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Originally Posted by http://www.cbc.ca/news/background/food/prices.html
In Depth
Food
Rice riots and empty silos: Is the world running out of food?
Last Updated March 27, 2008
By Robert Sheppard
Gold and oil get all the headlines. But when it comes to suddenly soaring prices, they barely hold a candle to the real staples of human existence today — wheat, corn, soybeans and rice.
As the Scotiabank commodity price index reported recently, Canada No. 1 grade wheat jumped to an extraordinary $798 a tonne in February 2008, which is more than three times the $252 a tonne it was averaging over each of the past two crop years.
This is great news, of course, for western farmers who have been squeezed by three decades of mostly declining prices and higher input costs. But the sudden surge in crop prices over the past year is creating social havoc and other, almost revolutionary, changes all over the world.
For the first time in recent memory, there were food riots last year in a host of countries, ranging from Austria and Hungary to Mexico, Namibia, Zimbabwe, Morocco, Yemen, Mauritania, Senegal and Uzbekistan.
Russia and Pakistan introduced food rationing for the first time in decades (and Pakistani troops have been sent out to guard imported wheat). To conserve dwindling stocks, India has banned the export of rice, except for high-end basmati, and other big rice-eating countries, notably the Philippines, are talking of a "rice crisis" and promoting drastic measures to guarantee supply.
Is the world running out of food? "I don't think so," says Harriet Friedmann, a sociology professor at the University of Toronto's Munk Centre for International Studies and one of the country's foremost experts on the economics of food.
But, she says, we are at the beginnings of a "pretty serious trend" that could "shock the international system" with higher prices and regionalized shortages for some time to come.
According to the UN's World Food Program, the root causes of today's higher prices are rising energy costs, the almost decade-long drought in Australia (an important exporter), and the flourishing middle classes in China and India, who have developed a taste for grain-fed beef, pork and chicken.
Friedmann and others, such as the best-selling author Michael Pollan (The Omnivore's Dilemma), also point to what they call the industrialization of the food system, in which basic commodities like wheat, corn and soy are now simply inputs into everything from bread to animal feed, fast food and biofuels — and available worldwide to the highest bidder.
By some counts, a third of the U.S. corn crop this year will go into the production of ethanol and other related biofuels, a controversial approach to help wean that country from imported oil.
"We've gone from competing with our animals for grain to competing with our cars," says Friedmann.
'The new face of hunger'
World stockpiles
Wheat 110.4 tonnes
Corn 104 tonnes
Rice 75.2 tonnes
Source: U.S. Dept. of Agriculture, March 11, 2008
For Canadians, the rising cost of food is starting to show up at the supermarket and other food outlets. Baked goods, eggs and meat have all gone up in price, though the overall impact has been masked somewhat by a decline in the cost of many imported foods, courtesy of the stronger dollar.
Because of the loonie, the grocery store cost of imported fruits and veggies is down 14 per cent from last winter, Statistics Canada reported recently.
However, for much of the rest of the world, particularly developing countries, the impact has been much more immediate. Officials from the UN's World Food Program made an extraordinary appeal in February, saying they will need an additional $500 million in donor contributions just to meet existing needs, helping feed 73 million extremely malnourished individuals in 78 countries.
They also said that will still only be a drop in the bucket when it comes to world hunger and that they expect food shortages to be more acute in the years ahead, particularly in larger centres of the developing world. The world's poorest people will now have to spend a larger portion of their income on food or do without.
"This is the new face of hunger," WFO head Josette Sheeran told reporters. "There is food on shelves, but people are priced out of the market."
This is exactly the situation — Scarce food among the plenty — that CBC reporter Stephen Puddicombe witnessed on his recent assignment in Pakistan. It seems to be what is behind the food riots that have been springing up all over the globe — for example, protests over the cost of tortillas in Mexico.
With the stockpiles of wheat, rice and corn as low as they have been since the 1970s — in the case of U.S. wheat, as low as they have been since the Second World War — no one expects prices to ease any time soon. And this is putting an extra burden on the big donor nations such as Canada.
The U.S. has already told the UN it might not be able to meet its past commitment on donated foods, at least in tonnage, because there are no surpluses anymore and delivery and other energy-related costs have gone up so much.
Canada was the world's fourth largest food-aid donor last year and is pledged under international conventions to supply 420,000 tonnes of food aid per year to the UN. Because of the higher prices, the 2008 cost looks to be at least 20 per cent higher than last year, the Canadian International Development Agency estimated recently. That would bring it close to $200 million.
Eating like a North American
Droughts, floods and skyrocketing energy costs have all contributed to the perfect storm that is the higher cost of food. But the real underlying reasons, say food system experts like Friedmann, are the hidden environmental and social costs of transporting specific commodities long distances and the fact that everyone now wants to eat like a North American.
For most of history, Friedmann says, humans existed on a variety of locally grown grains and legumes and a smattering of meat. But today, "meat is the new norm, even in countries like India which used to be almost entirely vegetarian."
Grain that used to feed humans is now being grown to feed chickens and animals raised for their meat, a not particularly efficient way for humans to get their dose of protein.
What's more, countries such as Nigeria that grow little wheat on their own have become accustomed to bread because of decades of international grain aid.
But more than crop diversion is at issue here: The commodification of agriculture has led to highly specialized commercial organizations even in the developing world and is pushing small, versatile farmers off their lands and into cities, which may not be capable of coping with everyone's food needs as prices rise or recessions set in.
The world has seen large-scale food shortages and spikes in commodity prices before, says Friedmann, but this time could be different. We have made obtaining food much more income dependent than ever before, she says.
"Even in the Depression in the 1930s, most people tended to know someone on a farm. They could barter for food. Doctors were paid in chickens. That is not the case anymore. If you don't have money, you won't eat well."
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