Print Page - Forget oil,the new global crisis is food:

Alia McMullen, Financial Post
Published: Monday, January 07, 2008

Forget oil, the new global crisis is food
BMO strategist Donald Coxe warns credit crunch and soaring oil prices will pale in comparison to looming catastrophe

Rising demand for grain to make fuel, food and livestock feed has helped push the prices of corn and soybeans.
A new crisis is emerging, a global food catastrophe that will reach further and be more crippling than anything the world has ever seen. The credit crunch and the reverberations of soaring oil prices around the world will pale in comparison to what is about to transpire, Donald Coxe, global portfolio strategist at BMO Financial Group said at the Empire Club's 14th annual investment outlook in Toronto on Thursday.

"It's not a matter of if, but when," he warned investors. "It's going to hit this year hard."

Mr. Coxe said the sharp rise in raw food prices in the past year will intensify in the next few years amid increased demand for meat and dairy products from the growing middle classes of countries such as China and India as well as heavy demand from the biofuels industry.

"The greatest challenge to the world is not US$100 oil; it's getting enough food so that the new middle class can eat the way our middle class does, and that means we've got to expand food output dramatically," he said.

The impact of tighter food supply is already evident in raw food prices, which have risen 22% in the past year.

Mr. Coxe said in an interview that this surge would begin to show in the prices of consumer foods in the next six months. Consumers already paid 6.5% more for food in the past year.

Wheat prices alone have risen 92% in the past year, and yesterday closed at US$9.45 a bushel on the Chicago Board of Trade.

At the centre of the imminent food catastrophe is corn - the main staple of the ethanol industry. The price of corn has risen about 44% over the past 15 months, closing at US$4.66 a bushel on the CBOT yesterday - its best finish since June 1996.

This not only impacts the price of food products made using grains, but also the price of meat, with feed prices for livestock also increasing.

"You're going to have real problems in countries that are food short, because we're already getting embargoes on food exports from countries, who were trying desperately to sell their stuff before, but now they're embargoing exports," he said, citing Russia and India as examples.

"Those who have food are going to have a big edge."

With 54% of the world's corn supply grown in America's mid-west, the U.S. is one of those countries with an edge.

But Mr. Coxe warned U.S. corn exports were in danger of seizing up in about three years if the country continues to subsidize ethanol production. Biofuels are expected to eat up about a third of America's grain harvest in 2007.

The amount of U.S. grain currently stored for following seasons was the lowest on record, relative to consumption, he said.

"You should be there for it fully-hedged by having access to those stocks that benefit from rising food prices."

He said there are about two dozen stocks in the world that are going to redefine the world's food supplies, and "those stocks will have a precious value as we move forward."

Mr. Coxe said crop yields around the world need to increase to something close to what is achieved in the state of Illinois, which produces over 200 corn bushes an acre compared with an average 30 bushes an acre in the rest of the world.

"That will be done with more fertilizer, with genetically modified seeds, and with advanced machinery and technology," he sai

Sharply rising prices have triggered food riots in recent weeks in Mexico, Morocco, Senegal, Uzbekistan, Guinea, Mauritania and Yemen, and aid agencies around the world worry they may be unable to feed the poorest of the poor.

In the Philippines, officials are raiding warehouses in Manila looking for unscrupulous traders hoarding rice, while in South Korea, panicked housewives recently stripped grocery-store shelves of food when the cost of ramen, an instant noodle made from wheat, suddenly rose.

The shadow of "a new hunger" that has made food too expensive for millions is the result of a sudden and dramatic surge in food prices around the world.

Rising prices for all the world's crucial cereal crops and growing fears of scarcity are careening through international markets, creating turmoil.

Last Thursday, as world rice prices soared by as much as 30% in one day, Egypt decided to suspend rice exports for six months to meet domestic demand and to try to limit price increases.

That was bad news for its main rice customers -- Turkey, Lebanon, Syria and Jordan.

Egypt's move was matched by Vietnam, the world's second-largest rice exporter after Thailand, which cut exports by 25% and ordered officials not to sign any more export contracts this year.

India and Cambodia also rushed to curb their exports in order to have enough supplies to feed their own people.

With crude oil soaring above US$100 a barrel, higher fuel prices have driven up the cost of production and increased transportation costs for all foods.

Pests in Southeast Asia, a 10-year drought in Australia and a 45-day cold snap in China have combined to aggravate the situation.

At the same time, millions of people in China and India have suddenly become relatively wealthy and are changing their eating habits, consuming more meat and chicken, which places a huge demand on cereal stocks.

In China, per-capita meat consumption has increased 150% since the 1980s. But producing more meat requires more feed to raise more animals.

"You simply feed less people on maize [corn] via cattle than you do in maize direct," said John Powell, the UN World Food Program's (WFP) deputy director of external programs in Rome.

Also influencing the food crisis is the move in North America and Europe to biofuel in an effort to ease global warming and reduce reliance on imported energy.

A surge in demand for biofuel has resulted in a sharp decline in agricultural land planted for food crops. About 16% of U.S. agricultural land formerly planted with soybeans and wheat is now growing corn for biofuel.

"For the first time in history, there is a clear link between the price of fuel and the price of food," Mr. Powell said.

"If there were a miraculous 20% increase in the quantity of food production, we would not know what would go toward increased food consumption and what would go to biofuels.

"Where it would go is where the prices are best."

Rice is a staple food for half the world's population. But the sudden surge in prices and restrictions on exports come at a time when stockpiles of rice are at their lowest level in decades.

At the moment, world rice inventories are said to stand at a mere 72 million metric tonnes -- about 17% of what the world consumes annually.

The low stockpiles create a market in which any supply disruption will result in radical price swings.

They also complicate delivering foreign aid to those most in need.

The WPF, which feeds 73 million of the world's most destitute each year, says its costs have increased 55% since June. Unless it gets US$500-million in emergency funding, it may soon have to reduce feeding programs.

Experts predict world food markets will be locked into an inflationary spiral for at least four years, but some say the crisis could linger for a decade or more.

"There is pretty much a sense that what we are seeing is a step change or a structural change and not a peak to be followed by a trough," Mr. Powell said.

"In other words, we are into an era of high food prices. It's not just volatility, it's a step increase."

Global food crisis on horizon, expert says
Days of big stockpiles are gone: Don Coxe
PAUL DELEAN, The Gazette
Published: Monday, February 18
Don Coxe is never at a loss for words. Especially when the topic of discussion is the new world order in economics.

Three years ago, the Chicago-based global portfolio strategist for BMO Financial Group predicted parity for the Canadian and U.S. dollars.

He also foresaw this decade's surge in oil and metal prices. Now, he sees a similar scenario shaping up for foodstuffs and agricultural products and services, where supply will be hard pressed to keep up with snowballing demand as developing countries, in particular China and India, get richer.

"The biggest threat we face is a global food crisis," he said in a wide-ranging discussion during a recent visit to Montreal. "Milk is the new oil."

Coxe said the world is entering a period of food shortages and swiftly rising prices, and expects to see government embargoes on food exports at some point.

China and India, he said, are "making up for 200 years of lost time" with their rapid growth, and " by the middle of this century, they will be the biggest economies on Earth."

Their appetite for raw materials and commodities is the reason the usual cyclical downturn in prices has not occurred, and probably won't, Coxe said. The days of massive stockpiles are long gone.

"Everyone's learned to manage inventories," he said. "It's the religion of just-in-time ."

As the populations of emerging countries develop a taste for animal protein and dairy products and the wealth to afford them, there will be huge pressure placed on the agricultural sector, Coxe said. Countries that have the foresight to reorient their economies to food production should be amply rewarded, he said, because "we need to produce more food."

While commodities have kept the Canadian economy buoyant, the U.S. has taken a turn for the worse. Coxe said the U.S. economy is in "a financial recession, not an economic recession."

The financial system is the trouble spot, not the economy as a whole, he said. Unemployment remains low, inflation and interest rates are low, and "there are no excess inventories ... except in houses and political hot air."

But with about a quarter of subprime mortgages in U.S. in default within six months, the U.S. housing market appears to be in for a lengthy slump, he said. And long-term prospects for housing aren't great either, in the U.S. and many other countries, since one of the consequences of an aging population will be reduced demand for homes.

"It'll become global. The U.S. just happened to be first because of these exotic mortgages."

Another consequence of the evolving demographics will be stress on the labour market.

Coxe anticipates "25 years of labour shortages" as competition heats up for a dwindling pool of young employees. Companies will have to try to hang on to skilled workers, he said, paying the price in significantly higher wages.

Africa: UN Warns Over Looming Global Food Crisis

The East African (Nairobi)

7 April 2008
Posted to the web 7 April 2008

Kevin J Kelley
Nairobi

The United Nations is appealing to donors for $500 million in emergency funding to help feed displaced Kenyans and other Africans in increasing danger of going hungry.

"A perfect storm" is threatening millions as food prices soar and as the need for aid grows rapidly, UN World Food Programme director Josette Sheeran warned last week. During a visit to East Africa, Ms Sheeran said food prices are likely to continue rising, making it harder and harder for the poorest Africans to maintain subsistence diets.

"We are seeing a new face of hunger," Ms Sheeran declared at a UN conference in Ethiopia last week. "We are seeing more urban hunger than ever before. Often, we are seeing food on the shelves but people being unable to afford it."

Intensifying economic pressures linked to the cost of food have resulted in civil disturbances in five African countries this year - Burkina Faso, Cameroon, Mauritania, Mozambique and Senegal.

The World Food Programme has meanwhile launched an "extraordinary emergency appeal" so it can boost its aid budget for the current year from $2.9 billion to $3.4 billion. Food price increases are jeopardising the programme's ability to continue feeding 73 million people worldwide, UN officials say.

World Bank President Robert Zoellick sounded the alarm in a speech in Washington last week, saying "many more people will suffer and starve" unless the United States, the European Union, Japan and other prosperous countries meet the aid request.

Ms Sheeran assured President Mwai Kibaki last week that WFP will strive to increase its assistance to Kenyans displaced as a result of the post-election violence. Kenya is already set to benefit from a $250 million food aid package for about a dozen African countries recently approved by the European Union.

The WFP provides direct aid to the hungry in Kenya as well as help for local farmers. It also seeks to link the two components by purchasing produce from Kenyan farms for distribution to the needy.

The UN agency states in regard to Kenya that "poverty and vulnerability to food insecurity are highest in urban slums and among pastoralists and marginal agriculturalists in remote, arid and semi-arid lands." It notes persistently high malnutrition rates among children under five in those areas.

In Tanzania, 38 per cent of children under five are stunted in height due to chronic malnourishment, the programme reports. Tanzania, like Kenya, also hosts a large number of refugees who are heavily dependent on food aid.

Five per cent of Uganda's rural households continue to experience food insecurity, despite fertile soil and favourable climate, the UN agency adds.

The most acute food shortages in East Africa are currently being experienced in Somalia, where war and drought have produced what aid agencies are calling a catastrophic humanitarian crisis.

Steep increases in the price of oil play a key role in pushing food out of the reach of millions of Africans. Higher fuel costs drive up the price of fertilisers while making food processing more expensive as well.

Relevant Links

Food, Agriculture and Rural Issues
Aid and Assistance
Capital Flows
International Organizations and Africa
Sustainable Development

Transporting farm products to markets has also grown costlier, adding to inflation rates that surpassed 40 per cent for many types of grain lastyear.

Growing demand for so-called biofuels is contributing further to the rising cost of food. About 14 per cent of the maize crop in the United States was converted into ethanol last year, with the proportion expected to reach 30 per cent by 2010.

This switchover to crops grown for fuel rather than for food causes a ripple effect that raises maize prices worldwide, since the US accounts for about 40 per cent of the global maize trade.

China's rising grain prices could signal global food crisis

BEIJING

US environmentalist Lester Brown warned Wednesday that sudden food price hikes in China could be the sign of a coming world food crisis brought on by global warming and increasingly scarce water supplies among major grain producers.

"I view the price rises as an indication, as the warning tremors before the earthquake," Brown, director of the Washington-based Earth Policy Institute, told an audience of Chinese environmental non-governmental organizations. "World grain harvests have fallen for four consecutive years and world grain stocks are at the lowest level in 30 years. If farmers can't raise production by (late next year) we may see soaring grain and food prices worldwide."

In the past few months, wheat prices in northeast China have shot up 32 percent, maize prices have doubled and rice prices are up by as much as 13 percent, official reports show. China faces a 40 million ton grain shortfall this year, following five years of smaller harvests. Brown said that the world will be facing a 96 million ton shortfall in grain this year following poor harvests in the United States and India in 2002, and a poor harvest in Europe due to scorching temperatures this year. Shortfalls worldwide have been made up through dwindling grain reserves. Brown, described by the Washington Post as "one of the world's most influential thinkers," was in China to unveil the translation of his new book "Plan B, Rescuing a Planet Under Stress."

While grain producers revel in rising prices, Brown said the trends are unsustainable, especially as the world population approaches eight billion by mid-century and as the main grain producers -- China, India and the United States -- face increasing water shortages. As China's population grows, and its people demand a more meat-based diet with rising living standards, China will increasingly have to look to world markets to satisfy grain needs for both food and feed for livestock, he said.

"When China turns to the world market for grain, it will need 30, 40, 50 million tons, more than anyone else in the world imports," Brown said. "They will first come to US markets, which is going to make a fascinating geo-political situation."

With a 100 billion dollar trade surplus with the United States in 2002,China has "enormous purchasing power" to buy US grain, which "could drive up prices by two times." Already an increase in Chinese demand for American soybeans, plus last year's bad soybean harvest, have seen prices jump from five dollars a bushel to eight dollars a bushel.

China is expected to announce substantial grain purchases from the US in the weeks ahead of a visit to Washington by Premier Wen Jiabao in December. Further exacerbating falling grain harvests will be the effects of global warming as increasing scientific evidence reveals that grain production falls when temperatures mount, Brown said. Studies by the International Rice Institute and the US-based Carnegie Institution have shown that grain production can fall 10 percent with a one degree Celsius (1.7 degree Fahrenheit) increase in temperature, as the increased heat stresses the plants.

The UN's International Panel on Climate Control has come to the conclusion that global warming from greenhouse gases caused by the burning of fossil fuels will lead to temperature rises from two to five degrees Celsius this century.

"This is not encouraging for food security and we may very well be seeing that decisions made at ministries of energy will have a greater effect on food than decisions made at ministries of agriculture," Brown said.

Global food crisis looms as climate change and population growth strip fertile land. 'Ignorance, need and greed' depleting soil
. Experts warn competition will lead to conflict
Ian Sample in science correspondent The Guardian, Friday August 31 2007 Article historyAbout this articleClose This article appeared in the Guardian on Friday August 31 2007 on p12 of the UK news and analysis section. It was last updated at 14:04 on October 11 2007. Climate change and an increasing population could trigger a global food crisis in the next half century as countries struggle for fertile land to grow crops and rear animals, scientists warned yesterday.

To keep up with the growth in human population, more food will have to be produced worldwide over the next 50 years than has been during the past 10,000 years combined, the experts said.

But in many countries a combination of poor farming practices and deforestation will be exacerbated by climate change to steadily degrade soil fertility, leaving vast areas unsuitable for crops or grazing.

Competition over sparse resources may lead to conflicts and environmental destruction, the scientists fear.

The warnings came as researchers from around the world convened at a UN-backed forum in Iceland on sustainable development to address the organisation's millennium development goals to halve hunger and extreme poverty by 2015.

The researchers will use the meeting to call on countries to impose strict farming guidelines to ensure that soils are not degraded so badly they cannot recover.

"Policy changes that result in improved conservation of soil and vegetation and restoration of degraded land are fundamental to humanity's future livelihood," said Zafar Adeel, director of the international network on water, environment and health at the UN University in Toronto and co-organiser of the meeting.

"This is an urgent task as the quality of land for food production, as well as water storage, is fundamental to future peace. Securing food and reducing poverty ... can have a strong impact on efforts to curb the flow of people, environmental refugees, inside countries as well as across national borders," he added.

The UN millennium ecosystem assessment ranked land degradation among the world's greatest environmental challenges, claiming it risked destabilising societies, endangering food security and increasing poverty.

Some 40% of the world's agricultural land is seriously degraded. Among the worst affected regions are Central America, where 75% of land is infertile, Africa, where a fifth of soil is degraded, and Asia, where 11% is unsuitable for farming.

The majority of soil erosion is caused by water, either through flooding or poor irrigation, with the rest lost to winds. Farming practices such as ploughing also damage soil, as does repeated planting in fields, which depletes the soil of nutrients.

"You can sum it up as need, greed and ignorance," said Andrew Campbell, an Australian environmental consultant. "Some pressures on soil resources come from simple human needs, where people don't have any option but to grow crops or farm animals. But in other instances world markets demand produce, so farmers try to meet those markets. And sometimes, there will be land that's cleared that should not have been, or grazed when it shouldn't have been. All these place great pressures on soil resources."

He warned that increased competition over depleted resources would lead to conflict - "and the losers will inevitably be the environment and poor people".

According to the UN's food and agriculture programme, 854 million people do not have sufficient food for an active and healthy life.

The global population has risen substantially in recent decades. Between 1980 and 2000 it rose from 4.4bn to 6.1bn and food production increased 50%. By 2050 the population is expected to reach 9bn.

The threat of a food crisis is exacerbated by fears over energy security, with many countries opting to plant biofuel crops in place of traditional food crops. India, for example, has pledged to meet 10% of its vehicle fuel needs with biofuels.

Andres Arnalds, of the Icelandic soil conservation service, said the pressures on food production would have knock-on effects all over the world because of the international links in food supply.

Mr Campbell said: "If we can improve agricultural practices across the board we can dramatically increase our food production from existing lands, without having to clear more or put more pressure on soils. Simple things like good crop rotation, sowing at the right time of year, basic weed control, are what is needed. They're very well known but not always used."

Tue, April 8, 2008

Global food crisis warningRiots begin as UN fears could unrest
By Barbara Surk, THE ASSOCIATED PRESS
Tear gas fired at food price protest in Haiti
DUBAI, United Arab Emirates — The recent outbreak of food riots is a warning sign that rising food prices could cause unrest and instability across the world, the UN’s top humanitarian official said Tuesday.

Combined with the negative impact of climate change and soaring fuel prices, a “perfect storm” is brewing for much of the world’s population, said John Holmes, undersecretary general for humanitarian affairs and emergency relief co-ordinator.

“The security implications (of the food crisis) should also not be underestimated as food riots are already being reported across the globe,” Holmes told a conference in Dubai, addressing challenges facing humanitarian work.

His comments came after two days of rioting in Egypt, where the prices for many staples has doubled in the past year. And violent food protests were continuing for a second day in the capital of Haiti.

“Current food price trends are likely to increase sharply both the incidence and depth of food insecurity,” Holmes said, noting a 40-per-cent average rise in prices worldwide since the middle of last year.

Holmes said that the biggest challenge to humanitarian work is the effects of climate change and the resulting “extreme weather” that has doubled the number of recorded disasters — from an average of 200 a year to 400 per year in the past two decades.

Adding food scarcity and expensive fuel to the mix have made for a very volatile situation, he said.

“Compounding the challenges of climate change in what some have labelled the perfect storm are the recent dramatic trends in soaring food and fuel prices,” he said.

One of the factors pushing food prices higher and sparking protests all over the world is more expensive diesel fuel, which is used to transport most of the world’s food.

Along with the riots over food scarcity in Haiti and clashes with police over high prices in northern Egypt, UN employees in Jordan staged a day-long strike for pay raises due to a 50-per-cent rise in prices there.

A teenager injured in the clashes in the northern Egyptian city of Mahalla al-Kobra has died from his wounds.

In Port-au-Prince, the Haitian capital, UN peacekeepers fired rubber bullets and tear gas into a crowd outside the presidential palace Tuesday on the second day of protests over soaring food prices.

Some protesters were trying to break down the palace gates before the UN troops established a security perimeter around the building. “We are trying to deal with the situation,” said Fritz Longchamp, chief of staff to President Rene Preval who was at work inside the palace.

The food unrest began last week when Haitians burned cars and attacked a UN police base in the southern city of Les Cayes. At least five people were killed there. The demonstrations reached the capital Monday as thousands marched past the National Palace, some of them crying out: “We’re hungry!”

John Powell, the deputy executive director of The United Nation’s World Food Program, emphasized the need for developed countries to help governments in the developing world.

Developing countries experiencing unrest over high food prices need help in developing “social safety net programs,” he said.

“Riots today mean you need a solution tomorrow,” Powell said. Governments with no “policy space” and under pressure from organized discontent in urban centres “is not likely to be the best decision” in trying to solve the problem, he said.

Powell said the planet is getting hungrier with four million people added to the list of those in most dire need for food to survive.

The rise of fuel and food prices is unlikely to stop soon and it affects everyone, Powell said. In the past, natural disasters, wars and ethnic conflict made the rural areas most vulnerable to poverty and hunger.

Now, the most vulnerable live in the cities, Powell said.

“They see food on the shelves but they cannot afford to buy it,” said Powell. He called urban poverty the “new face of hunger.”

UN warns of world food crisis

By Barbara Surk, THE ASSOCIATED PRESS

People walk past a burning barricade during an anti-government demonstration in Port-au-Prince, Monday, April 7, 2008. Protesters angered by high food prices flooded the streets of Port-au-Prince, forcing businesses and schools to close as unrest spread from the countryside. THE ASSOCIATED PRESS/Ariana Cubillos

DUBAI, United Arab Emirates - The recent outbreak of food riots is a warning sign that rising food prices could cause unrest and instability across the world, the UN's top humanitarian official said Tuesday.

Combined with the negative impact of climate change and soaring fuel prices, a "perfect storm" is brewing for much of the world's population, said John Holmes, undersecretary general for humanitarian affairs and emergency relief co-ordinator.

"The security implications (of the food crisis) should also not be underestimated as food riots are already being reported across the globe," Holmes told a conference in Dubai, addressing challenges facing humanitarian work.

His comments came after two days of rioting in Egypt, where the prices for many staples has doubled in the past year. And violent food protests were continuing for a second day in the capital of Haiti.

"Current food price trends are likely to increase sharply both the incidence and depth of food insecurity," Holmes said, noting a 40-per-cent average rise in prices worldwide since the middle of last year.

Holmes said that the biggest challenge to humanitarian work is the effects of climate change and the resulting "extreme weather" that has doubled the number of recorded disasters - from an average of 200 a year to 400 per year in the past two decades.

Your Ad Here

Adding food scarcity and expensive fuel to the mix have made for a very volatile situation, he said.

"Compounding the challenges of climate change in what some have labelled the perfect storm are the recent dramatic trends in soaring food and fuel prices," he said.

One of the factors pushing food prices higher and sparking protests all over the world is more expensive diesel fuel, which is used to transport most of the world's food.

Along with the riots over food scarcity in Haiti and clashes with police over high prices in northern Egypt, UN employees in Jordan staged a day-long strike for pay raises due to a 50-per-cent rise in prices there.

A teenager injured in the clashes in the northern Egyptian city of Mahalla al-Kobra has died from his wounds.

In Port-au-Prince, the Haitian capital, UN peacekeepers fired rubber bullets and tear gas into a crowd outside the presidential palace Tuesday on the second day of protests over soaring food prices.

Some protesters were trying to break down the palace gates before the UN troops established a security perimeter around the building. "We are trying to deal with the situation," said Fritz Longchamp, chief of staff to President Rene Preval who was at work inside the palace.

The food unrest began last week when Haitians burned cars and attacked a UN police base in the southern city of Les Cayes. At least five people were killed there. The demonstrations reached the capital Monday as thousands marched past the National Palace, some of them crying out: "We're hungry!"

John Powell, the deputy executive director of The United Nation's World Food Program, emphasized the need for developed countries to help governments in the developing world.

Developing countries experiencing unrest over high food prices need help in developing "social safety net programs," he said.

"Riots today mean you need a solution tomorrow," Powell said.

Governments with no "policy space" and under pressure from organized discontent in urban centres "is not likely to be the best decision" in trying to solve the problem, he said.

Powell said the planet is getting hungrier with four million people added to the list of those in most dire need for food to survive.

The rise of fuel and food prices is unlikely to stop soon and it affects everyone, Powell said. In the past, natural disasters, wars and ethnic conflict made the rural areas most vulnerable to poverty and hunger.

Now, the most vulnerable live in the cities, Powell said.

"They see food on the shelves but they cannot afford to buy it," said Powell.

He called urban poverty the "new face of hunger."

THE WORLD FOOD CRISIS
Monday, Nov. 11, 1974 Article ToolsPrintEmailReprintsSphereAddThisRSSYahoo! Buzz For nation shall rise against nation . . . and there shall be famines and troubles; these are the beginnings of sorrows. —Mark 13:8

Related Articles

CARE Says No Thanks to US Food Aid
Sacks of millet are offloaded into a warehouse by CARE in Maradi, Niger. A major international cha...
Food Crisis Renews Haiti’s Agony
Haitians are no strangers to hunger. But even the resilience of the hemisphere’s poorest citizens ca...
Niger: Behind the Headlines
The crisis in Niger, 600 miles west of Sudan, has captured the attention of media and aid groups, wh...
How Hunger Could Topple Regimes
The idea of the starving masses driven by their desperation to take to the streets and overthrow the...

Nothing is older to man than his struggle for food. From the time the early hunters stalked the mammoths and the first sedentary "farmers" scratched the soil to coax scrawny grain to grow, man has battled hunger. History is replete with his failures. The Bible chronicles one famine after an other; food was in such short supply in ancient Athens that visiting ships had to share their stores with the city; Romans prayed at the threshold of Olympus for food.

Every generation in medieval Europe suffered famine. The poor ate cats, dogs and the droppings of birds; some starving mothers ate their children. In the 20th century, periods of extreme hunger drove Soviet citizens to cannibalism, and as late as 1943, floods destroyed so much of Bengal's crops that deaths from starvation reached the millions.

After World War II, however, it seemed that man at long last was winning the battle against hunger. Bumper harvests in many nations, notably the U.S., created food surpluses in the West, while the development of "miracle seeds" brought the hope that the densely populated poor countries would soon attain self-sufficiency. Then, in the past two years, this optimism turned to despair as hunger and famine began ravaging hundreds of millions of the poorest citizens in at least 40 nations. Much of the ground gained in the battle for food seemed lost as the world's harvest in 1972 was roughly 3% short of meeting demands. This year's harvest has also been disappointing, and experts now question whether man can prevent widespread starvation.

The world's reserves* of grain have reached a 22-year low, equal to about 26 days' supply, compared with a 95-day supply in 1961, according to Lester Brown, a leading U.S. food expert. Low harvests and high prices have forced the traditional surplus-producing nations to curtail the amount of food that they normally give as aid to the hungry nations. For example, unless the U.S. adopts an expanded program, American aid this year will drop 50% in some categories. Sales of food are also shrinking. Argentina, Brazil, Thailand, Burma and the Common Market nations have restricted food exports. Several weeks ago, President Ford blocked the sale of some 10 million metric tons of grain to the Soviets and is permitting them to buy scarcely one-fifth of that amount. Ford feared that massive sales to the Soviet Union could inflate food prices in the U.S.

Who caused the world food crisis?
Terence Corcoran, National Post
Published: Tuesday, April 08, 2008

More On This Story
Market crisis, chaos as food crisis felt around world

Forget oil, the new global crisis is food

Food boom: Canada's growing wealth
Related Topics
Alternative Energy

Biofuel Production

Energy Sector

Story Tools
-+ Change font size

Print this story

E-Mail this story
Share This Story
Facebook

Digg

Del.icio.us

More

Story tools presented by

Shaun Best/ReutersCanadian wheat grows in a field near Teulon, Man., on July 26, 2006.
We are now by all accounts in the midst of a global food crisis: key grain prices were up 40% to 130% in the last year, people are protesting and hardship is mounting. But it could soon be worse. Governments and agencies all over the world are gearing up for a global "New Deal" on agriculture policy to solve the food crisis, which means the people who brought us the food crisis are the same people who now want to fix it.

The World Bank reports that prices of staples have jumped 80% since 2005. The price of rice hit a 19-year high last month, and wheat rose to a 28-year high, twice the average price of the last 25 years. Factors behind the surge in prices are varied, including bad weather in some regions, soaring demand from growing populations, and US$100-a-barrel oil.

But no factor gets more consistent credit for food price turmoil than the international biofuels stampede. Spurred on by what can only be described as massive subsidies and supporting regulations, farmers all over the planet are giving up on food production and shifting to fuel production.

The biggest biofuels boosters are in the United States, Europe and Canada. In the U.S., the leading Democratic candidates are campaigning on even more aid for ethanol. Canada's Conservative government, playing to the farm lobby and a coterie of rent-seeking corporations, has showered millions on the biofuels market. Regulations forcing consumers to convert to biofuel automobiles are in the works.

As the world food market is thrown into chaos, no Canadian politician has yet been asked to answer for Canada's role. Canada's agriculture policy is largely aimed at dodging trade bullets at the Doha Round of talks that could undermine Canada's trade-killing farm policies. The biofuels subsidies and mandates sink Canada's farm economy deeper into the arms of government policy.

Developing countries are also promoting biofuel programs. In the Philippines, where people are protesting soaring prices for rice, the government recently passed the Biofuels Act to mandate and subsidize biofuel production. Meantime, the Philippine government is considering using

policy powers to to take over rice warehouses to prevent merchants from stockpiling.

Warnings that ethanol programs, brought on by absurd national energy policies and myths about reducing the risk of climate change, could severely disturb food production and prices, have been issued for years. Now that the consequences have materialized, a new policy stampede is in the making.

It starts at the top, where the G8 -- home of the world's leading biofuels subsidies -- is being called on to do something. At the World Bank, president Robert B. Zoellick last week proposed a "New Deal for Global Food Policy." The bank estimates that 33 countries face potential social unrest because of the "acute hike in food and energy prices."

The United Nations, previously a big booster of biofuels, is now issuing warnings. The head of the UN panel on climate change, Rajendra Pachauri, said the other day that the world must take great care in developing biofuels. "Several questions have arisen on even the emissions implications of that route, and the fact that this has clearly raised corn prices," he said. "We should be very, very careful about coming up with biofuel solutions that have major impacts on production of food grains and may have an implication for overall food security."

Too late for that science alert from the UN. So now what is to be done? Agencies and governments all over the world are now busy dreaming up and imposing fix-it programs. Countries are banning exports of grains, imposing price controls and drafting new laws and regulations to counter the price surges.

There are rumours that the Doha trade talks are about to produce an agreement, or at least a meeting about a possible agreement. That might help, but not much. Farm production and food trade, even after some liberalization, would still be too much the domain of governments and the United Nations. Food is a trade issue before it is a food issue. In the case of biofuels, it became a climate-policy game that lost sight of food.

Food crisis being felt around world
Market Chaos, Riots

Peter Goodspeed, National Post
Published: Wednesday, April 02, 2008

More On This Story
Forget oil, the new global crisis is food

Grains likely to be more volatile
Related Topics
United Nations World Food Programme

John Powell

Story Tools
-+ Change font size

Print this story

E-Mail this story
Share This Story
Facebook

Digg

Del.icio.us

More

Story tools presented by

David Silverman, Getty ImagesA farmer turns hay outside the town of Hod Hasharon in central Israel. World food prices are soaring as a result of shortages caused by poor weather, changing consumption patterns and the diversion of ...
Sharply rising prices have triggered food riots in recent weeks in Mexico, Morocco, Senegal, Uzbekistan, Guinea, Mauritania and Yemen, and aid agencies around the world worry they may be unable to feed the poorest of the poor.

In the Philippines, officials are raiding warehouses in Manila looking for unscrupulous traders hoarding rice, while in South Korea, panicked housewives recently stripped grocery-store shelves of food when the cost of ramen, an instant noodle made from wheat, suddenly rose.

The shadow of "a new hunger" that has made food too expensive for millions is the result of a sudden and dramatic surge in food prices around the world.

Rising prices for all the world's crucial cereal crops and growing fears of scarcity are careening through international markets, creating turmoil.

Last Thursday, as world rice prices soared by as much as 30% in one day, Egypt decided to suspend rice exports for six months to meet domestic demand and to try to limit price increases.

That was bad news for its main rice customers -- Turkey, Lebanon, Syria and Jordan.

Egypt's move was matched by Vietnam, the world's second-largest rice exporter after Thailand, which cut exports by 25% and ordered officials not to sign any more export contracts this year.

India and Cambodia also rushed to curb their exports in order to have enough supplies to feed their own people.

With crude oil soaring above US$100 a barrel, higher fuel prices have driven up the cost of production and increased transportation costs for all foods.

Pests in Southeast Asia, a 10-year drought in Australia and a 45-day cold snap in China have combined to aggravate the situation.

At the same time, millions of people in China and India have suddenly become relatively wealthy and are changing their eating habits, consuming more meat and chicken, which places a huge demand on cereal stocks.

In China, per-capita meat consumption has increased 150% since the 1980s. But producing more meat requires more feed to raise more animals.

"You simply feed less people on maize [corn] via cattle than you do in maize direct," said John Powell, the UN World Food Program's (WFP) deputy director of external programs in Rome.

Also influencing the food crisis is the move in North America and Europe to biofuel in an effort to ease global warming and reduce reliance on imported energy.

A surge in demand for biofuel has resulted in a sharp decline in agricultural land planted for food crops. About 16% of U.S. agricultural land formerly planted with soybeans and wheat is now growing corn for biofuel.

"For the first time in history, there is a clear link between the price of fuel and the price of food," Mr. Powell said.

"If there were a miraculous 20% increase in the quantity of food production, we would not know what would go toward increased food consumption and what would go to biofuels.

"Where it would go is where the prices are best."

Rice is a staple food for half the world's population. But the sudden surge in prices and restrictions on exports come at a time when stockpiles of rice are at their lowest level in decades.

At the moment, world rice inventories are said to stand at a mere 72 million metric tonnes -- about 17% of what the world consumes annually.

The low stockpiles create a market in which any supply disruption will result in radical price swings.

They also complicate delivering foreign aid to those most in need.

The WPF, which feeds 73 million of the world's most destitute each year, says its costs have increased 55% since June. Unless it gets US$500-million in emergency funding, it may soon have to reduce feeding programs.

Experts predict world food markets will be locked into an inflationary spiral for at least four years, but some say the crisis could linger for a decade or more.

"There is pretty much a sense that what we are seeing is a step change or a structural change and not a peak to be followed by a trough," Mr. Powell said.

"In other words, we are into an era of high food prices. It's not just volatility, it's a step increase."

World food crisis threatens rich nations (that's us), too
Stephen Hume, Special to the Sun
Published: Wednesday, April 16, 2008
The first food crisis to topple a national government in the 21st century occurred last weekend in one of the world's most desperate countries.

Haiti sacked its prime minister as food prices reached levels the already hungry poor could no longer pay. This is likely a first tremor of fulminating global instability should growing food insecurity push 100 million people closer to starvation.

Yet, while the demand-side drama of spiking food prices garners headlines today, the re-emergence of a virulent plant disease that threatened world food supply before the "green revolution" is of equal concern.

Email to a friend

Printer friendly
Font:****In the first half of the 20th century, wheat rust destroyed hundreds of millions of bushels in Canada and the United States, two of the world's biggest food producers. But the world population has tripled since 1950. Now, with four billion additional people to feed, wheat rust is on the march again and resistant strains bred to defeat it are no longer immune.

A strain named Ug99 emerged in Africa in 1999. Despite containment efforts, winds carried spores to the bread baskets of the Middle East. It is now poised to infect prime wheat growing regions in Europe, Ukraine, Russia, India and Pakistan.

Should even one major wheat producer have a crop failure, the effect on the world's ability to feed itself would be immense, which explains why crash programs to develop new rust resistant strains are now underway.

However, if Ug99 spreads swiftly, devastating crops before science can breed resistant strains, already grave food security problems will expand. So this isn't simply a distant problem for poor nations, it looms over rich ones like Canada and the United States, too.

On Sunday, Britain's Observer newspaper reported World Bank president Robert Zoellick's blunt warning to the world's richest countries that a potential planetary catastrophe is unfolding with frightening speed.

In Rome, Reuters reported Jacques Diouf, head of the United Nations Food and Agriculture Organization, warning that with 37 countries already in crisis, each day brings greater risk of global famine. "I'm surprised that I have not been summoned to the UN Security Council," Diouf said. "Naturally people won't be sitting dying of starvation, they will react."

India's finance minister was more direct. "It is becoming starker by the day," Palaniappan Chidambaram said. "Unless we act fast for a global consensus on the price spiral, the social unrest induced by food prices in several countries will conflagrate into a global contagion, leaving no country -- developed or otherwise -- unscathed."

Demonstrations and food riots have now occurred in Austria, Egypt, Indonesia, Ivory Coast, Mauritania, Cameroon, Mozambique, Senegal, Mexico, China, Pakistan, Zimbabwe, Italy, Hungary, Uzbekistan, Yemen, Guinea and Burkina Faso.

Russia and Pakistan have imposed selective food rationing. India, Egypt, Vietnam and Cambodia have placed controls on rice exports. In Vietnam, armed guards protect paddies from rice thieves. In South Korea, a food panic stripped supermarket shelves.

World Food Crisis Worsening
By Carolyn Presutti
Washington
25 April 2008

World Hunger Global Instability report / Broadband - Download (WM)
World Hunger Global Instability report / Broadband - Watch (WM)
World Hunger Global Instability report / Dialup - Download (WM)
World Hunger Global Instability report / Dialup - Watch (WM)

Increasing food prices have sparked protests in five African nations and several more countries worldwide. United Nations officials are warning that food prices are likely to keep rising. Humanitarians worry about the effect on lives, while some terrorism experts caution about an increase in violence and a situation ripe for terrorism recruitment. VOA's Carolyn Presutti explains the connection.

North Korean boys eat lunch at government-run orphanage
One sees the faces of the hungry in many areas of the world, where food costs too much to afford.

The United Nation's World Food Program says at least 850 million people worldwide are hungry. Executive Director Josette Sheeran says, “The world's misery index is rising to a silent tsunami that respects no borders - most don't know what hit them."

In Somalia, the price of the food staple sorghum has doubled since February.

Peter Smerdon of the World Food Program predicts the rising prices will push poor people into destitution or even death. "We may have to cut rations or cut the number of people that we feed in Somalia because of these increased costs," he said.

The World Bank says wheat prices have increased 120 percent over the past year. The Peruvian defense minister says his country copes by making potato bread.

"Wheat isn't produced here; it's imported and every day it costs more," explains Peruvian Defense Minister Antero Flores-Araoz. "With the potato mixed into the bread, we try to avoid, to control as much as possible, the cost of the bread."

People wait as WFP staff unload food aid for residents of Kibera slum, at Woodley stadium in Nairobi, Kenya (file photo)
"Poor people in Yemen are now spending more than a quarter of their incomes just on bread before they pay for other essential foods for their children, let alone basic healthcare or shelter," Robert Zoellick, with the World Bank said.

In Asia, the military guards are precious cargo. The price of rice, the staple for Asian countries, has tripled since January. Prices in Thailand surged to a record high on Thursday, 24 April.

The hungry are driven to desperate acts, as desperation becomes the substitute for food. In Haiti, there has been violence. In Egypt, the same.

Professor Vanda Felbab-Brown of Georgetown University says world hunger threatens global security. "Anti-American groups such as al-Qaida will be able to mobilize marginalized, frustrated populations that are especially affected by the food crisis," noted Brown.

Some terrorism experts say al-Qaida will blame Western countries for the lack of food, then use modern technology for recruitment.

Jan Lane is with the Homeland Security Policy Institute at George Washington University. “People aren't pushed into radical ideology," she says. "They are pulled into rebellion through those social networks."

Lane says the U.S. and its allies need to counter the radical ideas with long-term solutions. "It's not an American [public relations] campaign,” she said. “It's not an American image campaign. We have to offer and encourage alternative visions and hopes and dreams for these youth to come forward. How can we work to insure they can have an alternative future, other than one that pulls them into extremism."

Lane says global counter-action needs to start now before the deepening food crisis worsens. The U.N. is already predicting that more than 100 million additional people could be plunged into hunger and malnutrition because of the crisis.

UN meets with dev't agencies on how to solve food crisis

Agence France-Presse

BERNE - UN Secretary General Ban Ki-moon on Monday held talks with key development agencies on how to tackle the crisis provoked by soaring food and fuel prices.

"This is an exciting time for the United Nations, but it is also a time when we are challenged to exert our best efforts to rise to the expectations that the world is placing on us," Ban said ahead of meetings in the Swiss capital.

The United Nations was to hammer out a battle plan of emergency measures at the two-day conference in Berne, while exploring other longer-term measures to solve the global food crisis.

The talks were expected to see advocates of protectionism face off against those who favour opening up markets, as well as arguments between both supporters and opponents of biofuels.

Rising populations, strong demand from developing countries, increased cultivation of crops for biofuels and increasing floods and droughts have sent food prices soaring across the globe.

Ban met first with officials from the Universal Postal Union before holding main talks with 27 key UN agencies.

Also in Berne were Josette Sheeran, Executive Director of the UN's World Food Programme; World Bank President Robert Zoellick; Jacques Diouf, head of the Food and Agriculture Organisation (FAO); and Lennart Baage, president of the International Fund for Agriculture Development (IFAD).

"I would like to thank you for your hospitality and your active support of the United Nations," Ban told Swiss President Pascal Couchepin at a reception in the Swiss parliament.

Despite hosting the European headquarters of the organisation, Switzerland did not formally join the United Nations until 2002 after a hotly-contested popular referendum.

Couchepin assured Ban he could count on continued Swiss support and participation in UN activities for "many years to come".

Ban was expected to issue a statement and hold a press conference on Tuesday at 9 a.m. (0700 GMT).

In a statement on IFAD's website, Baage said the international community needed to come up with an urgent response to the crisis, warning that the parallel threat of climate change would only heighten the risks for the world's poor.

"Responding effectively to the impact of higher food prices must be a top priority for the global community," he said.

But he criticised protectionist measures by developing countries such as Brazil, Egypt and Ghana, saying they would prove counter-effective in the long run.

"Some of these measures ... have not only contributed to the instability on global markets, but have also undermined the prices that producers are able to realise," Baage said.

Instead he hailed moves by countries such as Yemen and China, who have promoted credit facilities for those hardest hit by rising prices, and subsidies for production in Pakistan, the Philippines and Jordan.

Besides seeing Couchepin, Ban met Monday evening with Swiss Foreign Minister Micheline Calmy-Rey to discuss development issues, climate change and the current food crisis.

In Geneva, the United Nations' outspoken independent expert on the right to food, Jean Ziegler, said the meeting on Monday marked "an essential day for hungry people around the world."

Ziegler, who is from Switzerland, criticised the World Trade Organisation's trade liberalisation talks, saying that they worked against those who are dying from hunger.

"The line taken by Pascal Lamy (director general of the WTO) is completely against the interests of people dying of hunger because it's exactly the protectionist taxes that allow farmers to cultivate food crops," he said.

Ziegler also called for a suspension of biofuels which he said are one of the causes of the sharp increase in food prices.

His call was echoed by international development charity Oxfam which on Monday called for an end to the biofuels mandates in rich countries.

Celine Charveriat, Oxfam International's deputy advocacy director said: "Biofuels are not only a major cause of increasing prices but are also linked to labour rights abuses and land grabs in developing countries.

"Furthermore, research suggests they may make climate change worse. In this context it is absolute madness to have mandatory targets."

Search TheCattleSite:
Section:
Whole Site News Articles Business Direcory Disease Guide Recipes Books Focus
Use the above box to search this section or the whole site
Thursday, May 08, 2008Print This Page
An Insatiable Global Hunger for Grain
GLOBAL - Wheat is by far the most traded grain as it is so adaptable to many uses, but production for the world market has so far been the privilege of a handful of countries.

But the economic growth of emerging nations, coupled with their urbanisation, has profoundly changed people’s eating habits. They are eating more, particularly meat. The Chinese, for example, consumed five times more meat in 2005 than in 1980. Three kilogrammes of grain are needed to produce 1kg of poultry; more than double that is needed for 1kg of beef. Feed and oil-producing grain are part of livestock’s daily diet.

With a growing world population and a better quality of life in emerging nations, the demand for grain is growing inexorably. International wheat exports tripled between 1960 and the beginning of the millennium. Egypt , which used to supply the wheat for ancient Rome , has become the product’s leading importer. Increased cheap imports during the times of plenty strangled local agriculture in the Mediterranean region and sub-Saharan Africa . The food bill for these countries has reached exorbitant levels.

In a report by the UN’s Food and Agriculture Organisation (FAO) in June 2007, the economist Adam Prakash concluded that food imports will cost 90% more on average than in 2000 for the least advanced countries (3). The UN experts drove the point home a few months later. At a press conference in Dakar on 9 November 2007 , Henri Josserand, head of the Global Information and Early Warning Service at the FAO, calculated that the food bill for African nations had grown by a third, or even 50% for the most dependent among them, between 2006 and 2007.

3rd World Human Hunger
African populations are suffering the consequences of rising grain prices, and there have been hunger riots and demonstrations against the cost of bread. Meanwhile, grain is breaking all records on the American markets.

Food security is once again causing concern, even in industrialised nations. Observers such as Jean Ziegler (until recently UN Special Rapporteur on the Right to Food) raise the spectre of famine in west Africa. Even in the United Kingdom , where agriculture was long ago sacrificed in favour of industrial revolution (1), the Department for Environment, Food and Rural Affairs (Defra) raised concerns about the dangers facing food security in a study published in December 2006 (2).

Just over a year later there is real anger on the streets about the high cost of living – in the UK but also, and especially, in the South where people depend on imports to feed themselves but with incomes that are unimaginable for the British. Prices (milk, oil, rice and wheat) have exploded and the surge has been most spectacular on the grain markets.

Prices doubled during the summer of 2007 when farmers in the North were harvesting. The price of wheat rose from $200 to $400 per ton between May and September at the Chicagoland Chamber of Commerce, the benchmark for the international grain trade. The same occurred in Paris where milling wheat peaked at €300 ($477) per ton at the beginning of September. Prices rose again in mid-March when the United States had almost exhausted its export capabilities. One bushel (27kg) passed the symbolic $13 mark – a record. In one year the price of wheat increased by 130% on the American futures market. Millers and manufacturers of pasta and livestock feed in developed countries were taken by surprise and protested loudly.

But for several years there has been a noticeable difference between supply and demand. The final reserves (what is left in the silos of producer countries before the start of the harvest) have been shrinking while demand has been growing. The market is no longer regulated by the growth of supply but by the use of the accumulated reserves of the large exporter countries.

In 2007 this precarious balance collapsed for two reasons: increased demand generated by the boom in biofuels, and poor harvests due to the vagaries of the weather. These two phenomena came to a head as tension grew, caused by the growing demand of emerging nations such as China .

Biofuels absorb 10% of world corn production, but this is only partially responsible for the spectacular surge in grain prices because US companies, its main manufacturers, increased their corn production to meet this new demand. However, according to the Washington-based International Food Policy Research Institute (IFPRI), the ethanol industry could increase the price of corn by at least a quarter, and possibly by as much as 72%, by 2020 (see “Ethanol: the new anti-depressant”).

Weather played a crucial role in 2007. Drought in Australia , lack of sun and too much rain in Europe , frost in Argentina ; all weakened production. No one is talking about a shortage at this point but, in the trading rooms where sales and purchasing decisions are based mainly on final reserves, such a substantial drop encouraged a surge in prices throughout the season.

First to benefit
The large exporter nations are the first to benefit from the situation. The leader of the pack, the US , registered record agricultural export revenue in 2007 – $85bn. According to estimates from the United States Department of Agriculture, the 2008 harvest looks even more promising. In France grain farmers have doubled their income. The large trading companies are also, discreetly, recording astronomical results.

Anger is brewing at the other end of the chain in the developing countries which are net importers. Riots have broken out in Mexico , Senegal , Morocco and Mauritania . Local agriculture cannot cover the population’s needs in these countries.

The increased cost of groceries may be bearable in developed economies where food represents only 14% of household expenses, but it becomes unmanageable in sub-Saharan African nations where 60% of income is taken up by food.

In the face of such food inflation, emerging nations which have traditionally been exporters have raised barriers to keep local prices at an affordable level. Argentina (4) and Russia have imposed taxes on exports as well as restricting the amount distributed. When these measures are reflected on the world market, the tension is pushed up a notch.

The most exposed countries, the net importers, have resorted to subsidies when their finances allow it. In Morocco last September the rise in bread prices set by the bakers union provoked violent demonstrations in several towns. Fearing that the anger in the streets would lead to riots, the government preferred to cancel the increase and suspend several taxes on importing wheat to support the millers. The Tunisian government even asked bakers to reduce the weight of bread to avoid increasing the price.

’Food aid vanishes’
According to the agronomist Marc Dufumier, an expert on comparative agriculture, famine can be triggered by the most insignificant climatic incident and will be even more difficult to deal with at a time when world food aid reserves are becoming dangerously low.

“Food aid vanishes when the price of wheat rises,” he says. “Countries in the northern hemisphere are generous when they have a surplus. Aid reduces reserves and contributes to supporting prices at home. But as soon as prices take off, they sell to anyone who has a solvent demand.”

Figures published by the International Grains Council (5) confirm this. During 2005-06 8.3m tons of grain were exported as food aid; only 7.4m tons were exported in 2006/2007. Aid is expected to fall to 6m tons for the season which is now coming to an end.

The hunger riots show no signs of burning themselves out. While supply does not satisfy demand, prices will continue to rise. To reverse this trend, governments could ask their populations to eat less couscous, bread and particularly meat, but this suggestion is hardly likely to be favourably received in countries where food standards are just starting to improve – not to mention those who have not even seen such improvement thus far.

In China , for example, the health minister is encouraging women to consume dairy products to absorb more calcium. Milk requires livestock, and grain to feed them. Demand will almost certainly grow in the years to come.

Investors seduced
There is the speculative trend too. In the autumn of 2007 Financeagri, a French firm specialising in raw agricultural materials, encouraged its subsidiaries in an email to “play a part in the volatility of agricultural markets. Don’t just be a spectator. Find out more.” Their commercial offer illustrates the current revolution taking place on the agricultural futures markets. Initially created to cover the risk of price variation, they have become a hunting ground for all kinds of speculators, be they regular (investors and negotiators) or occasional (farmers). The arrival of regular investors has had a sharp effect on listings by feeding price volatility.

Agricultural indexes, which reflect the current evolution, are popular with investment funds. According to Barcap (a Barclays subsidiary specialising in investment), between the end of the first and fourth quarters of 2007 – when the grain markets really took off – the volume of capital managed by listed investment funds (ETFs in finance jargon) on European agricultural products grew fivefold from $156m to $911m (6). The same source has indicated that the amount of capital placed on the American agricultural markets jumped even further, increasing sevenfold between the first and last quarters of 2007.

The convergence of the prices for energy products and grain for the biofuels industry has also seduced investors. An increasingly voracious (and carnivorous) population, and undervalued agricultural products compared to other raw materials, could create a long-term surge in agricultural products. The metal and energy markets have been bubbling away nicely for five years. Now it’s the turn of agricultural products.

In such a euphoric atmosphere producers are also seeking to maximise profits. According to an analyst with a large trading company, “high prices have strengthened the position of operators”. In France many contracts have not been honoured, particularly as regards the delivery of milling wheat and brewing barley. Producers believed that more profit could be generated from direct sales to manufacturers and have had to reimburse the injured cooperatives.

’Land is an investment in the future’
For Philippe Mangin, president of Coop de France, this attitude is entirely understandable. “Small farmers have never faced such volatility,” he says. “Prices have tripled in 15 months. It’s enough to make your head spin, especially after three lean years.”

However, he deplores this development. Faced with the concentration of industrial demand and the disengagement of the public sector, the solidarity of producers, underwritten by the cooperative movement, would be particularly helpful.

According to the International Grains Council’s assessments, farmers are starting to react. Wheat fields should increase by 4% in 2008, comparable to the progress observed the last time the grain market was so active in 1995-96.

But when all grains are taken together, few countries have the necessary technical means or, more importantly, the available land. “Land is an investment in the future,” maintains British investor Jim Slater. He made his fortune in the metal market and is now turning his attention to agriculture, focusing on investments in irrigation programmes.

Russia , particularly the vast steppes in East Siberia , and Ukraine , thanks to its famous black earth, could develop farming. But the continental climate makes this a risky enterprise as frost can cause returns to fall drastically from one year to the next. Argentina and Brazil , on the other hand, can convert pampas and forests into farmland.

According to Dufumier, “there are still unexpected productivity gains to be had”. Not in Europe , though, where the return per hectare is the highest in the world. The future of export agriculture is probably to be found in these new countries where production costs are low and returns still weak.

It will involve rolling out genetically modified organisms (GMOs) which are already omnipresent in Argentina , across the board – and will lead to a series of harmful consequences for the environment, such as deforestation in Brazil .

The countries most affected by the grain explosion will be saved by the renaissance of their own agricultural industry. Mali strengthened its own productivity and has therefore been relatively spared, thanks to investments made in rice cultivation in the Niger delta and the common sense of its cotton farmers.

Disappointed by the ever-lower prices offered by cotton companies for a kilo of seed cotton, they used the materials allocated for this crop for sorghum and corn seedbeds. In neighbouring Burkina Faso , soya fields have advantageously replaced the cotton trees.

Faced with a lack of generosity by the donor countries on which it depends, the World Food Programme is trying to support internal production by intensifying local purchases. In West Africa their share increased from 13% in 2005 to 30% in 2007.

The explosion in grain prices again raises the question of what role agriculture should play in development. It should be at the heart of Europe ’s Common Agricultural Policy and the Doha negotiations. The World Bank, which contributed to weakening agriculture in some countries by imposing economic liberalisation, has now put this sector at the heart of its efforts to fight poverty in its 2008 report on development.

Tuesday, May 13, 2008Print This Page
A Closer Look at the Food Vs Fuel Debate
URBANA, US - Symptoms of the food-versus-fuel crisis are appearing regularly in the news but the underlying causes - and long-term implications - are poorly understood. Much of the problems boil down to new Asian wealth, a global desire to eat more meat and a thing called elasticity, all of which can be mapped on a three-dimensional computer, explains Bob Sampson, a University of Illinois agricultural economics professor.

"An important component of the food-versus-fuel debate that is not well understood is how increases in wealth for Asian consumers are dramatically affecting the markets for commodities worldwide," said Peter Goldsmith, director of the National Soybean Research Laboratory and an associate professor in the U of I's Department of Agricultural and Consumer Economics.

To help fill that knowledge gap, Goldsmith, Tad Masuda, a postdoctoral researcher, and Barbara Mirel of the University of Michigan have built a 3-D computer model that visually conveys the interrelationship and impacts of income changes around the world on consumption, production, and markets.

--------------------------------------------------------------------------------
*
"Not only can we not add land fast enough to meet this rapid rise in demand, but it would place a significant burden on our natural resources"
Peter Goldsmith, director of the National Soybean Research Laboratory and an associate professor in the U of I's Department of Agricultural and Consumer Economics.
--------------------------------------------------------------------------------

"Global Food in 3-D--Version 2" is a Web-based program that will be accessible on a trial basis worldwide to analysts and other interested parties by June.

"It will put the story of food demand at everyone's fingertips," Goldsmith said.

The program deploys three interactive features on the screen--a sidewall, a back wall, and a floor.

On the "side wall," users can graphically display consumption and production data for 15 protein commodities. These can be displayed by country, region, or for the world.

"In the global food system, the production and consumption of commodities are increasingly separate," Goldsmith said. "For example, poultry and pork trade has increased 14 percent to 16 percent per year since 2000, respectively. Brazil is now the largest exporter with Russia and China being the leading importers. The shift in the loci of world poultry and pork production will have larger impacts on underlying feed markets and grain flows."

The "back wall" features country-specific information such as consumption per capita, income elasticities, and population metrics. These data help to demonstrate how income affects consumption.

"The relationship is simple--if I get $1 more in income, I'll not only eat more. If I get significantly more income, I'll eat even more but will shift my consumption to different types of food," he said. "We have that data for every country in the world going back to 1961 and projecting up to 2030."

As a component of the food-versus-fuel debate, there is an economic principle known as "elasticity." Simply defined, this means as incomes move up, food consumption and expenditures change. This is why small increases in income in heavily populated nations like India and China can have major impacts on commodity markets, especially those tied to protein.

"The visualization provided by this program helps one understand this relationship. It provides a vivid demonstration of how the complex system involving income growth, population changes, and food consumption functions," he said.

The "floor" of the model is a map of the world which dynamically reflects changing consumption or production patterns and elasticities over time.

As meat and poultry consumption rises in Asia with increased incomes, a greater demand is triggered for corn and soybeans to feed beef, pork, and poultry. Holding all factors constant, projections indicate that 120 million metric tons more of pork and poultry will be needed by 2030. This means 110 million metric tons more of soybean meal, 140 million metric tons of soybeans, and 62 million hectares of land to grow these additional crops.

"Not only can we not add land fast enough to meet this rapid rise in demand, but it would place a significant burden on our natural resources," he said. "So how do you produce more soybeans?

"I think the answer lies in more research and technical change. Improvements in yield, technologies to reduce input use, and increases in livestock feed efficiency will be critical to meeting future demand while improving the productivity of agricultural inputs and reducing the load on environmental resources."

The Global Food in 3-D model can be used to demonstrate and understand how demand has changed for commodities and where production has been and is going. Poultry, for example, was a commodity largely consumed during the 1960s in the Caribbean, North America, and Europe. By 2007, new countries in other areas of the world were becoming major consumers and a radically different pattern emerged.

"In terms of consumption, poultry was until the 1990s largely a U.S. business," said Goldsmith. "After that, Brazil and China have become major players. China now consumes more poultry than the United States and is projected to consume 40 percent more poultry than the United States by 2030. Where will the grain to feed this poultry come from? This demand is placing a tremendous stress on crop production even without using crops for fuel."

The model allows users to make comparisons. What are the effects on markets when incomes are rising in Asia and what are the implications for the future?

"We also know that as incomes rise, consumers change their food choices. They go first from rice to meat and then in some countries move to high-end seafood," he said. "Other commodities stay basically flat in some countries. In the United States, for example, dairy consumption doesn't seem to change while the big opportunities for dairy appear to be in South America. But each country, at each point in time, for each foodstuff can be unique and makes generalizations risky. Hence, we felt there was a need for a software tool that employed visualization to help simplify a complex situation."

Asia can't produce the food needed to feed its population, Goldsmith added. "That food will have to come from the western hemisphere. China, once the home of the soybean, is now the world's largest importer of soybeans."

All of these complex and interrelated developments become clearer when moving across the screen with its tables and maps.

Goldsmith noted that the original idea for the model was developed earlier this decade by Steven Sonka, a former director of NSRL and retired professor of agricultural economics, and his then-doctoral student Donna Fisher. They studied how visualization helped managers make better decisions when dealing with complex problems in the future. The Illinois Soybean Association and the Soybean Disease and Biotechnology Center provided support for development of the software.

Wednesday, May 21, 2008Print This Page
Effects of Rising Food Prices Outlined by Commission
EU - The European Commission today adopted a Communication setting out potential policy responses to mitigate the effects of rising global food prices. The document will be discussed at the European Council on 19-20 June.

The Communication analyses structural and cyclical factors and proposes a three-pronged policy response, including short-term measures in the context of the Health Check of the Common Agricultural Policy and in the monitoring of the retail sector; initiatives to enhance agricultural supply and ensure food security including the promotion of sustainable future generations of biofuels; and initiatives to contribute to the global effort to tackle the effects of price rises on poor populations.

Commission President José Manuel Barroso stated: "The European Union has reacted rapidly to the sudden surge in food prices. We are dealing with a problem that has many root causes and many consequences. So we need to act on several fronts at the same time to address them. The possible policy responses we put on the table today complement the measures we have already taken. The Commission calls on Member States to give a united European response to this global challenge. We will coordinate our response with our international partners within the UN and the G8".

Why have food prices risen?
The Communication examines the reasons behind the recent surge in food prices, both within the EU and internationally. The increase followed a three-decade long trend of declining agricultural prices. Recent indications show a decline from the peak levels of early 2008 for most commodities. Among structural drivers of higher food prices has been a steady rise in demand for both staple and higher value-added foods, particularly in large emerging economies and a general growth in world population. Rising energy costs are having a marked effect on food prices, particularly by increasing the cost of inputs like nitrogen fertilisers, for which the cost has risen 350 percent since 1999, and through increased transport costs. The growth in crop yields has slowed down and new outlets for agricultural products have emerged. Temporary contributing factors include poor harvests in a number of regions of the world, a historically low level of stocks, the depreciation of the US dollar, and export restrictions in a number of traditional suppliers to the world market. Speculation has amplified the underlying price volatility.

Effects in the EU
Rising commodity prices have contributed to higher food and headline inflation in the EU, though transmission to retail prices was limited by the appreciation of the euro, the falling share of raw materials in food production costs compared to energy and labour and the low share of food in average household expenditure. But the impact has been felt much more starkly in some Member States than others and has had a more serious effect on low income families. While arable farmers have benefited, livestock producers have been hit by higher feed prices.

Effects at global level
Developing countries that are net food importers are the hardest hit, while net exporters have generally benefited. If higher prices have not yet led to food shortage, they have translated into greater poverty, malnutrition and increased vulnerability to further external shocks for the world's poorest. However, in the medium to long-term, rising prices potentially present new income-generating opportunities for farmers in the developing world and could enhance farming's contribution to economic growth.

Future trend
Prices have begun to fall from recent peaks and the Commission expects this to continue and markets to stabilise. However, the Commission does not expect a return to the low prices of the past.

The policy response
The three-pronged policy response proposed by the Commission today consists of the following measures:

short-term: the Health Check of the Common Agricultural Policy and monitoring of the retail sector under the Single Market Review in line with competition and internal market principles.
longer-term: initiatives to enhance agricultural supply and ensure food security including the promotion of sustainable criteria for biofuels and development of future generations of biofuels in Europe and at international level, and strengthening agricultural research and knowledge dissemination especially in developing countries.
Initiatives to contribute to the global effort to tackle the effects of price rises on poor populations including: a more coordinated international response to the food crisis, in particular in the UN and G8 context; continued open trade policy offering preferential access to the EU market to the world's poorest countries; swift response to immediate short-term humanitarian needs; targeting development aid at longer-term projects to revitalise developing country agriculture.
Generally, the Commission will continue to actively monitor the situation and to adapt policies to take the new circumstances into account.

Should the EU drop its biofuels target due to rising food prices?
In 2007, the European Council fixed the target for biofuels for transport, and in January 2008 the Commission made its proposals to implement it. The target has never been to reach 10% biofuels at any price. It is 10% biofuels under strict conditions. Those conditions include a workable and robust sustainability scheme, and commercial viability for second generation biofuels. This EU sustainability scheme is currently under discussion at the Council and the European Parliament. It will be the first of its kind in the world. It will need to ensure that production will not have damaging side-effects and has to be robust and enforceable. With or without the Union's 10% target, there will be a further increase in the worldwide production of biofuels. Europe can best make a contribution by doing everything possible to show that a sustainability scheme can work and to ensure a rapid transition to the new generation of biofuels. In the transport sector today, the only alternative to non-sustainable fossil fuel is biofuel. The EU objective for sustainable biofuels has a decisive role to play in enabling the EU to reduce its CO2 emissions by 20 % by 2020.

Poor soil lowers world's production of food
One-fifth of the cropland is degraded
By Seth Borenstein
AP science writer
Sunday, May 25, 2008

Photos by Bullit Marquez / AP A farm laborer carries rice seedlings in experimental plots of the International Rice Research Institute in the Philippines. Scientists are working on ways to improve rice yields through better soil and water.

The International Rice Research Institute, started in 1963, has planted its 133rd crop in long-term trials in plots with zero fertilizer and nitrogen.

WASHINGTON — Science has provided the souped-up seeds to feed the world, through biotechnology and old-fashioned crossbreeding. Now the problem is the dirt they're planted in.

As seeds get better, much of the world's soil is getting worse, and people are going hungry. Scientists say if they can get the world out of the economically triggered global food crisis, better dirt will be at the root of the solution.

Soils around the world are deteriorating with about one-fifth of the world's cropland considered degraded in some manner. The poor quality has cut production by about one-sixth, according to a World Resources Institute study. Some scientists consider it a slow-motion disaster.

In sub-Saharan Africa, nearly 1 million square miles of cropland have shown a "consistent significant decline," according to a March 2008 report by a worldwide consortium of agricultural institutions.

The cause of the current global food crisis is mostly based on market forces, speculation and hoarding, experts say. But beyond the economics lie droughts and floods, plant diseases and pests, and all too often, poor soil.

Fertile soil essential

A generation ago, through better types of plants, Earth's food production exploded in what was then called the "green revolution." Some people thought the problem of feeding the world was solved and moved on. However, developing these new "magic seeds" was the easy part. The crucial element, fertile soil, was missing.

"The first thing to do is to have good soil," said Hans Herren, winner of the World Food Prize. "Even the best seeds can't do anything in sand and gravel."

Herren is co-chairman of the International Assessment of Agricultural Knowledge, Science and Technology for Development, a group of scientists sponsored by the United Nations and World Bank. It produced a 2,500-page report last month which, among other recommendations, emphasizes a need to improve the world's soil.

Genetic improvements in corn make it possible to grow up to 9,000 pounds of corn per acre in Africa. But millions of poor African farmers get only about 500 pounds an acre "because over the years, their soils have become very infertile and they can't afford to purchase fertilizers," said Roger Leakey, a co-author of the international report and professor at James Cooke University in Australia.

Nutrients robbed from soil

Soil and water issues "have been taken for granted," said Ohio State University soil scientist Rattan Lal. "It is a problem that is not going to be solved. It's going to get worse before it gets better."

In Africa, farmers are forced to use practices that rob nutrients from the soil, not put it back, said Herren, who heads an Arlington, Va., nonprofit. Fertilizer is a quick, short-term fix, but even that isn't being done, he said.

The current crisis could have been avoided "if we, the world, had promoted fertilizer in Africa and we have known for ages it works," said Pedro Sanchez, Columbia University tropical agricultural director.

In that way, the problem with soil is a prime example of a larger failing of agriculture science, said Sanchez, who has won both the World Food Prize and a MacArthur genius grant. Scientists have the knowledge to feed the world right now, but that is not happening, Sanchez said. "It's very frustrating, especially when you see children dying."

Money needed up front

The fruits of biotechnology and the staples of modern agricultural scientific techniques include irrigation, crop rotation, reduced tilling, use of fertilizer and improved seeds. It's a way of farming differently — instead of just using better seeds — that requires extra money up front that many African farmers don't have, scientists said.

Fixing soil just isn't "sexy" enough to interest governments or charities, said Robert Zeigler, director general of the International Rice Research Institute in Manila, Philippines.

Zeigler's center last week planted its 133rd crop of rice in the same land since 1963, trying to pinpoint the right combination of nitrogen and fertilizer. Better seeds worked wonders. But finding money for soil health is difficult and because of that, less work is accomplished, he said.

But there are success stories, Sanchez said, pointing to the small African country of Malawi. Three years ago, the country's new president invested 8 percent of Malawi's national budget in a subsidy program to get fertilizer and better seeds to small farmers. Each farmer got two bags of fertilizer and 4 1/2 pounds of seeds at less than half the cost.

Malawi a success story

Before the program started, one-third of Malawi was on food aid and the country wasn't growing enough food for itself, Sanchez said. It was producing 1.2 million tons of maize in 2005. In 2006, Malawi had more than doubled its production. By 2007 and 2008, the crop was up to 3.4 and 3.3 million tons. Now Malawi is exporting corn.

"In two years, the country has changed from a food aid recipient to a food aid donor and is self-sufficient," Sanchez said. "If Malawi can do it, richer countries like Nigeria, Kenya can do it."

On the Net:

EconomyPrint E-mail Share Delicious Digg StumbleUpon Propeller Reddit Magnolia Newsvine Furl Facebook Google Yahoo TechnoratiRespond

Can the whole world be fed?
We live in a world that has the capacity to feed everyone in it. And yet, each day, hundreds of millions of people around the globe go to bed without enough to eat. Elizabeth Schulte explains why.

May 23, 2008 | Issue 672

THE DEPTH of the global food crisis is best expressed by what poor people are eating to survive.

In Burundi, it is farine noir, a mixture of black flour and moldy cassava. In Somalia, a thin gruel made from mashed thorn-tree branches called jerrin. In Haiti, it is a biscuit made of yellow dirt. Food inflation has sparked protests in Egypt, Haiti, Mexico and elsewhere. Tens of thousands protested earlier this month in Mogadishu, as the price of a corn meal rose twofold in four months.

And while the crisis seemed to come out of nowhere, the reality of hunger is a regular feature of life for millions of people. The United Nations' Food and Agriculture Organization (FAO) estimates that 854 million people worldwide are undernourished.

Hunger isn't simply the result of unpredictable incidents like the cyclone that struck Myanmar. In most cases, millions teeter on the edge of survival long before the natural disasters hit. According to UN Millennium Project Web site, of the 300 million children who go to bed hungry every day, only "8 percent are victims of famine or other emergency situations. More than 90 percent are suffering long-term malnourishment and micronutrient deficiency."

The technology and know-how exist to make our capacity to produce food even greater--if this were made a priority. As part of a recent series on the global food crisis, the Washington Post described the damage being done by gnat-sized insects called "brown plant hoppers." Billions of them are destroying rice crops in East Asia and putting millions of poor people at risk of going hungry.

What else to read
The International Socialist Review has a special feature on the global food crisis, including Sharon Smith's "The revolt over rising food prices," an eyewitness report on "Haiti's food riots" by Mark Schuller and Hossam El-Hamalawy's "Revolt at Mahalla" on the eruption of class struggle in Egypt in connection with the food crisis.

For updated statistics on world hunger, visit the United Nations' Food and Agriculture Organization Web site. The FAO's report "State of Food Insecurity in the World" is available online. The Food First Web site also has useful articles and analyses.

World Hunger: Twelve Myths by Frances Moore Lappe, Joseph Collins, Peter Rosset and Luis Esparza is an authoritative examination of the policies and politics that cause hunger, as well as the misconceptions about "humanitarian" aid from advanced countries.

The threat could easily be eliminated with the creation of rice strains resistant to this pest, but that hasn't happened--because funding for research projects has been cut. The International Rice Research Institute used to have five entomologists, or insect experts, overseeing a staff of 200 in the 1980s. Now it has one entomologist, with a staff of eight.

The world's wealthiest countries and their international loan organizations, like the World Bank, have cut money for agricultural research programs. According to the Post, "Adjusting for inflation and exchange rates, the wealthy countries, as a group, cut such donations roughly in half from 1980 to 2006, to $2.8 billion a year from $6 billion. The United States cut its support for agriculture in poor countries to $624 million from $2.3 billion in that period."

- - - - - - - - - - - - - - - -

SEARCHING FOR answers to the crisis, some people argue that "there simply isn't enough to go around," or that there are "too many" people to feed in a world of limited resources. This argument has been around for many decades. In effect, it tries to blame starvation on the starving themselves. And it simply isn't true.

"The food crisis appeared to explode overnight, reinforcing fears that there are just too many people in the world," wrote Eric Holt-Giménez and Loren Peabody of Food First. "But according to the FAO, with record grain harvests in 2007, there is more than enough food in the world to feed everyone--at least 1.5 times current demand. In fact, over the last 20 years, food production has risen steadily at over 2.0 percent a year, while the rate of population growth has dropped to 1.14 percent a year. Population is not outstripping food supply."

The problem isn't that there isn't enough food. The problem is that the people who need it are too poor to buy it. This is the case around the globe, including some of the wealthiest countries in the world.

In the U.S., food pantries report being stretched to the breaking point because more working people are turning to them when their paycheck doesn't make it. Demand is up 15 to 20 percent over last year, and the pantries are serving "folks who get up and go to work every day," Bill Bolling, founder of the Atlanta Community Food Bank, told USA Today. "That's remarkably different than the profile of who we've served through the years."

This flies in the face of the commonly held idea that average Americans and a culture of overconsumption and waste are eating up the world's resources.

Of course, examples abound of people who get much more than their fill, in elite hotels and restaurants around the globe--but they are a small fraction of the population. And when these parasites gorge themselves, they steal from the mouths of poor people everywhere--in less developed countries, but also in wealthy nations like the U.S.

- - - - - - - - - - - - - - - -

THE POTENTIAL exists to eliminate hunger and malnutrition anywhere in the world. What stands in the way of our ability to feed each and every person is really the system we live under--capitalism.

The drive for profit at the heart of the system--where things like food, which should be viewed as a fundamental right, are seen as commodities to be bought and sold--is really the source of the problem. No amount of technology can overcome this fundamental fact.

Thus, during the Great Depression, while millions of poor and unemployed Americans went hungry, U.S. farmers were facing the exact opposite problem: They were producing too much food to keep prices from falling. So at the same time that millions of poor and unemployed people stood in breadlines for food assistance, food crops were being destroyed, because no profit could be made from giving it away.

As the author John Steinbeck wrote in the Grapes of Wrath:

The works of the roots of the vines, of the trees, must be destroyed to keep up the price, and this is the saddest, bitterest thing of all. Carloads of oranges dumped on the ground. The people came for miles to take the fruit, but this could not be. How would they buy oranges at 20 cents a dozen if they could drive out and pick them up?...A million people hungry, needing the fruit–and kerosene sprayed over the golden mountains...

There is a crime here that goes beyond denunciation. There is a sorrow here that weeping cannot symbolize. There is a failure here that topples all our success. The fertile earth, the straight tree rows, the sturdy trunks and the ripe fruit. And children dying of pellagra must die because a profit cannot be taken from an orange. And coroners must fill in the certificate--died of malnutrition--because the food must rot, must be forced to rot.

Capitalism is a chaotic system, where starvation can exist amid plenty, and where a disaster seems to loom around every corner. In Mexico, for example, the price of tortillas went up 60 percent last year. Increased demand for American farmers to divert corn for use in ethanol as opposed to corn for food was largely to blame for the skyrocketing prices of this Mexican staple.

But Walden Bello of Focus on the Global South asked an important question in a recent article: "How on earth did Mexicans, who live in the land where corn was domesticated, become dependent on U.S. imports in the first place?"

During the 1980s, in return for bailouts from the IMF and World Bank, Mexico was forced "liberalize" its trade policies, and this accelerated under the North American Free Trade Agreement. U.S. farm products flooded the Mexican market, and agribusiness giants like Cargill reaped huge profits. Mexican farmers couldn't possibly compete.

International "aid" is organized around the principle not of solving poverty but of making profits--and in the process, it usually leads to more suffering. In Ethiopia, the poverty "experts" at the World Bank forced the country to devote good land not to food crops, but to export crops to sell on the world market. As a result, the famine of the 1980s were made even worse.

These crises aren't aberrations, but are built into the system. A recent Time magazine article grudgingly commented, "The social theories of Karl Marx were long ago discarded as of little value, even to revolutionaries. But he did warn that capitalism had a tendency to generate its own crises." The Time article was titled "How Hunger Could Topple Regimes."

The current system and its warped priorities can't possibly accomplish something as important as feeding the world's people. It will take a society organized on a completely different basis to achieve this. If we could harness the resources wasted on the pursuit of profit--including the wars that our government funds around the globe--we could feed the world many times over.

Early last year, the bush storyteller Murray Hartin penned a 14-stanza poem in three hours flat. Rain From Nowhere is about a farmer on the brink of ruin who receives an empathetic letter from his father. A celebration of resilience and hope, it is as moving a piece of Australian verse as has been published in decades. It's also pertinent. The driest continent on earth is in the grip of the worst drought in its recorded history. Beginning in 2002 and spanning, at times, the breadth of the country, the dry spell has pushed farmers to the limits of their ingenuity and patience. Some have cracked. In this hot land, the suicide rate in rural areas is 20% higher than in the cities.

Photos
A Thirsty Land
The decade-long dry that blights parts of southern Australia was recorded by some best documentary photographers. Their work will be on show in the exhibition Beyond Reasonable Drought, at Old Parliament House in Canberra
from July 5 to October 26

No thought so dark has lodged in the mind of Les Gordon, a rice grower near the town of Barham in the country's southeast. But the drought's baking breath has dried and cracked his fields. Gordon should have been harvesting last month across a good portion of his 1,600-hectare farm. Alas, there was nothing to harvest. With no rain in sight and no access to the depleted reserves of government-controlled water, Gordon last September didn't bother to plant a crop.

He was one among many. "Rice is basically buggered," says Brett Heffernan, of Australia's National Farmers' Federation. In a normal year, Australia's 2,000 rice farmers produce about 1.2 million metric tons of the grain. This year's harvest was a paltry 18,000 tons — the lowest yield since 1927, when the country's rice industry was four years old. "Frustration is the common feeling at the moment," says Gordon, president of the Ricegrowers' Association of Australia. "We think we're really good food producers. But at the moment we're not producing any food."

No longer just threatening Australia's $30 billion agricultural economy, the drought is contributing to soaring world food prices — rice, wheat and corn prices have more than doubled in the past two years — which in recent weeks have triggered panic buying, hoarding and a string of riots across the developing world. "International agencies are belatedly recognizing," says Julian Cribb, a professor of science communication at Sydney's University of Technology, "that the global food crisis is much closer than the climate change crisis or even the next oil crisis."

A cluster of factors is depleting the world's supply of grains. In Europe, the U.S. and Asia, more farmers are growing crops, especially corn, not as food but for conversion into biofuel. Meanwhile, demand for food is surging in China and India, where hundreds of millions of increasingly prosperous people are eating more. Though the demand in these countries is for less rice and more meat and fish, this increases the consumption of grain in the form of feed: it takes 7-15 kg of grain to produce a kilogram of meat. Record-high oil prices and escalating freight costs, as well as drought in the Middle East, have all contributed to world wheat stocks, for example, plunging to their lowest level in 30 years.

With everything else that's going on, the drought-ravaged rice and wheat farms of Australia's agricultural heartland — the Murray-Darling Basin, named for its two major rivers — have become the world's problem. As to how long that problem's likely to last, scientific opinion is divided. One school of thought is that there's no evidence global warming is causing this drought or will ever cause anything like a permanent one; there's even a theory that higher temperatures could help boost Australian agricultural production by bringing more rain to some parts of the country. On the other hand, modeling studies by Australia's Commonwealth Scientific and Industrial Research Organisation suggest temperatures will rise by 1-6°C over the next 60 years, increasing evaporation and water scarcity in future droughts.

Even in normal times, the Murray-Darling Basin, which covers parts of four states and the Australian Capital Territory, isn't water rich. On average, it receives a modest 250-300 mm of rain a year, and much of the terrain is semi-arid. Its farmers have mostly thrived until now because over 70% of the country's irrigation resources are concentrated there. But with the drought dragging on, the allocation of surface water to farmers last Southern spring — planting time for rice farmers — was zero.

"The land is lunar-like now," says Ian Brunt, who's on 120 hectares near the New South Wales town of Finley and has been rice farming for 32 years. "The tractor's throwing up clouds of dust." Les Gordon recalls the disenchantment among farmers in 1982 when state authorities limited farmers to 60% of their normal water allowance. Now, "I would kill for a 60% allocation," says Gordon, who still farms with his father, Henry. "Dad planted his first rice crop in 1949. No one around here has seen conditions like this before."

This year's meager Australian rice harvest has sent shockwaves through the local industry and beyond. With almost nothing to process, the grower-owned company SunRice announced late last year that it was mothballing its Deniliquin rice mill, the largest in the Southern Hemisphere, as well as its Coleambally mill, making 180 jobs redundant. Though no Australian farming family relies purely on rice for its income, many have laid off workers, sold machinery and increased their debt in response to recent shortfalls.

In a normal year, Australia exports 85% of its rice production as branded product to some 70 markets through Asia, the Middle East, the South Pacific and other destinations. So it is that although Australian rice represents only 0.2% of world rice production, it accounts for more than 4% of the global rice trade — enough to feed 40 million people one meal a day for a year.

This year's near wipeout has thrown the market out of kilter. To keep its customers supplied with high-grade rice, SunRice has had to buy it from a number of other countries, then process and pack it overseas. In coming months, not even Australians will be eating much locally grown rice; instead it will be imported from Thailand, India and Pakistan. The SunRice purchases partly explain why rice importers in other parts of the world are having trouble finding supplies.

The drought has also savaged recent Australian wheat crops. Normally among the top three or four wheat exporters in the world, Australia has managed to produce little more than half of its usual 20 million metric tons in each of the past two years. But these setbacks are having a paradoxical effect. Not nearly as thirsty a crop as rice and expensive now on world markets at about $350 a ton, wheat in Australia is attracting new growers. "Some are looking at putting wheat in this year instead of restocking on cattle — because it's cheaper and because they can get a better return," says the Australian Wheat Board's Peter McBride. If the wheat belt gets average rainfall between now and the end of the year, industry insiders believe Australia's next crop will be its largest ever.

That's a big if. A La Niña weather pattern, which is associated with above-average rainfall and had been giving farmers in southeastern Australia hope over the Southern winter, is weakening, according to forecasters. "Australian farmers have been incredibly innovative in overcoming water shortages and maximizing production under trying conditions," says the National Farmers' Federation's Heffernan. "If they just get a bit of rain, you'll see production kick in very quickly because they've done the preparation." Any Australian rebound would be a bonus on top of expected bumper wheat crops out of the U.S. and Canada in 2008-09.

Such cautious optimism doesn't extend to all crops, however. Insiders doubt whether Australia's rice production will ever return to pre-drought levels. Under proposed water-policy reforms, farmers in the Murray-Darling Basin will be subject to tighter restrictions than in the past. "My wife and I are sticking it out," says Ian Brunt. "But we've got three boys with equity in their own farms, and they've had enough and want out. They're sick of drought and sick of the politics of water." Murray Hartin's poem ends happily, with the hero hugging his wife as "they heard the roll of thunder and smelled the smell of rain." For many Australian farmers — and some of the world's poorest people — real life mightn't be so kind.

Rice tops agenda of Thai prime minister's talks in Philippines; Japan to release rice reserves
By HRVOJE HRANJSKI,Associated Press Writer AP - Friday, May 23MANILA, Philippines - Thailand's prime minister assured the Philippines on Thursday that his government was willing to beef up Manila's rice inventories, an official said.

ADVERTISEMENT

President Gloria Macapagal Arroyo thanked Prime Minister Samak Sundaravej during talks at the presidential palace on the first day of the Thai leader's two-day visit to the Philippines, Agriculture Secretary Arthur Yap said.

"The prime minister said he is extending the hand of friendship. Should the Philippines need rice, Thailand is willing to supply," Yap told reporters.

Sundaravej said Thailand will supply rice to the Philippines "in the spirit of ASEAN brotherhood."

Thailand _ the world's largest rice exporter _ and the Philippines _ the top rice importer _ are partners in ASEAN, or Association of Southeast Asian Nations, along with Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Singapore and Vietnam.

The Philippines says it has contracted for 1.7 million tons of rice to fill a 10 percent domestic production gap this year, and wants to buy an additional 675,000 tons as buffer stocks for the last quarter of the year.

The government has secured contracts with Vietnam for up to 1.5 million tons and Japan for 200,000 tons.

Yap said no specific volumes and amounts were discussed during Arroyo's talks with Samak.

Samak offered rice from last year's crop, the next harvest this year or from both stocks. Thailand also was open to government-to-government or private contracts, Yap said.

Rice prices in Asia have tripled this year, with the regional benchmark hitting US$1,038 a ton Wednesday for Thai 100 percent grade B white rice. U.S. rice futures, meanwhile, have fallen by about 20 percent over the last month and fetched US$20.20 per 100 pounds (45 kilograms) on the Chicago Board of Trade on Wednesday.

Prices have been lifted by growing demand, rising fuel prices, cuts in agriculture funding, increasing use of food crops for biofuels, financial speculation and bad weather.

Yap has said Asian Thailand and Vietnam have expressed concern that the Philippines' aggressive buying was driving up prices.

He said his government preferred to negotiate directly with other governments rather than buying rice at public auctions.

Instead of a previously announced visit Friday to the International Rice Research Institute south of Manila, Samak would visit a market in the capital. He will hold separate talks with officials from IRRI, which has been developing rice varieties to increase production and withstand drought or floods to help farmers across the world.

A Japanese Foreign Ministry aid official, Shigeru Kondo, said Tokyo will release 50 million (�32 million) in an emergency food aid plan that includes the distribution of rice, grains, beans and other foods in 12 countries, including Afghanistan, by international relief agencies.

"Rice prices are skyrocketing, even though prices of wheat and other crops have somewhat subsided," Kondo said in Tokyo. "Our aim is to make effective use of our resources for those who are in dire need of food relief."

News
Farm

OFA Commentary #2108
Food or ethanol?

By Geri Kamenz, President, Ontario Federation of Agriculture

Daily we see stories of rising food prices around the world. Food riots in Philippines, Haiti and other countries are attributed to these price increases.

Some writers and pundits are drawing links between the high price of food and the use of foods like corn to produce ethanol as a fuel supplement. Some Canadian politicians are wrestling with our government’s support of programs requiring an increased ethanol content in gasoline in Canada

A recent public poll in the Globe and Mail indicated 77 per cent of respondents don’t support federal government legislation that would boost ethanol content in Canadian gasoline. Is this because they believe there is a link between ethanol produced from corn and the perceived shortage of food in parts of the world? This food vs. fuel controversy seems to be one of the most uninformed debates in recent memory.

Statistics tell us the price of rice has doubled in the past six months, but we all know rice and corn do not compete for the same land base. Duncan Macintosh of the International Rice Research Institute in Manila says ‘the current rise in rice prices is the result of a steady decline in global rice stocks since 2004.’

Available statistics draw no link between the use of corn to produce ethanol and the rising cost of rice in other parts of the world. Jim Jubak, a financial analyst and commentator, says there is a direct link between unstable governments and unstable food policies. These governments subsidized rice prices, keeping them artificially low, while at the same time discouraging their own farmers from producing more rice, he claims. Rising demand is now leading to shortages.

Distiller’s grain is a byproduct of ethanol production from corn. There is no loss in protein value allowing that grain to be fed as part of a livestock ration. The cycle is simple and elegant: the corn produces ethanol, carbon dioxide and protein; the CO2 is used to nourish greenhouse tomatoes and other vegetables which also pump out oxygen. The protein is used to feed livestock; the manure is then used to produce electricity and nurture the next corn crop.

A recent Chicago Tribune story quotes Merril Lynch analysts who say without biofuels, the price of oil would be about 13 dollars per barrel higher than it is. That 13-dollar saving for each barrel could save the United States 65 billion dollars in foreign oil payments. They suggest making flex-fuel – a mix of gasoline and ethanol – an international standard providing competition for oil-based fuels.

North American farmers are enjoying grain prices like they haven’t experienced in many years. Finally they are able to market their crops and expect to cover their costs of production and still have some money to put in the bank.

That extra money becomes available to permit the replacement of old equipment, worn down through years of low commodity prices, and investment in new technologies. This is what farmers do to nourish the local economy, keeping the money in circulation, they invest it in their industry and subsequently in their community.

With no evidence to support all the theories that using grains like corn to produce ethanol is a conspiracy against humanity, it is obvious there are more benefits than harm from the production and use of ethanol.

Africa: At Time of Food Crisis, New Rice Varieties Boost Rice Production

Email This Page

Print This Page

Comment on this article

Africa Rice Center (Cotonou)

PRESS RELEASE
23 May 2008
Posted to the web 23 May 2008

Cotonou

As African governments and tens of millions of poor African consumers faced a dangerous rice crisis in 2007, new rice varieties adapted to African conditions helped achieve a 6 percent increase in the continent’s output. Though this represents a major advance, it is still far short of meeting demand, according to a report released today in advance of a key international conference in Japan on Africa’s development.

The new rice varieties, which are suited to drylands, were distributed and sown on more than 200,000 hectares during the last five years in several African countries, notably Guinea, Nigeria, Côte d’Ivoire, and Uganda, according to the Africa Rice Center report.

The results of the New Rice for Africa (NERICA®) Project, which is funded by the African Development Bank, the Japanese government, and the United Nations Development Programme, will be discussed next week at the Fourth Tokyo International Conference on African Development (TICAD IV) in Yokohama, where world leaders and development experts are meeting for three days, starting May 28, to talk about pressing development issues in Africa.

The gains from the new rice varieties came against a worrisome backdrop of rapidly increasing consumption of rice in Africa, which imports 40 percent of its rice. Africa Rice Trends, a report released earlier this year by the Africa Rice Center, notes that rice production in West Africa – the continent’s main rice belt – increased 5.1 percent annually from 2001 to 2005, while consumption increased 6.5 percent annually during the same period. Africa imports more than one-third of the rice traded in the world. In 2006, when prices were much lower, the region’s rice imports cost US$2 billion.

“Relying so much on rice from other countries is a recipe for disaster for this continent,’’ said Dr. Papa Abdoulaye Seck, Director General of the Africa Rice Center, one of 15 centers supported by the Consultative Group on International Agricultural Research (CGIAR). “Unless government leaders take strong action now, the economic recovery experienced in so many parts of Africa will evaporate. We need short- and long-term solutions that boost domestic rice production.” The Center’s African Rice Initiative is managing the $35 million, five-year project, which started in 2005.

In less than three years, the project has shown tangible impact in seven countries – Benin, The Gambia, Ghana, Guinea, Mali, Nigeria and Sierra Leone. According to the Food and Agriculture Organization (FAO) of the United Nations, Guinea achieved a record harvest of 1.4 million tonnes in 2007 – 5 percent higher than in 2006 and the highest in its history, largely because of the government’s massive support for NERICA® dissemination. Domestic rice production now covers about 70 percent of consumption.

In Nigeria, the government announced that the country’s rice imports had declined from 2 million tonnes in 2003/04 to less than 1 million tonnes in 2005/06. And officials in Uganda reported that the country had reduced its rice importation from 60,000 tonnes in 2005 to 35,000 tonnes in 2007, saving Ugandans roughly $30 million. The initiative has helped disseminate improved rice varieties in about 30 African countries, including post-conflict countries.

Overall, since 2005, the project has produced more than 10,000 tonnes of improved rice seed. Experts from the Africa Rice Center estimate that 1 tonne of that seed is enough to plant 20 hectares of land. The project has trained 6,500 farmers, more than half of them women, to produce high-quality seed. In addition, the initiative has helped train 1,225 technicians.

At the TICAD meeting, Africa Rice Center experts will discuss the importance of boosting the continent’s agricultural production to increase food self-sufficiency and reduce reliance on imported food staples and food aid. Researchers said that while people around the world have been feeling the impact of the soaring prices of key staples like rice and maize, no one has been hurt more than Africa.
Over the last several months, food riots have broken out in several rice-importing countries in Africa. According to the Africa Rice Center, the best option for Africa is to combine emergency responses in the short term with measures that favor sustainable expansion of the continent’s rice supply in the longer term.

Short-term measures include reduction of customs duties and taxes on imported rice and setting up mechanisms to avoid speculation in rice markets. At the same time, governments must avoid undermining incentives for domestic rice production. In the medium- and long-term, taxes on all critical inputs, cost-saving agricultural machinery and equipment as well as post-harvest technologies need to be reduced.

Governments should also facilitate access to financial services and credit for stakeholders in the domestic rice sector; increase investment in water-control technologies; expand rice areas under irrigation; increase investment in regional research capacity to support the development of rice varieties resistant to major pests and diseases and sufficiently robust to withstand drought and climate change-induced shocks; and boost investment in rural infrastructure to enhance rice farmers’ access to markets and capacity to respond to market signals.

U.S. in Difficult Position Over Japan’s Rice Plan
Sign In to E-Mail or Save This
Print
Reprints
Share
Digg
Facebook
Mixx
Yahoo! Buzz
Permalink

By KEITH BRADSHER and ANDREW MARTIN
Published: May 23, 2008
HONG KONG — Japan is preparing to send at least 220,000 tons of rice to the Philippines, and possibly Africa. The Japanese government says the plan is meant to ease the suffering of poor nations punished by rising rice prices.
Rolex Dela Pena/European Pressphoto Agency
Residents in Manila with rice sold to them by the Philippine government. Japan would like to provide 220,000 tons of rice to the nation. Rice prices have more than tripled in the last year.
But critics, including some in Washington, worry that it could set a precedent for Japan to dump foreign rice it was obligated to import but had never wanted. They say that the Japanese plan risks setting off a trade dispute with the United States — and may barely dent the price of rice.

Yet opposing the Japanese plan could put the United States in a delicate diplomatic position. The price of rice, the most important staple food of the world’s poor, has risen faster than any other cereal, nearly tripling this year alone, according to rice traders. The high prices have caused protests in many countries and, according to World Bank officials, pushed 100 million people back into poverty.

“It is a fact that people around the world regard the situation as one in which the United States is systematically obstructing Japanese efforts to use its minimum access rice reserve usefully — we have to exchange opinions with each other,” said Tatsuya Kajishima, the director of the food trading division of Japan’s ministry of agriculture, fisheries and forestry.

American and Japanese officials are scheduled to resume talks on the issue on Friday.

The Japanese shipments could damp slightly the rise in global rice prices. The effect would be more pronounced if Japan followed it with further sales or donations from the 1.7 million tons of imported rice now sitting in Japanese warehouses. Roughly 30 million tons of rice are traded globally each year.

Mr. Kajishima said no decision had been reached yet on how much of the 220,000 tons for the Philippines would be sold and how much might be donated. Japan’s cabinet is also preparing to approve $50 million worth of food aid for Africa, part of which may be rice, he said.

The plan is controversial among trade experts because the rice earmarked for shipment is rice that Japan reluctantly imported from other countries under an agreement to provide at least a minimum level of access to its largely protected rice market each year.

Separately, experts in international development warn that shipments of free or subsidized food hurt farmers in developing countries, robbing them of their customer base and making the country dependent on foreign food.

The United States led an international effort by rice-exporting nations in the 1980s and early 1990s to insist that Japan begin allowing rice imports. Japan finally agreed to buy nearly 700,000 tons a year, as part of the 1993 global pact that created the World Trade Organization.

But Japan has put much of the imported rice in warehouses at an annual cost to the government of $144 million, according to the United States Department of Agriculture.

Each year, Japan also donates limited quantities of rice to countries, including Tanzania, sends some to rice cracker makers and other food processors and even uses some rice as animal feed.

Only a small amount of the imported rice has been sold to Japanese consumers, allowing rice prices in Japan to remain four times higher than the world average. “We look forward to having discussions with the Japanese on Friday to discuss this issue further and learn exactly what they plan on doing with the rice,” said Gretchen Hamel, a spokeswoman for the United States Trade Representative’s office, adding that the Americans would be supportive of any “food price crisis efforts.”

Blocking the shipment through diplomatic appeals to the Japanese government or through litigation at the W.T.O. could make the United States appear indifferent to hunger and poverty.

Protesting that the shipments will hurt local farmers could be difficult because the United States is already one of the world’s largest donors of free food to poor countries. President Bush is trying to shift part of these donations to cash instead for the purchase of food from local farmers, but American farm and shipping lobbyists have urged Congress to prevent such a shift.

Under world trading rules, the United States could have tried to block the re-export of rice that had already been imported from the United States. Almost two-thirds of the imported rice in Japanese government warehouses came from the United States.

“We recognize these are extraordinary times,” said an American official. “We don’t have a problem with using it for humanitarian purposes.” The official agreed to speak only if his name was not used, because of the delicate nature of the issue.

Bob Cummings, the senior vice president of the USA Rice Federation, a trade association, said American producers wanted to see if Japan would donate any rice from its reserves of rice grown in Japan. “We would be very concerned if Japan donated only imported rice,” Mr. Cummings said.

Mr. Kajishima said that no rice grown in Japan would be sold or donated because this rice was needed for Japan’s own domestic reserves.

Consumers in many African countries have developed a taste for imported bread and other food that has left these countries dependent on costly imports when food aid is halted, said Supachai Panitchpakdi, a former director general of the World Trade Organization who is now the secretary general of the United Nations Conference on Trade and Development.

He declined to comment on the details of the Japanese initiative.

A draft text for the slow-moving Doha Round of global trade talks would ban countries from exporting free food if it displaced commercial purchases.

Selling the imported rice instead of donating it would address the food aid issue, and might comply with the letter of Japan’s pledges to the W.T.O.

South Korea and Taiwan have both accepted deals under W.T.O. auspices that require them to allow some rice imports and explicitly bar them from re-exporting the rice. But the text of Japan’s agreement to allow minimum access to imported rice does not mention the prohibition on re-exports.

Lawyers at the W.T.O.’s headquarters have been arguing strenuously this week over whether Japan can re-export rice, and have not come to a consensus. The W.T.O. declined to comment on the Japanese plan.

Keith Bradsher reported from Hong Kong and Andrew Martin from New York. Yasuko Kamiizumi in Tokyo contributed reporting.

More Articles in Business »

Global rice prices set to fall but food prices will remain high for years to come, U.N. warns
The Associated PressPublished: May 22, 2008

ROME: Skyrocketing world rice prices that have tripled in Asia over the course of the year may come down, but overall food prices will remain high for years to come, a U.N. food agency warned Thursday.

High oil prices, growing demand, flawed trade policies, panic buying and speculation have sent food prices soaring worldwide, trigging protests from Africa to Asia and raising fears that millions more will go hungry and suffer malnutrition.

On Thursday, tens of thousands of workers in Senegal — from teachers to tax officials, fishery and port workers — stayed home as part of a strike staged by unions to protest the spiraling cost of rice, fuel and other basic goods.

Surging food prices have also sparked riots in Haiti and fed worries about supplies in the Philippines.

The Food and Agriculture Organization said it had some good news: The world prices of most agriculture commodities have started to drop.

Today in Europe
Eurovision triumph by Dima Bilan gives Russia another shot of prideEU machine grinds to a halt for Irish voteNaples garbage face-off turns violent
The bad news: The prices are unlikely to fall back to pre-2007 levels, the agency said in a report Thursday.

"We are facing the risk that the number of hungry will increase by many more millions of people," said Hafez Ghanem, assistant director-general of the FAO.

Conditions on the global rice market could ease as new crops are harvested around the world. But price pressures will remain high until at least October or November, when the bulk of this year's paddy crops reach the market, the report said.

"Stock levels are low and you need several good seasons to replenish them," Ghanem said. "There will be some improvement, but we don't expect a major change."

Internationally, rice prices skyrocketed by about 76 percent from December to April while overall food prices have risen 83 percent in three years, according to the World Bank.

In Asia, rice prices have tripled this year, with the regional benchmark hitting US$1,038 a ton Wednesday for Thai 100 percent grade B white rice.

The FAO said the price pressure could ease further if producing countries such as India relax export restrictions on rice.

Recent natural disasters such as the cyclone in Myanmar and the earthquake in China are likely to have a domestic impact, rather than on international markets, FAO experts said.

In Geneva, the U.N. Human Rights Council debated a Cuban resolution expressing "grave concern at the worsening of the world food crisis."

The resolution, co-signed by most members of the 47-nation council, said nations "have a primary obligation to make their best efforts to meet the vital food needs of their population."

The international community, meanwhile, must provide poorer nations with food aid and assistance so that farmers can increase food production and improve "food crop rehabilitation," the draft resolution says.

In Japan, a government official announced Thursday that his nation would release some of its huge stockpile of rice to help ease the crisis, sending some 20,000 tons to five African nations in coming weeks.

That step is part of a US$50 million (€32 million) emergency food aid plan to be endorsed by Japan's Cabinet on Friday, said Shigeru Kondo, a Foreign Ministry aid official.

The total aid package — which includes grains, beans and other foods in addition to rice — will be distributed in 12 countries, including Afghanistan, by international relief agencies such as the World Food Program.

Thailand's prime minister assured the Philippines during a visit there Thursday that his government was willing to increase Manila's rice inventories, an official said.

The FAO is forecasting an increase of 3.8 percent in this year's cereal production compared with last year, assuming favorable weather. Tight wheat supply is likely to improve the most, the agency said. Global milk, sugar and meat production are also expected to grow.

Recently, FAO said rice production is expected to hit a new record of 666 million tons worldwide, a global increase of 2.3 percent.

Production in Asia is forecast to rise to 605 million tons from 600 million tons, with particularly large increases in Bangladesh, China, the Philippines, Thailand and Vietnam, the agency has said.

African production is forecast to grow nearly 4 percent to 23.2 million tons and in Latin America by 7.4 percent to 26 million tons, while production is expected to be down in Australia, the United States and Europe.

___

Associated Press writers Bradley S. Klapper in Geneva, Switzerland, and Sadibou Marone in Senegal, Dakar, contributed to this report.

Learning from Thailand the way they learned from us
Philippine Star - Thursday, May 22Too many activities tonight. There's cocktails onboard the visiting USS Blue Ridge hosted by United States Ambassador Kristie Kenney with Vice Admiral Douglas Crowder. And then there's the State Dinner in Malacañang for Thai Prime Minister Samak Sundaravej - which makes it difficult to be in two places at one time. At any rate, the State Dinner is definitely an important occasion in making our ties with Thailand tighter especially now when the world is facing a major food and rice crisis.

ADVERTISEMENT

Thailand has now become a major exporter of a wide variety of food and agricultural products, among them corn, cassava, seafood, poultry, pineapple. Today, they are one of the top rice exporters in the world - and the irony of it all is that they learned from us when they came to the Philippines during the early '80s to study our innovative rice production methods at the International Rice Research Institute in Laguna. Now it's time for us to learn from them.

No doubt Thailand is miles ahead of the Philippines in so many things. For one, the steady expansion of their agricultural sector accounts for much of the impressive economic growth of Thailand starting in the '70s and early '80s, with large tracts of land made available for farming. Agriculture accounted for 25 percent of their GDP in the '80s, with the agriculture industry providing employment for 75 percent of the labor force.

While the king traditionally owned all the land in Thailand and thus could give them away to officials and other people, any land left uncultivated for three years could be reverted to the crown. Although they also had some trouble regarding ownership with landless farmers establishing informal rights to land they had cleared and cultivated for a number of years, land reforms and titling procedures plus the establishment of the Agricultural Land Reform Act in 1975, eventually paved the way for landless and tenant farmers to acquire land of their own.

Despite strong opposition from large landowners, the act allowed farmers to buy as much as eight hectares of land from private owners, from forest lands and those owned by the crown, to be paid on a long-term instalment basis. What also contributed to the success of the program - in spite of the political turmoil brought about by a number of coups - is the fact that the Thai government gave additional support to farmers through infrastructure and credit. Over the years, they have continuously supported agricultural research and used innovations in technology to develop a vigorous agricultural industry.

Perhaps one very significant policy that greatly contributed to the economic progress Thailand enjoys today is their implementation of a concrete population management program. In the early '70s, the Thai government introduced a revolutionary national family planning program where public health officials toured towns and villages to promote family planning and distribute contraceptives to villagers. Volunteers were trained to disseminate information and teachers were trained on issues such as population growth, family planning and contraception. The information was then passed on to the parents, who in turn were taught basic concepts of family planning.

Of course, the successful population management program of Thailand is largely credited to Mechai Viravaidya, Thailand's "Condom King" whose radical approach included the use of cartoons and the holding of balloon blowing contests using condoms and teaching children his "condom song" that goes, "Too many children make you poor." Along with some partners, he also put up a restaurant called Cabbages and Condoms - based on the reasoning that condoms should be made as freely available as the vegetable. At the restaurant, customers are given condoms instead of mints after a meal.

Experts all over the world agree that Thailand's successful implementation of a population management program has "achieved wonders" where other Asian nations like the Philippines have failed. In a 1996 interview, Mechai said the Philippines and Thailand had the same population in 1972, "but whereas the Philippines now has a population of 72 million, Thailand's today is only 59 million." Whether we like it or not, 13 million more hungry mouths to feed did make a difference.

Today, we see a vast contrast between our two countries. Thailand's population is estimated at 66 million, while the Philippines has ballooned to approximately 90 million people. As a major rice and food exporter, Thailand has the opportunity to help alleviate the global food crisis - and the Thai government plans to respond by making expanded food production become a national agenda. On the other hand, the Philippines continues to be a rice importer and is one of the countries most vulnerable to food shocks.

The Philippines still has the opportunity to develop its agricultural sector and achieve rice and food sufficiency in the near future. We can now learn from Thailand's example - just as they learned from us.

* * *

Speaking of agriculture, the Manila Overseas Press Club (MOPC) will hold its Farmers' Night tomorrow at the Grand Ballroom of the InterContinen-tal Hotel in Makati with Agriculture Secretary Arthur Yap as guest speaker. With the theme "Food Self Sufficiency," Sec. Yap is expected to discuss the government's plans to address a looming food crisis as well as other controversial issues regarding the agriculture and fishery sector.

* * *

Pinoyagribusiness

LIVESTOCKS => AGRI-NEWS => Topic started by: mikey on April 14, 2008, 07:10:14 AM