Food (Price of, That Is) Is On The Table Again

Food prices spiked again this year, as they did in 2008, and that has a lot of people worried again about how we are to feed a growing population. That is, indeed, the theme of a special report in this week's Economist.

An era of cheap food has come to an end. A combination of factors—rising demand in India and China, a dietary shift away from cereals towards meat and vegetables, the increasing use of maize as a fuel, and developments outside agriculture, such as the fall in the dollar—have brought to a close a period starting in the early 1970s in which the real price of staple crops (rice, wheat and maize) fell year after year.

The end of the era of cheap food has coincided with growing concern about the prospects of feeding the world. Around the turn of 2011-12 the global population is forecast to rise to 7 billion, stirring Malthusian fears. The price rises have once again plunged into poverty millions of people who spend more than half their income on food. The numbers of those below the poverty level of $1.25 a day, which had been falling consistently in the 1990s, rose sharply in 2007-08. That seems to suggest that the world cannot even feed its current population, let alone the 9 billion expected by 2050. Adding further to the concerns is climate change, of which agriculture is both cause and victim. So how will the world cope in the next four decades?

The answer to that question is obviously complex, and the Economist delves into it in some depth, emerging with what might be called a cautiously optimistic view that we could be OK, partly because we have to make the changes that are necessary. Food insecurity too easily leads to political insecurity, and that has to be a motivation to change the way we're doing things. One of the elements highlighted in the story is the absurdity of trying to substitute biofuel for oil in a world where we are, at the moment, unable to adequately feed the current 7 billion people. 

"THIS is the craziest thing we’re doing," says Peter Brabeck, the chairman of Nestlé. He is talking about government biofuels targets which require a certain proportion of national energy needs to be met from renewable fuels, most of them biofuels (ie, ethyl alcohol made from crops, usually maize or sugar).

That sentiment was echoed this week by former President Bill Cinton:

Specifically, Clinton told those at USDA's Annual Outlook Forum that producing more biofuels could bring food riots around the globe.

"If we produce more biofuels, that means less food and that will bring food riots," Clinton said, even while stressing that the U.S. needs to become more energy independent.