【New Coronary Pneumonia】 Revise the food crisis 12 years ago and make no mistakes ｜ 01Weekly

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Author: Yi Wenjian

2020-04-29 18:00

What is more worrying than the blockade countries is the impact of the grain export ban. The reason why food export restrictions are so sensitive is because these policies and panic emotions are like viruses, and can easily be transmitted from one country to another. The original purpose of export restrictions was to protect the country ’s sufficient food and avoid panic buying. However, as more and more countries are restricted, cross-border supply will decrease, and grain prices will increase.

To undertake the above: [New Coronary Pneumonia] The disruption of the supply chain triggers a panic buying pandemic

In Hong Kong, the public had earlier worried that the new coronary pneumonia would hinder the import of rice. (Information picture / photographed by Lao Minyi)

Major exporters of export restriction disputes such as needle felt

The society still has a lingering fear over the global food crisis from 2007 to 2008. At that time, the international rice price had tripled in a few months, directly or indirectly causing riots in Cameroon, Côte d’ Ivoire, Bangladesh, Mozambique and Yemen. The Haitians were dissatisfied that the price of rice had doubled in a short period of time, and the price of oil had risen three times in two months. They took to the streets in April 2008 to protest and shocked the presidential palace, which eventually led to the removal of the prime minister.

There were many reasons for the food crisis at the time, such as rising crude oil prices leading to increased demand for biological raw materials, adverse weather in wheat-producing countries, and depreciation of the US dollar. However, analysts generally agree that banning food exports is an important culprit. In September 2007, Vietnam took the lead in banning some new export orders; by March 2008, India banned the export of non-fragrant rice, which caused a chain effect. Vietnam, Egypt, and Cambodia successively introduced bans, and the price of rice quickly skyrocketed. The World Bank ’s research report estimates that 45% of the increase in the price of rice in the 2006-2008 price surge stemmed from the export ban. The Philippines is a major importer of rice. It is the first to be hit hard. To prevent the price of rice from soaring, the government has amended the law to sentence prisoners who raise rice prices to life.

Looking back, the outside world judges that export bans and export taxes are just tricks for self-preservation and may even harm others. After analyzing the food crisis in 2008, FAO pointed out that although the wheat export tax and export ceiling introduced by Argentina in that year can control the price of wheat, but because wheat only accounts for about 10% of the cost of bread, it has a limited effect on preventing the rise in the retail price of domestic bread. The study even suggested that it is precisely because the production in the exporting country still has more than enough to meet domestic demand, allowing exports to stabilize prices.

It is precisely because of the bitter lesson more than ten years ago, including international organizations and economic organizations such as the United Nations Food and Agriculture Organization, the International Food Policy Research Institute, etc., after the New Coronary Pneumonia epidemic, they began to speak out against the export ban. In an interview with the Guardian in late March, FAO Chief Economist Maximo Torero stated bluntly, "Government restricting food flow is the worst case, and measures against free flow must have an adverse effect", "Trade barriers will lead to Extreme (price) fluctuations ". In addition, Australia, Canada, Chile, New Zealand, Brunei, Myanmar, and Singapore signed an agreement on March 25 to keep trade and supply chains open and not implement export controls, tariffs, and non-tariff obstruction measures.

(Hong Kong 01 Cartography)

Even so, some grain exporting countries restrict the export of basic agricultural products for self-protection. Thailand has banned the export of eggs for five weeks from March 26 in response to the public's rush to buy eggs; Russia has also set a ceiling on the export volume of cereals; Vietnam has once again suspended the signing of new rice export contracts since March 25, and finally lifted the ban and replaced it with a quota system However, a large number of rice merchants failed to obtain quotas and could not export, and many rice spoiled; Cambodia banned the export of white and brown rice from April 5; Romania also banned the export of grain from outside the EU from April 10. The emergence of a ban, coupled with the impact of the epidemic on the global supply chain, has greatly shaken the confidence of countries in food globalization, and its effects have emerged one after another.

Among the grains, the rice trade has always attracted much attention. According to statistics from the US Department of Agriculture, global rice production and stocks have generally risen in recent years, but exports have tightened last year and this year (Table 2), mainly due to changes in individual countries ’production capacity and export policies. However, at the beginning of this year, all parts of the world experienced high buying demand, and India, the world ’s largest rice exporter, suspended rice exports due to the closure of the country. Cambodia, Vietnam and other countries have also heard news of export restrictions, as well as Thailand, one of the major exporters. Affected by the drought, this year's drop in rice production is expected to cause Thailand's export rice prices to rise above US $ 580 a metric ton at the end of March, a seven-year high (Table 3).

Based on these signs, the United Nations Food and Agriculture Organization, the World Trade Organization and the World Health Organization rarely issued a joint statement on March 31, calling on all countries to work together to reduce the obstruction of food circulation due to border restrictions to ensure global food security.

(Hong Kong 01 Cartography)

Many commentators have long proposed that international agencies such as the World Trade Organization and the United Nations should strictly regulate export bans, balance the interests of all countries, and promote cooperation among countries in response to global crises. In fact, WTO members are obliged to comply with the provisions on export restrictions. In addition to tariffs and fees, they must not use quotas or export licenses or other measures to establish or maintain quantity restrictions. However, the article also states that the temporary prohibition or restriction of exports in order to prevent or alleviate the severe shortage of food in exporting countries may be an exception.

The loophole of the provisions is that there is no time limit and upper limit for the implementation of export taxes in member countries, and the country can achieve the effect of implementing the ban through substantial taxation, and the terms do not clearly define the words "temporary" and "serious lack". Many countries do not even report to the WTO before export restrictions are imposed, reflecting the weak determination of international cooperation. Although some member countries have tried to communicate at the WTO level for many years, hoping to narrow their differences, so far no great results have been seen.

In Florida, crops in the United States have been unsaleable due to the impact of the epidemic, and a large number of fruits have been discarded. (Associated Press)

Epidemic pandemic reshapes global supply chain

Leaving aside whether the WTO encourages developed countries to exploit developing countries, from the perspective of food exports alone, it is absolutely desirable to build an international coordination mechanism when food globalization has flourished. However, this epidemic has exposed the consequences of the global food supply chain break and shaken people ’s confidence in food security-the original complex and smooth logistics procedures that are usually operated will be severely tested and interfered with during the pandemic And the scale is far beyond imagination.

In addition, regional or global cooperation is also fragile in this outbreak. For example, European countries missed the opportunity to work together to control the spread of the virus, the supply chain broke down and food could not be transported as usual. Has successively restricted grain exports and so on. The virus spread along with humans' frequent journeys, which indirectly led to globalization becoming the accomplice of the new coronary pneumonia pandemic. All of these are easy to be wary of the development of globalization.

The epidemic has exposed the consequences of a broken global food supply chain and shaken people's confidence in food security. The picture shows a rice farmland in Mozambique. (Xinhua News Agency)

It is true that the epidemic will make deglobalization stronger, and countries will strengthen their ability to produce and store food on their own. At the domestic level, the state will increase the reserves of basic grain during normal periods, step up exploration of urban farming, and increase the proportion of grain self-sufficiency. The country may also strive for a certain degree of regional cooperation, such as formulating administrative and logistics shortcuts between neighboring countries to ensure the smooth transportation of food at emergency junctures under the premise of strengthening the protection of employees' health; increasing interregional food reserves and establishing an overall structure For example, the emergency rice storage warehouse established by ASEAN and China, Japan and South Korea can cope with unexpected needs among members.

Nonetheless, we must not forget that countless people depend on food production and trade to make a living, and it is difficult to see that the entrance will be self-sufficient. Unless the world is caught in a war, the general trend of division of food supply, availability of communication, and interdependence of countries or cities is difficult to change. More importantly, pneumonia has been resolved, and there is a greater climate change crisis. Global problems require global cooperation to maintain smooth trade and reduce export restrictions. In addition to timely relief measures, it is necessary to protect the livelihoods of thousands of food and agricultural employees and grassroots. And health. The food crisis of 2007/08 has proved that being alone is the best policy, and we have no reason to repeat mistakes.

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The above is excerpted in the 211th issue of "Hong Kong 01" Weekly Report (April 27, 2020), "Thinking of the" Food Panic "in the Circumstances of Panic Purchasing Caused by the Interruption of the Supply Chain".

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