Wake-up Call

Resist the Corporate State

The New Politics of Food Scarcity

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Veteran world watcher Lester Brown sounds dire warning of spreading political unrest, conflicts, and deepening division between rich and poor as food prices soar and supply falls further and further behind rising demand, but does not point to obvious solution  Dr. Mae-Wan Ho

June 14, 2011                    The Institute of Science in Society

 

Soaring food prices and political unrest

Soaring food prices were a major trigger for the riots that has destabilized North Africa and the Middle East beginning December 2010 in Tunisia. Political unrest has since engulfed Algeria, Egypt, Jordon, Libya, Syria, Yemen, and spread to Burkina Faso, Niger, Nigeria, Cameroon, Uganda, and beyond [1-4]. Latin America is said to be at risk [5], and even Britain, if food prices continue to rise [6]. The UN Food Price Index has been hovering above 231 points since the start of 2011, and hit its all-time high of 238 points in February. The May 2011 average was 232 points, 37 percent higher than a year ago [7].

Richard Ferguson, global head of agriculture at Renaissance Capital, an investment bank specializing in emerging markets, told The Guardian newspaper in the UK [1] that the problems were likely to spread. “Food prices are absolutely core to a lot of these disturbances. If you are 25 years old, with no access to education, no income and live in a politically repressed environment, you are going to be pretty angry when the price of food goes up the way it is.” It acted “as a catalyst” for political unrest, when added to other ills such as a lack of democracy.

“Scarcity is the new norm”

Food has quickly become the hidden driver of world politics [8], says Lester Brown, venerated veteran world-watcher, who also predicts that crises like these are going to become increasingly common. “Scarcity is the new norm.”

Historically, price spikes tended to be almost exclusively due to bad weather such as monsoon failure, drought, heat wave, etc., but today, they are driven by trends of both increasing demand and decreasing ability to supply. With a rapidly expanding global population demanding to be fed, crop-withering temperatures and exhausted aquifers are making it difficult to increase production. Moreover, the world is losing its ability to soften the blow of shortages. USA, the world’s largest grain producer, was able to rescue shortages with its grain surpluses in the past, or bring idle croplands into cultivation. “We can’t do that anymore; the safety cushion is gone.”

That’s why “the food crisis of 2011 is for real”, Brown warns, and why it may bring yet more bread riots and political revolutions. Tunisia, Egypt, Libya, may not be the end, but the beginning.

Brown does not mention the huge speculation on agricultural commodities in the world financial markets that not only drives up prices but increases volatility, making it much more difficult for farmers and consumers to cope (see [9] Financing World Hunger, SiS 46). Olivier de Shutter, the United Nations special rapporteur on the right to food, has referred to the 2007-2008 crisis as a “price-crisis” not a “food-crisis”, precipitated by speculation and not linked to insufficient food being produced, at least not yet, as Brown elaborates.

Scarcity due to increased demand and failure of supply

The scale of the problem is enormous [8]. On the demand side, farmers have to feed 80 million additional people each year, nearly all in developing countries. The world’s population has doubled since 1970, and heading towards 9 billion mid-century. At the same time, the swelling middle classes in China and elsewhere are moving up the food pyramid, consuming more meat, milk and eggs that require many times more primary agricultural produce to sustain. To compound the problem, the US is converting massive amounts of grain into biofuels. In 2010, it harvested nearly 400 m tons of grain, of which 126 m tons went to ethanol (up from 16 m tons in 2000).

On the supply side, global warming is already compromising productivity. Direct field monitoring has shown that a night time temperature rise of 1ºC during the growing season reduced yield by 10 percent [10]. Simultaneously, water tables are falling, and in countries where more than half of the world’s people live [8]. The Arab Middle East is the first region where grain production has peaked and begun to decline because of water shortages. Grain production is going down in Syria and Iraq and may soon decline in Yemen. But the largest food bubbles are in India and China.

In India, where farmers have drilled some 20 million irrigation wells, the World Bank reports that 175 million Indians are being fed with grain produced by over pumping. In China, over pumping is concentrated in the North China Plain, which produces half of China’s wheat and a third of its corn. An estimated 130 million Chinese are currently fed by over-pumping.

Satellite images show two huge new dust bowls: one stretching across northern and western China and western Mongolia; the other across Central Africa. Each year, some 1 400 square miles of land in northern China turn into desert. In Mongolia and Lesotho, grain harvests have shrunk by half or more over the last few decades. North Korea and Haiti are also suffering heavy soil losses, both countries face famine if they lose international food aid.

Rice yields in Japan have not risen at all for 16 years. In China, yields may level off soon. Meanwhile, wheat yields have plateaued in Britain, France and Germany, Western Europe’s three largest wheat producers.

As I write, Britain is experiencing the worst drought since 1990, and farmers and government are holding drought talks [11]. Such crop destroying weather extremes will be more and more common as the globe warms.

Worldwide scramble for supply and land grab

During the food crisis of 2007-2008, many exporting countries tried to control the rise of domestic food prices by restricting exports; among them Russia and Argentina, two leading wheat exporters. Vietnam, the world’s second largest rice exporter, banned exports entirely for several months in 2008. Importing countries panicked, and several tried to negotiate long-term grain-supply agreements with exporting countries. The Philippines negotiated a three-year agreement with Vietnam for 1.5 million tons of rice per year. Yemen pursued a similar deal with Australia but failed.

Some of the more affluent countries, led by Saudi Arabia, South Korea, and China, began buying or leasing land in other countries to grow grain for themselves (see also [12] ‘Land Rush’ as Threats to Food Security Intensify, SiS 46). Most of the land acquisitions are in Africa, where some governments lease cropland for less than £1 per acre per year, mainly in Ethiopia and Sudan where millions are already being sustained with food from UN World Food Programme.

By the end of 2009, hundreds of land acquisition deals had been negotiated, some exceeding a million acres. A 2010 World Bank analysis reported a total of nearly 140 million acres involved, an area exceeding the cropland devoted to corn and wheat combined in the US. The acquisitions typically also include water rights, so land grabs potentially affect all downstream countries as well. Any water extracted from the upper Nile River basin to irrigate crops in Ethiopia or Sudan, for example, will now not reach Egypt.

The potential for conflict is high. Often made in secret, the land deals in most cases involve land used by villagers when it was sold or leased. And because there is typically no formal land title in many developing country villages, the farmers who lost their land have little or no recourse.

Local hostility to such land grab is the rule, not the exception [8]. In 2007, as food prices were starting to rise, China signed a deal with the Philippines to lease 2.5 million acres of land for food crops that would be shipped to China. Once word got out, the public outcry from the Filipino farmers forced Manila to suspend the agreement. A similar uproar shook Madagascar, where a South Korean firm, Daewoo Logistics, had pursued rights to more than 3 million acres. Word of the deal helped stoke a political storm that topped the government and forced the agreement to be torn up.

Land grab is no solution

The land acquisitions are estimated to represent US$50 billion. But it is hardly a solution to the food crisis. It could take many years to realize any substantial production gains. The public infrastructure for modern market-oriented agriculture does not yet exist in most of Africa. In some countries it will take years just to build the roads and ports needed to bring in agricultural inputs such as fertilizer and to export farm products. The World Bank analysis indicates that only 37 percent of the projects will be devoted to food crops. Most of the land bought up so far will be used to produce biofuels and other industrial crops.

Even if some of these projects do eventually boost land productivity, it will most likely contribute little to the country’s economy, particularly if virtually all the inputs – the farm equipment, fertilizer, pesticides, and seeds – are brought in from abroad and all the output is shipped out of the country. “Thus far the land grabs have contributed more to stirring unrest than to expanding food production.”

Deepening divide between rich and poor

The divide between rich and poor country could grow even more pronounced, and soon, Brown predicts [8]. In January 2011, South Korea which imports 70 percent of its grain announced the creation of a new public-private entity responsible for acquiring grain. With an initial office in Chicago, the plan is to bypass the large international trading firms to buy grain directly from US farmers. As the Koreans acquire their own grain elevators, they may well sign multiyear delivery contracts with farmers to buy specified quantities of different grains at a fixed price. China, Japan, Saudi Arabia, and other leading importers may join in. And deals could be struck with Canada, Australia, Argentina and other major exporters. China’s 1.4 billion increasingly affluent consumers will start to compete with US consumers for the US grain harvest, so “cheap food, seen by many as an American birth right, may be coming to an end.”

The low income countries that host land grabs or import grain will likely see their food situation deteriorate even further.

No organized effort to ensure adequate food supplies

There is no organized effort to ensure adequate world food supplies.  Indeed, most international negotiations on agricultural trade until recently focused on access to markets, with the United States, Canada, Australia, and Argentina persistently pressing Europe and Japan to open their highly protected agricultural markets. But in the first decade of the present century, access to supplies has emerged as the overriding issue. The World Food Program now provides food aid to 70 countries with an annual budget of $4 billion, which is hardly sufficient; but there is little international coordination otherwise. And it is aimed at alleviating the symptoms and not the cause of food scarcity.

“We are now so close to the edge that a breakdown in the food system could come at any time.” Brown declares. “Consider, for example, what would have happened if the 2010 heat wave that was centered in Moscow had instead been centered in Chicago. In round numbers, the 40 percent drop in Russia’s hoped-for harvest of roughly 100 million tons cost the world 40 million tons of grain, but a 40 percent drop in the far larger U.S. grain harvest of 400 million tons would have cost 160 million tons. The world’s carryover stocks of grain (the amount in the bin when the new harvest begins) would have dropped to just 52 days of consumption. This level would have been not only the lowest on record, but also well below the 62-day carryover that set the stage for the 2007-2008 tripling of world grain prices.”

“At issue now is whether the world can go beyond focusing on the symptoms of the deteriorating food situation and instead attack the underlying causes. If we cannot produce higher crop yields with less water and conserve fertile soils, many agricultural areas will cease to be viable. And this goes far beyond farmers. If we cannot move at wartime speed to stabilize the climate, we may not be able to avoid runaway food prices. If we cannot accelerate the shift to smaller families and stabilize the world population sooner rather than later, the ranks of the hungry will almost certainly continue to expand. The time to act is now — before the food crisis of 2011 becomes the new normal.”

Rather disappointingly, Brown has failed (time and again) to recommend an outright shift to organic, agro-ecological farming, which, according to an emerging scientific consensus, is capable of addressing most, if not all the underlying causes of deteriorating productivity as well as conservation of natural soil and water resources while saving the climate (see [13, 14] Food Futures Now: *Organic *Sustainable *Fossil Fuel Free , ISIS/TWN publication, Sustainable Agriculture Urgently Needed, UN Agencies Say, SiS 50). Better yet, agro-ecological farming can easily be combined with efficient local, and even off-grid renewable energy generation ([14] Green Energies – 100% Renewable by 2050, ISIS/TWN publication) that can serve local businesses, stimulate local economies and create plenty of employment opportunities.

Reposted with permission.

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2 Responses

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  1. excellent summary of the issues.

    I can use this in an upcoming piece.

    Rady

    June 14, 2011 at 8:34 am

  2. The MSM is neglecting this story, but people still talk about food prices anyway!! I’ve seen prices nearly double on many things here in the last year. Don’t know how most people manage.

    laudyms

    June 14, 2011 at 8:43 am


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