Michel Barnier, the French Agricultural Minister, has called upon Europe to increase protectionism in the face of rising food prices. On French radio he stated “We cannot and we must not leave food for people to the mercy of the rule of the market alone and to international speculation.” Framed as a humanitarian gesture, it is nothing of the sort. The position is an attempt to upload France’s national policy to the European level, protecting their own uncompetitive farming industry in the face of increasing pressure as the biggest receiver of EU subsidies.
Concerns from many about the price of staple foods have long been on the agenda for a while. However, the argument used to be that the price of food was too low, and that this was having a negative impact upon farmers. Now it is being acknowledged that rising food prices are impacting upon the wider population in developing countries, with serious effects.
Barnier’s solution is the wrong way out of the situation. In fact, it is a thinly veiled cover for what he perceives as France’s self-interest. He is wrong even about France’s own self-interest. The appalling impacts of protectionism (on consumers at home as well as on producers abroad) have been clearly acknowledged by any self-respecting economist.
Rising food prices are a real problem. However, looking towards the Europe Union for reasonable solutions is like consulting Robert Mugabe on improving the economy. The ludicrous goal of having 10 percent of transportation fuel made from biofuels by 2020 is still sadly in effect. This Brussels backed initiative is exacerbating the high food prices. The International Food Policy Research Institute in Washington suggests that biofuel production accounts for a quarter to a third of the recent increase in global commodity prices. It is about time the plug was pulled on this harmful policy.