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The World-Wide Food Crisis Food prices are soaring; a wealthier Asia is demanding better food, and farmers can't keep up. In short, the world faces a food crisis and in some places it's already boiling over. Around the globe, people are protesting and governments are responding with often counterproductive controls on prices and exports -- a new politics of scarcity in which ensuring food supplies is becoming a major challenge for the 21st century. Plundered by severe weather in producing countries and by a boom in demand from fast-developing nations, the world's wheat stocks are at 30-year lows. Grain prices have been on the rise for five years, ending decades of cheap food. Drought, a declining dollar, a shift of investment money into commodities, and the use of farm land to grow bio-fuel have all contributed to the steep rise in the cost of food. Of these, population growth and the growing wealth of China and other emerging countries are likely to be the most enduring factors. World population is set to hit 9 billion by 2050, and most of the extra 2.5 billion people will live in the developing world. It is in these countries that the population is demanding dairy and meat, which require more land to produce. "This is an additional setback for the world economy, at a time when we are already going through major turbulence. But the biggest drama is the impact of higher food prices on the poor," said Angel Gurria, head of the Organization for Economic Cooperation and Development, or OECD. In Gurria's native Mexico, tens of thousands took to the streets last year over the cost of tortillas, a national staple whose price rocketed in tandem with the price of corn (maize). Global food prices, based on United Nations records, rose 35 percent in the year to the end of January, markedly accelerating an upturn that began, gently at first, in 2002. Since then, prices have risen 65 percent. In 2007 alone, according to the U.N. Food and Agriculture Organization's world food index, dairy prices rose nearly 80 percent and grain 42 percent. "The recent rise in global food commodity prices is more than just a short-term blip," British think tank Chatham House said in January. "Society will have to decide the value to be placed on food and how market forces can be reconciled with domestic policy objectives." Many countries are already facing these choices. After long opposition, Mexico's government is considering lifting a ban on genetically-modified crops, to allow its farmers to compete with the United States, where high-yield, genetically modified corn is widely accepted. The European Union and parts of Africa have similar bans that could also be revoked. A number of governments, including Egypt, Argentina, Kazakhstan, and China, have imposed restrictions to limit grain exports and keep more of their food at home. This knee-jerk response to food emergencies can result in farmers producing less food and threatens to undermine years of effort to open up international trade. "If one country after another adopts a 'starve-your-neighbor' policy, then eventually you trade smaller shares of total world food production, and that in turn makes the prices more volatile," said Joachim von Braun, director general of the International Food Policy Research Institute in Washington. Vietnam and India, both major rice exporters, announced further curbs on overseas sales on Friday, sending rice higher on U.S. futures markets. Other food commodities retreated from record highs in recent days but analysts attributed that less to fundamentals and more to profit-taking by investors. Waves of discontent are already starting to be felt. Violent protests hit Cameroon and Burkina Faso in February. Protesters rallied in Indonesia recently and media reported deaths by starvation. In the Philippines, fast-food chains were urged to cut rice portions to counter a surge in prices. Last year, the central bank of Australia -- where minds were focused by a two-year drought -- asked whether the surge in commodity prices could be one of the few really big ones in world history, like that of the mid-1930s. Real commodity prices remained flat or even fell during the rapid industrialization of the United States and Germany in the early 20th century. But the industrialization of China, with 1.3 billion people, is on a totally different scale, it noted. "China's population is proportionately much larger than the countries that industrialized in earlier periods and is almost double that of the current G7 nations combined," the Australian central bank said. The emergence of China's middle class is adding hugely to demand for not just basic commodities like corn, soybeans, and wheat, but also for meat, milk and other high-protein foods. The Chinese, whose rise began in earnest in 2001, ate just 20 kilograms (44 pounds) of meat per capita in 1985. They now eat 50 kilograms (110 pounds) a year. Dr. Cinque's comments: The United States is now a net importer of food. We buy more food from the rest of the world than we sell to them, and the trend is likely to continue. Consider how much farmland in California was sacrificed in order to accommodate the housing boom. Now all that good soil is under pavement and buildings and is gone forever. Food prices have been rising, and they will continue to rise, and eventually, it will affect the way in which we shop. We are a spoiled people. We go into these giant supermarkets where everything is out and about. We get to handle, and manhandle, the produce before we buy it. And if a few grapes or cherries wind up in our mouths while we're shopping, it's been no big deal. But as food prices continue to rise, there will be no room for such grazing. I am told that in many European countries, you don't get to touch the food until you buy it. It's all secured behind counters. You point to it, you pay for it, and then you get to handle it, and not before. We'll see that here too if prices continue to rise. Someone suggested that there is a "perfect storm" of factors that are driving up food prices: unfavorable weather patterns, poor harvests, increased demand from Asia, and the diversion of grain for ethanol production. That last factor is pure insanity. Every single corn harvest erodes tons of topsoil that takes hundreds of years for Nature to replenish. To do it for food production is one thing, but to do it for the sake of more trips to the mall is pure, unmitigated madness. When we run low on money, our illustrious leaders just print more. But they can't do that when we run low on top soil. There are no tricks, no gimmicks, and no Federal Reserve wizardry that will pull topsoil out of thin air. E-mail to a friend Next Article |
