In 1987, the Nobel Prize-winning economist Amartya Sen showed that many famines are not caused by a lack of food production, but by a change in the incomes of poor people.
For example, a group of peasants may suffer entitlement losses when food output in their area declines, perhaps because of a local drought, even when there is no general lack of food in the country. The victims would not have the means to buy food from elsewhere, since they wouldn’t have anything much to sell to earn an income, given their own production loss. Others with more secure earnings in other occupations or in other locations may be able to get by well enough by buying food from elsewhere. Something very like this happened in the famous Wollo famine in Ethiopia in 1973, with impoverished residents of the province of Wollo unable to buy food, despite the fact that food prices in Dessie (the capital of Wollo) were no higher than in Addis Ababa and Asmera. Indeed, there is evidence of some food moving out of Wollo to the more prosperous regions of Ethiopia where people had more income to buy food.
In other cases, food prices may shoot up because of the increased purchasing power of some occupation groups, and as a result others who have to buy food may be ruined because the real purchasing power of their money incomes may have shrunk sharply. Such a famine may occur without any decline in food output, resulting as it does from a rise in competing demand rather than a fall in total supply. This is what started off the famine in Bengal in 1943, with urban dwellers gaining from the "war boom" – the Japanese army was round the corner and the British and Indian defence expenditures were heavy in urban Bengal, including Calcutta. Once the rice prices started moving up sharply, public panic as well as manipulative speculation played its part in pushing the prices sky high, beyond the reach of a substantial part of the population of rural Bengal.
What is striking about these cases is that food aid – that is, buying surplus production from rich countries and shipping it to the places where people are hungry – may do more harm than good. What the poor people need in these circumstances is buying power, to enable them to buy the food that is already being produced but is not available to them. Food aid may depress local food prices, and thereby cause some harm to food producers and perhaps reduce future production. In these circumstances, it would be better to drop dollar bills out of helicopters than sacks of food.
It seems that we may be in something like this situation right now in Niger. According to this news report, there is food in the markets in Niger: the problem is that the poorest people there do not have money to buy it:
Johanne Sekkenes, the mission head of MSF which is mounting the biggest emergency exercise in its history in Niger, says the current emergency could have been avoided. ‘This is not a famine, in the Somalian way,’ she said. ‘The harvest was bad in 2004 and the millet granaries are empty. Yet there is food on the markets. The trouble is that the price of the food is beyond anyone’s reach.
It has been encouraging to hear that there is now some international response to the crisis in Niger. But we we must do so in ways which deal with the real causes of the problem. Too often, our own self interest (we can provide income for our own farmers) combines with an ill-informed set of assumptions about Africa ("they can’t grow enough food to feed themselves") and leads us to support inappropriate solutions.
Hat tip: Ian