Crisis 2008: The Worldwide Food Shortage

For many years, we have known of the damage that the US Farm Bill and the EU Common Agricultural Policy have done to poorer non-subsidised farmers in the third world. It is an indictment upon us all that it is cheaper for a Ghanaian consumer to buy American tomatoes than those locally grown in Ghana.

We talk of the flood of Chinese goods coming into our countries when we have been flooding the poorer nations with our produce for the last 25 years.

Then just when the global demand for seed and corn begins to exceed production, we divert it away from the dinner table in order to fuel cars. The true cost of ethanol production is massive. Just consider the use of water:

From USA Today:

"The figures cited by both Martin and Pimentel include only a plant's production of ethanol, not the water it takes to grow corn. After adding that, about 1,700 gallons are needed to produce every gallon of ethanol, Pimentel said.

The entire water-use picture, coupled with the fuel it takes to produce ethanol, makes long-term, mass production of ethanol unsustainable, Pimentel said.

"I wish it were sustainable, I'm an agriculturalist," he said. "I wish this whole ethanol deal was a major benefit, but you've got to be a scientist first and an agriculturalist second."

Newsweek reported:

In the arid regions of the American West,water has always been a precious liquid gold. But in Adamson's home of Yuma County, Colorado, two hours east of Denver, the stakes just got higher. Thanks to the boom in ethanol production spurred by green-energy concerns, corn farmers in Yuma County—one of the top three corn-producing counties in the country—are enjoying a new prosperity.

But the green-fuel boom touted as a clean, eco-friendly alternative to gasoline is proving to have its own dirty costs. Growing corn demands lots of water, and, in eastern Colorado, this means intensive irrigation from an already stressed water table, the great Ogallala Aquifer. One sign of trouble: in just the past two decades, farmers tapping into the local aquifers have helped to shorten the North Fork of the Republican River, which starts in Yuma County, by 10 miles. The ethanol boom will only hasten the drop further, say scientist and engineers studying the aquifers. The region's water shortage has pitted water-hungry farmers against one another. And lurking in the cornrows: lawsuits and interstate water squabbles could shut down eastern Colorado's estimated $500 million annual ethanol bonanza with the swing of a judge's gavel. Collectively, "[ethanol] is clearly not sustainable," says Jerald Schnoor, a professor of engineering at the University of Iowa and co-chairman of an October 2007 National Research Council study for Congress that was critical of ethanol. "Production will have serious impacts in water-stressed regions." And in eastern Colorado, there's lots of water stress.

Michael Grunwald reports that one person could be fed 365 days "on the corn needed to fill an ethanol-fueled SUV". He further reports that though "hyped as an eco-friendly fuel, ethanol increases global warming, destroys forests and inflates food prices." Environmentalists, livestock farmers, and opponents of subsidies say that increased ethanol production won't meet energy goals and may damage the environment, while at the same time causing worldwide food prices to soar. Some of the controversial subsidies in the past have included more than $10 billion to Archer Daniels Midland since 1980. Critics also speculate that as ethanol is more widely used, changing irrigation practices could greatly increase pressure on water resources. In October 2007, 28 environmental groups decried the Renewable Fuels Standard (RFS), a legislative effort intended to increase ethanol production, and said that the measure will "lead to substantial environmental damage and a system of biofuels production that will not benefit family farmers...will not promote sustainable agriculture and will not mitigate global climate change."

Ethanol is also becoming less sustainable politically. John McCain opposes it openly and Barack Obama will face pressure to do the same. In the EU, Britain has been joined by the Scandinavians in their opposition to Ethanol.

This week the G8 meet here in Japan, with world hunger on the agenda. The time has come to stop feeding our SUV's in order to feed people.

Just as importantly, welfare for major agricultural corporations and wealthy farmers must stop. Self sufficiency in food production will become more key over the next few years for the poorer countries.

Below is todays editorial from the New York Times:

Editorial

Man-Made Hunger

To a large degree, this crisis is man-made — the result of misguided energy and farm policies. When President Bush and other heads of state of the Group of 8 leading industrial nations meet in Japan this week, they must accept their full share of responsibility and lay out clearly what they will do to address this crisis.

To start, they must live up to their 2005 commitment to vastly increase aid to the poorest countries. And they must push other wealthy countries, like those in the Middle East, to help too. That will not be enough. They must also commit to reduce, or even better, do away with their most egregious agricultural and energy subsidies, which contribute to the spread of hunger throughout the world.

In the last year, the price of corn has risen 70 percent; wheat 55 percent; rice 160 percent. The World Bank estimates that for a group of 41 poor countries the combined shock of rising prices of food, oil and other raw materials over the past 18 months will cost them between 3 and 10 percent of their annual economic output.

Some of the causes are out of governments’ control, including the rising cost of energy and fertilizer, and drought in food exporters like Australia. Higher consumption of animal protein in China and India has also driven demand for feed grains. Wrongheaded policies among rich and poor nations are also playing a big role.

Of those, perhaps the most wrongheaded are the tangle of subsidies, mandates and tariffs to encourage the production of biofuels from crops in the United States and the European Union. According to the World Bank, almost all of the growth in global corn production from 2004 to 2007 was devoted to American ethanol production — pushing up corn and animal feed prices and prompting farmers to switch from other crops to corn.

Long-standing farm subsidies in the rich world have also contributed to the crisis, ruining farmers in poor countries and depressing agricultural investment.

Rich countries are not the only culprits. At least 30 developing countries have imposed restrictions or bans on the export of foodstuffs. Importing countries are now stockpiling supplies, which takes more food from global markets. Export barriers also reduce farmers’ profits and discourage them from investing in more production.

So far there is no sign that the leaders of the developed countries are ready to do what is needed. The United States and Europe have refused to curtail their bio-fuel subsidies or their lavish farm subsidies. They are also falling far short of their aid commitments.

At the 2005 G8 summit meeting, leaders said that by 2010 wealthier nations would increase annual development aid to poor countries by $50 billion. Yet aid has increased by only $11 billion. And there is suspicion that the G8 nations, who were to provide the lion’s share of the increase, want to wiggle out of their commitment.

We welcome President Bush’s pledge to provide $5 billion this year and next to “fight global hunger,” but much more must be done. The United States remains the stingiest of rich nations when it come to foreign aid.

In a letter to heads of state of the G8, Robert Zoellick, the World Bank president, estimated that the bank needs $3.5 billion to provide immediate food aid and seed and fertilizer in poor countries. The International Monetary Fund and the World Food Program estimate they need $6.5 billion more in the short term to help feed vulnerable populations. This does not even count the need for essential longer-term investments to increase farm productivity in poor nations in Africa and elsewhere.

As Mr. Zoellick wrote, the food crisis is a test of the world’s willingness to help the most vulnerable. The leaders gathered in Japan must rise to the challenge.