Kenyan politics: food prices to rise; more stories from 2008

There is lots of daily “news” in the Kenyan presidential race, naturally.  What of this will matter six months from now?  Obviously it is hard to know, but one current headline that is more likely to impact the day to day lives of most Kenyans is the drought in the United States and the accompanying huge drop in the U.S. corn/maize crop.  From the Financial Times, “Food crisis fears as U.S. corn soars”:

.  .  .  The US is crucial to supplying the world with food: the country is the largest exporter of corn, soyabeans and wheat, accounting for one in every three tonnes of the staple grains traded on the global market.

Prices for this year’s corn crop, deliverable in December, have jumped 44 per cent in a month, wheat has rallied 45 per cent, and soyabeans 17 per cent.

The rise in grain prices has inspired comparisons with 2007-08, when a price surge triggered a wave of food riots in more than 30 countries from Bangladesh to Haiti, and 2010, when Russia banned grain exports, setting off a price jump that some have argued helped to cause unrest across the Arab world last year. . . .

For the immediate present, the Kenyan headlines dwell on former Raila Odinga aide Miguna Miguna’s book launch, of Peeling Back the Maskwith sections being serialized in The Nation.  The basic notion seems to be the argument that at this stage of his career Raila is just another Kenyan politician who is not any more careful than the usual suspects about the company he keeps or the people he brings into public positions.  A large point may be that the book, published in London, was launched this weekend in Kenya itself.  This means that Kenya has come a long way on free speech in campaigns; it also means that the Prime Minister does not in fact have equal clout in government or chose not to use it if one compares the treatment of this book to others in recent years.

Initial serialization does include an interesting story of how ODM reached over Assistant Secretary of State Jendayi Frazer’s head to appeal to Secretary of State Rice through Sally Kosgei when Frazer was said to recommend formalizing a “qualified endorsement” of Kibaki’s claim to a second term in January 2008.  This is reportedly the background of Rice’s direct intervention to further push the “power sharing” negotiations in February 2008. Those in Nairobi at the time will remember that Ambassador Ranneberger was immediately advocating “power sharing” once the initial U.S. congratulations on Kibaki’s “victory” were withdrawn.

Nestle Chairman Says U.S. Biofuel Policy Causes Starvation at Time of Food Crisis

Interestingly, the head of Nestlé lashed out at U.S. ethanol policy yesterday at the Council on Foreign Relations as reported in The Independent:

Today, 35 per cent of US corn goes into biofuel,” the Nestlé chairman told an audience at the Council on Foreign Relations (CFR) in New York yesterday. “From an environmental point of view this is a nonsense, but more so when we are running out of food in the rest of the world.
“It is absolutely immoral to push hundreds of millions of people into hunger and into extreme poverty because of such a policy, so I think – I insist – no food for fuel.”

Corn prices almost doubled in the year to February, though they have fallen from their peak in the past few weeks. Anger at rising food prices contributed to protests across the Middle East, and rising commodities costs were among the factors pushing UK inflation to 4.4 per cent in February, according to figures out yesterday.

US exports account for about 60 per cent of the world’s corn supply. Demand has surged as more people join the middle classes in emerging economies such as China and India, not just because these new consumers demand more food made from corn, but also because demand for meat has increased and livestock farmers need to buy more feed.

Nestlé, the company behind Shredded Wheat, Nescafé and Aero chocolate bars, has been lobbying European regulators and governments around the world against setting high targets for biofuel use, even though many countries see the production of ethanol as a means of meeting obligations to cut carbon fuel emissions.

The lobbying has fallen on deaf ears in the US, however. Ethanol production from corn is heavily subsidised, with output running at more than 13.5 billion gallons annually. Policies to promote its production are “absurd”, Mr Brabeck-Letmathe claimed yesterday, and meeting a mooted global target of having 20 per cent of fuel demand with biofuels would involve increasing production by one third.

“What is the result? Prices are going up. It’s not very complicated,” he said. “This question is now the number one priority for the G20 meeting in Nice, and the main thing we are going to do is fight against speculation. We are concentrating on the irrelevant.”

Speaking to farmers earlier this month, the Obama administration’s agriculture secretary said he found arguments from the like of Nestlé “irritating”. Mr Vilsack said: “The folks advancing this argument either do not understand or do not accept the notion that our farmers are as productive and smart and innovative and creative enough to meet the needs of food and fuel and feed and export.” . . . .

There are a number of recent biofuel projects at various stages in Kenya. Obviously this is controversial, but without the subsidies so far as I know these projects involve non-food crops,  UPDATE:  Here is a story this week in AFP about opposition to plans to grow jatropha on 50,000 hectares near Malindi on the Kenyan coast for the European ethanol market.