How bad is the problem?
Food prices are now at an all-time high, according to the U.N. Food and Agriculture Organization. Wheat cost twice as much in January as it did last June, pushing an additional 44 million people worldwide into poverty. Higher prices of staples, particularly wheat, helped drive the public anger in Egypt, the world’s largest wheat importer, where the average family spends 38 percent of its income on food (compared with 7 percent in the U.S.). “Some days we do not eat dinner,” said Cairo truck driver Ahmed Said, who went on strike for higher wages after President Hosni Mubarak’s government fell. “If our child goes to the hospital and we have to pay for that, then my wife and I do not have a meal. How can Mubarak be worth so much and we have so little?”
Why are prices so high?
In one sense, it’s a simple matter of supply and demand. Bad weather, poor crop yields, and the production of ethanol and other biofuels have reduced the amount of grain available for human consumption. At the same time, rapid economic growth in India, China, and other nations has created far more demand for food. The causes of the reduced supply, however, are complex, and may be connected to global climate change. Last summer, a prolonged heat spell, with temperatures exceeding 100 degrees, withered nearly half of Russia’s wheat crop. Huge rainfalls depressed yields in Iowa and Illinois, the two U.S. states that produce the most corn. Epic flooding left much of Australia’s wheat crop fit for nothing but animal feed. A drought on the North China Plain has set loose a dustbowl that could be bigger than the one that ravaged America’s Great Plains in the 1930s. “The land yielded only half what it does in a good year,” farmer Hou Guifa told the London Telegraph from his dust-covered house in a village in Shanxi province. China has long been self-sufficient in grain, and its newfound need to import wheat for its 1.3 billion people has propelled prices to new highs.
What other factors are involved?
Demand is also increasing because the world population is growing by 219,000 people per day. And thanks to globalization and rising incomes, more people in the developing world can afford food that was once out of their reach, such as animal products like meat and milk. Meat and milk are relatively inefficient sources of protein, requiring far greater amounts of energy and grain to produce than do simple grains and vegetables. Although the average Chinese person still eats less than half as much meat as the average American, that’s changing fast, and in the aggregate, China already consumes twice as much meat as the U.S.
Is there already too little food?
Actually, no. There would be enough to go around if it were distributed properly. In response to rising prices and spot shortages of grain, some countries, such as Russia, have banned exports, which only panics markets and drives up prices for the rest of the world. One recent study found that universally open trade in foodstuffs could lower average prices by 57 percent. Another, by Oxford University researcher Charles Godfray, suggested that 30 percent to 50 percent of food is wasted either before or after it gets to consumers. And a growing percentage of corn and other foodstuffs is now going into gas tanks instead of hungry mouths.
Do biofuels raise food prices?
Without a doubt. Forty percent of the U.S. corn harvest—enough to feed 350 million people for a year—now goes into ethanol production, which has increased by 33 percent just since 2008. The resulting spike in corn prices has pushed up the worldwide cost of meat, milk, and replacement crops like wheat and soy. Some experts see making biofuels from edible crops as the main factor in destabilizing food prices. “Agriculture production is keeping up in general with the growing demand for food,” says Princeton researcher Tim Searchinger. “But it keeps up with the added demand for biofuels only if growing weather is good.”
Will prices keep rising?
Higher prices encourage farmers to plant more, and that greater supply will lower prices in the short term. But the seesawing of a complex market in a world of increased demand means that prices will probably be volatile for the foreseeable future. Harvests, too, are likely to remain uncertain: Climatologists say this year’s extreme weather is likely to become the new normal. Meanwhile, the world’s overpumped aquifers are drying up in the grain belts of the Middle East, India, China, and the American West. And yet, to meet demand, global agricultural production will have to double by 2050, the U.N. estimates. “If we don’t do anything,” said French President Nicolas Sarkozy, “we run the risk of food riots in the poorest countries and a very unfavorable effect on global economic growth.”
Food riots and hunger
High food prices can drive people into the streets, but the world’s estimated 900 million hungry people aren’t at the fore; they suffer mostly in desperate silence. Researchers Evan Fraser and Andrew Rimas have found that food riots don’t correlate with hunger, but with “moral outrage” over perceived profiteers. Mohamed Bouazizi, the man who triggered Tunisia’s revolt by setting himself on fire, wasn’t starving; he was angry that he had to bribe corrupt officials to let him sell fruits and vegetables. “It’s the sense of injustice rather than price volatility that ultimately causes the rioting,” Fraser told the Toronto Globe and Mail. While poverty is rampant in Egypt, hunger is not. Most people, however, spend so much on food they have little left for better housing or luxuries. Rising food prices heightened the broad conviction among Egyptians that the Mubarak regime was getting fat while the poor had to eke out a bare living. With that in mind, Egypt’s new rulers are likely to use subsidies to hold bread prices down.