Nothing new under the sun

Among the most popular policy responses to recent rises in food prices are export bans. Cambodia has banned rice exports, for example. Kazakhstan, Pakistan and Iran have refused to export wheat to hungry neighbours like Afghanistan. And Burkina Faso, one of the West African countries that has been hardest hit by the price rises, has banned cereal exports to neighbouring Ghana.

Such measures have been widely criticised, but they are not new. I recently came across FJ Pedler’s ‘Economic Geography of West Africa’, published by Longmans in 1955. Among many other interesting topics, he writes about the maize shortages of 1947. He notes the wildly fluctuating price of guinea-corn in the Zaria region of Nigeria, which rose from £8 per ton in 1946 to £38 per ton a year later. “These price movements,” he says, “are an indication that too little food is produced to meet the needs of the people throughout the year.” Traders take advantage of this, buying up food at harvest time to sell it later when prices rise (a bit like today’s commodities traders, who have been stocking up on food): “They are often blamed for high prices and scarcity [plus ça change…], but their action is the result of shortage, not the cause of it.”

As in today’s crisis, Mr Pedler reports that governments “often get frightened by the high prices and shortages…and prohibit the movement of food from one place to another.” Like Burkina Faso today, West African governments in the 1950s banned the export of guinea-corn from one state to another – in this case, from Katsina Province into Zaria Province. It didn’t help then either, and Pedler explains why the approach is flawed:

It is difficult to defend these bans on economic grounds. If they are effective, they prevent food from moving to the place where people will pay most for it. This must drive prices even higher in the needy area: while in the producing area an artificially low price is maintained, so that there is less economic incentive for farmers to increase their production.

Little has been learnt, it seems, in the intervening half-century. However, as Mr Pedler observed back then, the bans are easily evaded; “their principal effect is to add to the cost of transport by making it necessary for traders to avoid control posts or bribe the guards.” Good news for the corrupt, then, but bad news for the hungry.