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Columns: Boomer Bucks
Barbara Mlotek Whelehan   Expert: Barbara Mlotek Whelehan
Boomer Bucks
A few people are benefiting from rising grain prices, but many more are suffering from hunger
Boomer Bucks

Tackling food and fuel costs
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Those are the ones that have made recent headlines. World Bank President Robert Zoellick said recently that 33 countries are at risk of social upheaval due to rising food prices.

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A call to action
In March, the United Nation's World Food Programme, or WFP -- the largest distributor of food aid in the world -- appealed to governments of richer nations to help narrow the shortfall of $500 million for food rations that the WFP distributes to 70 million people in 80 nations. That shortfall has since widened to $755 million. The executive director of WFP makes a compelling case for assistance in a video available on the WFP Web site.

The World Bank suggests several solutions that governments of stricken nations could take effectively. They can institute food-for-work programs, emergency food aid distribution and school feeding programs. Other strategies involve issuing food stamps, reducing tariffs on food imports, offering grain or bread subsidies to consumers, or taxing or banning altogether grain exports (the least desirable of options).

Plight of the poor
In Niger, tariffs on imported rice were removed. In Thailand, consumers are restricted to limited rice purchases. Governments in Malaysia and the Philippines plan to subsidize rice for their peoples. According to an article in The New York Times, in Haiti, the poorest of the poor are eating mud patties mixed with oil and sugar to help quell hunger.

The store shelves are not empty. There is enough food to feed these people. They simply can't afford it.

In the first quarter of this year alone, U.S. wheat export prices rose 9 percent while Thai rice export prices climbed 54 percent, according to a report by the World Bank. That's on top of a 181 percent increase in global wheat prices and an 83 percent rise in overall food prices over the past three years.

An article in The Economist describes the plight of the poor in hierarchical terms:

The middle classes in poor countries are giving up health care and cutting out meat so they can eat three meals a day. The middling poor, those on $2 a day, are pulling children from school and cutting back on vegetables so they can still afford rice. Those on $1 a day are cutting back on meat, vegetables and one or two meals, so they can afford one bowl. The desperate -- those on 50 cents a day -- face disaster.

Back at the farm ...
Meanwhile, the food industry in the U.S. is doing quite well overall. Grain companies and related businesses reported huge profits recently. Archer-Daniels-Midland reported a 42 percent profit jump in its fiscal third quarter. Monsanto's profit doubled in the last quarter; Deere's earnings increased 55 percent; and Cargill's profits rose 86 percent. Other food companies expecting or posting positive gains include DuPont, Syngenta, Bunge and Mosaic, according to The Wall Street Journal.

American farmers are prospering as well, just as Congress puts the finishing touches on a big $300 billion farm bill that will subsidize farmers over the next five years. These subsidies give American producers unfair advantage over farmers in developing countries. Growers in these countries say they can't compete.

While the bill is complicated and does a lot of good (for instance, it provides nutrition programs for low-income families in the U.S.), it also supports higher food prices and subsidizes wealthy farmers. Provisions in the bill will limit income assistance to farmers with adjusted gross incomes of up to $950,000. But over the past several years, farmers with incomes of up to $2.5 million benefited from subsidies.

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