Monday, April 28, 2008

Think Food Prices Are High? Wait Until the UN Gets Involved

You can count on the UN to further screw up an already difficult situation. Now the UN, ever eager to regulate the free market, wants to get deeper into the food business.

Key United Nations development agencies are meeting in Switzerland to try to develop solutions to ease the escalating global food crisis.

Led by secretary general Ban Ki-Moon, officials want to mitigate the impact of the steep rise in staple food prices and prevent food shortages worsening.
The only real "solutions" are to stop taking food out of the supply chain to make ethanol (might want to check with Saint Algore on that one) and increase the overall production of food. The food production aspect of this will happen due to the free market impact of higher profits due to the increased prices. Of course, neither of these solutions are within the purview of the UN, but it sounds good.

Others are also recognizing the reality that the UN can't do much.
But the BBC's Imogen Foulkes in Geneva said it was less clear how more deep-seated problems could be addressed.

These include the current impasse in global trade talks, general economic weakness and profound differences over the use of agricultural land for biofuels.
However, it's always a nice way to justify asking for more money, which is what this is really all about.
The WFP has launched a massive fund-raising appeal, saying it needs an extra $755m to purchase the necessary food to meet its obligations.
I bet very little extra food gets to anybody who is hungry. But it's also a good excuse to go after investors.
The authorities in Vietnam, meanwhile, have warned that market speculators forcing up the price of rice would face "severe punishment".

Speculators including food suppliers, commodity trading houses and other investors have started to buy rice, before selling it on for considerable profits or holding back supplies, thereby distorting the market further.
Understand this: somebody will make money on these higher prices. My take is the UN just wants to make sure that the "somebody" is them.

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