World Hunger and Its Complications

There are many issues today regarding our food, where it comes from and why everyone doesn’t have enough. Some believe America directly affects the food resources overseas and drives mass starvation. The problem with this is that often it is only backed by the emotional argument regarding children starving around the globe. It is rarely, if ever, backed by numbers showing that the U.S. is tight-fisted with its food or money. To truly assess world hunger, it is important to look at what the U.S. has contributed as well as the effect world leaders have had on their countries.

According to a press release issued July 16 by the U.S. House of Representatives Committee on Agriculture, the U.S. gives approximately 58% of the total money contributed to global food aid. In 2007, this equated to more than $1.78 billion. In 2008, $1.53 billion was appropriated with another $1.2 billion supplied by a bill passed by Congress. This means in 2008, Americans will give $2.73 billion to help those in foreign countries feed themselves and their family.

“Food for Progress”

For those that don’t believe $2.73 billion is enough, more numbers follow. For instance, according to Michael Yost, the administrator of the Foreign Agricultural Service, in 2007, the USDA initiated 21 food for progress (FFP) agreements in 15 countries. This provided $120 million. In 2006, Catholic Relief Services gave 4,400 metric tons of U.S.-donated food to feed over 32,700 students in 658 elementary schools in Honduras. This totaled $3.4 million. Food rations were also given to over 13,000 children up to five years of age and 7,000 pregnant women and new mothers. Expenses also come from other things such as 120 gardens and fish ponds, income for schools, training for teachers, sanitation systems and infrastructure for 77 of 100 of the neediest schools with work continuing at the final 23.

In 2006 in Guatemala, an FFP agreement used 8,000 tons of U.S. soybean meal and 2,000 tons of U.S. tallow to support a microcredit program. This created $3.2 million in revenue. This money was used to initiate a banking program which could provide loans for women. These loans allowed women to begin businesses to better support their families.

Another program, the McGovern-Dole, has given food, money and assistance to reduce hunger and improve education. Since 2000, more than 22 million children were fed in 41 countries. A third program, Trade and Investment Missions (TIMs), has the specific goal of increasing trade and investments in new markets around the world. Since 2005, new trade has produced $45.8 million in countries such as the Republic of Georgia and Kazakhstan and all parts of Africa.

As for Iraq and Afghanistan, in 2009, the U.S. is slated to spend $12.5 million to support farming, agricultural development, USDA volunteers and livestock management. Agriculture is a major force in these countries since 80% of Afghanistan’s population is involved with agriculture or livestock. In Iraq, agriculture is the second largest revenue source for the country’s gross domestic product. These industries employ 25% of the working population and are the largest Iraqi employers. To provide more money, the USDA has established a “Stocks-for-Food” program where government-owned commodities are exchanged for food aid. According to Yost, this new program is giving $120 million and has put $100 million in The Emergency Food Assistance Program. More than $20 million has gone to help 650,000 mothers and children in multiple countries.

To meet unexpected needs in Africa and other countries, President Bush has made another $200 million immediately available through the P.L. 480 Title II Program. In 2008, $850 million was given through this program with $395 million available in 2009.

Enough Blame to Go Around

Many times, populations starve not because of a lack of food but because food is mismanaged by the government. According to the biography Mao: The Unknown Story, in 1953, Mao took control of the food supply in order to export almost all of it to pay for his Superpower Programme. This program was established to satisfy Mao’s desire to “control the Earth.” According to Mao, the population only needed “140 kg of grain, and some only…110.” This is less than half the amount considered necessary for basic survival. He responded to the peasant’s pleas for more food with “educate peasants to eat less, and have more thin gruel.” While 30 million people died during peacetime due to this program, after 1958, 40 million died due to his “Great Leap Forward” plan which tightened his stranglehold on the country’s food resources.

More recently, a new problem has developed from genetically modified (GM) food. While much of America’s food sources are modified to produce more, faster, larger and cheaper, many countries have great disdain for GM foods. It would seem that if a population is starving, that any food aid would be happily accepted. In 2002, however, Zambia refused to receive GM corn provided by the UN’s World Food Programme even though they were facing a famine. In 2004, Hugo Chavez initiated a total ban on GM foods in Venezuela. In 2005, the Hungarian government refused GM corn even though it was authorized by the EU. Many would point out that the citizens refuse to eat such GM food, leaving the government blameless. Either way, millions are unnecessarily starving. (Read Jennifer Bunn’s blog on genetically modified foods for specifics.)

When one looks at the amount the U.S. contributes to help those in need as well as the roadblocks many of governments initiate to prevent food from getting to the people, one has to wonder why people are so willing to fully blame the U.S. for world hunger rather than lay at least some blame on the governments and people themselves.

How Economics Helps Us Understand Laws

Law and economics – is there a connection between the two? The purpose of law is to regulate society in such a way as to provide, among other things, economic benefits. Economics provides fundamental organizing principles for the whole body of law and a scientific theory to study the effects of legal sanctions on behavior. It simplifies the law and focuses on the real-life effects of the law such as protection of weak contract parties.

Although Adam Smith studied the economic effect on mercantile legislation in the 18th century, economic analysis of law is relatively new. The origin can be traced to two path breaking articles – “The Problem of Social Cost” by Ronald Coase published in 1960 and “Some Thoughts on Risk Distribution and the Law of Torts” by Guido Calabresi published in 1961. Over the years, this field has developed in a variety of directions. It has been one of the most successful of all the outward expeditions of economics since the 1960s. There are two basic questions involved in economic analysis of law – what are the effects of legal rules on the behavior of the concerned parties, and are these effects of legal rules socially desirable? The objective of this field is to apply an economic approach to all areas of law. In the U.S., this field is most active in the area of antitrust laws. Recent decisions of the Supreme Court have been shown to be influenced increasingly by the discipline of law and economics (e.g., the Microsoft case). Although the U.S. is the birth place of law and economics, it is now gaining ground worldwide.

Why should an economist have any knowledge about the law? Economics does not operate in an institutional vacuum. Economists can model their theories on real life situations.

There are two main features which make the study of law and economics an important field. Firstly, the courts allocate and reallocate resources, and the courts’ decisions necessarily affect the use of society’s limited resources. The second feature is that the legal system is concerned with behavior, just like economics. Law tries to influence behavior by establishing rules of conduct and imposing sanctions for their breach. These rules and sanctions must be made with the resource implications in mind.

Major economic, political, and social changes inevitably question the public policies underlying legal rules. With so much economic and social changes, it has become important to take stock of our laws, to inquire if they truly reflect the society’s ever changing values, and to assess their economic and social implications.

The two apparently dissimilar subjects of law and economics should be integrated to make their application more effective. It is an integral part of any democratic set up and enables policymakers to implement their strategies on basic healthcare, education, etc. Ownership, endowment, and numerous other economic concepts have a legal underpinning. The integration of law and economics is good not only for both disciplines but also to the societal goals they are serving in the development process.