BackFood prices and revolutions
A rise in food prices can often destabilize regimes but there is little evidence to show that rising volatility in food prices can do the same
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In the winter of 1973, students of the Ahmedabad-based Lalbhai Dalpatbhai College of Engineering went on strike in protest against a rise in the hostel food bill and the poor quality of food. That protest ignited similar protests in other parts of the state. Within no time, the protests had coalesced into a major political movement against the then Gujarat chief minister, Chimanbhai Patel, widely perceived to be corrupt and inefficient. Under the banner of Nav Nirman (or reconstruction), teachers, lawyers and factory workers joined the ranks of students to demand an end to price rise and corruption.
The Nav Nirman protesters demanded, and won the resignation of the chief minister. But that’s not all. It inspired the firebrand socialist Jayaprakash Narayan, who toured the state at that time, to give a clarion call for Sampoorna Kranti (or total revolution) to overthrow the Indira Gandhi-led Congress regime at the centre. Narayan’s tireless campaign to bring together all political forces opposed to Indira Gandhi under one umbrella eventually led to the formation of the first non-Congress government at the centre.
The humble student strike over food prices was the spark that changed the political landscape of the country for ever.
Food prices have always been deeply political and this was just one illustration of how rise in food prices can breed discontent and lead to political upheavals. A growing number of scholars seem to identify rising food prices as one of the key drivers of protests and revolts in Arab countries such as Tunisia and Egypt in recent years.
While many acknowledge the key role of dearer food in destabilizing regimes, right from the time of the French Revolution in the 18th century to the Arab Spring in 2011, there are only a few studies that have sought to study the links between food prices and social unrest empirically. In a recent research paper, the economist Marc Bellemare of the University of Minnesota attempts to fill that gap by establishing a causal link between rising food prices and social unrest.
Other careful studies have arrived at conclusions similar to Bellemare’s. A 2011 International Monetary Fund working paper by Rabah Arezki and Markus Bruckner showed that increases in international food prices led to ‘a significant increase in the incidence of anti-government demonstrations, riots, and civil conflict’ in low income countries. Such effects were absent in the richer nations, where basic needs for most have been met.
In a 2010 study of food riots following the spike in global food prices in 2007, Ray Bush, professor of African studies and development politics at the University of Leeds, argues that the spike in food prices was often the trigger for an outburst of people’s pent-up frustration against old regimes. Bush presciently warned that the Hosni Mubarak regime was in increasing danger of being toppled in Egypt a year before that actually happened.
Over the past few years, a number of reports have blamed rising volatility in food prices as the key driver of food riots. Bellemare collates monthly cross-country data on food riots between 1990 and 2011 to show that it is the level of food prices rather than the volatility in food prices that drives food riots across countries. The distinction is important because identifying what leads to riots prepares policymakers to guard against them.
“While rising food prices appear to cause food riots, food price volatility is at best negatively associated with and at worst unrelated to social unrest," writes Bellemare. “These findings go against much of the prevailing rhetoric surrounding food prices. Indeed, whereas many in the media and among policy makers were quick to blame food price volatility for the food riots of 2008 and of 2010-2011, the empirical results in this article indicate that rising food price levels are to blame and that increases in food price volatility may actually decrease the number of food riots."
In most democracies, policymakers are aware of the links between food inflation and political upheavals. But food policies designed to prevent price volatility can be very different from those designed to prevent food price increases. India is a case in point. As my colleague T.C.A. Sharad Raghavan pointed out in a recent article, while India’s closed door policies have managed to limit volatility in food prices, they have led to an increase in food prices by preventing imports of cheaper food.
Perhaps, it is time to embrace more openness and volatility, if it brings with it lower prices on average, and greater political stability.
Economics Express runs every week, and features interesting reads from the world of economics and finance.
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