A world of hunger again

Each year, the world demands more grain, and this year the world's farms will not produce it. Millions more people will be malnourished, and hundreds of millions who are already hungry will eat less or give up other necessities. Agricultural production is keeping up in general with the growing demand for food - but it keeps up with the added demand for biofuels only if growing weather is good.

Demand for biofuels is almost doubling the challenge of producing more food. Since 2004, for every additional ton of grain needed to feed a growing world population, rising government requirements for ethanol from grain have demanded a matching ton. Brazil's reliance on sugar ethanol and Europe's on biodiesel have comparably increased growth rates in the demand for sugar and driven up demand for vegetable oil. Biofuels have grown rapidly, from consuming 2 percent of world grain and virtually no vegetable oil in 2004 to more than 6.5 percent of grain and 8 percent of vegetable oil last year. Governments worldwide seek to triple production of biofuels by 2020, and that implies more moderately high prices after good growing years and soaring prices after bad ones. It's pretty simple — corn that could go for food or fuel is diverted to fuel. That influences prices.

The price of corn in your corn flakes and other retail products is so small that even a tripling of crop prices has little effect at U.S. grocery stores. But the world's poor do not eat processed, packaged corn flakes; they spend more than half of their incomes on staples such as corn meal. "Ethanol uses 4.9 billion bushels of corn in the U.S.," says Lester Brown, president of the Earth Policy Institute, an environmental think tank. "That's enough grain to feed 350 million people."

The ethanol industry in the U.S., though, is hitting back against the suggestion that it is pushing up food prices.Growth Energy CEO Tom Buis complained that a "highly well-funded and highly orchestrated campaign of misinformation" was overstating the impact of biofuels on food prices. Yet no one is arguing that biofuels are solely responsible for driving up food prices. Rising demand and bad weather play significant roles — droughts, heat waves and floods could become more common in the future as the climate warms. Speculators who buy up food futures as investments contribute to price volatility, too. But it's clear that in a tighter market, diverting corn and other crops to biofuels will only act to raise prices. Canadian Wheat Board market analyst Neil Townsend said U.S. incentives first offered almost a decade ago to encourage producers to grow corn for ethanol have led to stiffer competition between corn and other crops for limited farmland. With bad weather, rising demand and production problems all conspiring to create pressure on food prices, "there's no wiggle room in the system'' at the moment, he said.

Adding to the crisis was U.S. trade policy: Because they subsidize wheat, corn and a handful of other crops so much, they can offer them cheaper on the world market and “dump” supplies on other countries. This puts farmers in those countries out of business, as they are forced to compete with artificially low prices at the market.

Go back a little further in time in Egypt and the roots of their political crisis can be found with its 1992 land reform. Guided by what many say was U.S. and International Monetary Fund influence, the country’s small farmers who were “registered tenants” became subject to rent increases, in many cases triple what they had been paying. As expected, these small farmers couldn’t afford the steep rent increases and were forced off their land. More than half of all Egyptians live in the countryside, and millions were forced into poverty. Moreover, Egypt itself became more reliant on imports.

In 2009, developed nations promised to provide more than $20 billion to aid agriculture in developing countries; $6 billion of that total was intended for a food security fund at the World Bank. Less than $1 billion of those pledges has been paid.

http://www.washingtonpost.com/wp-dyn/content/article/2011/02/10/AR2011021006323.html

feeding the world

President Bush in an interactive business session had argued that while prosperity in countries like India is good, it triggers increased demand for better nutrition, which in turn leads to higher food prices.The comments came close on the heels of US Secretary of State Condoleezza Rice's controversial statement that 'apparent improvement' in the diets of people in India and China is among the causes of the current global food crisis.

The Truth

Biofuels have forced global food prices up by 75% - far more than previously estimated - according to a confidential World Bank report

The figure emphatically contradicts the US government's claims that plant-derived fuels contribute less than 3% to food-price rises. It will add to pressure on governments in Washington and across Europe, which have turned to plant-derived fuels to reduce emissions of greenhouse gases and reduce their dependence on imported oil. Senior development sources believe the report, completed in April, has not been published to avoid embarrassing President George Bush. The report confirms a British finding that t the rush to develop biofuels has played a "significant" role in the dramatic rise in global food prices. And an estimates their impact as 20-30% rise .

"Political leaders seem intent on suppressing and ignoring the strong evidence that biofuels are a major factor in recent food price rises," said Robert Bailey, policy adviser at Oxfam.

Production of biofuels has distorted food markets in three main ways. First, it has diverted grain away from food for fuel, with over a third of US corn now used to produce ethanol and about half of vegetable oils in the EU going towards the production of biodiesel. Second, farmers have been encouraged to set land aside for biofuel production. Third, it has sparked financial speculation in grains, driving prices up higher.

"It is clear that some biofuels have huge impacts on food prices," said Dr David King, the government's former chief scientific adviser.

However , the Indian apologists for capitalism should not feel too smug .

More than 1,300,000 tonnes of food grain rotted in storage stock-piles over the last decade in India according to a recent report .

"This amount of food grain could have fed over 10 million people in a year," said activist Dev Ashish Bhattacharya.

The Future is Famine

From IRIN

Global food prices continue to soar to new highs despite a record world harvest last season . Realising the urgency of the situation, the three food agencies of the UN - the FAO, the World Food Programme (WFP) and the International Fund for Agriculture development (IFAD) - are organising a High-Level Conference on World Food Security and the Challenges of Climate Change and Bioenergy from 3 to 5 June 2008 in Rome.

International wheat prices in January 2008 were 83 percent higher than a year earlier.

"Wheat prices are up because it is being used as animal feed instead of maize, stocks of which are running low partly as a result of the increase in demand for making biofuel," said Liliana Balbi, senior economist at the FAO's Commodities and Trade Division .

According to the FAO, climate change and the demand for agricultural commodities for biofuels production required complex trade-offs and economic, social and environmental policy decisions that would have important repercussions on world agricultural production, access to food and the incomes of rural populations.

"We are facing a crisis triggered by several factors: more intense weather events as result of climate change, the global economic crisis, fuel prices and the pressures brought on by biofuel. ..." said Kanayo Nwanze, Vice-President of IFAD.

Food Inflation and Food Shortages

According to Sue Fisher, an economics analyst at the Meat and Livestock Commission world food prices, as measured by the UN's Food and Agricultural Organisation, rose by at least one-third in the first nine months of 2007.

Last season resulted in a fall in production of wheat and maize in the UK, Canada and Australia by as much as 60 million tonnes. World stocks are now at the lowest level for almost 40 years . U.S. wheat stocks in 2008 will hit a 60-year low and world barley stocks a 42-year low. Global oilseed stocks are projected down 22 percent in one year.

In 2007, Chicago Board of Trade prices -- world benchmarks for wheat, corn, rice and soybeans -- soared despite big U.S. harvests. Wheat prices rose 90 percent, soybeans 80 percent, corn 20 percent. U.S. prices are key because America is still the world's breadbasket, the single biggest grain exporter.

"The fact we're having higher commodity prices here will have an impact around the world on food prices," Lapp , president of consultancy Advanced Economic Solutions , said. "We've only started to see the impact of higher costs translate into higher consumer prices,"

"Things are really getting tight now and the importing countries are getting worried and some of them may even be panicking a bit because they need to import grain and are not sure if there will be enough," Lester Brown , president of the Earth Policy Institute and author of the 1995 book, "Who Will Feed China?", said, noting that world grain stocks have fallen in seven of the last eight years. "There is going to be continued upward pressure on prices. One of my concerns is that this will lead to social unrest and growing political instability in the low- and middle-income countries that import a large share of their grain supply."

The Food and Agriculture Organization in Rome on December 17 said 37 countries are facing food crises and called for aid.
"High international cereal prices have already sparked food riots in several countries," the FAO said.

FAO chief Jacques Diouf pointed to political unrest over food markets in countries like Yemen and Senegal."There is a very serious risk that there will be less people able to get access to food because of prices," Diouf said.

The reasons apart from bad weather and the suspected climate change , income growth and population growth in China and India -- they are westernizing their diets . Moving up the food chain to meat has a built-in accelerator for draining grain supplies . Chinese consumers ate an average of 20 kilograms (44 lb) of meat a year in 1985, but this shot up to 50 kg in 2007. This reduces the amount of grain available because one kg of beef can take as much as eight kg of grain to produce.

And then there is the effect of the new darling of farmers, politicians and agribusiness: biofuels.

About 24 percent of a record U.S. corn crop in 2007 will be diverted to ethanol , a percentage that could shoot well past 30 percent within two years after President George W. Bush signed the new U.S. energy bill into law on December 19.

"If we convert our entire grain harvest into fuel for cars, it may satisfy 16 percent of our total automotive fuel needs. So it's not really a solution," Brown said. At a time when more than 800 million people go to bed hungry every night, history will judge the U.S. energy bill as "one of the great tragedies," he added.

So importer and biofuels demand look set to continue to shrink world grain stocks, even without major weather or climate shocks. It all adds up to rising U.S. food price inflation with knock-on effects for the world.

A Very Happy New Year

The Ominous Future

The soaring cost of food is threatening millions of people in poor countries, the United Nations Food and Agriculture Organisation has warned. Food prices have risen an unprecedented 40% in the last year and many nations may be unable to cope, the agency says. It is calling for help for farmers in poor countries to buy seeds and fertiliser, and for a review of the impact of bio-fuels on food production. The FAO says 37 countries face food crises due to conflict and disaster.

"Without support for poor farmers and their families in the hardest-hit countries, they will not be able to cope," said FAO Director-General Jacques Diouf.

International cereal prices have already sparked food riots in several countries, the FAO points out

The causes of the rise food prices are a mixture of reasons .
Partly due to droughts and floods linked to climate change .
Changing diet in fast-developing nations such as China is also considered a factor, with more land needed to raise livestock to meet increasing demand for meat.
Rising oil prices boosting demand for bio-fuels , the use of land to grow plants which can be used to make alternative fuels - and the use of food crops themselves for fuel - has reduced food supplies and helped push up prices.

Pollution and slavery

China's forced the World Bank to censor a study for fear that one of its findings - that 750,000 people die of pollution-related illness each year - might stoke social unrest.

China's environment watchdog Sepa (the State Environment Protection Agency) and the Health Ministry reportedly asked the World Bank to cut the calculations of premature deaths from the report when a draft was finished last year.

Deaths from diarrhoea and cancer caused by polluted water correspond to 66,000 premature deaths a year.

The World Bank previously reported that 16 of the world's 20 most polluted cities were in China.

Meanwhile similar to the slave labour discovered in China , in Brazil more than 1,000 "enslaved" workers have been released from a sugar cane plantation in the Amazon following a raid that has highlighted the dark side of the current ethanol boom. Brazilian authorities said that the workers in the northern state of Para were being forced to work 14-hour days in horrendous conditions cutting cane for ethanol production. The plantation's owner, Para Pastoril e Agricola SA, are one of the biggest ethanol producers in Brazil .