Now That We Have Your Attention, Can We Talk?

Who would have thought it would be Tunisia and Egypt that made the sleepy western world sit up and take notice of the impacts of the food crisis setting in around the world?  If nothing else, we now seem to have mastered the equation:  climate change = food shortage = political + economic + social upheaval.

But that's just a problem for backward Arab countries, isn't it?   Well, no.  The Argentine-based NGO, Universal Ecological Fund, has just released a report that predicts, among other things, that the crop yield in India, the world's second largest producer of wheat and rice, will fall by 30% by 2020.

The report, "The Impact of Climate Change on Food Production, a 2020 Perspective,"   adds that,in China, agricultural production could increase by 20% during the same period.   Overall, however, the picture isn't good.   Among the nations forecast to be hardest hit by climate change are the top 20-producers of wheat, rice, corn and soya beans.  This translates into a deficit between demand and production of 14% for wheat and 11% for rice.

2020.   Not that far off.   Remember "Y2K"?  That was eleven years ago.  2020 is less than nine years off and the crop deficits are already starting.   So, what's the plan?  The reality is, there isn't a plan.   Just as climate change is a global challenge that has been a remarkable success at eluding meaningful global action, the food deficit is also a global problem only not in those parts of the globe where we are.  We're just going to hunker down and watch this happen and hope we can keep our distance when it hits the fan.

World grain reserves were at 72-days' supply last August and they're heading toward 64.   The US Department of Agriculture has just trimmed its forecast of American corn production by 70-million bushels to 675-million bushels for the 2010-2011 crop year which has sent corn prices to a 2-year high of $7 per bushel.  The main culprit in the price rise is said to be the demand for ethanol.  Corn is also under pressure from increasing demand for livestock feed and for corn syrup which poorer countries are increasingly having to turn to because of high sugar prices.   The USDA announcement is said to have triggered hikes in wheat prices across Europe.

Chinese officials say their country is bracing for a severe and extended drought that will cut the nation's wheat production.    Concern now is that China may actually have to import wheat at today's peak prices which could trigger domestic inflation the government fears may trigger social unrest.  Even China's winter wheat crop is endangered.   There hasn't been enough snow to protect it and a severe frost this month could cause shortages in the June harvest.

It's remarkable how we Norte Americanos take food for granted while, in much of the rest of the world, it's a serious threat of hunger, famine and unrest.   The good news from the UEF report is that Canada is expected to enjoy increased grain production in the coming decades.   Prices will go up at the grocery store but meeting domestic demand shouldn't be a problem.