Food shortages and rising costs

 

Rising costs for food around the world and shortages of food in several nations have many worrying how they will feed their families.

Food riots have broken out in Bangladesh, Egypt, Burkina Faso, Mauritania, Mozambique and Senegal. Rising prices have hit poor countries like Peru (and even developed countries like Italy and the United States).

Why is this happening?

Several problems have come together all at the same time: as some might say, “a perfect storm.” They include soaring petroleum prices, which increase the cost of fertilizers, transport and food processing; rising demand for meat and dairy in China and India, resulting in increased costs for grain, used for cattle feed; and the ever-rising demand for raw materials that also are used to make biofuels.

 

The global market has driven the growing demand for grains, leading to a shortage of supply. Wheat inventories, for example, have reached a 30-year low. In one year, inventories in the European Union have plummeted from 14 million to one million tons. The fact is that arable land cannot be increased at will. Over the past three decades, the amount of arable land worldwide has stagnated at about 1.5 billion hectares (3.7 billion acres), while the world’s population has increased.

World Bank President Robert Zoellick said, “While many are worrying about filling their gas tanks, many others around the world are struggling to fill their stomachs, and it is getting more and more difficult every day.”

The United States uses corn to make ethanol, and as we increase the amount of ethanol required for motor fuels, less corn is available for consumption. 

 

A couple of years ago the United States Congress passed The Energy Policy Act of 2005, which requires that increasing amounts of ethanol be used in the United States to dilute gasoline. The law called for 4 billion gallons of ethanol to be used in 2006, 6.1 billion gallons in 2009, and 7.5 billion gallons by 2012.

Global inventories of grains are nearing historic lows, while twenty percent of the U.S. corn crop this coming year will be used for ethanol production.

Meanwhile wheat, rice and soybean prices have reached all-time highs and corn prices have jumped to a 12-year high.

“Congress needs to revisit these food-for-fuel policies. We really shouldn’t be pitting our fuel needs against hunger and the environment,” said Scott Faber, vice president of foreign affairs for the Grocery Manufacturers Association. “I don’t think any member of Congress would have voted for this legislation if they had known that the price of corn would jump like this.”

How long will these shortages last?

 

Michael Schmitz, an agricultural economist and professor, used databases to forecast how far trends would last when global conditions change as they have recently. The professor says that the current shortages and price hikes are not a phenomenon that will end in a few months — or even in a few years. Schmitz predicts: “This could continue for two or three decades.”

There are many contributing factors that come into play in this “perfect storm.” Droughts caused by global climate change, a growing world population, energy costs, wars. More land is being given over to residential and industrial uses around the world and less to agriculture, and there is a lack of cooperation and some denial among many of the world’s leaders.

Riots already have broken out in parts of the world because of food shortages. These shortages will be getting worse before they get better, according to most experts. We will see many more riots in the months and years to come if our world leaders do not start taking this crisis seriously.

If you think going to war for oil, as we have, is bad, wait until millions of people start rioting because they are hungry.