This article is atken from uk msn Money written by Nick Louth
March 07 2008
China's booming economy, a spate of poor harvests across the world and the growing trend to turn food into fuel for our cars are causing millions of people to go hungry.
The international price of wheat, maize (corn), soya beans and dozens of other foods has at least doubled in the last two years and in some cases nearly trebled.
World grain reserves are at their lowest ebb since 1960, and the US stockpile has not been this low since 1948.
The granary is almost emptyThe United States, the world's biggest granary, no longer has much surplus grain to export because most of the spare crop is being turned into ethanol for cars. Australia, another big grain producer, has been devastated by drought. The situation has been so bad Down Under that every four days on average an indebted farmer has committed suicide.
Saudi Arabia, which perhaps surprisingly is a big global wheat producer, is going to stop production of the crop altogether. Despite the high market prices, the irrigation requirements are depleting Saudi underground aquifers, water that took thousands of years to accumulate. Production, which was heavily subsidised, is being cut by 12% a year and will cease by 2016, turning Saudi Arabia from a large wheat exporter into an importer.
Rice is nice...if you can afford itNow the price of rice has begun to soar too, caused by bad weather, soaring demand and loss of paddy fields to urban encroachment.
Rice, on which two thirds of the world's population depend, has seen prices up 75% in the last year at nearly $500 tonne (£251), a level not seen since 1989. Vietnam, India and Egypt, three of the world's key suppliers are restricting exports to make sure they can meet domestic demand.
Robert Zeigler, director at the International Rice Research Institute in Manila, said policymakers should be concerned. "If history is any indicator, we should be worried because rice shortages have in the past led to civil unrest," he told the Financial Times.
Last month, the United Nations World Food Programme said the cost of its programmes to provide food to 78 million hungry people in 80 countries would rise from $2.9 billion (£1.5 billion) to $3.5 billion (£1.8 billion). The World Food Programme, which is entirely funded by voluntary donations, doesn't yet have the extra money.
In a small way, we can help. The World Food Programme has an addictive little word game, ideal for children, which tests your vocabulary. Advertisers to fund the donation of 20 grains of rice for each word correctly defined. Try the free rise game here
No great difficulties for the westWe certainly notice the price of food increasing here. Bread prices have risen, eggs have gone up by 30% in a year and meat prices are on the rise too, reflecting the increased cost of animal feed.
It is no coincidence that this week saw 500 disgruntled British pig farmers demonstrate in Downing Street about the poor prices they get from supermarkets, which after paying for feed leave them out of pocket.
But it is in developing nations that food prices really bite. We spend less than 15% of our disposable income on food in the west. In India, Bangladesh and the Philippines that figure is at least half and often much more among the poorest families.
A price rise that is an inconvenience for us can make the difference between eating adequately and going hungry.
Food, the ultimate political issue Hunger and malnutrition have real, political effects. One of the causes of the Tiananmen Square riots in China in 1988 was soaring food prices.
Mexicans were already demonstrated about the rising cost of flour for tortillas a year ago, while just last month Indonesians took to the streets in Jakarta to bemoan the cost of soya beans which had jumped 50% in just one month.
The fact that rich westerners are able to buy grains just to power their cars while those in the third world struggle to afford one meal a day has not gone unnoticed.
Countries like India and Mexico have subsidised flour prices to ease the effect on the poor. Other big importers, like Algeria, Egypt and Iran, may be forced to do the same.
The reasons why...China's economic growth is probably the biggest single reason for soaring food prices.
With hundreds of millions of people having left the land to work in the cities over recent decades, incomes are rising and the demand for meat, principally pork and chicken, is soaring. Industry figures suggest that three-quarters of the increased demand for soya beans is coming from China where they are used to fatten pigs.
In the US huge federal subsidies to farmers to grow corn to turn into ethanol for fuel have been prompted by the rising price of oil. This has led to a surge in corn acreage, as farmers switched from other grains. This in turn has led to shortages and price rises in soya beans, wheat, barley and other crops.
In Europe, the same route has been followed. The European commission plans to mandate that by 2010, 5.7% of vehicle fuel must come from biomass. This will come from rape seed oil, sugar beet, wheat and some agricultural waste.
Hans-Willem Windhorst, of the University of Vechta in Germany, has calculated that for the EU to meet its 2020 target for biofuels, of 10% of all vehicle fuel, a quarter of all European arable land will have to be turned over to producing biofuels.
Forests destroyedBrazil is the world's biggest soya bean exporter and much of it goes to feed pigs. As the newly-wealthy urban population of China eats more pork, soaring prices encourage Brazilian farmers to burn down rain forest to grow more.
The soaring price of timber, again partly fuelled by Chinese demand, makes that even more worthwhile. But for global warming, loss of rainforest is a disaster.
The same thing has happened in Africa, Malaysia and Indonesia, prompted by surging prices for palm oil.
What can be done?Nothing can be done about Chinese demand, or about the poor harvests that have hit many different crops recently. There is some good news as after torrential rain in recent weeks, Australia's drought is over in most areas. Next year's wheat harvest may be good. It certainly needs to be.
The one really unnecessary part of this is turning food into biofuel. While there are plenty of second generation biofuels on the drawing board which would use plant waste and other non-food materials to substitute into fuel, most of the subsidy money is still going into turning food into fuel.
For that, there's really no excuse.
March 07 2008
China's booming economy, a spate of poor harvests across the world and the growing trend to turn food into fuel for our cars are causing millions of people to go hungry.
The international price of wheat, maize (corn), soya beans and dozens of other foods has at least doubled in the last two years and in some cases nearly trebled.
World grain reserves are at their lowest ebb since 1960, and the US stockpile has not been this low since 1948.
The granary is almost emptyThe United States, the world's biggest granary, no longer has much surplus grain to export because most of the spare crop is being turned into ethanol for cars. Australia, another big grain producer, has been devastated by drought. The situation has been so bad Down Under that every four days on average an indebted farmer has committed suicide.
Saudi Arabia, which perhaps surprisingly is a big global wheat producer, is going to stop production of the crop altogether. Despite the high market prices, the irrigation requirements are depleting Saudi underground aquifers, water that took thousands of years to accumulate. Production, which was heavily subsidised, is being cut by 12% a year and will cease by 2016, turning Saudi Arabia from a large wheat exporter into an importer.
Rice is nice...if you can afford itNow the price of rice has begun to soar too, caused by bad weather, soaring demand and loss of paddy fields to urban encroachment.
Rice, on which two thirds of the world's population depend, has seen prices up 75% in the last year at nearly $500 tonne (£251), a level not seen since 1989. Vietnam, India and Egypt, three of the world's key suppliers are restricting exports to make sure they can meet domestic demand.
Robert Zeigler, director at the International Rice Research Institute in Manila, said policymakers should be concerned. "If history is any indicator, we should be worried because rice shortages have in the past led to civil unrest," he told the Financial Times.
Last month, the United Nations World Food Programme said the cost of its programmes to provide food to 78 million hungry people in 80 countries would rise from $2.9 billion (£1.5 billion) to $3.5 billion (£1.8 billion). The World Food Programme, which is entirely funded by voluntary donations, doesn't yet have the extra money.
In a small way, we can help. The World Food Programme has an addictive little word game, ideal for children, which tests your vocabulary. Advertisers to fund the donation of 20 grains of rice for each word correctly defined. Try the free rise game here
No great difficulties for the westWe certainly notice the price of food increasing here. Bread prices have risen, eggs have gone up by 30% in a year and meat prices are on the rise too, reflecting the increased cost of animal feed.
It is no coincidence that this week saw 500 disgruntled British pig farmers demonstrate in Downing Street about the poor prices they get from supermarkets, which after paying for feed leave them out of pocket.
But it is in developing nations that food prices really bite. We spend less than 15% of our disposable income on food in the west. In India, Bangladesh and the Philippines that figure is at least half and often much more among the poorest families.
A price rise that is an inconvenience for us can make the difference between eating adequately and going hungry.
Food, the ultimate political issue Hunger and malnutrition have real, political effects. One of the causes of the Tiananmen Square riots in China in 1988 was soaring food prices.
Mexicans were already demonstrated about the rising cost of flour for tortillas a year ago, while just last month Indonesians took to the streets in Jakarta to bemoan the cost of soya beans which had jumped 50% in just one month.
The fact that rich westerners are able to buy grains just to power their cars while those in the third world struggle to afford one meal a day has not gone unnoticed.
Countries like India and Mexico have subsidised flour prices to ease the effect on the poor. Other big importers, like Algeria, Egypt and Iran, may be forced to do the same.
The reasons why...China's economic growth is probably the biggest single reason for soaring food prices.
With hundreds of millions of people having left the land to work in the cities over recent decades, incomes are rising and the demand for meat, principally pork and chicken, is soaring. Industry figures suggest that three-quarters of the increased demand for soya beans is coming from China where they are used to fatten pigs.
In the US huge federal subsidies to farmers to grow corn to turn into ethanol for fuel have been prompted by the rising price of oil. This has led to a surge in corn acreage, as farmers switched from other grains. This in turn has led to shortages and price rises in soya beans, wheat, barley and other crops.
In Europe, the same route has been followed. The European commission plans to mandate that by 2010, 5.7% of vehicle fuel must come from biomass. This will come from rape seed oil, sugar beet, wheat and some agricultural waste.
Hans-Willem Windhorst, of the University of Vechta in Germany, has calculated that for the EU to meet its 2020 target for biofuels, of 10% of all vehicle fuel, a quarter of all European arable land will have to be turned over to producing biofuels.
Forests destroyedBrazil is the world's biggest soya bean exporter and much of it goes to feed pigs. As the newly-wealthy urban population of China eats more pork, soaring prices encourage Brazilian farmers to burn down rain forest to grow more.
The soaring price of timber, again partly fuelled by Chinese demand, makes that even more worthwhile. But for global warming, loss of rainforest is a disaster.
The same thing has happened in Africa, Malaysia and Indonesia, prompted by surging prices for palm oil.
What can be done?Nothing can be done about Chinese demand, or about the poor harvests that have hit many different crops recently. There is some good news as after torrential rain in recent weeks, Australia's drought is over in most areas. Next year's wheat harvest may be good. It certainly needs to be.
The one really unnecessary part of this is turning food into biofuel. While there are plenty of second generation biofuels on the drawing board which would use plant waste and other non-food materials to substitute into fuel, most of the subsidy money is still going into turning food into fuel.
For that, there's really no excuse.
No comments:
Post a Comment