Tag Archives: Price Rise

Trading in Hunger

Worldwide, food inflation is a worry.The rising prices have been attributed to failing harvests, rising population and increased demand for food, increased consumption/changing consumption patterns in emerging economic powers, the demand for ethanol etc. But a key factor that is not often mentioned is speculation in agricultural commodity prices which often cause severe fluctuations in the price of staple foods like corn, wheat, or soy, for the consumer. When we click a button to execute a trade and then look at the profits afterward, we may sometimes lose sight of the fact that food is not like any other commodity and trading in food is often the same as trading in hunger. It would seem obvious that there is a need to ban or at least limit trading in essential food commodities. Like other contentious issues such as subsidies, however, there is a lack of political will and consensus in making this happen. More on this here.

Adapting to Climate Change

 

A new study ,which analyses data on changes in weather and agricultural production in different countries estimates, that the effects of warmer temperatures has lead to a 20% increase in global prices for maize and wheat. The debate on the factors responsible for these changes may continue but the impact of changing climate patterns is already evident to farmers. In the Midwest, farmers are already investing in machinery, seeds and farm practices that will help them deal with the short term variations in weather. More efforts are required to develop crops that can with stand the long term trend of global warming. It is estimated that a 1 degree Celsius rise in temperature causes a 10 percent fall in crop yield. How will the 2012 Farm Bill provide for these challenges? Funds are required for research into creating strains of crops that will be able to withstand excess heat and flooding, for conservation of existing resources and also for providing counter cyclical insurance to farmers as they grapple with uncertain weather conditions. There needs to be a recognition of the problem and also an openness to scientific methods which can help us face this challenge. In the current economic conditions, obstacles are to be expected.

Seeds of Change

They say every cloud has a silver lining and with this long downturn it seems like the clouds have been here forever. But,even in these difficult times, there is some good news. Rising food and healthcare costs are forcing people to rethink the way they live. Farmer’s markets are thriving and people are trying to grow their own produce. The next step is the revival of (almost) lost skills like canning, pickling and preserving produce. That is how people used to live in the past: enjoy produce when it is fresh and also prepare for the rest of the year. But grocery stores continue to be a source of produce for many and I wonder if this trend will impact what we pay in the store for fruits and vegetables?

Note: the link above is to the New York Times article on the changes in produce growing in rural Kentucky. There is some issue with the link that I am trying to fix at the moment, you could go straight to the new York Times site to read it in full.

Food Price Rise Report

The USDA’s  Economic Research Service analysis on rising food prices is now available online here.

Facing the Food Challenge with Consensus

Food prices and shortages are rising around the world and this trend is expected to continue. A broken and defective food system that is wasteful and out of reach for many, will be further stressed by the impact of climate change and rising population. How can we deal with this crisis? As an earlier post pointed out, the world can choose between consensus or conflict to resolve this issue.

It would seem that some countries have already made their choice: China and Saudi Arabia among others are investing in farmland in Africa and now Brazil in order to secure food security for their citizens. This will only serve to enhance conflict. Starving people cannot be expected to respect borders, wherever there is plenty , conflict will follow. It would be in the interest of all to approach this in a way that is thoughtful and  just. This problem can be interpreted as an opportunity to fix the broken food system at home and also at the global level. The 2012 farm Bill needs to ensure that citizens at home are not deprived of access to food produces in their own country by others who seek to bypass the market system here. Lester Brown’s article explains how South Korean buyers are establishing direct contacts with farmers and buying up grain before it even reaches the market. Globally, countries and their governments must come together to respond to this challenge in a timely and effective way. The political will to make big changes and go in a different direction is always. We can support positive measures by keeping ourselves informed, making our voice heard by approaching our representatives and making good choices in our daily lives.

Food Friction

We are just now waking up to a new world, one in which conflicts will revolve around food: this is Lester Brown’s analysis in Foreign Policy magazine this month. The causes for this crisis are not just the old ones of rising population, lack of access, scarce resources, or vagaries of the weather which constrain supply and cause food inflation. To these, we now have to add, the diversion of grain from food to fuel, disappearing aquifers and desertification, leading to countries becoming unable to feed their people and of course, the elephant in the room, climate change. It is estimated that for a 1 degree Celsius rise in temperature, crop yields drop by 10 percent. In another article, Frederick Kaufman addresses the role of speculation in fueling the rise in food prices.

How is the world reacting to this? In the post World War II era, the world was rebuilt by coöperation, through the setting up of institutions  (UN, FAO, World Bank, IMF)  that were supposed to work in the interest of the common good. Today, however, countries are intent solely on pursuing their parochial interests. Some like China and Saudi Arabia are leasing or buying land in Africa for their own projects. (That this land is essential for the food security of the people living there is of obvious concern). South Korea is setting up a system of buying grain directly from US farmers so a part of the produce would be diverted before it ever enters the market.

This is not about the future, this war is here and now: we have to address the issue of climate change in a constructive way, we have to restructure our food world: from industrial size operations to mid and small size farms, from destructive techniques to nurturing agroecology practices,  and personally to a healthier (smaller portions, less meat, more seasonal) diet.

Food Impossible

It is forecast that by the year 2050 there will be 9 billion people on the planet. How will they all be fed? It depends on who is asked the question, but the fact remains that a crisis is growing. On the demand side, the increase in population means that there is an ever increasing demand for food. As countries make economic progress, consumers in those countries move into higher income brackets and demand a higher proportion of meat in their diet. This leads to the diversion of resources in the agricultural sector from food to feed production and raising animals for meat also leaves a bigger carbon imprint contributing to global warming. Even without this, we have to contend with the fact that drier, warmer weather are going to have an adverse impact on crops. So, where should we direct out efforts?

One of the positive effects of economic progress is that increased incomes and standards of living lead to smaller families and some experts feel that the population growth rate will not be as high as projected. Others argue that the problem is not one of production, we already produce enough food, but one of access. Increased incomes should provide increased access but if this leads to a demand for a meat based diet then that would be unsustainable for the planet.

So much for the factors behind the crisis. To get back to the original question: how do we feed so many people? There are those who would vote for a more widespread adoption of organic/sustainable methods which would also help heal the badly battered planet while others see a huge potential in biotechnology which can provide drought resistant crops, increased yield and also the possibility of better health outcomes (for example, golden rice).

Perhaps we could see our way to picking from these choices the best combination to solve our problems? Can we try to follow good farming practices while harnessing the benefits of  new technology? We have been experimenting with cross-breeding, growing hybrids and other techniques for centuries; adopting some new strains developed through the use of genetic modification is another step down that road, it will not make us grow another ear or turn purple. There is no satisfaction in being “right” while people and the planet suffer.

Food Inflation

A visit to the grocery store any day of the week will confirm what is in the news all the time: food prices are rising all over the world and this trend is expected to continue. Normally, farmers in the U.S. could be expected to respond to rising prices by planting more of that particular crop (corn or beans etc) but this year there is little room to do so. That is because farmers have already expanded cotton production in response to rising cotton prices. So, food will cost more and so will clothes. These are obvious impacts. Less apparent but equally important are the changes in package sizing which skew the grocery bill. Producers and manufacturers are making package sizes smaller while continuing to charge the usual prices. A can of tuna might cost the same as ever but look closely and you will notice that there is less tuna in it. The consumer gets hit both ways: either the rising cost gets passed on as higher prices or we pay the same but get less in return. Another reason to follow the dictum: always, always read the label!!