Global Food Prices May Double by 2030

What's that awful sound?   Could it be empty bellies - or is that the clarion call of war?

Oxfam is warning that the already record-breaking price of staple foods could more than double by 2030.  It says we're embarking on an era of permanent food crisis that will hardest hit the most vulnerable, the poor, and spark unrest.

Research to be published on Wednesday forecasts international prices of staples such as maize could rise by as much as 180% by 2030, with half of that rise due to the impacts of climate change.

A devastating combination of factors – climate change, depleting natural resources, a global scramble for land and water, the rush to turn food into biofuels, a growing global population, and changing diets – have created the conditions for an increase in deep poverty.

...[Oxfam] said global food reserves must be urgently increased and western governments must end biofuels policies that divert food to fuel for cars.

It also attacked excessive corporate concentration in the food sector, particularly in grain trading and in seed and agrochemicals.

The Oxfam report followed warnings from the UN last week that food prices are likely to hit new highs in the next few weeks, triggering unrest in developing countries. The average global price of cereals jumped by 71% to a new record in the year to April last month.

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Meanwhile Canada is saddled with a Ruler who thinks al Qaeda, not climate change, is the greatest threat to global security and our own.

It's tough to come to grips with this.   We all have an image, an understanding of our world that we've each pieced together over a few decades.   That world, the world as we knew it in the 70s, 80s and 90s, is no longer.   It has been transformed, shifted into a new reality, and that transformation continues and accelerates.   Our climate is changing and it is changing our very civilization, rendering old ways, old wisdom, old rules utterly obsolete.

For most of my lifetime the future was something we had the power to shape to our liking, something through the elixir of knowledge and technology we might grow to suit our needs and wants.   But we overreached and now the future has turned into something we no longer control and to which our primary option is to adapt, if we can.

Adaptation, however, will not be on the priority list of our Ruler as he sells out our country and our people for his dream of fossil fuel energy superpowerdom.  It's filthy lucre our Ruler covets, so shamefully filthy that he deliberately conceals it from the United Nations.  Adaptation is the last thing on a mind that perverted for any meaningful and effective action on it merely shines a giant spotlight on the very thing Ruler works so hard to keep in the shadows - Athabasca.

And so Ruler sails off to Afghanistan to declare our mission a "great success" in the war against terrorism unaware that he's fueling conditions that may give rise to terrorism on a scale he cannot begin to imagine.   Numbnutted fool.

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.

Understanding the Danger in the Global Food Crisis

Record food prices are instrumental in the upheaval spreading through the Middle East and the situation is going to get a lot worse before it gets any better.  Reuters has a good analysis of what's happening and what that's likely to mean:

Catastrophic storms and droughts have slammed the world's leading agriculture countries in recent months, including flooding and a massive cyclone in Australia and a powerful winter storm that swept across the United States.

Dubbed "  Stormageddon,"   one of the biggest snowstorm in decades dumped up to 20 inches of snow in some parts of the U.S. grain belt this week, paralyzing the shipment of grain and livestock.

A deep-freeze forecast for the Midwest, the bread basket of the United States, threatens the region's winter wheat because it may lack sufficient insulating moisture to withstand the cold.

Sugar prices also have surged to three-decade highs on fears of damage Cyclone Yasi would bring to the Australian cane crop. Prices for Malaysian palm oil, a cooking staple in the developing world, hit 3-year highs on flooding.

Big companies have had to adjust to higher raw material costs. Kellogg Co, the world's largest breakfast cereal company, said on Thursday it has boosted prices on many of its products to offset rising costs for ingredients such as grains and sugar.

During the last food price crisis, the World Bank estimated that some 870 million people in developing countries were hungry or malnourished. The FAO estimates that number has increased to 925 million.

"  2008 should have been a wake-up call, but I'm not yet sure all the countries in the world that we need to support this have woken up to it,"  the World Bank's Zoellick said.

Indonesia, Southeast Asia's biggest economy, last week bought 820,000 tons of rice, lifting rice prices, while suspending import duties on rice, soybeans and wheat.

Algeria last week bought almost 1 million tons of wheat, bringing its purchases to at least 1.75 million since the start of January, and ordered a speeding up of grain imports.

On a day of bloody confrontation in Egypt, where protesters are demanding an end to the 30-year rule of Hosni Mubarak, the U.N. World Food Programme's Executive Director Josette Sheeran said the world was now in an era where it had to be very serious about food supply.

"  If people don't have enough to eat they only have three options: they can revolt, they can migrate or they can die. We need a better action plan,"   she said.

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It's Official - UN FAO Food Price Index Shatters Record

Food, food, food - we're finally waking up to how critical the food supply is to global stability.

As predicted, the UN Food and Agriculture Organization food price index for January set an all time record and the future looks worse:

Global food prices hit a record high in January, the U.N Food and Agriculture Organisation said on Thursday, adding that prices, already above the 2008 levels which sparked riots, were likely to rise further.
   
Up for the seventh month in a row, the closely watched FAO Food Price Index touched its highest since records began in 1990, in nominal terms, and topped the high of 224.1 in June 2008, during the food crisis of 2007/08.
  
The index, which measures monthly price changes for a food basket composed of cereals, oilseeds, dairy, meat and sugar, averaged 230.7 points in January, up from 223.1 points in December.
  
Surging food prices have come back into the spotlight after they helped fuelled protests that toppled Tunisia's president in January. Food inflation has also been among the root causes of protests in Egypt and Jordan, raising speculation other nations in the region would secure grain stocks to reassure their populations.
  
Severe drought in the Black Sea last year, heavy rains in Australia and dry weather in Argentina and anticipation of a spike in demand after unrest in north Africa and the Middle East has helped power grain prices to multi-year highs.

We need to get it through our heads that this is a serious problem, with serious and wide-reaching consequences and it's not going away anytime soon, if at all.

This video report from Reuters gives an idea of what we can expect to face in the coming decade.  

Is Wall Street Engineering a Food Bubble for the Third World?

This is the rotten, predatory face of a financialized economy - extracting wealth from bringing misery to the poor.



At some point we're going to have to come to grips with the need to rein in the financial sector to keep them out of critical areas. Wall Street is already up to its neck in the carbon trading industry and now it's wreaking mayhem by gaming food futures. I'm sure all of this is going to make the vastly rich vastly richer but at what cost?

Biofuels Drive Food Crisis

A secret World Bank report obtained by The Guardian concludes that biofuel production is responsible for a 75% increase in global food prices.

"The damning unpublished assessment is based on the most detailed analysis of the crisis so far, carried out by an internationally-respected economist at global financial body.

The figure emphatically contradicts the US government's claims that plant-derived fuels contribute less than 3% to food-price rises. It will add to pressure on governments in Washington and across Europe, which have turned to plant-derived fuels to reduce emissions of greenhouse gases and reduce their dependence on imported oil.

Senior development sources believe the report, completed in April, has not been published to avoid embarrassing President George Bush.

"It would put the World Bank in a political hot-spot with the White House," said one yesterday."

http://www.guardian.co.uk/environment/2008/jul/03/biofuels.renewableenergy

Fueling Famine

Few understand the global food crisis better than Josette Sheeran, the executive director of the UN World Food Programme. Below are excerpts from a Newsweek interview with Sheeran in which she outlines the pernicious link between world oil prices and global famine:

What is the primary factor driving this surge in prices?

"The number one factor I look at is the price of oil. It may seem a strange thing, as I'm in the hunger field, but I wake up every morning and start in the back of the paper and I look at the price of oil, because if the price of oil stays high or goes higher, I know that the energy buyers in food markets will be buying food as an energy input at a very expensive price. That is the world we are in now that is new."

Are you saying that because people are buying ethanol—

"The demand for food as an input into energy production, whether it's biodiesel or bioethanol or any of these, is a global phenomenon. And it affects everything from palm oil to cassava to everything else … There isn't much marginal room in the global food supply system. We've been consuming more food than we produce for the last three years. "

"We" meaning the world?

"Yes, we the world. Now, there's a point at which it doesn't economically make sense to buy food as an energy input. It's pretty low; it's apparently when oil hits about $70 a barrel. So anything above that makes food a very viable energy production input."

http://www.newsweek.com/id/132013

Biofuels Pose Poverty Fight Setback

These are scary times for the world's poorest people. Food, for them, is rapidly becoming unaffordable. This isn't just one or two countries struck by some natural disaster, it's a plight now common to the poor around the world.

The World Bank estimates the food crisis has set back the fight against poverty for seven years.

World Bank president and former US trade negotiator, Robert Zoelleck, has called on rich countries to come up with an extra half-trillion dollars for the World Food Programme and to enact a "New Deal for global food policy." From The Guardian:

"Zoellick said: 'In the US and Europe over the last year we have been focusing on the prices of gasoline at the pumps. While many worry about filling their gas tanks, many others around the world are struggling to fill their stomachs. And it's getting more and more difficult every day.'
He said the price of wheat had risen by 120% in the past year, more than doubling the cost of a loaf of bread. Rice prices were up by 75% in just two months. On average, the Bank calculates that food prices have risen by 83% in the past three years.

"In Bangladesh a 2kg bag of rice now consumes almost half of the daily income of a poor family. With little margin for survival, rising prices too often means fewer meals," he said. Poor people in Yemen were now spending more than a quarter of their income on bread. "This is not just about meals forgone today, or about increasing social unrest, it is about lost learning potential for children and adults in the future, stunted intellectual and physical growth. Even more, we estimate that the effect of this food crisis on poverty reduction worldwide is in the order of seven lost years."

Zoellick criticised the subsidies and import tariffs used to promote wider use of the fuels.

Liz Stuart, spokeswoman for Oxfam, said: "Europe and the US must stop adding fuel to fire by increasing crop production for biofuels. These have dubious environment benefits, and by driving up prices, are crippling the lives of the poor."

Now, let's see how long this New Deal takes to make it to the legislative tables of the western nations. Surely there has now been a critical mass of research showing that our hopes for biofuels were unfounded and they're causing more harm than good.