Remember the Rice Riots?

You might have missed it last year, what with the economy in free-fall, banks collapsing, the oil price shock, The Surge, and the election and Sarah Palin's glasses and that fierce debate over hockey moms, pigs and lipstick.

But big parts of the developing world were embroiled in food riots last spring. Soaring prices for staples -- particularly rice -- sparked the unrest, which stretched from Bangladesh to Yemen. The biggest upheavals were felt in places where the population depends on rice as a staple, which tend to be the places where people are poorest.

If you did hear about it, it was probably in the context of a food vs. fuel debate, and how the U.S. decision to increase ethanol production was creating a global shortage of grain.

The debate struck a nerve, and played into a narrative that seemed to resonate in some quarters: Americans, in our greed and hubris, were ripping food out of the mouths of starving Third World peasants to fuel our carbon-spewing, V-8 powered automotive behemoths.

Or were we?

A new report is out from economists at the U.S. Department of Agriculture, taking a detailed look back at the global rice crisis. Its findings suggest that:

* While a U.S. decision to convert more corn into ethanol was part of what drove the global food price spike, it was only one of many factors, and it didn't play into the rice crisis much at all.
* Contrary to what you might think, the rice shortages weren't the result of a global shortfall -- in fact, the worldwide rice crop in 2007-08 was the biggest ever recorded.
* The major causes that directly led to some of the worst of it were decisions made by politicians in rice-exporting nations to benefit domestic consumers -- and voters -- at the expense of poor people in rice-importing countries, and their political leaders responded in ways that only made things worse.

It's a 25-page report with a lot of detailed economic data, but the last page summarizes it well:

The rise in global rice prices in early 2008 coincided with a worldwide food crisis. ... For corn, wheat, and soybeans, the primary factors behind the price increases were increased use of biofuels, changing diets in China and India, major weather problems, and tight (supplies). Increased participation in futures markets by nontraditional investors likely contributed to greater price volatility. ...
(But) these factors had only indirect effects on global rice prices. In fact, the rice price rise occurred in a year of record global rice production, larger supplies, and a buildup in stocks. For rice, the most important factors behind the price increase in late 2007 and early 2008 were export restrictions by major suppliers, panic buying by several large importers, a weaker dollar, and record high oil prices
If you can spare a minute, I'd recommend reading the whole thing. It's about three cautionary tales in one:

* The unintended consequences of governments meddling in markets;
* The way markets run amok, fueled by fear -- and maybe greed -- can have very damaging real-world consequences
* And the very complex balance between macroeconomic trends and microeconomic responses in global markets.

And it should also teach us not to assume too much. Yes, there are some very real problems with corn-based ethanol, both pratically and philosophically. But to blame it for last year's hunger, crisis and riots in so many parts of the world is just wrong. Those things happened because people failed, not because of a failed fuel technology.