Single poppy in wheat field

Behind the food crisis

In Business and Environment, Diet, Nutrition and Recipes, Environment, Ethical and Eco Agriculture by Martin OliverLeave a Comment

What does food ultimately represent? Is it just another commodity to be shipped around the world? Or is it something far more essential that we should stop taking for granted?

Over the last couple of years, the price of staple foods has risen dramatically, leading to accelerating unaffordability in developing countries. Recently, this has been achieving greater media coverage than any other big picture issue, including climate change. It is perhaps the world’s first multidimensional crisis involving a broad range of mutually reinforcing factors.

Measured over 12 months to April this year, the global price of food as a whole has risen by 56%. Wheat has climbed by 92%, and the price of rice, the staple food for billions, has shot up by 96%. This has led to unprecedented steps such as imposing limits on purchases of certain rice varieties at Sam’s Club, an American warehouse retail outlet owned by Wal-Mart.

Impacts on the poor

Worst affected are the world’s poorest people, those who are living on less than $2 per day. Whereas in rich countries approximately 10-20% of household income is spent on food, according to the Food and Agriculture Organization (FAO), in less developed countries this figure rises dramatically to 60-80%. For those caught in such a dilemma, sometimes the only available recourse is to eat less.

Traditionally, Third World hunger used to be a rural phenomenon, but as a result of fast-growing economic inequality in these countries it now extends to some urban workers. The UN estimates that in addition to the 850 million people already classified as ‘food insecure’, a further 100 million are now at risk.

In recent months, food riots have occurred in a total of 37 countries, including Bangladesh, China, Mexico and Egypt. In Haiti, a country where unaffordable food has become a way of life, the government was toppled from power in April following food-related disturbances.

As a response to this urgent problem, some countries have been providing relief to their citizens. Subsidised food is being sold in Bolivia, the Dominican Republic and Ethiopia, while food taxes have been removed in Burkina Faso. The UN is calling for urgent international action to help find solutions.

Identifying the causes

Among the supply-related factors contributing to food inflation, one is certainly Australia’s multi-year drought, and its impact on our sizeable wheat and rice exports: chaotic weather of any kind is liable to interfere with food production capacity.

Several producer countries, including Argentina, India, Ukraine, Kazakhstan, China and Brazil, have responded to the food crisis by restricting export sales of grains in order to ensure that their populations are fed. This squeezing of supply is further pushing up the price.

Meanwhile, the soaring price of oil, driven upwards by financial speculators, has to be factored into the costs of transport, chemical fertiliser and irrigation.

Despite reams of news coverage, the mainstream media has largely failed to mention one important fact: last year’s grain harvest broke all records at 2.1 billion tonnes. The world is not on the verge of running out of food, and the roots of the current predicament can be traced back to the economics of food distribution.

It is becoming obvious that unfettered capitalism is destabilising the food economy. Hedge funds searching for the highest returns have been prompted by the weaker US dollar to move their investments into commodities such as wheat futures. This may be creating an economic bubble that will burst some time down the track, but in the short term its effects are being acutely felt.

Another inflationary issue that may come into play at a corporate or household level is food hoarding, either out of fear, or as an intelligent way to hedge against expected price hikes. Hopefully, we can learn to transcend the ‘Me first’ mentality that led to widespread stockpiling for the Y2K non-event, thereby avoiding the need for government rationing.

Bad biofuels

However, it is the recent global shift towards biofuels, particularly ethanol, that has been receiving the most criticism. About 20% of America’s 2007 corn crop was diverted into ethanol production, and this year that figure is expected to rise to 27%. This extra demand has pushed up the price of corn, and that of wheat too, as generous corn subsidies have persuaded some of America’s farmers to switch crops.

Speaking at the UN in April, the presidents of Peru and Bolivia both claimed that biofuels had made food too expensive for the poor to afford. In Mexico, where the tortilla is an important staple food, last year the price of corn doubled within a few months, as the grain was sent north to America’s ethanol refineries.

Ethical question marks surrounding biofuel use are highlighted by a statistic from the US: the corn needed to produce the ethanol to fill up the 25-gallon (95-litre) tank of a 4WD vehicle could instead feed one person for a year. One possible solution to this widely recognised ‘food versus fuel’ dilemma is cellulosic ethanol, made from non-food plant feedstocks such as switchgrass or micanthus.

Grain for animals

While global biofuel production is expected to account for 100 million tonnes of grain this year, 760 million tonnes (especially soya and corn) is set to be used as animal feed, largely in rich countries. This large chunk of the total harvest is largely ignored in the current debate because, having existed for many decades, it has become embedded in the structure of the global food trade.

However, as the middle classes of India and China swell, and increasing numbers of households in these countries become able to afford their own refrigerators, consumption of meat and other animal foods is growing rapidly. The extra demand for animal feed that this creates is considered to be one among many factors contributing to the food crisis.

When choosing meat, there are large differences in conversion efficiency from grain to the final product. Beef is the least efficient, requiring approximately eight kilos of grain to produce one kilo of meat, the figure for pork is about six kilos, and chicken is the most efficient at two kilos. Obviously, factory-farmed animals will require far more feed than those left to graze naturally.

Rethinking agriculture

As with petrol, expensive food is looking like a future way of life. Four long-range issues identified by the UK’s Chatham House think-tank that could affect food production include the cost of energy, water scarcity, land availability, and climate change. This does not take into consideration future population issues, or economic uncertainties.

The modern industrialised food system has always been fraught with difficulties. Its yields are heavily reliant on oil, and figures from the US indicate that food production requires ten times more external energy than is produced in food calories. Other negatives include soil erosion, chemical use, food miles, and generous agricultural subsidies favouring the largest producers. The present food crisis provides the opportunity for a major rethink.

Meanwhile, peddlers of band-aids and quick fixes have been quickly emerging from the woodwork. Various interests are using the urgency of the crisis to lobby for more pesticide spraying, a focus on genetic engineering, or larger and more mechanised farms. However, any environmentally unsustainable means of increasing production, spurred by high commodity prices, is short-sighted and risks diminishing yields in the longer term.

Pascal Lamy, director of the World Trade Organization, believes that a free market is the key to the problem. However, one reason why trade liberalisation in agriculture has been progressing so slowly is because governments have an instinctive aversion to leaving the feeding of their populations to the vagaries of the global market. They may have a point.

Early this year, the agricultural survey group IAASTD put out a report calling for a major change in the world’s agricultural priorities. It encourages a focus on small-scale farmers operating in diverse ecosystems, and urges governments to adopt a more holistic attitude towards agriculture. In a joint statement, several environment groups including Greenpeace and Friends of the Earth described the IAASTD report as a “sobering account of the failure of industrial farming”.

These groups went on to say that small farmers using ecological methods tend to lose out the most under trade liberalisation. With the present myopic bias towards the large-scale, misleadingly described as ‘rationalisation’ and ‘efficiency’, such farmers tend to be regarded as inefficient; in reality low-input peasant agriculture on smaller plots has been found to produce higher per-hectare yields. In one large Ethiopian study, composting was found to provide a 30% increased harvest when compared to plots using chemical fertiliser.

A decade ago, relocalisation expert Richard Douthwaite made the hard-hitting assertion that no-one can fully rely on the global economy to supply them with necessities. This philosophy has been echoed more recently with the 100-Mile Diet movement that hopes to build a strong local and regional food system to reduce dependence on outside imports. Local agriculture options include farmers markets, box systems, urban agriculture and growing your own.

As individuals, although it may not appear to make much of a difference on the global stage, we can still take an ethical position by avoiding overeating and wasting food, while cutting down on our meat intake.

Such moves will have health benefits, in addition to making a surprisingly large dent in our personal carbon footprints.



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About the author
Martin Oliver

Martin Oliver

Martin Oliver is based in Lismore, and writes on a range of environmental, health and social issues. He takes the view that sustainability is about personal involvement, whether this involves making our lives greener, lobbying for change at a political level, or setting up local eco-initiatives.

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