World Food Crisis Conference with Solomon Katz

Last week Solomon Katz came to the university to talk to us about the current problems with food prices and supplies. He is a professor of anthropology and director of the Wilton M. Krogman Center for Research in Child Growth and Development at the University of Pennsylvania. Here is a summary of the information I picked up and some of my thoughts…

He sees the current crisis as a very special time for the world and that the crisis could turn into a catastrophe if action is not taken to deal with some of the causes. The current situation is unique as it is the first time we have seen a world-wide food supply issue. There have always been crop failures, famines, price instabilities, but they have always been restricted to one part of the world or another. Globalisation has finally proved to be able to spread disaster around the world as easily as it has moved cultural ideas, money and merchandise.

Although there were many warning signs that the world food situation faced dangers, the exact circumstances and the speed with which the situation deteriorated took almost everyone by surprise. Professor Katz’s illustrative example of this was how in only July last year, the secretary general of the UN presented evidence that the UN’s millennium goals on alleviating hunger were being met. Almost immediately after this event the prices of maize, wheat and rice started to quickly rise and are now roughly double what they were at that time, pushing vast number of people into or back into hunger.

Looking at the immediate causes of the problems, he identifies the US drive to reduce oil dependency by increasing use of biofuels for vehicles. Brazil had had an effective biofuel programme for many years and the US government saw potential in converting maize into ethanol. Unfortunately, the process involving maize in heavily mechanised US agriculture is no where near as efficient as it is in Brazil where sugar cane is grown with lots of manual labour. This reduced efficiency, which by some measurements means that there is no net gain in energy from producing fuel in this way, did not prevent the idea being put into action.

To stimulate biofuel use, which had never been welcomed by the oil industry, having nothing to gain from its development, the government introduced a tax incentive of 51 cents for every gallon of fuel to which biofuel was added. They also introduced a tariff on imported biofuel to boost internal production. This immediately created a massive interest in producing and mixing ethanol into fuel. Prices for maize that were around $2,500 in 2004 to 2006 have been $4,000-6000 in 2007/2008. The initial price increases were the cause of the protests over tortilla prices in Mexico in 2007. These were quelled by the newly elected president abandoning his free-market ideals to put in place price controls.

What happened next was more difficult to predict. With the sudden interest in producing maize in the US, the area planted to maize went up by around 15%. Other crops were dropped to make way, including soy, for which the US is the world’s largest producer and exporter. With a reduction in soy production, its price on the commodity markets started to follow the maize prices upwards. World wheat production was suffering from an intense drought in Australia, a major exporter, whose exports were subsequently much less than normal. There were also some problems with rice crops in some countries and prices of rice began to rise. This started to impact the vast numbers of poor in Asia causing unrest. Rice-producing countries like India and China started to reduce or restrict exports to protect their internal markets. With the resulting reduction in supply, prices rose even quicker making the situation far worse for the rest of the world. Other big producers like Thailand are having to decide whether to take action and big importers like the Philippines are badly affected by the price increases.

Other concomitant factors were the increasing use of grain for animal raising in developing countries like China and increasing costs of oil making production and many agricultural inputs more expensive. Rising prices stimulated interest from commodity traders, further inflating markets.

The US is not the only culprit behind the biofuel related price rises. The EU also put into affect plans to increase biofuel use. But concentrating more on biodiesel than ethanol as in the US. Biodiesel is made from vegetable oils and the most efficient plant for producing oil is the tropical oil palm. Malaysia is the largest producer country and has been greatly increasing its production, often at the cost of virgin rainforest (another victim of the drive for “green” fuel). The rising demand for vegetable oils for biodiesel throughout the world led to a doubling of price for palm oil from 2001 to 2004 and now stands at about 3 times the 2001 level. Poor consumers across the world now have to make do with much less of what was a very valuable part of their diets.

As if all this wasn’t bad enough, Katz is worried about some other pressures that could extend or exacerbate the situation. In the longer term, there are issues with the expansion of corn production in the US. With the higher prices giving bigger incentives to grow it, it becomes more attractive to use less suitable agricultural areas, such as where soils are poor or there is insufficient rainfall. The higher incomes can be used to offset the increased costs of fertiliser, irrigation water, pesticides etc. Of course the side effects on the environment and fuel use can not be offset so easily. Finally, and potentially most damaging is the very recent spread of a wheat rust from the African continent into the middle east. Wheat rust is a fungal disease that can devastate wheat plantations and it has been spreading through Africa for the last few years. The particularly worrying aspect of the disease is that very little research has been done to develop wheat strains with immunity against it. With 90% of the world’s wheat at risk, a rapid spread of the disease through the producing regions of the world could decimate wheat yields in the near future.

The rise in food costs has highlighted the gross inequalities that have developed with the current system based on the “free trade” concept which is mostly about the facilitating of making money, most easily by the richer players of the system. Katz estimated that with every 1% increase in food prices, an extra 16 million people would go hungry. Currently food prices are up around 40% meaning that the number of under-nourished people in the world has probably doubled in the last year or so. The poorest people of the world tend to be most impacted by the cost increases, Katz showed that the lowest 20% of income earners in the US spent only 16% of their income on food where Indonesians spend 50%, Vietnamese 65% and Nigerians 73%. With little choice but to go hungry, many people around the world are becoming angry and starting to protest. The government of Haiti has already been brought down by discontent over food prices and the Egyptian government is looking to be in a precarious position.

Katz then focused on some solutions to these problems... An immediate reversal of the biofuel policies could restore some normality to food prices in the short term.

In the longer term, the whole food system needs to become more sustainable, from what is grown, how and where, to how it is distributed, processed and even eaten. Conservation of natural resources needs to be built into the system. One of the most important long-term factors is population growth. The increasing world population is pressurising an already strained and unsustainable food system. The best way to decrease population growth has to be education – the more education women receive, the more able they are to provide for themselves, their families and the fewer children they have at a young age.

With the interest in developing biofuel production leading to competition between cars and people for food I was left wondering how much food a car would require to run on. I decided to work out results for ethanol produced from maize so I looked up some figures and calculated that for a car running on ethanol driving 10,000 miles (16,000km) per year (this is a UK average, quite a bit less than the US average) at 30 miles per imperial gallon (about 25 US mpg, around 9 litres per 100km) the car would be using ethanol produced from almost 20kg of maize per day. At average caloric input levels those 20kg of maize could feed around 31 people for a day. That means that a car running on ethanol consumes almost as much food as can sustain one person for a day for each mile driven!

Extrapolating those figures further, 240 million cars on that diet would consume enough maize to feed the whole world population. And currently the number of cars in the world is between 500 and 600 million.

These findings are especially bad due to the inefficiency of the corn-ethanol system.  Unfortunately, the distorted economics and politics have conspired to invest in this system in particular in the US, ignoring the evidence that there are much more efficient biofuel production systems.


2 Responses

  1. Thanks Henry, for stopping by my blog and for leaving your very thoughtful comment about the food crisis that is afflicting us. You are a very talented photographer!

    You may be interested in this:

    Maybe you can spread that meme to your part of the world?

  2. […] the issues behind and caused by the recent food commodity price rises (that I also wrote about here).  Here are some contributions that stood out for […]

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