Monday, August 01, 2005

Plenty of food - yet the poor are starving

A Guardian report on the two faces of Niger:

    There is plenty of food, but children are dying because their parents cannot afford to buy it. The starvation in Niger is not the inevitable consequence of poverty, or simply the fault of locusts or drought. It is also the result of a belief that the free market can solve the problems of one of the world's poorest countries.

    ... ...

    Niger, the second-poorest country in the world, relies heavily on donors such as the EU and France, which favour free-market solutions to African poverty. So the Niger government declined to hand out free food to the starving. Instead, it offered millet at subsidised prices. But the poorest could still not afford to buy.

    ... ...

    The UN, whose World Food Programme distributes emergency supplies in other hunger-stricken parts of Africa, also declined to distribute free food. The reason given was that interfering with the free market could disrupt Niger's development out of poverty.

Here's an NYTimes article on the same topic.

Update (August 4): Guardian reports on looming crisis in Mali and Burkina Faso as well.

Update (August 5): Another Niger link (via Veena):

    Niger's government ruled out both free food aid and health care to hungry families, preferring to sell surplus millet at subsidized prices in an effort to force the price of scarce millet down. But millet prices skyrocketed, forcing families to sell cattle and other goods to buy food. The charity has angrily accused governments of allowing children to die, albeit not intentionally, so that the free market in grain would not be disrupted. Others say that Niger is on a steady course toward future disasters, free aid or not.


At 6:59 PM, Blogger uma said...

"plenty of food - but the poor are starving"

hmmm. haven't we heard that before, closer home..

At 9:14 PM, Anonymous Anand said...

Unfortunately Yes. And many a time.

At 10:10 PM, Blogger Abi said...

Unfortunately Yes. And many a time.

And, the person who told us how we may avoid this plight is right here in India, as per your previous post ...

At 10:43 PM, Blogger Old Path said...

The UN's decision is indeed laudable. Hope there will be enough people alive in Africa to enjoy the fruits of 'free market'. Question - is people for 'free market' or 'free market' for people ?

At 10:50 PM, Blogger Anand said...

Abi -- The NY Times article does mention Sen. Interestingly, and perhaps not surprisingly, it doesn't mention that the free market pill did not work in Niger.

Madhu -- You still have doubts?! People for free markets!

At 2:18 AM, Blogger Michael Higgins said...

Hi Anand
This sure sounds like a tragedy. I want to point out that charities may have contributed to this nightmare by putting the local farmers out of business. Continally giving free food makes it impossible for the farmers to sell their food on the free market.

Here's my suggestion as an economist to help these people and not mess up the markets (too much):
1. Give the people tickets, if they want the free goods, they will take the tickets to the next place.
2. The next place hands out real money. Oh everyone will want free money won't they. So the tickets above will be to a place that is out in the desert a few miles. It will be not fun walking there. Only the needy will bother. This is called incentive compatiblity in game theory. In effect, you are paying them to walk in the desert.
3. You sell at market (or even a little above market) rates. Local farmers are not hurt by your aid. Over time, the farmers grow more prosperous and the risk of famine falls.

I will also point out that a previous non-market economy might have created a huge number of people who were dependent on the old system and have nothing of marketable skills to offer in the new economy. This is why people might starve. They have nothing to offer the economy. That transition could be wrenching.

At 5:21 AM, Anonymous Anand said...

Thanks Michael.

The Guardian report says that the prices of essential food grains have skyrocketed in the market and the poor can't afford it. At such prices there's no question of the poor purchasing anything anyway even in a not so alarming situation. And no one is asking for free supply for everybody. Charities are calling for free food distributions only in the worst affected areas and to the most vulnerable sections of the society. I can't think of any other solution other than directly bringing food to one's mouth in a case like this where mothers starve and infants die without even having breastmilk.

I do support the sort of points you raise, but, in more 'normal' circumstances. In fact instead of giving 'free' money for walking in the deserts, I'll support food for work, especially when there's plenty of food available.

The same report also says that "around 2,000 protesters marched through the streets of the capital, Niamey, demanding free food". At least those 2,000 should have got free food even by your model (to which I find a lot to agree with). I'm sure only the needy would bother to join a protest march and walk miles as joining a march anywhere today is a sure way of getting beaten up and water cannoned if not being shot at and killed.


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