By David L. Brown
We have written extensively about the looming specter of famine, and today an article by the Associated Press brings us up to date on what they term a “perfect storm” of factors that are pushing food prices inexorably higher.
An article in the current issue of The Economist (subscription required) covers some of the same ground and provides this somewhat gruesome illustration to drive home the point:
The image of a food consumer being garroted by an enormous rate of inflation may seem over the top, but the rising cost of food is truly an enormous problem, especially in the Third World. Here’s an excerpt from the AP story as it begins to build its case for the perfect storm:
From subsistence farmers eating rice in Ecuador to gourmets feasting on escargot in France, consumers worldwide face rising food prices in what analysts call a perfect storm of conditions.
Freak weather is a factor. But so are dramatic changes in the global economy, including higher oil prices, lower food reserves and growing consumer demand in China and India.
The world’s poorest nations still harbor the greatest hunger risk. Clashes over bread in Egypt killed at least two people last week, and similar food riots broke out in Burkina Faso, Cameroon earlier this month.
But food protests now crop up even in Italy. And while the price of spaghetti has doubled in Haiti, the cost of miso is packing a hit in Japan.
“It’s not likely that prices will go back to as low as we’re used to,” said Abdolreza Abbassian, economist and secretary of the Intergovernmental Group for Grains for the U.N. Food and Agriculture Organization [FAO]. “Currently if you’re in Haiti, unless the government is subsidizing consumers, consumers have no choice but to cut consumption. It’s a very brutal scenario, but that’s what it is.”
Let’s take a look at this “perfect storm” and see if we could have seen this one coming. Hmm, it seems that “freak” weather is a factor. Well, umm, could that have something to do with “climate change” perhaps? Some of us have been warning about that for a long time, but few others wanted to listen.
And here’s the next point: changes in the economy including … gee, this one is going to be a big surprise for you … “higher oil prices.” Yes, we’ve seen that one coming for a really long time, ever since the 1950s when M. King Hubbert warned of an impending Peak Oil event that is finally upon us.
And “lower food reserves”. Well, gosh, didn’t Malthus warn about that well over 200 years ago. He did, and four decades ago Paul Ehrlich was ridiculed for reminding us of the problem in his classic book “The Population Bomb”. Even more recently, during the past couple of years we at Star Phoenix Base have written extensively about the coming crisis of world agriculture, and especially the misguided practice of turning food into ethanol or biodiesel. The facts have been out there for anyone to see, so yes, we sure could have seen that one coming, if anyone had been paying attention.
And yet again we see that “growing consumer demand” in runaway population regions such as China and India has contributed to this perfect storm. Again, refer to Malthus and Ehrlich for the answer to this one. Yes, we could have seen it coming down the road from way back that the human race has been in the process of expanding beyond the ability of the Earth to sustain. We have embarked on a classic example of overshoot-and-collapse, and on a worldwide scale. And whether Malthus, Ehrlich, the Club of Rome, or Star Phoenix Base, the messages have been generally ignored in preference for unbridled economic expansion.
(There are numerous articles here on Star Phoenix Base relating to these problems and more. Try entering these keywords in the search field at upper right: climate change, population, Peak Oil, Malthus, Ehrlich (there are reviews of each of their books), China, ethanol, and many others.)
So how is this a perfect storm? Says the AP: “What’s rare is that the spikes are hitting all major foods in most countries at once. Food prices rose 4% in the U.S. last year, the highest rise since 1990, and are expected to climb as much again this year, according to the U.S. Department of Agriculture.”
Well, I beg to differ that this situation is “rare” — it is beyond rare that the problem is popping up everywhere because it is utterly without precedent, in a word, unique. To compare what is happening today with regional food shortages of the past is like comparing a common cold with the Black Death.
An important reason why this is happening everywhere at once is that we now have a global economy. Commodities such as oil, iron ore, and copper are no longer priced and sold locally but through vast international cartels and exchange markets. And now food, like those other commodities, has become fungible; that is, having a value in all places that is tied to and related to the value of the same commodity anywhere else. Save for transportation costs and government duties or other market distorting factors, a bushel of wheat in Kansas can be exchanged for a bushel of wheat in Afghanistan.
From escargot and croissants in France to miso in Japan and wheat flour in China, the inexorable rise in food costs is raising the ire of consumers, and in the poorer regions the problem is critical because hungry people are living under dire threat of famine. In the West, where food costs are a significant but not overwhelming share of living costs, we can make adjustments as prices rise. Furthermore, most of the foods we consume are highly processed so the increased cost of basic ingredients has a relatively small effect on the price we pay. (There are exceptions such as meat, milk, butter and eggs and we can see the real effect of food inflation from the soaring cost of those items.)
In the Third World, however, many of the poor spend a majority of their meager incomes for food, and they generally purchase basic commodities such as flour or rice from which they prepare basic dishes themselves. What would happen if you already spend half your income for food and the price of food doubles? It doesn’t leave anything for the other necessities of life, does it? That is more or less what is happening to many in the Third World right now.
And what happens next? Well, hungry people are desperate people. Riots will become civil wars that morph into anarchy; the ultimate power of the rifle and the machete will overwhelm all rules of law. As the world’s population continues to rise and food reserves falter and slip into negative territory (world grain stocks already are sufficient for only about seven weeks of current demand) we are going to see a lot more of that kind of thing. It is not going to be a pretty picture, not at all.
And do not for one minute think that “food aid” is going to help us through this problem. Food aid is pretty much a thing of the past because excess food will no longer exist. Those struggling nations that have been buoyed up by the largess of international food aid can expect little or nothing in the future as the “perfect storm” continues to gain momentum. About all we will be able to offer them will be advice on how to increase their own local agricultural production, which amounts to about the same thing as Marie Antoinette advising the French peasantry to “eat cake.” In fact, the fate of the French Monarchy holds a great lesson relating to the sort of things that may soon be occurring in many places as hungry peasants find that there is no bread.
What can you or I do about it? Not much, unfortunately, but here is one idea: Next time you see a service station that crows about the fact that all of its products contain ethanol … keep on driving. Insist on the real thing. That may not help the world’s energy crisis, but at least it may do an itsy bitsy bit to help prevent more food from being squandered to make fake gasoline. As vast regions of the world teeter toward famine, distilling crops to make ethanol is an inexcusable sin. Meanwhile, you can address the energy crisis by cutting back on your driving and taking other steps toward energy conservation.