Maybe you guys have heard of the scary dialogue from IMF, World Food Program, and others about the rising costs of staple commodities across the globe. Like with hydrocarbons, it's not a matter of poor supply (there was no bad harvest or climate disaster to blame), but demand has gone up across the board. There have already been riots in Mexico, Haiti, Egypt, and other places, where basic necessities such as corn/rice/wheat have risen 30-130% over the last YEAR.
Due to geography, socioeconomics, and whatnot, of course some nations will be grain importers or exporters. Obviously the price changes are benefiting the exporters (usually prosperous Western nations with mechanized mega-agriculture) and severely hurting the importers (besides Japan and parts of Europe, mostly Third World nations). The US is an interesting case where federal subsidies have kept our major agribusinesses competitive during periods of cheap pricing. To be fair, most rich nations subsidize their farmers too, even wealthy farmers who would turn a nice profit without any assistance. I would hope subsidies will decrease as global prices rise, but I'm not sure how Congress has structured the laws. Actually producers may prefer to sell their corn/soy/etc. as biofuel raw materials to domestic distilleries, rather than exporting them overseas as foodstuffs. The amount of corn needed to produce 25 gallons of fuel ethanol is equal to an average person's yearly corn intake. So that means a million SUV fill-ups could feed a million people for a year. Kind of scary. I guess that's why the World Bank chief called biofuels a "significant contributor" to the food price crisis, and others said it was the "straw that broke the camel's back".
China, India, and other emerging Asian nations are another bizarre case study. Due to economic growth, all of a sudden we have half a billion Asians eating more meat and more raw mass of food per capita versus 20 years ago, when global food prices were quite low. We know that animal farming for meat production is highly grain-intensive. It's also very polluting and wasteful of water, as farmers require 7X more water to produce one kg of beef versus one kg of wheat, and we know that water shortages have been the cause of many conflicts too. Well, the average Chinese is eating 250% more meat than he/she did in 1980, so no wonder prices are on the rise.
But what can we do? Westerners have the money to pay top dollar for grains in order to produce (subsidized) ethanol for our vehicles. We have places to go and things to do/buy. More Asians have the money to buy more and better food. They deserve to enjoy a good diet, and we are trying to reduce our dependence on fossil fuels as well as combat climate change (even though ethanol fuel is more environmentally harmful than oil by some measures). Yet all the while, the poorest two billion people, who were already hard-pressed to put food on the table, are now priced into starvation because of us. The World Food Program has had to recalculate its budget from $500M to $700M since last year, and still they don't come close to providing for everyone. 40-50% of that sum comes from US taxpayers – so their growing difficulty in feeding the needy is hurting us too. It's not like "evil, greedy people" are causing this problem, but market forces and whatnot are making the most vulnerable third of humanity suffer even more. I do find it despicable that a select few farmers/speculators are rolling in cash from this crisis, and in some cases taking advantage of the rest of us by manipulating an already panicky market.
All this makes me want to become a vegetarian, especially now that beef prices hit a record high (http://agresearch.tamu.edu/agnews/index.php?id=392).
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Side note: Actually the biofuel economy has opened the door for a lot of manipulation. The EU and US both passed mandates to increase biofuel availability, so subsidies exist that encourage import and production. Producers have found a way to exploit a loophole in the trading system, where some Europeans will ship biodiesel to the US, where it is blended with 1% fossil fuel diesel, and then shipped back to the EU for sale. This "B99.9" blend is heavily subsidized, which undercuts other European producers. But does that save the planet to waste energy shipping basically the same product back and forth across the Atlantic, just so a few jerks can make a buck? And all the while, global demand and cost for soy have risen dramatically, making many people go hungry.
The cost of food: facts and figures | |
| Explore the facts and figures behind the rising price of food across the globe.
   Rising oil prices and fears over climate change have seen a massive rise in the use of maize to make bio-fuels, pushing up food prices  There will be billions more mouths to feed by 2050, making an increased demand for food a long-term trend    Rising prices will improve the trade balance of major food exporters, but major importers stand to see a greater deficit | |
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