Food is the new world crisis

In what has come to be notoriously referred as the food riots, the current shortage of food, coupled with increasing grain prices in the world, has lately heralded a new world crisis that is not oil, but has everything to with oil.

In what has come to be notoriously referred as the food riots, the current shortage of food, coupled with increasing grain prices in the world, has lately heralded a new world crisis that is not oil, but has everything to with oil.

In the recent past, rising food prices have led to the collapse of the government of Haiti, and the unrest has already been sparked in Ivory Coast, Bangladesh, and Egypt.

These events have provoked reexamination of the reigning development thinking especially in regards to agriculture, food production and energy supply.

To begin with, the much touted introduction of more environmentally friendly bio-fuel to replace the rapidly dwindling unsustainable fuel sources like oil and coal, has began to boomerang even before its real ramifications begin to show, in terms of significant reduced dependence on fossil fuels.

Since the main sources of raw materials for bio-fuels are grains like wheat, Soya and corn for their starch and sugarcane for its sugar, which are similarly the main sources of carbohydrates for humans, a significant shift in farmland from food production to serve this new, more lucrative demand has already began to hurt the global food production.

The ethanol produced from fermentation of sugar and starch is mixed with diesel or used purely to produce bio-diesel.

To further aggravate the food shortage, in order to increase the crop yields of these raw materials, massive amounts of nitrogen-based fertilizers like urea have to be diverted from the growing of food crops to satisfy this demand.

It obviously does not help matters to know that the basic raw material for nitrogen-based fertilizer is fossil-based oil, whose prices are sky-rocketing to record levels of over US$100 per barrel (by 1996, US$ 25 per barrel lay in record terms), and is responsible for the sharp rise in agricultural fertilizer prices, threefold or more.

Furthermore, the cost in terms of oil, of transporting these grains from the cheap plantation farms in the developing world that are envisaged to produce raw material to the location of fuel production will count more.

This movement of resources away from food production together with other factors like climate trends and pest attacks has simultaneously placed a lot of pressure on the remaining grain sources, by reducing total yields and proportionately increasing prices.

For countries that depend on importation of grain, it implies, for example, that less wheat will be available for import at a much higher price leading to a spike in bread prices which is the staple food in Egypt.

In the traditional rice-exporting counties of Asia, governments are seeking to reduce exports to protect their countries from price hikes and inflation with the direct impact that those countries that depend on rice imports are headed for severe food shortage.

Even though rice in not a raw material for bio-fuel, climate changes leading to drought, pest attacks and floods in various rice growing areas have destabilized its supply. The exception is that rice suppliers are smiling all the way to the bank, the naughty ones exacerbating the problem by hoarding stocks. The trouble with food does not end there.

In many developing countries like India and China, people are now slowly beginning to afford more meat in their diets, and as a sign of affluence, hence putting more pressure on available resources.

This is because, in order to move away from grain production to milk or meat production, more land is needed to grow the livestock feed as well as to rear the animals themselves.

According to Jeremy Laurence (The Independent, UK), it takes 8kg of grain to produce 1kg of beef, and large tracts of forest have been cleared for grazing land that might have been used to grow crops.

The global economic crisis caused by the credit crunch in the Unite States, has led to more speculation on food stocks which is perceived to be safe, since people must eat whether there is a financial crisis or not, as a result of the weaknesses of the conventional financial  instruments like stocks, which were heavily affected by the crisis.

But very importantly, for the sub-Saharan Africa and the rest of the developing world, the struggle to convince developed countries to drop their protectionist policies, which for years has fueled the passions at Doha talks, while the Breton Wood institutions discourage poor countries from subsiding their farmers, will return to the forefront, as poor countries feel the heat of the food crisis.

It is a vote for the age-old arguments of fair trade rules for third world countries and that the bio-fuel drive might actually lead to more climate change due to increased use of fossil fuels instead of reducing it.

With FAO already talking about rationing of food aid, and the World Bank director, Mr. Robert Zoellick, sounding the alarm over the deepening crisis and the potential social unrest it may provoke, world over, we remain to see, if the leaders will put our money where our mouth is, so that we can put food into hungry mouths.

Contact: kelviod@yahoo.com

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