Wednesday 07 January 2009
Bits of News - Home
Main Menu
Services
Advertisement
Weblinks

 Sci/Tech

 Culture

 Pol/Econ

 News Services
Advertisement
Login
Writers Wanted
Town Called Dobson
Town Called Dobson
Daily Preview
Recent Articles
Recent Blog Entries
Advertisement
Advertisement
Pol/Econ Trade
Pol/Econ: Global Food Crisis Hits Home
print
Monday, 03 March 2008 Written by Garrett Johnson

Last week the country of Burkina Faso was brought to the edge of chaos by food riots. You probably didn't notice. In Morocco, 34 were sentenced to prison for participating in food riots. In Yemen at least a dozen have died in violent food riots.

img
A month ago, Indonesia had to call out federal troops in order to quell protests against the rising cost of basic food items. Last November food riots in Mauritania claimed the life of an 18-year old boy. The Indian state of Bengal also saw massive food riots. In Italy, residents are protesting the rising cost of pasta.

There are four major reasons for all this suffering and death, and two of those reasons can be traced back to President George Bush.
"This is the new face of hunger. There is food on the shelves, but people are priced out of the market."
- Josette Sheeran, the executive director of the UN's World Food Programme



If you think that this global food crisis is something that only other nations have to deal with, you would be wrong. The problem stretches all the way back to Kansas farms.
The high cost of corn, wheat and soybeans is leading to a rash of thefts from grain elevators in western Kansas. The thieves have driven big rigs to the grain elevator, filled the truck with cash crops and then sold the grain somewhere else.

Augustine reported that a thief could fill up a semi-trailer with 1,000 bushels of corn in about five minutes. That load would be worth $5,000.
The problem stretches into large American cities as well. Just a quick Google search turned up news articles of critical shortages at food banks in Amarillo, Texas, southern Minnesota, New York City, Los Angeles, California, eastern Texas, and Manchester, New Hampshire, just to name a few.

But yesterday the real bad news came out.
The U.S. government's humanitarian relief agency will significantly scale back emergency food aid to some of the world's poorest countries this year because of soaring global food prices, and the U.S. Agency for International Development is drafting plans to reduce the number of recipient nations, the amount of food provided to them, or both, officials at the agency said.

USAID officials said that a 41 percent surge in prices for wheat, corn, rice and other cereals over the past six months has generated a $120 million budget shortfall that will force the agency to reduce emergency operations. That deficit is projected to rise to $200 million by year's end.

*******

“Misery does not wait and you see people witnessing everyday rising prices and they do not know what to do. The situation is like having matches near cotton that can catch fire at any moment.”
- Laurent Ouédraogo



This announcement comes on the heals of a similar announcement by the U.N. food program last week.
The announcement by Josette Sheeran, executive director of the U.N. World Food Program, that the globe's main provider of food aid may have to start rationing is not just bad news for countries like Afghanistan and Ethiopia that depend on its supplies.

It's grim news for everybody. [...] Wheat prices hit $24 a bushel this week in the futures markets, having been $3 a bushel four years go. That dwarfs the rise in oil prices.

******

"In some of these developing countries, prices have gone up 80 percent for staple food. If food is twice as expensive, we can bring half as much in for the same price and the same contribution."
- Josette Sheeran, executive director of the U.N. World Food Program

American food aid is expected to drop from 2.6 million tons last year to about 2.2 million this year. Since America is still the largest single food donor in the world, that means that people are going to starve to death.

It's really as simple as that.
Already, 25 million people in India are believed to have cut their meals from two to one a day. The calorie intake from an average meal in El Salvador has fallen by half in less than two years. Riots have broken out from Mexico to Mauritania.
President Musharraf's electoral defeat in Pakistan can be partly attributed to his reintroduction of food rationing cards.

China and Russia are imposing price controls. Argentina and Vietnam are applying export taxes on food staples and limiting wheat exports. Kazakhstan has frozen grain exports and Russia is considering doing the same.


The brutal numbers




World grain supplies are at their lowest levels since records were first kept in 1960.

America's wheat stockpiles are at their lowest levels since 1948, and barley stockpiles are at a 42-year low. Global oilseed stocks are projected down 22 percent in one year.
"The USDA projects global grain supplies will drop to their lowest levels on record. Further, it is likely that, outside of wartime, global grain supplies have not been this low in a century, perhaps longer."
- NFU Director of Research Darrin Qualman

Worldwide grain stockpiles, which had a 115-day supply in 2000, are now down to a 53-day supply. In addition, 1/3 of all the world's fisheries are in a state of collapse. 2/3 will be in collapse by 2025.



Soybean prices have doubled since 2004. Wheat prices have tripled (60% rise in 2007 alone). Because grains are feedstock, the prices also cascade over to places such as milk prices, which rose 29% last year, and eggs, which rose 36% last year.

The U.N. Food Program feeds 73 million people every day.


The Causes


The rising standard of living in India and China has caused a massive increase in grain demand.
As people get better off they demand more meat, which mops up grain supplies, since it takes some 8lbs (3.5kg) of cereals to produce 1lb (450g) of beef.
Another reason is that the world is finite, and we are simply running out of new places to farm. Already, 40% of the Earth's land is used for food production.
"The maps show, very strikingly, that a large part of our planet (roughly 40%) is being used for either growing crops or grazing cattle," said Dr Navin Ramankutty, a member of the Wisconsin-Madison team. By comparison, only 7% of the world's land was being used for agriculture in 1700.
[...]
The research indicates that there is now little room for further agricultural expansion.

"Except for Latin America and Africa, all the places in the world where we could grow crops are already being cultivated. The remaining places are either too cold or too dry to grow crops," said Dr Ramankutty.
Both of those reasons are huge, long-term problems that have no easy solutions. However, the two most immediate reasons for this growing food crisis can be directly attributed to the man currently in the White House.

The first obvious cause of the skyrocketing food prices is dramatically higher energy prices. Whether it is fertilizer, farming equipment, or transportation, energy has a direct and immediate effect on the cost of food production.



Although there are a lot of reasons for the rising energy prices, the most obvious (and preventable) reason is the invasion of Iraq. It doesn't take a genius to realize that destroying the infrastructure and causing a civil war in a major oil exporting nation will cause worldwide energy prices to rise.

The one thing that isn't causing rising food prices is failing crop harvests.
In 2006, world production of grain came to 1.992 billion tons of grain while consumption came to 2.043 billion tons. In 2007, production rose to 2.075 billion tons while consumption went to 2.098 billion tons.
As you can see, harvests are increasing, but so is consumption by a tiny bit more. But tiny bits move markets. The old saying on Wall Street is "the price is set in the margins".



Which brings us to the last reason for higher energy prices: ethanol.
world grain consumption rose an average of 21 million tons per year from 1990 to 2005, the US Department of Agriculture reported this month. Demand for grain to make ethanol soared by 27 million tons last year, USDA reported.
Last year 20% of the country's maize crop went to produce ethanol. According to the Earth Policy Institute, by next year almost a third of America's corn crop - which traditionally would feed millions of the world's poor - will go to making ethanol.

This push towards biofuels is not limited to America.
The Indian government says it wants to plant 3 140 000 square kilometres of biofuel crops, Brazil as much as 1,2-million square kilometres. Southern Africa is being touted as the future Middle East of biofuels, with as much as four million square kilometres of land ready to be converted to crops such as Jatropha curcas (physic nut), a tough shrub that can be grown on poor land.
Corn ethanol is not a very good alternative energy source. It takes 1 unit of fossil fuel energy to produce 1.3 units of corn ethanol energy. Other types of biofuels have much better results, but aren't being used on a large scale in America yet.

Filling up one U.S. SUV fuel tank one time with ethanol uses enough corn to feed one person for a year.

It really comes down to a case of morality. There are 800 million motorists in the world. There are 850 million undernourished poor. Right now, in a year of bumper crops for grains, we are making the decision that the poor should go hungry so that our gas tanks can be full.


Repercussions

"You cannot have political stability based on empty stomachs and poverty."
- Norman Borlaug, Nobel Winner
"The double impact of high energy and food prices is increasing the risk of social and political instability in vulnerable countries."
- Mike McConnell, Director of National Intelligence

It's takes no imagination to realize that famine and starvation are destabilizing to a nation. Any student of history knows that a strongman can raise an army that will do anything for him as long as he can feed his soldiers and family in a time of hardship. The last thing a nation on the brink, such as Pakistan, needs is food shortages.

On the bright side, we've been here before. The energy crisis of the early 1970's caused a similar food crisis, but the world didn't end. In 1931 and 1932 hunger stalked America even while crops rotted in the fields. Yet America survived.
"By 1932 organized looting of food stores was a nationwide phenomenon."
- Irving Bernstein

There are severe, long-term problems that need to be addressed, and aren't being addressed. But the short-term problems caused by choosing cheap gas over feeding the poor can be changed.

Add to Reddit Add to Newsvine Add to Digg Add to Propeller Add to Delicious Add to Furl Add to Blinklist Add to Shadows Add to Fark Add to Kinja Add to Magnolia Add to Spurl Add to Wink Add to Wists Add to Technorati Add to Squidoo Add to StumbleUpon Add to Yahoo MyWeb Add to Google Add to Windows Live
Permalink | 1 Comments | Post A Comment