It’s probably safe to say that the American Bakers Association (ABA) does not command the same amount of attention in this town as does the American Bankers Association, so it should come as little surprise that the ABA’s recent “march” on Washington failed to gather much attention.
Still, for all those who follow the food crisis, it’s worth listening to what the ABA has to say. With the price of a load of bread now achieving parity with the price of a gallon of gasoline, the bakers of America are worried about the “wheat crisis.” During their March 12th “march” on Washington, the bakers stopped just short of calling for restrictions on grain exports, urging instead a “USDA review of wheat export policies in light of the new market dynamics.”
American bakers, of course, are not the only people sounding the alarm. In China, there appears to be growing concern and debate about the size of country’s grain reserves. A news report yesterday quoted Premier Wen Jiabao as saying that China's current grain reserves are between 150 million tonnes to 200 million tonnes, adding "we are confident in curbing overly fast price rises". But Beijing News quoted Yuan Longping, a top rice scientist and a Chinese government advisor, as saying that some local grain reserves are actually empty, suggesting that Chinese grain reserves may be overstated.
But if there is a grain crisis, let’s remember it’s a global problem. A few weeks ago, the New York Times, ran a feature story (“A Global Need for Grain That Farms Can ’t Fill”) that warned:
Farmers the world over are producing flat-out. American agricultural exports are expected to increase 23 percent this year to $101 billion, a record. The world’s grain stockpiles have fallen to the lowest levels in decades.
“Everyone wants to eat like an American on this globe,” said Daniel W. Basse of the AgResource Company, a Chicago consultancy. “But if they do, we’re going to need another two or three globes to grow it all.”
The ABA notwithstanding, it’s probably not a good idea for the U.S. to impose grain restrictions or embargoes in the interest of keeping U.S. bread prices low. Several other major grain exporters, including China, have already announced export restrictions, but if the current grain crisis takes another turn for the worst, a wave of grain embargoes could be the worst possible reaction. For the world’s poor who survive on less than $2 a day and happen to live in a grain-importing country, it could spell disaster. Better that the price of bread rise in the U.S. than to deny bread to the world’s poorest and hungriest.
