By Glenn Ashton · 28 Aug 2012
Food prices are rapidly heading toward new record territory, with far more at play than a simple drought in the US Midwest. There are serious implications, especially for nations with high rates of inequality and poverty. We will almost certainly face a potentially catastrophic, global scale famine in the next couple of decades.
The main reason there are now over seven billion people on earth is largely due to the emergence of two separate technologies. Firstly, cheap fossil fuels have enabled us to grow food on industrial scales. We presently require around 10 calories of fossil fuel energy to produce one calorie of food. A century ago each calorie of energy expended produced two calories of food. Secondly, advances in health care, primarily antibiotics and vaccines, have increased human life-spans.
It is an increasing challenge to feed this exponentially increasing population. We produce sufficiently for everyone on earth to have enough food, yet despite this cornucopia a significant proportion of people cannot afford to eat properly. Why?
There are three major reasons for this. Firstly, unequal wealth distribution. Secondly, meat consumption has grown as wealth has increased. Grazing area for meat production, mainly beef, uses more than a quarter of ice-free land surface. Additionally, more than a third of all cropland is used to grow crops to feed livestock. These are produced using energy intensive, industrial agricultural practices.
Third, the risks associated with diminishing energy supplies has encouraged wealthy governments to promote the production and consumption of “biofuels”. These are produced from agricultural resources such as sugar cane, beet, maize, soy, and oil crops such as palm oil and canola.
This focus on biofuels – which opponents prefer to call agro-fuels because of their propensity to divert scarce agricultural resources toward fuel crops – has caused an unprecedented shift in focus in agricultural production from food production to growing fuel crops.
As a result swathes of sensitive ecosystems have been destroyed to be planted by monocultures like palm oil, sugar cane, maize and soy. High oil prices have provided a potent economic incentive to underpin this ecologically disastrous shift. This destruction is occurring from the jungles of Indonesia - displacing iconic species like ourang-outang - to West Africa, where local communities are expelled in order to attract “foreign investment” and plant agrofuel crops.
Biofuel production has a clear impact on global food reserves, which are presently approaching historical lows. Last year nearly 40% of the US maize crop went into ethanol for fuel. Because the US is the world’s largest maize producer this has serious implications for global food trade. This is especially so in light of this year’s serious drought across the Midwest. Maize prices have risen to record levels, nearly double that of last year.
High oil prices will maintain demand for maize ethanol, perpetuating the insanity of food for fuel. The global trade in these commodity crops is dominated by three corporations – Cargill, Bunge and Archer Daniel Midland – each deeply involved in both ethanol production and market hedging and speculation.
This commodification of food leaves food security at the mercy of the market. There is no central global oversight or planning to secure sufficient food stocks as a buffer. Food is controlled by the market, not by logic, and certainly not by benevolence.
One solution proposed by the neo-liberal interests such as the G8 and the elitist World Economic Forum is to modernise agriculture throughout the developing world, particularly in Africa, where production has historically lagged international norms. This solution is modelled on imposing high-cost, high-input agricultural practices, reliant on fertilisers, hybrid and genetically modified sees, increased mechanisation and use of pesticides and chemicals on vulnerable economic and agricultural systems.
The poor inevitably fall victim to this inequity. Peasant farmers are forced to seek loans to secure their position on the industrial agricultural treadmill. When crops fail, their land is lost to consolidated industrial agricultural interests which wrings profits from the land at the cost of biodiversity and social stability.
Huge swathes of land have already been absorbed in land grabs by foreign governments, private entities and speculators to grow biofuel or feed and fodder crops. Displaced farmers migrate to urban areas to seek work as jobs are lost to mechanisation.
The poor majority are consequently forced into an ever bleaker reality in order to accept these market-oriented solutions to hunger, which in turn annihilates the delicate social and economic dynamics that has sustained them for countless generations.
In the West families, spend 15% of income on food – in the global South this rises to 80%. Yet the dominant economic model claims that small-scale, self-sufficient farmers do not provide any income to tax or the national balance of payments. Therefore the neo-liberal dogma insists these “worthless” farmers must modernise and adopt high input agriculture. And remember, these worthless farmers represent nearly a third of the world’s population and feed even more.
These changes add to the already profound threats to food security, social cohesion and to poverty reduction goals such as the millennium development goals. Ironically, small farming projects are far more resilient to climate instability than the intensive, industrial model being promoted.
In turn, climate change is increasingly related to instability in agricultural productivity. Sharply increased levels of carbon dioxide and more recently, methane released as the arctic fringe rapidly thaws, has exacerbated this uncertainty. This feedback spiral places agricultural production at further, direct risks.
Climate change is more about increasingly unpredictable and extreme weather events than pure “warming.” The harbingers of these changes are events like droughts in the US Midwest, Russia, South Asia, melting of the Arctic ice cap and permafrost and floods in Pakistan, Burma and North Korea.
Add to this volatile mix the predatory instincts of commodity traders seeking short-term profits in the real-time cas ino economy and it is clear that the poor are exposed to ever increasing, cynical levels of risk. Activism against this exploitation has brought CommerzBank and several other German banks to cease this immoral trade. However speculative traders elsewhere have no such qualms.
All of these factors add up to a perfect storm. Maize and soy prices are at record levels, above even the speculative bubble prices they reached in 2008. Wheat is headed in the same direction, as are many other key crops.
All of us will feel the impact of this perfect storm but yet again it will be the poorest amongst us who are most seriously affected. This has serious implications for social stability, especially in nations beset by the twin challenges of poverty and inequality.
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The disadvantage of "free trade" is the extremely important role play by the government, to take steps to preserve food production capacity at home. Should a short term policy of “cheap imports” be followed to the detriment of the local farmer, South Africa, with time may be faced not with food security but “food insecurity”.