Monday, January 31, 2011
Grains Gone Wild
We have heard a lot about the world financial crisis. But there was another world crisis underway and it it is hurting a lot more people that the food crisis.
Over the past few years the prices of wheat , rice, corn, pulses, vegetables, fuel and other basic food stuffs have doubled or tripled with much of the increase taking place just in a few months.There have already been food riot around the world. Food-supplying countries from Ukrain to Argentina have been limiting exports in an attempt to protect domestic consumer, leading to angry protest from farmers and making things even worse in countries that need to import food.
How did this happen?
the answer is a combination of long term trend, bad luck and bad policy.Firstthere is the march of the meat eating chinese that is growing number of people in emerging economies who are for the first time rich enough to start eating like westerners. Since it take about 700 calories worth of animal feed to produce a 100 calorie peice of beef, this change in diet increase the overall demand for grain. second thing, there is the price of oil. Modern farming is highly energy intensive with oil persistently above $ 100 a barrel energy costs have become a major factor drawing up agriculture cost. And third, there has been a run of bad weather in key growing areas.
All these left the world food balance highly valnerable to a crisis affecting many countries at once. The most immediate need is more aid to people in distress. We also need a push back against biofuels . But it is not clear how much can be done cheap food, cheap oil may be a thing of the past.
Over the past few years the prices of wheat , rice, corn, pulses, vegetables, fuel and other basic food stuffs have doubled or tripled with much of the increase taking place just in a few months.There have already been food riot around the world. Food-supplying countries from Ukrain to Argentina have been limiting exports in an attempt to protect domestic consumer, leading to angry protest from farmers and making things even worse in countries that need to import food.
How did this happen?
the answer is a combination of long term trend, bad luck and bad policy.Firstthere is the march of the meat eating chinese that is growing number of people in emerging economies who are for the first time rich enough to start eating like westerners. Since it take about 700 calories worth of animal feed to produce a 100 calorie peice of beef, this change in diet increase the overall demand for grain. second thing, there is the price of oil. Modern farming is highly energy intensive with oil persistently above $ 100 a barrel energy costs have become a major factor drawing up agriculture cost. And third, there has been a run of bad weather in key growing areas.
All these left the world food balance highly valnerable to a crisis affecting many countries at once. The most immediate need is more aid to people in distress. We also need a push back against biofuels . But it is not clear how much can be done cheap food, cheap oil may be a thing of the past.
No comments:
Post a Comment