Monday, April 14, 2008

The world’s growing food crisis

The world is facing a growing food crisis. Biofuels are causing shortages of grain and forcing food prices up in general. Climate change resulting in flooding and droughts in different parts of the world causes loss of many crops and contributes to food shortages. Increased consumption of food – particularly in the booming economy of China – is a factor in food shortages and higher food prices elsewhere in the world.

This crisis can threaten local and global peace and security as the losers in this equation resort to violence. The problems arising from climate change, the shift to biofuels, and increased food consumption in formerly impoverished nations are all complex but need to be addressed because this is obviously not a short term problem.

This is from Sunday’s Observer:
… Across the world, a food crisis is now unfolding with frightening speed. Hundreds of millions of men and women who, only a few months ago, were able to provide food for their families have found rocketing prices of wheat, rice and cooking oil have left them facing the imminent prospect of starvation. The spectre of catastrophe now looms over much of the planet.

In less than a year, the price of wheat has risen 130 per cent, soya by 87 per cent and rice by 74 per cent. According to the UN's Food and Agriculture Organisation, there are only eight to 12 weeks of cereal stocks in the world, while grain supplies are at their lowest since the 1980s.

Not surprisingly, these swiftly rising prices have unleashed serious political unrest in many places. In Dhaka yesterday 10,000 Bangladeshi textile workers clashed with police. Dozens were injured, including 20 policemen, in a protest triggered by food costs that was eventually quelled by baton charges and teargas. In Haiti, demonstrators recently tried to storm the presidential palace after prices of staple foods leaped 50 per cent.

In Egypt, Indonesia, Ivory Coast, Mauritania, Mozambique, Senegal and Cameroon there have been demonstrations, sometimes involving fatalities, as starving, desperate people have taken to the streets. And in Vietnam the new crime of rice rustling - in which crops are stripped at night from fields by raiders - has led to the banning of all harvesting machines from roads after sunset and to farmers, armed with shotguns, camping around their fields 24 hours a day.

But what are the factors that led to this global unrest? What has triggered the price rises that have put the world's basic foodstuffs out of reach for a rising fraction of its population? And what measures must be taken by politicians, world leaders and monetary chiefs to rectify the crisis? Not surprisingly, the first two of these questions tend to be the easier ones to answer. Economists and financiers point to a number of factors that have combined to create the current crisis, a perfect storm in which several apparently unconnected events come together with disastrous effects.

One key issue highlighted at the G7 meeting was the decision by the US government, made several years ago, to give domestic subsidies to its farmers so that they could grow corn that can then be fermented and distilled into ethanol, a biofuel which can be mixed with petrol. This policy helps limit US dependence on oil imports and also gives support to the nation's farmers. However, by taking over land - about 20 million acres so far in the United States - that would otherwise have been used to grow wheat and other food crops, US food production has dropped dramatically. Prices of wheat, soya and other crops have been pushed up significantly as a result.

As to the other factors that have combined to trigger the current food crisis, experts also point to the connected issue of climate change. As the levels of carbon dioxide rise in the atmosphere, meteorologists have warned that weather patterns are becoming increasingly disturbed, causing devastation in many areas. For several consecutive years, Australia - once a prime grower of wheat - has found its production ruined by drought, for example. Scarcity, particularly on Asia's grain markets, has then driven up prices even further.

Some campaigners see climate change as the most pressing challenge facing the world while others now say that biofuels - grown to offset fossil fuel use - is taking food out of the mouths of some of the world's poorest people. The net result will be eco-warriers battling with poverty campaigners for the moral high ground.

On top of these issues, there is the growing wealth of China and its 1 billion inhabitants. Once the possessor of a relatively poor rural economy, China has becoming increasingly industrialised and its middle classes have swelled in numbers.

One impact has been to trigger a doubling in meat consumption, particularly pork. As the country's farmers have sought to feed more and more pigs, more and more grain has been bought by them. However, China has only 7 per cent of the world's arable land and that figure is shrinking as farmland has been ravaged by pollution and water shortages.

The net result has been to decrease domestic supplies of grain just as demand for it has started to boom. Again the impact has struck worst in the Third World, with wheat and other grain prices soaring.

And finally there is the issue of vegetable oils. Soya and palm oils are a major source of calories in Asia. But flooding in Malaysia and a drought in Indonesia have limited supplies.

In addition, these oils are now being sought as bio-diesel, which is used as a direct substitute for diesel in many countries, including Australia. The impact has been all too familiar: an alarming drop in supplies for the people of the Third World as prices of this basic commodity have soared.

One such victim is Kamla Devi. She has already had to abandon dhal, a central, protein-rich dish of lentils that was a key part of her family's diet for several months. Now the cooking of fried food - in particular, pooris: hot, puffed, oil-soaked bread - has had to follow suit for the simple reason that cooking oil has become unaffordable.

'It has affected my health,' she says. 'The rich are becoming richer. They go to shopping malls and they don't need to worry. The problem with prices only matters for the poor people like me.'

Four key factors behind the spreading fear of starvation across the globe

Growing consumption

Six months ago Zhou Jian closed down his car parts business and launched himself as a pork butcher. Since then the 26-year-old businessman's Shanghai shop has been crowded out - despite a 58 per cent rise in the price of pork in the past year - and his income has trebled.As China's emerging middle classes become richer, their consumption of meat has increased by more than 150 per cent per head since 1980. In those days, meat was scarce, rationed at around 1kg per person per month and used sparingly in rice and noodle dishes, stir fried to preserve cooking oil.

Today, the average Chinese consumer eats more than 50kg of meat a year. To feed the millions of pigs on its farms, China is now importing grain on a huge scale, pushing up its prices worldwide.

Palm oil crisis

The oil palm tree is the most highly efficient producer of vegetable oil, with one acre yielding as much oil as eight acres of soybeans. Unfortunately, it takes eight years to grow to maturity and demand has outstripped supply. Vegetable oils provide an important source of calories in the developing world, and their shortage has contributed to the food crisis.

A drought in Indonesia and flooding in Malaysia has also hit the crop. While farmers and plantation companies hurriedly clear land to replant, it will take time before their efforts bear fruit. Palm oil prices jumped nearly 70 per cent last year, hitting the poorest families. When a store in Chongqing in China announced a cooking-oil promotion in November, a stampede left three dead and 31 injured.

Biofuel demand

The rising demand for ethanol, a biofuel that is mixed with petrol to bring down prices at the pump, has transformed the landscape of Iowa. Today this heartland of the Midwest is America's cornbelt, with the corn crop stretching as far as the eye can see.

Iowa produces almost half of the entire output of ethanol in the US, with 21 ethanol-producing plants as farmers tear down fences, dig out old soya bean crops, buy up land and plant yet more corn. It has been likened to a new gold rush.

But none of it is for food. And as the demand for ethanol increases, yet more farmers will pile in for the great scramble to plant corn - instead of grain. The effect will be to further worsen world grain shortages.

Global warming

The massive grain storage complex outside Tottenham, New South Wales, today lies virtually empty. Normally, it would be half-full. As the second largest exporter of grain after the US, Australia usually expects to harvest around 25 million tonnes a year. But, because of a five-year drought, thought to have been caused by climate change, it managed just 9.8 million tonnes in 2006.

Farmers such as George Grieg, who has farmed here for 50 years, have rarely known it to be so bad. Many have not even recovered the cost of planting and caring for their crops, and are being forced into debt. With global wheat prices at an all-time high, all they can do is cling on in the hope of a bumper crop next time - if they are lucky.
You can read the entire article here.

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