Contributing Monkie Sarah Backhouse
Published on April 22, 2008
We’ve heard about the riots in Haiti and the suffering in India caused by the price of wheat, rice and maize doubling in the last 12 months, along with soy and corn trading well above average. But why is this happening? And why now? The BBC attributes this to end of the “Goldilocks era for global commodities”, which saw prices stable for some 30 odd years. This, combined with the fact that food buffers are at all time lows, is hitting India and other developing countries very hard.
“33 countries around the world are at risk of social upheaval as a result of acute increases in food and energy prices,” said Robert Zoellick, president of the World Bank (via the Chicago Tribune). Rice, lentils and wheat for a family in India can “take as much as 70 percent of a meager monthly salary… with the other 30 percent of the family’s income committed to rent,” which means no vegetables or other necessary food staples. Whereas, in rich developed nations, “people spend an average of 10 to 15 percent of their disposable income on food.”
The main reason for the price surge can be attributed to the rising global population, which is expected to reach 9 billion in 2050. This will put pressure on a whole host of resources from land and water to oil and food. Other factors include accelerating desertification in China and sub-Saharan Africa and increased rainfall — both of which impact agricultural production. Climate change is also behind another phenomenon: the shift in production from food to biofuels. “Ethanol production is on course to account for some 30% of the U.S. corn crop by 2010, dramatically curtailing the amount of land available for food crops and pushing up the price of corn flour on international commodity markets.”
To help resolve the current crisis, international aid agencies are calling for greater support of food production in developing countries, and the World Bank says it will “double its assistance to African agriculture to $800m”.
Hopefully, this will go some way toward relieving the suffering in the developing world. However, this current crisis raises many concerns about how to feed the world of tomorrow.