Food prices have sparked a media feeding frenzy of late (pun intended). The Interest stemming from the U.N.’s food price index report: December marked the sixth consecutive month of higher prices and 2010 ended by establishing a new index record. Daniel Gustafson, UN FAO Director, noted, “Things could become explosive again in 2011, and that’s what people are concerned about.” And thus we’ve witnessed a flurry of coverage and commentary.
Much of the reaction has been relatively gloomy. Foremost being Lester Brown’s (President, Earth Policy Institute) recent publication, “The Great Food Crisis of 2011.” The paper highlights several key indicators of impending global adversity:
• Population growth: “…we are still adding 80 million people each year.”
• Economic growth: “…some 3 billion people moving up the food chain, eating great quantities of grain-intensive livestock and poultry products.”
• Ethanol: “…U.S. investment in ethanol distilleries sets the stage for direct competition between cars and people for the world grain harvest.”
• Soil erosion: “…one-third of the world’s cropland is losing topsoil faster than new soil is forming through natural processes…”
• Water: “…aquifer depletion is fast shrinking the amount of irrigated area in many parts of the world…”
• Agricultural productivity: “…shrinking backlog of untapped technologies…”
• Global warming: “…making it more difficult to expand the world grain harvest fast enough to keep up with the record pace of demand.”
• Mountain glaciers: “…ice melt from glaciers helps sustain not only the major rivers of Asia during the dry season…but also the irrigation systems dependent on these rivers. Without this ice melt, the grain harvest would drop precipitously and prices would rise accordingly.”
• Ice sheets: “…melting ice sheets in Greenland and West Antarctica, combined with thermal expansion of the oceans, threaten to raise the sea level by up to six feet.
Brown’s conclusion being, “The current surge in world grain prices and soybean prices, and in food prices more broadly, is not a temporary phenomenon. We can no longer expect that things will soon return to normal, because in a world with a rapidly changing climate system there is no norm to return to,” and hence governments must act quickly to, “redefine security and shift expenditures.” Hunger is inevitable.
But is humanity really on the cusp of disaster? Perhaps….but let’s back up and view this from the broader perspective. Claims of catastrophe and doom are NOT a new phenomenon. Mark Ridley explains in his recent book, The Rational Optimist (c. 2010):
The fashionable reason for pessimism changed, but the pessimism was constant. In the 1960s the population explosion and global famine were top of the charts, in the 1970s the exhaustion of resources, in the 1980s acid rain, in the 1990s pandemics, in the 2000s global warming. One by one these scares came and (all but the last) went. Were we just lucky?...Or was it the pessimism that was unrealistic? Let me make a square concession at the start: the pessimists are right when they say that, if the world continues as it is, it will end in disaster for all humanity. If all transport depends on oil, and oil runs out, then transport will cease. If agriculture continues to depend on irrigation and aquifers are depleted, then starvation will ensue. But notice the conditional: if. The world will not continue as it is. That is the whole point of human progress, the whole message of cultural evolution, the whole import of dynamic change – the whole thrust of this book. The real danger comes from slowing down change. It is my proposition that the human race has become a collective problem-solving machine and it solves problems by changing its ways. It does so through invention driven often by the market: scarcity drives up price; that encourages the development of alternatives and of efficiencies. It has happened often in history…The pessimists’ mistake is extrapolationism: assuming that the future is just a bigger version of the past.
Perhaps higher food prices and hunger aren’t inevitable – there’s hope out there.
Does that suggest we should take future solutions for granted? To the contrary; agriculture takes its mission of feeding the world seriously and is responding accordingly. Case in point, the National Institute for Animal Agriculture 2011 Annual Meeting; the meeting theme defined by the following statement: “It is estimated that by 2050 nearly twice as much food will need to be produced to feed the world’s growing population! With limited resources, it will be even more important that animal agriculture continue to produce food, milk and fiber in responsible and sustainable ways that meet consumers’ expectations.” And while some may fret that short-term price spikes portend certain disaster going forward, the perspective overlooks the ingenuity and innovation capacity of agriculture and dismisses historic advances that have been made in the previous 50-100 years.
Ridley is also on target when he explains that, “scarcity drives up price; that encourages the development of alternatives and of efficiencies.” Over the long run shortages won’t be a function of supply – they’ll result from errant policies. As such, the worst response is to hamper the market because it inherently manages scarcity. When allowed to work, higher prices discourage consumption on one side and encourage production on the other side. The recent Russian embargo on grain exports is a perfect example of what NOT to do. The policy disallowed producers to access the world market. Consequently, it sends exactly the wrong signal to producers – don’t plant more wheat because there’s no opportunity for reward on the other side. Policy exacerbates the problem – not production shortfalls.
In the end, the enduring concern shouldn’t be about price spikes or lack of production. Rather, the focus needs to be upon agriculture’s business framework. Commodities, food products and technology must flow freely throughout the globe to feed its people. However, excessive regulation, corrupt or errant government policy, and absence of open markets will almost certainly guarantee failure. Solutions are possible if we don’t impede progress with needless stumbling blocks. After all, agriculture is THE success story of mankind, capable of responding to world needs when allowed to do so.