allAfrica.com: Ethiopia: The End of Cheap Everything (Page 1 of 1)

The end of cheap purchase worldwide of long list of things, especially chow, may be nigh. That seems the consensus among many pundits. But there are exceptions, as always, and I will mention a couple of them that come easily to mind and that make the above statement a lot less universal.

Just last week, Tata Motors, a giant Indian car company came up with not only a cheap car, but the cheapest that there is. Millions of Indians who until now walked or rode motorcycles will, it is assumed, have the pride of place of sitting in the driver's sit of mini cars. Never mind that this will exacerbate global warming or help the price of oil stay in the stratosphere. But heck, it's good the average Indian citizen will get a break.

Turning to Addis, one item which to my knowledge has been surely going down in price over the years is the charge of duplicating. To make a duplicate on an A-4 size paper used to cost Birr 1.5 or more, some 5-6 years back. Today, it cost merely 20 cents. This, despite the fact that the price of both paper and utility has held steady or is even going up.

Business experts could kindly explain this anomaly to us. They could also see to it if this sort of economics, charging cheaply despite high costs of production, couldn't be applied to the other products whose prices are soaring.

The news of the end of cheap food needs no telling, both here and in many other countries. The Economist of December 8th 2007 calls this Agflation and it goes on to explain this turn of events as follows: "Yet, what is most remarkable about the present bout of agflation is that record prices achieved at a time not of scarcity but of abundance. According to the International Grains Council, a trade body based in London, this year's total cereals crop will be between 1.66 billion tones, the largest on record and 89m tones more than last year's harvest another bumper crop. That the biggest grain harvest the world has ever seen is not enough to forestall scarcity prices, tells you that that something fundamental is affecting the world's demand for cereals" It is commonly thought that the worldwide rise in food price could be attributed to two things, without forgetting that there are many local exceptions. One is that China and India have not only huge populations but their diets are changing with meat curry more and more on the table, necessitating huge volumes of grain going as animal feed. The rising world population too needs more and more cereals for bread, tortillas and chapattis.

The other cause for cereals prices going up abruptly is due to the acceptance of ethanol from cereals as bona fide substitute for oil. With the price of a barrel of oil hitting the $ 100 mark, it makes ethanol look like godsend. Lots of grain, therefore, is being diverted to bio-fuel. Presently sizable amount of corn is being used in the United States for this purpose, for instance. Brazil is another big player in this business, so any scarcity in soybean internationally anytime should not come as a surprise.

Ethiopia too seems to be keen in the endeavor to make ethanol. At present no cereals are being diverted but according to some of the media, it might soon use sugarcane to produce the miracle black gold, or whatever its color may be.

As of now, Ethiopia is hardly a big player in both biofuel production and the export of cereals to China, India or any other place . So what is the cause of the end of cheap food in the country? Different people give different explanations. Our only conclusion here is all the answers given as explanations are nuanced.

Worldwide, extreme-eating or picky-eating, will be jeopardized if the present trend of food prices continues. Picky eating include organic foods and foods that have traveled the least distance from their place of origin. They are also known as farm-to-table foods as opposed to farm-to- plane.

If food prices continue to go wild, organic foods may no longer be affordable and might be considered Luddite. Prince Charles's advocacy of it might fall on deaf ears. GM crops might be upon us. Farmers might be future millionaries, replacing hedge fund artists.

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