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World Food Crisis Threatens Rich Nations (That's Us), Too

by Stephen Hume Friday, Apr. 18, 2008 at 3:48 AM

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 price contagion, leaving no country-developed or otherwise-unscathed.

World food crisis threatens rich nations (that's us), too

Stephen Hume

Special to the Sun

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.

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.

None of this was supposed to happen. Technology was supposed to boost production in a new green revolution; globalization was to bring down prices as food shipped quickly and cheaply from areas of surplus to markets where there was demand; the developing world was supposed to feed the developed.

Instead, climate change reduced some yields, particularly in Australia, and soaring fuel, fertilizer and seed prices boosted input costs worldwide. Global markets require global transport, so oil price inflation affects freight, refrigeration, warehousing and basic agricultural production costs. Subsidies for bio-fuels shifts production away from food while population growth and expanding dietary expectations consume production gains as fast as they come.

In 2007, farmers boosted world wheat output by 95 million tonnes. The market consumed it instantly. World cereal reserves dwindled to 12 weeks' supply from 18, the lowest in 30 years and the slimmest of buffers against a major crop failure.

These converging effects are behind the inflation that saw rice prices jump by as much as 30 per cent in a single day, corn increase 50 per cent and Canadian wheat, which normally brings about 5 a tonne, reach more than 0 before falling back to the 0 range.

In the face of all this turmoil, exactly what is Canada's national food security policy? Anybody know?

© The Vancouver Sun 2008

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