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August 1 2010
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United States | Focus: opinion analysis | food | 2007-07-11 | printable |
Source: The Arlington Institute
The End of Cheap Food
The era of cheap food is over. The price of corn (maize) has
doubled in a year, and wheat futures are at their highest in a decade. The
food price index in India has risen 11 percent in one year, and in Mexico
in January there were riots after the price of corn flour (used in making
the staple food of the poor, tortillas) went up fourfold. Even in the
developed countries food prices are going up, and they are not going to
come down again.
Cheap food lasted for only fifty years. Before the Second World War
most families in the developed countries spent a third or more of their
income on food (as the poor majority in developing countries still do). But
after the war a series of radical changes, from mechanisation to the Green
Revolution, raised agricultural productivity hugely and caused a long,
steep fall in the real price of food. For the global middle class, it was
the Good Old Days, with food taking only a tenth of their income.
It will probably be back up to a quarter within a decade, and it
may go much higher than that, because we are entering a period when three
separate factors are converging to drive food prices up. The first is
simply demand. Not only is the global population continuing to grow (about
an extra Turkey or Vietnam every year), but as Asian economies race ahead
more and more people in those populous countries are starting to eat
significant amounts of meat.
Early this month, in its annual assessment of farming trends, the
United Nations predicted that by 2016, less than ten years from now, people
in the developing countries will be eating 30 percent more beef, 50 percent
more pig meat and 25 percent more poultry. The animals will need a great
deal of grain, and meeting that demand will require shifting huge amounts
of grain-growing land from human to animal consumption -- so the price of
grain and of meat will both go up.
The global poor don't care about the price of meat, because they
can't afford it even now -- but if the price of grain goes up, some of them
will starve. And maybe they won't have to wait until 2016, because the
mania for "bio-fuels" is shifting huge amounts of land out of food
production. One-sixth of all the grain grown in the United States this year
will be "industrial corn" destined to be converted into ethanol and burned
in cars, and Europe, Brazil and China are all heading in the same
direction.
The attraction of bio-fuels for politicians is obvious: they can
claim that they are doing something useful to combat emissions and global
warming (though the claims are deeply suspect), without actually demanding
any sacrifices from business or the voters. The amount of US farmland
devoted to bio-fuels grew by 48 percent in the last year alone, and hardly
any new land was brought under the plough to replace the lost food
production. In other big bio-fuel producers like China and Brazil it's the
same straight switch from food to fuel. In fact, the food market and the
energy market are becoming closely linked, which is very bad news for the
poor.
As oil prices rise (and the rapid economic growth in Asia
guarantees that they will), they pull up the price of bio-fuels as well,
and it gets even more attractive for farmers to switch from food to fuel.
Nor will politics save the day. As economist Lester Brown of the Earth
Policy Institute told the US Congress last month: "The stage is now set for
direct competition for grain between the 800 million people who own
automobiles, and the world's two billion poorest people." Guess who wins.
Soaring Asian demand and bio-fuels mean expensive food now and in
the near future, but then it gets worse. Global warming hits crop yields,
but only recently has anybody quantified how hard. The answer, published
in "Environmental Research Letters" in March by Christopher Field of the
Carnegie Institution in Stanford, California and David Lobell of Lawrence
Livermore National Laboratory, is quite simple: for every 0.5C (0.9F)
hotter, crop yields fall between three and five percent. So two degrees C
hotter (3.6F), the lower end of the range of predicted temperature rise in
this century, means a twelve to twenty percent fall in global food
production.
This is science, of course, so that answer could be wrong -- but it
could be wrong by being too conservative. Last year in New Delhi, I
interviewed the director of a think tank who had just completed a contract
to estimate the impact on Indian food production of a rise of just two
degrees C in global temperature. The answer, at least for India, was 25
percent. That would mean mass starvation, for if India were in that
situation, every other major food-producing country would be too, and there
would be no imports available at any price.
In the early stages of this process, higher food prices will help
millions of farmers who have been scraping along on very poor returns for
their effort because political power lies in the cities, but later it gets
uglier. The price of food relative to average income is heading for levels
that have not been seen since the early 19th century, and it will not come
down again in our lifetimes.
____________________________
Gwynne Dyer, Ph.D., is a London-based independent journalist and GBN Network member
Source: The Arlington Institute
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