Image: Matt Collins
Editor's Note: This is an extended version of the story that original ran in the June 2008 issue of Scientific American.
The recent surge in world food prices is already creating havoc in poor countries, and worse is to come. Food riots are spreading across Africa, though many are unreported in the international press. Moreover, the surge in wheat, maize and rice prices seen on commodities markets have not yet fully percolated into the shops and stalls of the poor countries or the budgets of relief organizations. Nor has the budget crunch facing relief organizations such as the World Food Program, which must buy food in world markets, been fully felt. The results could be calamitous unless offsetting policy actions are taken rapidly.
The facts are stark. A metric ton of wheat cost around $375 on the commodity exchanges in early 2006. In March 2008, it stood at over $900. Maize has gone from around $250 to $560 in the same period. Rice prices have also soared. The physical inventories of grain relative to demand are also down sharply in recent years.
Several factors are at play in the skyrocketing prices, reflecting both rising global demand and falling supplies of food grains. World incomes have been rising at around 5 percent annually in recent years, and 4 percent in per capita terms, leading to an increased global demand for food and for meat as a share of the diet. China’s economic growth, of course, has been double the world’s average. The rising demand for meat exacerbates the pressures on grain and oil-seed prices since several kilograms of animal feed are required to produce each kilogram of meat.
Feed grains have risen from around 30 percent of total global grain production to around 40 percent today. Land that would otherwise be planted to the main grains is shifting to soya bean and other oil seeds used for animal feed. It is forecast, for example, that U.S. farmers will cut maize plantings by 8 million acres, while raising soya-bean production by about the same amount. The grain supply side has also been disrupted by climate shocks, such as Australia’s massive droughts.
An even bigger blow has been the U.S. decision to subsidize conversion of maize into ethanol to blend with gasoline. This wrong-headed policy, pushed by an aggressive farm lobby, gives a 51-cent tax credit for each gallon of ethanol blended into gasoline. The 2005 Energy Policy Act mandates a minimum of 7.5 billion gallons of domestic renewable-fuel production, which will overwhelmingly be corn-based ethanol, by 2012. Consequently, up to a third of the U.S. mid-Western maize crop this year will be converted to ethanol, causing a cascade of price increases across the food chain. (Worse, use of ethanol instead of gasoline does little to reduce net carbon emissions once the energy-intensive full cycle of ethanol production-- including the energy-intensive fertilizer and transport needs --is taken into account.)
The food price increases are pummeling poor food-importing regions, with Africa by far the hardest hit. Several countries, such as Egypt, India and Vietnam, have cut off their rice exports in response to soaring prices at home, thereby exacerbating the effects on rice-importing countries. Even small changes in food prices can push the poor into hunger and destitution: as famously expounded by Nobel laureate Amartya Sen, some of the greatest famines in history were caused not by massive declines in grain production but rather by losses in the purchasing power of the poor.
At a time when hundreds of billions of dollars each year veer to war rather than peaceful development, and when media attention is riveted on the U.S. financial crises, it is hard to raise even a few billion dollars for desperately hungry people. Still, it is urgent to do so. At least four measures should be taken in response to soaring food prices.
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17 Comments
Add CommentLack of money is not the problem. Lack of freedom, capitalism, and cheap abundant energy is the problem. Interestingly enough, the three things environmentalism seeks to undermine.
Reply | Report Abuse | Link to thisRe Recommendations, point for point:
Reply | Report Abuse | Link to this1. A Green Revolution in Africa requires non-corrupt governments, not more money to corrupt governments.
2. Certainly agree that subsidies only encourage non-productive, non-economic behavior.
3. Is Bush responsible for all the worlds' ills? How about general rejection of "genetically modified" foods (as much a misnomer as "organic food")?
4. Agree with first comment: Aid is encouraging freedom, capitalism, and cheap abundant energy. All else exacerbates the problems.
No more money, please. That is not what they need, because the money never goes to the farmers or hungry people. It ends up in some politician's bank account.
Reply | Report Abuse | Link to thisI did some freelance editorial work on a book of speeches given at the UN. First, the speakers complained that the US didn't cough up enough money for aid to Africa. Then other speakers argued that we gave them so much money that we somehow caused the problems. Well, if we're going to be blamed for the world's ills no matter what we do, why should we do anything?
I suggest reading [i]The Undercover Economist[/i] for insight into third-world economies.
Fifth, to add to this list, the United States government needs to divert at least half of the pentagon's budget towards feeding the hungry, healing the sick, and teaching people in hunger prone regions sustainable and environmentally sound agricultural practices. Imagine the Peace Corps times 1000!!! Hospital and disaster relief ships instead of war machines, and jobs as peace workers instead of in the military. Whatever terrorists there still are would have no recruits, and the West would become "a friend of Islam," and no longer a target of people angry with a greedy world neighbor. Problems solved!
Reply | Report Abuse | Link to thisMore money IS needed! Better distribution, etc., is also needed. How about I take you "No more money" folks and place you in a country like Somalia, take all your money and access to food and medicine. You tell me money is not part of the answer, then you should go without these things.
Reply | Report Abuse | Link to thisWe also need to address population growth. More food tends to lead to more people, who need more food. Also, high population exacerbates many contributing factors, such as global warming. We won't solve the problem of food shortages permanently until effective birth control is widely available to poor people around the world.
Reply | Report Abuse | Link to thisSo what , we have let die by the millions in the past, what could be different this time, we are a disgrace as a human society , so few voices so little care, and then the VATICAN with its own system and power cant or wont give these poor HORDES a fighting chance and I have heard all the BS arguments etc. GOD FORGIVE them, they and the RELIGIOUS PUNDITS CONMEN deserve no ,forgiveness but they will muddle by while millions suffer degradation starvation and RELIGIOUS platitudes Please let the POPE know, this is the 21 century, and the Pope and the governments Know. So much for the Faithfull who on Idiotic promisses fill the purses of the modern day Quasi CHRISTIANS . I would take Bets that there isent a true Christian alive
Reply | Report Abuse | Link to this.
Bravo, an excellent article. This of course does not apply to all of the countries, but here we have a serious problem with fuel costs in transport of edible goods (U.S.). I wonder if there could be some trade in this regard. But I'm afraid the Bush admin is not pliable enough to do anything like that - amazing rigidity, as evinced above.
Reply | Report Abuse | Link to thisOh my god, between the Vatican and the US fundies (like Bush and his gang) birth control and abortion have been seriously crippled overseas in places that really need it! It is a must, yet these religious fundie types have successfully blocked it, even here in the US!
Reply | Report Abuse | Link to thisI guess people like like Liddie "Sugar Lips" Dole, who prevented condoms from being distributed in Africa during the height of the AIDS epidemic, would rather see a kid starve to death than die as a developing ova that doesn't have a soul in it yet. They are batty!
I think it's cynical for some people from US to say "they don't need more money, they need a better government" when millions are literally starving to death. Of course they need more money and food produced in their areas.
Reply | Report Abuse | Link to thisAfrica is a strange continent. From there became the early men, but since that, to the south of the equator, no significant owns civilizations had developed. They think in a tribal behavior, without a bigger conscience of mankind. Watch South Africa, blacks killing blacks because they are outsiders! Many of them cannot plant seeds because the another tribe cut their water, there are a genocide disseminated spectre that permeate their mind. The famine in most cases ins´t caused by outsiders reason but because they are the own source, this is hard to say, but this is true. The world troubles give a increase in their problems but isn´t the only source.
Reply | Report Abuse | Link to thisWhat Sachs is advocating is exactly what has been done for the last 60+ years. The result of that is what we see.
Reply | Report Abuse | Link to thisThe USA treats all nations as sovereign governments. So over and over, (particularly in Africa) men with luck, cunning and lack of morals take over nations, acquire huge sums in loans and aid, then steal the money and put it in Swiss bank accounts. That is how the system of aid works. (I speak as someone who spent years in the field, initially with bright-eyed certainty that what I was doing was help.) After this theft, the leaders either die (which leaves their secret accounts in Switzerland (or some other tax haven), or they flee and live a life of ease and luxury.
Most such former dictator gangsters live in Europe. (Right alongside the families of wealthy terrorists.) A rare few have their incredible crimes so well publicized, like Idi Amin of Uganda, that they have to live somewhere like Saudi Arabia. But their lives of wealth and privilege remain as a clarion call to the next rat-bastard reaching for the brass ring.
And very often, [i]though it is never reported as such by the Western press[/i], famine is simply a weapon of war and a lever to acheive dominance by gangsters who take over nations. The closest thing the Western press does is once in a while softly say something like, "Mugabe is accused of using intimidation..." which is so fatuous it rivals Marie Antoinett's "Let them eat cake."
This is why the righteous sounding idealism of giving money to poor Somalis (as an example) is wrong. It simply attracts gangster predators who take the aid (even if given as food, directly.)
As a consequence, it is very unfortunate, but it is worse to give aid than to not give it, except in very rare instances of extreme natural disaster, where giving such aid can help to open up a dictatorship. (Such as in today's Myanmar.)
We should always remember that Dr. Sachs is the man who sold "Shock treatment" to Russia with the result that millions died in the civil breakdown that followed. Dr. Sachs, to this day, refuses to acknowledge his role in bringing about desperate horrors with his good intentions. I saw the aftermath. I was there. Schoolteachers dead of starvation. Incredible numbers of people dead from homicide and suicide and starvation.
I will also say that I agree completely that food price instability means global instability. If we look back at the 20th century, long periods of economic contraction are precursor to war. There are two primary drivers of large scale war.
Reply | Report Abuse | Link to thisA. Economic - Lowered living standards for long periods.
B. Revolutionary ideology - These can be new ideas/ideals such as Marxism was in the early 20th century. Or they can be old ideas/ideals, such as Marxism and neo-Islam in the 21st century. There will be new ones - there always are.
We are due for a long term correction. When global warming dislocation and the downside of Hubbert's peak raising energy costs in an economy that has no serious alternatives to oil are added together, the recipe spells global war. War is what desperate people do. Even more, war is what the deprived sons and daughters of privilege do to get their living standards back. People intinctively understand zero-sum systems, and once the psychology that "for me to win, you have to lose" makes it way into the world's collective psyche, it is just a matter of time before major war follows. (Barring some clever machinations or accidents that raise up a people instead.)
We have always been facing Malthus. While it is fashionable to disrespect Malthus and say that he is obviously wrong because his predictions did not come true - Malthus has always been correct. Given a fixed set of technologies, population will hit the wall and it looks exactly like what we are seeing today.
Please note that the key here, if people want to delay the day of Malthusian reckoning, is to embrace new technologies and opportunities. Those technologies and opportunities must be dramatically wider.
We have those technologies and opportunities. They are in front of us now. We have refused to embrace them, and hence we have no fronteirs, and we are hitting the wall.
Those primary technologies and opportunities are nuclear power (which can be clean and is always cleaner than coal), space satellite solar power stations beaming energy to earth, and development of Mars as a new world. (This last could have been done several times over for the price of the Iraq war.)
Instead, we are, collectively, being neo-Luddites, virtuously depriving ourselves of economic growth opportunities, lower energy costs and new fronteirs. We feel virtuous about this, and we think we are doing the "right thing" by donating some money to the poor and downtrodden. (Those poor Somalis, for instance.)
But, the reality is that when we contract the opportunities at the top of the pyramid where we are, we destroy the opportunity to even survive for those at the bottom of it. People should really think about that. If you really want to reform Somalia, Zimbabwe or anywhere else, then create a huge economic sucking sound in the peak of the developed world that can't help but pull them in because the opportunities are so great, and the way of life is obviously better.
There is a short comment by Mr. Choi on p. 38 of this June issue that relates well to Dr. Sach's third measure - the need for more Ag research: "biochar". Biochar, a negative carbon option, also ties in well with this issue's emphasis by the editors (p39) and John Broome's (p 96) on doing something urgently on CO2 reduction. Biochar is mentioned favorably in forthcoming Jim Hansen Science article. Does anyone know any technology that better couples ag and climate concerns and needs more funds for R&D?
Reply | Report Abuse | Link to thisThe alarm raised in "Diet for A Small Planet" needs more emphasis.
Reply | Report Abuse | Link to this> The alarm raised in "Diet for A Small Planet" needs more emphasis.
Reply | Report Abuse | Link to thisBut in actual practice, it is just the tiniest of delays - if you could convince everyone in the world to give up their dreams and live mother-goose beautiful together without eating meat. But that will not happen. It is the proverbial road to hell, paved with good intentions. Even if you could accomplish it, it would not delay malthusian problems more than a few years. It's not really worth wasting time on. I know this sounds harsh, but that's reality.
Reality is that economies will always be stratified and there will be a pyramid of wealth, with the bottom being established by ability to survive, just barely. If the economy drops, then the bottom falls out for those at the bottom. That is how it works. Very simple.
If you want to help all those people, then build wealth using new methods of engineering that are more efficient, and increase energy supplies to bring cost down. Everything else is useless BS. It ... does ... not ... work.
We have done all of the idealistic baloney for over 60 years. It ... does ... not ... work.
A definition of insanity is to keep doing what is proven not to work while insisting that it should.
Oil is surprisingly not mentioned as significant contributor to rising food prices. And since ethanol subsidies reduce the cost of oil - the relationship between ethanol and food prices is not quite so straightforward.
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