Dealing with the world food crisis.

BBC report.

Australia’s worst drought on record has slashed its exports of wheat. After America, Australia is normally the second largest exporter of grain, and in a good year it would hope to harvest about 25 million tonnes.

The country however remains in the grip of the worst drought in a century, which is why the 2006 crop yielded only 9.8m tonnes. Global wheat stocks are at their lowest levels since 1979, and the ongoing Australian drought is one of the reasons why.

New South Wales, Australia’s food bowl, is full of water-starved farms and huge empty grain silos. Some of the larger grain silos are only a tenth full when normally at this time of the year it would be half-full of grain, much of it waiting for export.

Solutions to combat rise in world food prices?

According to the Food and Agriculture Organisation of the United Nations (FAO), world food prices rose by almost 40 percent in 2007. Both EBRD and FAO believe that there is significant untapped agricultural production potential in the Eastern Europe and Commonwealth of Independent States (CIS) region, especially in countries such as Kazakhstan, Russia and Ukraine.

Senior government officials from Eastern Europe and the former Soviet Union met in London this week with executives from the private agribusiness sector to seek concrete proposals to boost agricultural investments and unlock unused output potential. Organised by the European Bank for Reconstruction and Development (EBRD) and FAO, participants explored options to foster better cooperation between the private and public sectors to facilitate this investment.

One of the key messages at the conference: it is crucial to increase investments not only in the primary agricultural sector but also in the whole infrastructure of agriculture, as well as in the processing industry.

In these countries around 23 million hectares of arable land were withdrawn from production in recent years. At least 13 million hectares could be returned to production, with no major environmental cost.

In a speech delivered by Charles Riemenschneider, Director of FAO’s Investment Centre, FAO Director-General Jacques Diouf called for courageous steps to be taken now to help unlock the untapped agricultural production potential, noting that current predictions for CIS grain production point to a rise of seven percent to 159 million tonnes between 2007 and 2016.

“But let us be bolder and imagine the removal of the institutional and financial constraints that limit production in the region. The region’s cereal output and its contribution to world exports would then be well above those projections,” Diouf said.

More here.

For up to date information on the global food outlook visit the FAO’s World Food Situation.

For an example of their ‘situation reports’ see Extreme Cold Exacerbating Poverty and Food Insecurity in Central Asia.

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13 Responses to Dealing with the world food crisis.

  1. earthpal says:

    We face a global food crisis and yet, Britain alone throws away one third of its food.

    How much of the world’s arable land is used to produce feed for animals? I seem to remember it being quite a large percentage.

    We just can’t seem to get it right.

  2. matt says:

    Good point about the food wastage.

    In the United States, farmed animals, mostly cattle, consume almost twice as much grain as is eaten by the entire US population (13). 70 per cent of all the wheat, corn and other grain produced goes to feeding animals (14). Over 100 million acres of US agricultural land is used to grow grain for animals (13) and still more is imported. See http://www.viva.org.uk/guides/feedtheworld.htm

  3. the Grit says:

    Hi y’all,

    As to animal production in the US, and I suspect elsewhere, you have to keep in mind that most of the area used is marginal land which would produce nothing if cattle weren’t grazed there. It’s also important to note that much of the land used to grow corn isn’t suitable for other grain crops, or much of anything else besides grass (not the smoking kind) either. The other consideration is that the world demand for corn is very limited due to cultural reasons. Besides that, the type of corn grown on all those acres isn’t the kind you eat off the cob or pop in the microwave, but is any of several variates that have been developed to grow well in harsh weather conditions, in poor soil, and with as little investment in fertilizer and insecticide as possible. While there are many industrial uses for the hard and nearly tasteless stuff, such as making food additives and corn syrup, it’s mostly only fit for cattle to fatten up on in the months before slaughter, and lately for fermenting. Thus, the system that has developed over time, while not perfect, has made all round best use of the available resources. Of course, if Europe, India, and China suddenly developed a craving for cornbread, that would be a different story.

    On a related note, one of the problems that diminishes food production in this area, and the rest of the US, is Government’s focus on large production of grain crops. My farm, for instance, is too hilly for large scale tilling, as most of the top soil would be floating down the Mississippi River within a very few years. Some portions of it are, however, almost perfect for modest scale production of herbs, annual vegetables, and/or fruit and nut orchards. Unfortunately, even though our Government dispenses annually enough agricultural aid to rival the total budget of many countries, almost none of it goes to developing such activities. On the other hand, I probably could get a grant to clear cut my forests, bulldoze the hills into nice flat fields, and get started in the corn, soybean, wheat rotation. Of course, this would take several years while the various Government agencies argued in slow motion over the environmental impact of such a change, by which time some housing developer would have made us an offer we couldn’t refuse, and our farm would turn into rows and rows of poorly constructed houses, the owners of which would bitch and moan about how the natural springs scattered over the area make it difficult to maintain a proper lawn.

    Sorry for the rant.

    the Grit

  4. Dave On Fire says:

    Surely it’s not just a question of increasing investments – they have to go to the right places. If there’s enough food to fill up our kitchen bins, there’s enough productive land – and more won’t be of any use for anyone without changing the economic system that prioritises the needs of those with money over the needs of those without. We could get another planetsworth of farmland and still have famines, while some people fill up on biofuels and luxury goods.
    Time for a global food ration, says I.

  5. matt says:

    Grit & Dave,

    You two could start a revolution all by yourselves. 🙂

    Grit,
    An understandable rant from you there Grit and don’t ever tell me you’re ‘sorry for the rant’; I don’t believe you! You make a good point about subsidy driven provision of food staples. Governments would rather waste some money here to guarantee production as they fear food riots more than anything. But the waste is there.

    Dave,
    Absolutely right about food inequalities. The free market directs food to the wealthiest consumers because the middle man wants top dollar. They’re not going to do anything else. Investing in farming practices and better crop strains in India, Africa and other areas of the world is the best approach.

    The corporations looking to invest into Eastern Europe would I suspect be supplying the west with food rather than any where else particularly. It’s a business proposition but, some extra grain production may find its way into the middle east where it’s desperately needed for example.

  6. the Grit says:

    Hi Matt,

    Dang but you are perceptive 🙂 Just trying to be polite.

    Which reminds me of a personal story that I never seem to get tired of telling. When we inherited the farm, someone mentioned that I should stop by the local branch of the Federal agriculture office. I did and, much to my surprise, while they couldn’t help me with developing any sustainable production for local consumption, they did know, or at least their computers did, that 40 years ago 20 acres of our land were used to grow cotton, of which we had a surplus at the time, so we received a $1,000 Government check for the next 4 years to not grow cotton. I would point out that I was meticulous in keeping up my end of the bargain. At least once a week, I drove across said field and made absolutely certain that no trace of cotton plants were evident. Of course, what with current gas prices, if they made me the same offer today, my inspections would have to be every other week.

    the Grit

  7. Baikong Mamid says:

    Food insecurity in the Philippines will soon worsen because of farmers shifting from rice farming to biofuel source plants. Many farmers have fallen into false promises of biofuel raw material source like oil palm, jathropa and others due to lack of support of government in rice/corn farming. And huge money and promotion is invested in biofuels.

  8. matt says:

    Hi Baikong Mamid

    This is exactly what is so worrying. Do you know which market(s) these crops are headed for? I’m guessing Europe.

  9. Baikong Mamid says:

    Of course, I know, its Europe. What is more worrying is that these small and poor farmers do not really benefit from biofuels. They just become growers, their lands are forced rented in $8 a month/hectare, in the end the investors and the promoters get the big share! I would rather promote Organic Farming than Biofuel source farming!

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  10. the Grit says:

    Hi Baikong Mamid,

    I’m surprised at the land rental rate you quote. If I understand the cost of living adjustments, that’s something like 4 times what good farm land goes for here, and that’s in the face of excessive land prices due to urban sprawl. On the other hand, I don’t see anything wrong with investors and promoters getting the largest cut, since without them there would be no pie to share. On the gripping hand, in the area of bio-fuels, since we, as in global we, are jumping the gun on this, so in this case, it’s probably best if those types couldn’t find a market.

    On a related note, I was watching a documentary the other night on the history of beer. Much to my surprise, the show informed me that Samuel Adams Brewing Company has developed a variety of yeast that can survive in an environment of 25% alcohol. For those who don’t follow the technical side of this technology, that is right at twice as good as the best standard yeast, which dies off at around 13% alcohol content. From a bio-fuels point of view, that means that a much more efficient process is within reach. From a beer drinker’s point of view, it means that a big kick is within reach. And, from a capitalist’s point of view, it means indicates we were right 🙂

    the Grit

  11. matt says:

    Grit, I followed your line of thinking until the last bit; ‘right’ about what?

    Interesting about the yeast though.

  12. the Grit says:

    Hi matt,

    Right about the superiority of private enterprise over Government when it comes to problem solving.

    I also got around to looking up the name of the beer I mentioned. It’s Utopias and it has the highest alcohol content of any non-distilled brew. It also goes for $125 a bottle 🙂 I’ve already started saving.

    the Grit

  13. matt says:

    OK, thanks Grit but we’re off topic now.

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