in Europe – but so are governments. Government promotion of biofuels, for instance, means that raw food materials are used for petrol alternatives and hence don’t go into food production. This lowers the supply of food and causes prices to rise. Many make too much of this argument, but there is something to it. Land grabs can also become a problem when biofuels are subsidized or when rules mandate that x% of every liter of fuel sold should be biofuel. These land grabs for biofuel production result in displacement of local production for local consumption, impacting the income of both local producers and consumers: people have to buy the food that they would otherwise have grown, and they have to buy it from further away.

Some government policies designed to remedy the problem only make it worse. Governments that restrict exports of food in order to pump up supply and hence reduce prices – or in order to shield their national market against increasingly expensive imports – may end up pushing prices even higher. When farmers can’t export, their incentives to farm are affected. Result: supplies go down and prices rise even further.

What can be done? Well, inefficient or counterproductive policies should be halted. Biofuel mandates should be scrapped. And in countries with large proportions of poor people governments should offer insurance against drought or bad harvests as well as better safety nets.

More posts in this series are here.

Measuring Human Rights (25): Measuring Hunger

First, and for those in doubt: hunger is a human rights violations (see article 25 of the Universal Declaration). Second, before we discuss ways to measure this violation, we have to know what it is that we want to measure. It’s surprisingly difficult to define hunger.

Definition of hunger

The word “hunger” in this context does not refer to the subjective sensation that we have when lunch is late. We’re talking here about a chronic lack of food or a sudden and catastrophic lack of food (as in the case of a famine). We measure a lack of food by measuring dietary energy deficiency, which in turn is computed based on average daily calorie intake. The FAO estimates that the average minimum energy requirement per person is 1800 kcal per day. The global average per capita daily calorie intake is currently about 2800 kcal. This average obviously masks extreme differences between the obese and the chronically undernourished.

The FAO minimum energy requirement per person of 1800 kcal is also an average. The minimum calorie need depends on many things: age, climate, health, height, occupation etc.

Usually, the concept of “hunger” as it is defined here is different from “malnutrition“. Hunger is a lack of food defined as a lack of calorie intake. Malnutrition is a lack of quality food, of micronutrients such as vitamins and minerals, and of a divers diet. Hence, people may have access to sufficient quantities of food and still be malnourished.

Hunger and famine are also different concepts. Hunger is a chronic and creeping lack of food, while a famine results from the sudden collapse of food stocks. A famine implies widespread starvation during a limited period. It can’t go on forever because it must stop when everyone has died or when food supplies are restored. Chronic hunger on the other hand can go on forever because it doesn’t imply widespread starvation. Of course, people do die of chronic hunger, and on a global level hunger kills more people than famines do. But whereas in the case of famine people die of starvation, the victims of chronic hunger usually don’t starve to death. When we say that hunger kills someone every 3.6 seconds we usually mean that this person dies from an infectious disease brought on by hunger. Hunger increases people’s vulnerability to diseases which are otherwise nonfatal (e.g. diarrhea, pneumonia etc.). In fact, most hunger related deaths do not occur during famines. Chronic hunger is much more deadly – it’s just not as noticeable as a famine. When and where famines occur, they are more deadly and catastrophic. But they occur, thank God, only exceptionally. Hunger on the other hand is a permanent fixture of the lives of millions and ubiquitous in many countries.

Measurement of hunger

Given this definition, how do we go about and measure the extent of chronic hunger? (The measurement of famine is a separate problem, discussed here). There are different possible methods:

  • So-called food intake surveys (FIS) estimate dietary intake and try to relate this to energy needs determined by physical activity. Calorie intake below a minimum level means hunger. The problem here is that minimum calorie intake thresholds are somewhat arbitrary and do not always take people’s different calorie requirements into account. Even for a single individual, this threshold can vary over time (depending on the climate, the individual’s age, occupation and health etc.). Moreover, when trying to measure calorie intake, you’re faced with the problem of hunger due to imperfect absorption: it’s not because someone in a sample buys and consumes x number of calories that he or she actually absorbs those calories. The widespread incidence of diarrhea and other health problems often mean that only a fraction of calories eaten are absorbed by the body.
  • In order to bypass this, some propose a measurement method based on revealed preferences. The greater the share of calories people receive from the cheapest foods available to them, the hungrier they are; and, conversely, the more they buy expensive sources of calories, the less hungry they are. Their choice of foods reveals whether they have enough calories. This method therefore eliminates the threshold and absorption problems.

Our approach derives from the fact that when a person is below their nutrition threshold, there is a large utility penalty due to the physical discomfort associated with the body’s physiological and biochemical reaction to insufficient nutrition. At this stage, the marginal utility of calories is extremely high, so a utility-maximizing consumer will largely choose foods that are the cheapest available source of calories, typically a staple like cassava, rice or wheat. However, once they have passed subsistence, the marginal utility of calories declines significantly and they will begin to substitute towards foods that are more expensive sources of calories but that have higher levels of non-nutritional attributes such as taste. Thus, though any individual’s actual subsistence threshold is unobservable, their choice to switch away from the cheapest source of calories reveals that their marginal utility of calories is low and that they have surpassed subsistence. Accordingly, the percent of calories consumed from the staple food source, or the staple calorie share (SCS), can be used as an indicator for nutritional sufficiency. (source, source)

  • Still another method consists of measuring hunger’s physical effects on growth and thinness. Instead of measuring calorie intake, hunger or revealed preferences, you measure people’s length, their stunted growth and their body mass index. However, this is very approximative since length and weight may be determined by lots of factors, many of them unrelated to hunger.
  • And finally there are subjective approaches. The WFP does surveys asking people how often they ate in the last week and what they ate, how often they skip meals, how far they are away from markets, if their hunger is temporary or chronic etc. Gallup does something similar.

More on hunger here. And more posts in this series here.

Economic Human Rights (38): A Silly Argument Against the Right to Food

The right to food (art. 25 of the Universal Declaration i.a.) doesn’t get a good press. Only a handful believe that it’s comparable in importance to rights such as free speech or freedom of religion. This disdain surprises me. And it’s not just that it shows a failure to understand the interdependence of rights – none of our rights make any sense on an empty stomach. If you know that 6 million children under the age of five die of hunger every year there is at least a prima facie reason – although not a sufficient reason, I admit – to claim that there should be a human right to food.

The counter argument goes as follows: if we grant people a right to food, they will stop working and just watch television all day while the government gives them food. That will destroy both the economy and people’s character.

I think that’s really silly. Let’s make an analogy with an uncontroversial right, the right to free movement. This right doesn’t mean that the government should “give people movement”. That doesn’t make sense. People claiming that right don’t ask for the government to move them. What they ask is

  1. that the government doesn’t hinder their free movement (hence a legal prohibition on internal border controls, restricted zones etc.); and
  2. that the government helps people to acquire the capability to move freely if they don’t have that capability (hence assistance to people with disabilities and the construction of public highways).

The same is true for the right to food. This right doesn’t tell the government to give people food. All it demands is that the government doesn’t take away people’s food or people’s ability to acquire food (as it did in the case of Ukraine’s Holodomor), and that it helps people acquire the ability to get food. The latter may imply temporary food provision (or giving cash for food) to those in dire need, but this provision is aimed at capacity building, and should stop when people’s capabilities are restored.

A closely related discussion is the one about positive and negative rights. See here.

Measuring Human Rights (22): When Can You Call Something a “Famine”?

With yet another famine in the Horn of Africa, perhaps it’s a good time for a few words about famine measurement.

People have a right to adequate nourishment and to be free from chronic hunger (see article 25 of the Universal Declaration). Starvation is an extreme form of violation of this right (and is obviously also a violation of the right to life). So we obviously want to know the existence and extent of cases of starvation. There are individual cases of starvation – a elderly person who has lost her mobility and social network may starve abandoned in her flat – but most cases involve large scale famines. Let’s focus on the latter.

The problem is that death by famine or starvation is difficult to identify. People suffering from extreme malnutrition often don’t die of hunger but of diseases provoked by malnutrition, such as pneumonia or diarrhea. Since those are diseases that can have other causes besides malnutrition, it’s often difficult to count the number of people who have died from malnutrition. Their body weight may tell us something, but you can’t go about weighing corpses on a large scale.

Hence it’s difficult to determine whether or not a famine has occurred or is occurring. When does widespread suffering of hunger become a famine? Not every food crisis or widespread occurrence of malnutrition leads to famine-type starvation. A famine is obviously characterized by mortality caused by malnutrition. So we must look at mortality rates, but given the difficulty of establishing whether deaths are caused by malnutrition or other factors, how do we decide that a certain mortality rate is caused by malnutrition and is therefore the symptom of a famine? It’s difficult.

And yet, it’s common to find newspaper reports about “an outbreak of famine” is this or other part of the world. Ideally, we only want to declare a famine when a famine is actually occurring or about to occur. False alarms are not only silly but they create indifference. Fortunately, people seem to have overcome some of the difficulties and have agreed on a non-arbitrary way to determine that there is a famine going on:

  • when overall mortality rates in a region are extremely high, or high compared to the baseline – which may itself be high already, perhaps because of a war (a mortality rate of at least two people per 10,000 per day is usually considered part of the evidence of famine conditions)
  • when this is combined with survey indicators about low food availability and malnutrition (a rate of malnutrition – ratio of weight to height – among children age six months to five years above an average of 30% is the usual measure here)
  • when there is anecdotal evidence (perhaps also from surveys)
  • and when there are proxy measures such as below average rainfall

then you can build a useful measurement and a more or less scientific way of ascertaining that a food crisis has passed the famine threshold.

None of this should be understood as implying that food crises which don’t reach the famine threshold are unimportant and don’t deserve attention or assistance. It only means that it’s a good thing to distinguish real famines from lesser crises and to avoid crying wolf.

One problem with the measurement system presented above is that it’s no help in preventing a famine. It’s difficult to turn it into a probability index rather than a threshold index. It tells you when a famine has occurred or is ongoing, not when there’s a risk of famine. When mortality rates are high, you’re already late, perhaps too late.

The Causes of Poverty (32): Overpopulation

How can I say, as I so often do on this blog, that overpopulation isn’t a very important problem, and certainly not the main cause of such human rights violations as famine, war, poverty etc.? Especially when we know that there will be 9 billion people on the earth in 2050, that with the almost 7 billion living now we can’t manage to properly feed one billion everyday, that many resources (water, fish, arable land in certain places etc.) are already overexploited, that rising incomes will mean rising consumption of food and water (especially meat, a water-intensive commodity), and that because of all of this green house gases will increase?

How can you be so stupid not to believe that overpopulation is a problem, I’m often asked in comments on this blog. Maybe it’s got something to do with the fact that people have been sounding the alarm about the “population bomb” for over 200 years now, and it still hasn’t gone off. Of course, it’s not because people have been wrong for 200 years that they will continue to be wrong. But there are some indications in this paper that they will continue to be wrong.

The paper explains how we can feed 9 billion people, and argues that we’ll need to change the food system. Agricultural waste is a huge problem. Up to 40% of the world’s food ends up in the garbage bin, because of deficiencies in the food-chain infrastructure, transportation and storage. Farmers produce more than they can sell because they receive financial penalties from wholesalers when they can’t deliver fixed quantities throughout the year irrespective of climate conditions. Add to this excessive quality selection (shops throw away perfectly edible food because it’s not visually appealing, and apply overly zealous use-by dates) and consumer waste, and you have mountain ranges of wasted food that could be used to feed many more billions of people.

We could also promote vegetarianism, or at least a reduction in meat consumption, since meat production is very costly in terms of water use, land use, deforestation, green house gases etc. (see here). A side effect would be that we reduce factory farming and are a bit nicer to animals.

Stricter systems to reduce overfishing are also required. And let’s not forget that on a global level, the arable land is underused.

Most countries are only using a bare fraction of their available agricultural land. The United States, for example – one of the world’s top producers – is using only 5.5 percent of its available agricultural land. According to the Food and Agriculture Organization of the United Nations, only 5.6 percent of the world’s arable and permanent cropland and permanent pasture is under irrigation. That gives humanity a lot of room to grow.

Mother Earth actually has the capacity to feed her people, even the billions that live on her now. As more and more people need to be fed, more and more people can be put to work farming, planting, and engineering new food management solutions. (source)

But not just the quantity of agriculture can be boosted, also its quality. Crop yields can be improved, perhaps by way of genetically modified crops but other techniques are also available: farmer training and financing for example, or more efficient irrigation, which would also solve the problem of water shortages, another “consequence” of overpopulation.

This shows that when you improve the food system, you automatically lessen other types of environmental population impact: not only water shortages but also global warming (because of less waste and less meat production), desertification (because of more efficient land use and again less meat production) etc.

Of course, focusing on food production and consumption is just part of the job. An increasing population also means increasing energy consumption. But here as well, there are many things that can be done short of population control. It’s the way energy is used, not the number of people using it, that is the problem. 85% of the people living on this planet consume below the world’s average energy use. Adding many more people isn’t likely to add substantially to energy use.

The Environment and Human Rights (3): Water and Human Rights

We obviously need water to survive, and no human rights without survival. Inadequate water supplies also cause diseases, violating our right to health. We need water – and clean water – to drink, but also to eat. Or rather, to produce our food. And we need a lot. People drink on average just a few liters a day, but they consume thousands of liters a day if we count the water required to produce their food. And evidently we should count it. Many areas of the world face already now face water shortages. A fifth of the world’s population already lives in areas short of water. A global water crisis waits around the corner, and one likely consequence is famine, another human rights violation.

If we want to do something about the water crisis, we should be aware of the effect of food production on water shortages. Especially the production of meat requires huge amounts of water, compared to the production of grains or even rice. People in the West eat a lot a meat, and therefore contribute substantially to water shortages. As incomes in the developing world increase, people there will consume more meat. Hence, global water consumption will also increase. Combine this future increase with the fact that there are already shortages and that these shortages will get worse with global warming, desertification etc., and you get a real crisis.

What are the solutions? Or how can we prevent things from getting worse?

  • Jokingly we could ask people to become vegetarians. That would also be better for greenhouse gas emissions, by the way.
  • More realistically: food production, and especially agriculture and farming, represent 70% of global water consumption. That number could be cut down significantly with better irrigation; “more crop per drop”. There’s incredible waste going on there. 70% of irrigation water is lost in the process. One reason: farmers rarely pay their water bills at market prices, hence no incentives to cut waste. Unfortunately, pricing water at market prices would drive up food prices, pushing many consumers into poverty. And many poor farmers already can’t pay for expensive irrigation systems. More expensive water surely wouldn’t help them. Moreover, market prices may mean the privatization of water, and that’s dangerous. You might as well privatize oxygen.
  • Other solutions: cut waste in households and industries. Here, everyone can help. Also more recycling efforts are needed. Desalination, although expensive, is an option. As are better water storage facilities, especially for poor families in developing countries. All these efforts will not only reduce the risk of a major global water crisis, but will also improve crop yields, thereby reducing the price of food and hence the risk of poverty and famine.

The Causes of Poverty (18): Amartya Sen, Famines, and Democracy

Famines are easy to prevent if there is a serious effort to do so, and a democratic government, facing elections and criticisms from opposition parties and independent newspapers, cannot help but make such an effort. Not surprisingly, while India continued to have famines under British rule right up to independence … they disappeared suddenly with the establishment of a multiparty democracy and a free press. … a free press and an active political opposition constitute the best early-warning system a country threaten by famines can have. Amartya Sen

Amartya Sen argues that democracy (which is a subset of human rights) is the best way to avoid famines. Of course, a well-functioning democracy is not a sufficient condition for the absence of famines. Other mechanisms also contribute to famine prevention, so it’s not impossible to see famines in democracies.

What is a famine?

G. B. Masefield states:

On balance it seems clear that any satisfactory definition of famine must provide that the food shortage is either widespread or extreme, if not both, and that the degree of extremity is best measured by human mortality from starvation. (source)

A famine occurs when there is a sudden collapse of the level of food availability and consumption (measured in terms of calorie intake). Sen’s argument is that a focus on lack of availability isn’t enough. Actual consumption is what counts. And consumption can drop when availability doesn’t (this was the case in the Bengal famine of 1943 for instance). Famines occur not only from a lack of food, caused by drought, crop failures or floods, but also from a lack of information. Rumors of a famine, even false rumors, are often enough for people to start hoarding and panic buying, which pushes up the price of goods, and which makes it impossible for poor people to get enough food. As a result, they may starve in the midst of abundance. A war may have the same effect or make it worse. And so can ineffective food distribution mechanisms.

Inequality

An important point about famines is therefore inequality:

While Famines involve fairly widespread acute starvation, there is no reason to think that it will affect all groups in the famine-affected nation. Indeed, it is by no means clear that there has ever occurred a famine in which all groups in a country have suffered from starvation, since different groups typically do have very different commanding powers over food, and an over-all shortage brings out the contrasting powers in stark clarity. Amartya Sen (source)

Information

Free information can counter these risks. It can debunk myths and rumors about food availability. It can inform accountable governments of certain risks and force them to act in order to remedy the food distribution, to impose price controls etc.

Price controls, however, are a risky business. Higher food prices may lead to a larger volume of food production because food producers will be encouraged to produce. Hence, higher prices may increase the overall availability of food and reduce the risk of famine. However, as we have seen, availability is not enough to stop famines. Distribution and equality of availability is just as important, and higher prices may result in very unequal availability and may put poor people at risk. But then, again, these poor people may find a better paying job in food production if food prices are higher… This is all very complicated indeed.

The Causes of Poverty (9): Poverty Traps

A poverty trap occurs when poverty has effects which act as causes of poverty, creating a vicious circle in which poverty engenders more poverty, a circle of cumulative causation leading to a downward spiral of ever more extreme poverty.

Poverty traps or poverty circles can be of different kinds: individual, social, national, international…

1. Individual poverty traps

A poverty trap can be limited to the purely individual: for example, a person being discouraged by his or her situation or misfortune, and thereby sinking deeper into misfortune because of inactivity.

2. Regional poverty traps

The poverty trap may also have a regional aspect: some parts of the country or the population may be poor because they are isolated geographically from the rest of the population and the main centres of wealth and prosperity.

Profitable business opportunities may be few, and thus productive employment lacking, owing to poor transport and communication links with those centres. But the low level of economic activity in the isolated region means that transport services are inadequate and that improved transport infrastructure cannot be economically justified, thus perpetuating the isolation. (source)

3. Racial/ethnic poverty traps

The isolation may also be racial or ethnic. This may harm their self-esteem or their sense of responsibility for their own advancement. The responsibility for their fate is, not without reason, projected on others, but this can become a fetish creating passivity and hence more poverty.

4. Social poverty traps

Poor people, because they tend to be more often sick, hungry and weak, don’t manage to get well paid jobs or – if they are independent producers – tend to produce less. As a result, they have less money, less food, and limited access to health care. And because of this, they get even more hungry, weak or sick, and the circle starts again.

Another example: an individual is poor because his or her parents are poor; because of this, a good education becomes problematic – the children may have to work instead of attending school; without a good education the individual does not acquire the tools and capabilities to escape poverty, may succumb to the temptation of crime, and as a result sinks deeper into poverty.

5. National poverty traps

Low income leads to low savings; low savings lead to low investment; low investment leads to low productivity and low incomes. Poverty leads to environmental degradation, which in turn undermines the assets of the poor and exacerbates poverty. Poverty can lead to violence and conflict, and the associated destruction of physical, human, social and organizational capital in turn causes poverty to intensify. (source)

6. International poverty traps

A poor country may have to rely on its natural resources for its exports and hard currency. As a result, however, other and more stable sectors of the economy are neglected and the resource curse may set in, creating poverty and forcing the other sectors even more to the background.

Some countries may find that they are regionally isolated from the global economic centres, much like some social groups can be regionally isolated within a country (see above). Their import markets are too far away from the main exporters, or too difficult to reach because of the poverty of the country and the resulting lack of investments in infrastructure and transport facilities.

Needless to say that the different kinds of poverty traps can exacerbate each other, and thereby creating a “poverty trap of poverty traps”, a vicious circle in which different poverty traps reinforce each other. This sounds quite apocalyptic, but fortunately seems to be only a theoretical possibility because globally poverty is actually on the retreat, but only on average. Many countries, many social groups and many individuals are still terribly poor, and the poverty traps are one reason.

Economic Human Rights (6): Health

Bad health and suffering create the same problems as poverty. You have to be healthy and without pain, in order to have a cultural and political life and to be able to use freedom rights and political rights. A sick, suffering or toiling person is thrown back upon himself and unable to relate to the outside world, just as a person who concentrates exclusively on his or her body for pleasurable reasons.

Intense bodily sensations of any kind – positive and negative – shut us off from the world, because they make it impossible to perceive anything except our own body. In other words, they make our public and political life and the use of our classical rights impossible or undesirable.

Hunger and consumption, as well, force you to concentrate on yourself and your body. You do not have the time, the energy or the desire to concentrate on the world. When you are eating or thinking of eating, you are imprisoned in cyclical biological necessities and in your metabolism with nature necessary for the preservation of life. You have to avoid sickness, pain and hunger – as well as their extreme opposites – to be open to the world and fit for cultural and political life.