FOOD SCARCITY AND ITS ECONOMIC IMPACT
Aside from political turmoil which often results to wars, another main problem among many countries is the lack of basic necessities, such as food. It was said that when people have a hard time getting access to their daily survival needs, economic foundations also drop in response, like what happened in many states. Even worse, majority of government policies implemented to resolve this problem mostly cause further damages.
A key example would be Venezuela. Because of the widespread famine, clashes have broken out, as locals become increasingly infuriated by the fact that they had to wait long lines to get their everyday ration of food, coupled with inefficient regulations. At present, there is a huge pressure in the administration to put an end to the problem, since failure to do so may cause more declines in industries, and even social disorder. The effects, which have already manifested themselves in terms of failing businesses, a slowdown in production, and halted international operations. The current condition of the once-wealthy nation has become completely different.
Responses to the shortage
Officials have many times attempted to address the prevailing crisis by implementing tighter controls on business and transactions, which was drove away high prices at a time they were most needed to attract suppliers. Months ago, a report showed that 85%of companies in the country have either shut down or completely stopped their production.
Another strategy tried out by the regime is printing several currencies to purchase supplies. However, it only gave rise to a severe inflation that surpassed 50%. Industries who could have sold their products to the public were forced to smuggle their items for a more profitable cost, eliminating resources even more, which may trigger revolutions, causing a bigger conflict.
Root of the issue
According to a study, insufficient supply of food is less likely to happen in a democracy. It further stated that famine springs not necessarily from the lack of food, but on inequalities surrounding it and the process of distribution. Most of the time, crises like this break out in the presence of a control, and claims to resources. This is why in many parts of the world, prices will be extremely expensive if not for the efforts of regulation to balance production and allocation. Farmers are given large subsidies and protection, because when certain companies sell below their desired costs due to these regulatory matters, they will either flee to a different market or close their shops altogether.
Basically, price control equals to shortage. Take for example the situation of Venezuela and Hong Kong wherein the former is rich in natural resources while the latter is mostly comprised of rocky mountains. Despite this, HK has never experienced a famine the way Venezuela had. This is because the state allows buyers and sellers to negotiate the value of their offerings themselves while the other constantly imposes control not just on items, but on who can or cannot participate in the market.