Middle East: Discussion

[Guest]

[url="http://www.marketwatch.com/story/why-us-farm-policy-caused-egypt-crisis-2011-02-11"]Why U.S. farm policy caused Egypt crisis[/url]

Egypt is among the world’s largest importers of wheat. When such commodity prices rise due to U.S. subsidy and tariff intervention, as well as speculation in the capital markets, the price of bread skyrockets. Bread is made from wheat.



In 2008, food riots broke out in Egypt, Mexico, Bangladesh and many developing countries when farmers, attracted to ethanol subsidies, abandoned food production in favor of fuel. This, along with rising oil prices, droughts, and other factors, decreased food supplies. Prices spiked.



Adding to the crisis was U.S. trade policy: Because we subsidize wheat, corn and a handful of other crops so much, we can offer them cheaper on the world market and “dump” supplies on other countries. This puts farmers in those countries out of business, as they are forced to compete with artificially low prices at the market.



Go back a little further in time in Egypt and the roots of the political crisis can be found with its 1992 land reform. Guided by what many say was U.S. and International Monetary Fund influence, the country’s small farmers who were “registered tenants” became subject to rent increases, in many cases triple what they had been paying.



As expected, these small farmers couldn’t afford the steep rent increases and were forced off their land. More than half of all Egyptians live in the countryside, and millions were forced into poverty. Moreover, Egypt itself became more reliant on imports.