Biofuel
Mania Ends Days Of
Cheap Food
By Gwynne Dyer
17 July, 2007
New
Zealand ZHerald
The
era of cheap food is over. The price of maize has doubled in a year,
and wheat futures are at their highest in a decade. The food price index
in India has risen 11 per cent in one year, and in Mexico in January
there were riots after the price of corn flour - used in making the
staple food of the poor, tortillas - went up fourfold.
Even in the developed countries
food prices are going up, and they are not going to come down again.
Cheap food lasted for only 50 years.
Before World War II, most
families in developed countries spent a third or more of their income
on food, as the poor majority in developing countries still do. But
after the war, a series of radical changes, from mechanisation to the
green revolution, raised agricultural productivity hugely and caused
a long, steep fall in the real price of food.
For the global middle class,
it was the good old days, with food taking only a tenth of their income.
It will probably be back
up to a quarter within a decade. And it may go much higher than that
because we are entering a period when three separate factors are converging
to drive food prices up.
The first is simply demand.
Not only is the global population continuing to grow - about an extra
Turkey or Vietnam every year - but as Asian economies race ahead, more
people in those populous countries are starting to eat more meat.
Early this month, in its
annual assessment of farming trends, the United Nations predicted that
by 2016, less than 10 years from now, people in the developing countries
will be eating 30 per cent more beef, 50 per cent more pig meat and
25 per cent more poultry.
The animals will need a great
deal of grain, and meeting that demand will require shifting huge amounts
of grain-growing land from human to animal consumption - so the price
of grain and of meat will both go up.
The global poor don't care
about the price of meat because they can't afford it even now. But if
the price of grain goes up, some of them will starve. And maybe they
won't have to wait until 2016, because the mania for bio-fuels is shifting
huge amounts of land out of food production.
A sixth of all the grain grown in the United States this year will be
"industrial corn" destined to be converted into ethanol and
burned in cars, and Europe, Brazil and China are all heading in the
same direction.
The attraction of biofuels
for politicians is obvious: they can claim that they are doing something
useful to combat emissions and global warming - although the claims
are deeply suspect - without demanding any sacrifices from business
or the voters.
The amount of United States
farmland devoted to biofuels grew by 48 per cent in the past year alone,
and hardly any new land was brought under the plough to replace the
lost food production.
In other big biofuel countries,
such as China and Brazil, it's the same straight switch from food to
fuel. In fact, the food market and the energy market are becoming closely
linked, which is bad news for the poor.
As oil prices rise - and
the rapid economic growth in Asia guarantees that they will - they pull
up the price of biofuels as well, and it gets even more attractive for
farmers to switch from food to fuel.
Nor will politics save the
day. As economist Lester Brown of the Earth Policy Institute says: "The
stage is now set for direct competition for grain between the 800 million
people who own automobiles, and the world's two billion poorest people."
Guess who wins.
Soaring Asian demand and
biofuels mean expensive food now and in the near future, but then it
gets worse.
Global warming hits crop
yields, but only recently has anybody quantified how hard. The answer,
published in Environmental Research Letters in March by Christopher
Field of the Carnegie Institution in Stanford, California, and David
Lobell of Lawrence Livermore National Laboratory is quite simple: for
every 0.5C hotter, crop yields fall between 3 and 5 per cent.
So 2C hotter, which is the
lower end of the range of predicted temperature rise this century, means
a 12 to 20 per cent fall in global food production.
This is science, so that
answer could be wrong - but it could be wrong by being too conservative.
Last year in New Delhi, I interviewed the director of a think tank who
had just completed a contract to estimate the impact on Indian food
production of a rise of just 2C in global temperature.
The answer, at least for
India, was 25 per cent. That would mean mass starvation, for if India
were in that situation then every other major food-producing country
would be too, and there would be no imports available at any price.
In the early stages of this
process, higher food prices will help millions of farmers who have been
scraping along on very poor returns for their effort because political
power lies in the cities.
But later it gets uglier.
The price of food relative to average income is heading for levels that
have not been seen since the early 19th century, and it will not come
down again in our lifetimes.
* Gwynne Dyer's book The
Mess They Made: The Middle East is published in New Zealand this week.
Copyright ©2007, APN
Holdings NZ Limited
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