live from moscow this is r.t. top stories now from schools on the syrian opposition to form a government saying paris would recognize it casualties of the conflict rebels reportedly shoot down an army helicopter while the government is accused of massacring over three hundred people. israel prevents activists carrying school supplies to children in bethlehem as refugee camps from entering the west bank from jordan and israeli soldiers also stand accused of using palestinian children as human shields. in every hundred nations not aligned with the us. to look for global solutions to the general ban ki-moon will also attend despite attempts by washington to play down the importance of the gathering. to bring it up to date for

the moment i'll be back with a news team with more in the meantime discusses rising food prices and whether they could bring about a new crisis in the latest edition of his debate show crosstalk. hello and welcome to cross talk i'm peter lavelle managing an avoidable disaster is the world facing another in more sustained food prices higher prices population growth bad weather and vested financial interest collectively do not bode well for the poorest of the poor in global political stability will the fact and complacent in

time. can. start. to cross that rising food prices i'm joined by timothy wise in boston he is the research director of the global development and environment institute at tufts university in chicago we have david moberg he is a senior editor at in these times and in washington we cross ronald bailey he is an award winning science correspondent for reason magazine and reason dot com all right gentlemen crosstalk rosen i think that means you can jump in anytime you want a david if i go to you first in chicago we had a food crisis price crisis in two thousand and seven two thousand and eight is that deja vu all over again did we learn anything from the last crisis. well some people may have learned something think the crisis has not really ever completely ended from the time it is building up once again. but there are basically lessons

still need to be learned and one of them is climate change is rapidly much more rapidly than anyone thought changing the whole circumstances for global food production. ok tim if you want to jump in there will one listen ok what lessons were learned learned tim well we did a report earlier this year that looked exactly at that question and i think our conclusion was that an alarming number of things haven't been learned or if they've been learned they haven't been acted on the main precipitating causes of the food crisis and the food crisis that we're talking about now isn't just. what another price spike after two thousand and seven and eight there was another in two thousand and ten eleven so this is the third price spike that we're facing in five years what have we learned we haven't learned that failing to keep adequate international stocks of basic grains is a huge mistake it makes the markets very vulnerable that's the situation we're in

now facing the drought in in the midwest we haven't learned that climate change as david points out is likely to increase the severity and frequency of extreme weather events that cause agricultural interruptions we haven't learned that financial speculation on a national commodity markets increases the volatility of those markets and so we're still largely unregulated in those markets. and perhaps most importantly we haven't learned that biofuels expansion that the feeding food to our cars is in a time of scarcity is actually a really bad idea and one that dramatically contributes to price increases ok ronald it would to him if he came and went across a lot of issues there which one would you focus in on and we'll discuss the other issues that timothy mentioned go ahead. right i would first of all like you agree with him about the biofuels we have certainly not learned that we should not be turning food into fuel just take take for example the fact of the matter is that

the amount of ethanol that you can produce using corn to feed to fill the tank of one s.u.v. one time would be enough calories to feed a person for an entire year that's a great tragedy in fact basically the amount of corn that we're turning into biofuels in this country could provide calories for as many as three hundred million people it's just a complete shame we should not be doing that government should not be subsidizing the development of biofuels in this way turning food into fuel the other thing that i hope that we've learned though i doubt it unfortunately and this is where i think tim and i will disagree is that what we need to do is keep the markets open that is when there's a drought in the united states we should therefore or or in russia another country that produces a great deal of grain and supplies it to the international market what we need to do is to be able to move food across the globe food security is increased and enhanced by free market that is countries that are who dev's that are able to buy it on markets and supply to their people from around the world last time what

happened is several countries closed their grain markets and that dramatically increased the price of food around the world and did not in fact increase food security except in those countries it's a very bad idea to do that well david i mean everyone on this program is mentioned all of them they're all right go ahead timothy but i could just point out that all of you pointed out the same problems that we face but i guess there's no political will to address these issues go ahead timothy well there was a lot of trouble is already in there with him in the first go ahead. well i was just going to say that i think the the issue of keeping markets open is is entirely right but but i think there's a real fantasy about how you do that there is no international economic police force to force governments to. to carry out policies that keep markets open even the world trade organization isn't going to do that and when a government is facing

a major food crisis for its own people it is going to act to protect its own people not international markets that only makes sense that one heater temora very well respected. food policy analyst an economist has pointed out that international reserves are actually the best way keeping food reserves is actually the best way to make markets work because it gives countries the confidence to know that there's enough food out there so they don't have to close off their borders ok ronald you want to respond to that before we move on to one of them and again you're right that there is no international police force to keep those markets open largely because the world trade organization. food was excluded from the free trade rules of the world trade organization the doha round which is unfortunately collapsed was aiming at exactly that problem of trying to open up free trade in food and to guarantee it through the world trade organization and i would hope that we would move in that direction and that the people on the panel here would be in favor of

pushing forward those negotiations in the future because then you would have rules that would apply and would certainly help stabilize markets well i mean that's a good point david if i go to you i mean i think many of the problems and yeah i think many of the problems that are actually being exacerbated by increased move towards free market reliance in recent decades and i would second what tim was saying about the need for government held food reserves. if you go back in history to even the earliest states that were formed in the su mer their governments from that point on until just recently made a point of having large grain reserves as a way of dealing with the natural fluctuations in food production and that's something they see on a consumer could only eat and with india or china is the problem i mean when you live in a primitive world where trade is forbidden across the globe that is

a process that you probably want to do if your government but with but currently you can buy off and i would anywhere a limited or a world and that that stabilizes the market if you allow those markets to go forward ok timothy winter is a very bad it hasn't stabilized the market in recent years but who wants to market to be stable as i can look for agribusiness timothy this is the problem there's a lot of money here involved. yeah i actually i actually would agree with david though i mean i think the point is you know the alternatives aren't no trade and free trade and unregulated trade the alternatives the question is how to manage trade what should the rules be for trade and should they be exactly the same for every country i think what where the doha negotiations were going and actually they broke down because the united states government and others refused to accept some of the proposals of developing countries is that

developing countries actually need more flexibility in the management particularly of their food resources and their food growing resources so free trade for a poor developing country is is not the same thing when it comes to to keep food resources so there were special provisions that were being negotiated something called special products that would allow developed developing countries to have added protection for key food crops key crops for. rural development and for livelihoods and incomes that's an anti-poverty whatever you and i long for development program it's exactly how the united states developed its own agriculture is with massive protection and government in me mention all right let me on that question know that we're in a different rules for different stages of developing ronald is in certain countries liable to make sure other countries don't go hungry is not what we're all saying here. what that they're not liable in the sense what we thing that will make sure

eventually that these kinds of things will go away of course is economic development of poor countries so that the people living in those countries will be in fact able to purchase the food that they need for their families from wherever it is in the market in the world the other problem that we haven't addressed here is also that we have massive subsidies in the first world in the united states for example and certainly in europe which is creating a lot of cheap food and in off years we'll call it which is then dumped into markets in poor countries undercutting the agricultural development of poor countries and that is a huge problem we need to get rid of and it's basically as last time i looked at it the world subsidizes production of food the rich countries to to about the tune of one hundred billion dollars if we got rid of that they would go a long way again to stabilizing the markets and helping developing countries develop their own agricultural production ok david i mean is there an interest in the rich countries you see poor countries develop their own agriculture i mean it's

business after all isn't it well there's an interest of the rich countries themselves as a society and seeing poor countries develop their own agriculture it may not be in the interests of cargo or other big grain traders and certainly the foreign policy in recent years has mainly been oriented in this country around service to. agribusiness and food processors of trying to keep inputs as cheap as possible so there's a difference between the interests of big agribusiness and the interests of the country and i think that there is an interest. on our part of seeing development take place one of the ways in which development can best take places like what happened with korea where farm prices were stabilized and. kept sufficiently high so that. peasants could. get richer as the country developed and not

simply be pushed off their way on by cheap cultural imports so i would agree that there's a problem with the dumping of us grain but i don't think that the answer to that is simply opening up markets indiscriminately ok we're going to in a moment i just ask can i just not let me jump in here joe i'm going to a short break and after that short break we'll continue our discussion on the global food crisis stay dark. and.

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if you. still. want to. welcome back to our stop i'm peter lavelle to mind you we're talking about soaring food prices. to. look at him and i to go back to you in boston i mean no one wants to see famine in the world no one wants to see people go hungry but the whole economic model global model really supports western business interests ok no one wants to see peasants starve but the entire business model doesn't allow them to grow their own food to feed themselves i mean it's the whole model was flawed. well i think there are a lot of flaws of the model and i think unfortunately that the debate gets bracketed as pro market or anti market and it's not anti market or per market at

all it's it's how are you going to manage international markets and national markets which are very different and are different from depending on where you are in the development process they look completely different any theo bia than they do in mexico than they do in the united states and there are different stages of development they have different levels of agricultural development different numbers of people making their living from agriculture and they're going through development processes that are not linear they don't look exactly alike from one country to the other i do a lot of work on mexico and we've seen. the utter failures of what's called the free market model in under nafta in mexico and it's for farmers what they've seen is a withdrawal by their own government in mexico from programs that helped keep them improving their productivity and and marketing their products in favor of.

imports of key products that mexico produces in abundance like corn coming in from the united states mexico now imports something like thirty four percent of its corn as a major corn producing country they still have some three million people making their living off of corn farming that's a large number of people in a country like mexico and in a country like mexico that has failed to deliver adequate jobs in the end in the manufacturing sector in the service sector you have something like fifty seven percent of mexicans living and working in the informal sector this is a middle income country with a trade agreement with the united states right next door the model just has failed and for farmers what that means is that they've been flooded by cheap imports as david said and that is undermined. viability of their production their markets and so they've had to. look for other markets look for other jobs and migrate to the

united states which is of course not part of the free trade agreement free movement of labor and that it's never included in that you know ronald if i go to you i mean it's really good for agribusiness ok i mean they're not looking out after the sovereignty of other countries or anything else and they're looking at the bottom line ok and investing in agribusiness is a very good investment these days because prices go up. i completely agree with that the problem is that's what our problem the problem is those are the result of crony capitalism the problem of government interference with markets through subsidies for example through closing of markets when there is a crisis those kind of things if we had a free and open market where we had trade then a lot a great deal more stability would be occurring and food prices around the world unfortunately we don't have that and developed hillary is exacerbated by jumps in government policy from time to time and also by subsidies and by helping if you will agribusiness that's a terrible thing but consider the situation with mexico again the problems of

mexico are not that they have poor corn farmers their problems are much deeper than that is a country where the rule of law barely exist was however it's almost impossible to be part of the business elite unless you're part of the central government those kinds of problems and agricultural trade is not mexico's biggest problem at all the reason that we have many migrants from mexico and i welcome them here to the united states is because their government has completely screwed up their economic development process and that is where we have to go with it if you think about it also history mexico is the first country that adopted the green revolution in fact it was incubated in mexico back in the one nine hundred forty s. and fifty's with norman borlaug and what you found is that in one thousand nine hundred eighty nine the rockefeller foundation that helps support the green revolution mexico was importing fifty percent of its wheat it was already a poor country after the green revolution it was exporting wheat and that and what you need to do are those kinds of technologies need to be applied in poor countries

so that they can also jumpstart their economic development again the distortions in the market our government and that's a problem ok david how much of it is a difficulty what you are being retired now massively aren't limited to go ahead but i mean how much is in a speculation and involved here well run and can i just can i just say something about the i mean the wheat example is a a is. excellent example mexico is now importing the mat the vast majority of its we can and that's because of the opening of its market and it's succeeded in becoming a wheat producer and so it's becoming more self-sustaining and we precisely because it did not open its market up it did invest in technology and and in yield enhancing seeds and and other improvements but it didn't help and it's and i did turn to you and i said if you want to do it and we're not and i said i think it's grain production well but my suggestion to you is that if the u.s. were not massively subsidizing its grain production then the mexican farmers would be able to compete better. the reason that the market's not it is because we have

provided so much money to farmers here that they can't over produce ok that's not a market mechanism that is not what i mean the british government policy ok alone ok david you want to jump in here. just on the good about bella tell of the exact one of the reasons for the increased volatility is the withdrawal of governments from price they position programs and increased reliance on markets like the futures markets and many investors have gotten into the market not in the traditional hedging functions like green millers buying grain in the future or farmers contracting to deliver grain in the future but instead getting in to speculate that food prices are up prices or other commodity prices will simply go up and they continue to drive the prices up. so the marketplace

particularly this financial market aspect of it is exacerbated the volatility in prices ok this is exactly where you want to go ronald you want to read. well the problem with saying speculation is part of the problem you're pretending that prices always go up the fact of the matter is they go down so the speculators lose money as well when you have a contract there's a person on either side of that contract someone is going to lose money in someone's going to make money that has nothing to do with the ultimate price of the grains ultimately ok can i do either to speculation that it's there but it's not it really doesn't have a long term effect on food prices that's a big debated question timothy what do you think about that. well i think the debate is is ongoing i think. you know the u.n. contract at a high land high level panel of experts to study it for the g eight and it's been studied by the g twenty i think the debate is over how much it contributes to

volatility not whether i think that it clearly contributes or volatility of futures markets and some of the biggest complainer about the. functioning of the futures markets with all of the financial capital flowing into them particularly when prices go up is that they big they lose their price discovery function so they lose their their ability to help legitimate hedgers people who are you know the northeast petroleum association trying to ensure that it has supplies of petroleum for the northeast heating oil market at a price that can be somewhat predictable the price discovery function of that is is significantly damaged you can read statements by all of them complaining about the entry of. the financial capitalists into those into those markets and what it what it has the effect of is to make hedging legitimate hedging like that much more

expensive so it's actually adding to costs for consumers in the end by making the hedging more expensive making the oil heating oil more expensive and adding in theory the idea is that it adds liquidity to the market but these are markets that have a lot of liquidity they do not lack for liquidity at this point well thank god you know we entering an age where the there's no longer cheap food in the world as you said prices go up and down. no i actually think the long term trend i don't think can you as it has over the last century where the price that will eventually continue to go down the international food policy research institute has looked out to the future to twenty fifty and they basically think that food prices will stabilize about where they are now and remain more or less that way for the next forty years as productivity continues to rise around the world so ultimately food if you think about it in the last twenty years if you look at the average price of

food it's never been cheaper or more abundant than any time else in history and i fully expect that trend to continue ok but david and in light of what well just said there's still a billion people that are hungry out there so the system is not working. that's because they're poor yeah and we need to do economic development so that they can buy food and markets we have plenty of food they just can't buy it and that's really the problem ok david you want jump in there go ahead well they have put plenty of through and. as i think one thing that a lot of people are beginning to rethink is the impact of global warming and climate change on the prospects for a good culture. not until just now many years ago many scientists expected global warming to actually help agricultural productivity and now there's increasing evidence that it's likely to be neutral or undermine

agricultural productivity and so these revised forecasts suggest that prices are likely do rise much more dramatically than a lot of people thought so the data still and what i would add to that is what is there and prospects are to to make the jump in go ahead yeah i mean what i would add to that is is that. is that i mean i think the study the ronald cites i'm familiar with and they modeled a lot of scenarios actually i mean they looked at what the what they admitted though was that there was increasing uncertainty. and that's what what david stalking about climate change which is you know however you want to view the debate over how much is is cause caused by human activity what the results will be it's it's now more an accepted fact that the climate is changing and we're seeing more severe weather events and it's having an impact on

agriculture and they're very it's going to happen you know here gentlemen fascinating discussion on the food crisis many thanks today to my guests in boston chicago and in washington and thanks to our viewers through watching us here if you see you next time and remember profitable. and if you want to.