Briefing: The global food crisis

Food prices around the world are soaring, sparking riots and even raising concerns that governments could fall. What’s driving up the price?

Is the world on the brink of famine?

Not at all. Farmers are producing record harvests. Last year, the world’s farmers reaped more grain than ever, and this year, the yield will be another all-time high of 2.16 billion tons, according to the U.N. The real problem is an overwhelming increase in demand, which has made rice, wheat, corn, and other staples unaffordable to tens of millions of people. Kamla Devi, 42, of New Delhi, says she and her husband are down to one meal a day. “When I go to the market and see how little I can get for my money,” she said, “it makes me want to hit the shopkeeper and thrash the government.”

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How far have food prices risen?

More than 80 percent over the past three years, the World Bank reported last week. In 2007, dairy products worldwide were up 80 percent, cooking oils were up 50 percent, and grains 42 percent. Wheat is at its highest price since 1980, causing startling increases in the price of bread and pasta. Corn has doubled in price since 2006. A metric ton of white beans that went for $235 just two years ago now fetches $1,160. The most catastrophic increases have come in the price of rice, a staple for billions of people worldwide. Rice rose a staggering 147 percent in the past year, with global supplies at their lowest levels since 1976. Vietnam, India, Cambodia, and China have adopted bans on exports, to conserve available supplies for their own populations, sparking a frantic search for supplies in importing countries such as the Philippines and Bangladesh. “It is panic,’’ said Vichai Sriprasert, president of Riceland International, a leading rice exporter in Bangkok.

How are people reacting?

In the world’s poorest places, they are taking to the streets. Some 10,000 Indonesians demonstrated in March outside the presidential palace in Jakarta, railing against soya bean prices, which have soared 125 percent since last year. In Egypt, 11 people died in recent rioting touched off by the skyrocketing cost of bread and cereals. Mexicans recently rioted against the high price of the corn used to make their tortillas, and there also have been food protests in Cameroon, Burkina Faso, the Philippines, Haiti, Ivory Coast, Senegal, Ethiopia, Pakistan, and Thailand. The Organization for Economic Cooperation and Development predicts that food prices will continue to rise for at least the next decade. It could get so bad, the World Bank warns, that dozens of nations may face social unrest so severe that governments could be toppled.

What’s driving the increase in food prices?

There are several interrelated factors. Six years of severe drought in Australia, recent flooding in Argentina, and other extreme weather have laid waste to millions of acres of crops. At the same time, the increasing demand for biofuels has diverted large amounts of grain—especially corn—from the food supply. The U.S. produces 40 percent of the global corn crop, but about one in five ears is now used to make ethanol. Record oil prices have also boosted food costs, since so much food is now shipped long distances via trucks, ships, and airplanes. But the single biggest factor behind the food crunch is the dramatic expansion of the middle class in China, India, and other formerly poverty-stricken nations.

Why is that a problem?

On the one hand, it’s obviously good news that hundreds of millions of people around the world are moving out of abject poverty. But China and India alone have a combined population of 2.3 billion, and as their people attain a higher standard of living, they consume more of everything, including food. They also change their diets and consume more meat, which is much more costly to produce. The average Chinese, for instance, now consumes 110 pounds of meat a year, up from 44 pounds in 1985. Because it takes almost 10 pounds of grain to produce a pound of pork, and twice that to yield a pound of beef, both grain and animal stocks are getting hit. And analysts say global demand will continue to rise. The Brookings Institution estimates that by 2020, the global middle class will increase by 1.8 billion people—or 30 percent—to constitute 52 percent of the earth’s population.

Is this a catastrophe in the making?

Not necessarily. Pessimistic projections about the planet’s ability to sustain humanity have proved wrong before. In his 1968 book The Population Bomb, Paul Ehrlich famously predicted that hundreds of millions would starve to death in the 1970s and ’80s. Ehrlich and other doomsayers failed to foresee the impact of such innovations as improved fertilization, irrigation, and crop strains. And if crisis breeds concern, some experts say, it also breeds opportunity. “It’s actually the greatest time in the world to be a farmer,” said Iowa State University economics professor Bruce Babcock. “We are going to see fairly substantial increases in production because farmers have never had such a large incentive to increase production.”

Is everyone that optimistic?

Far from it. Many experts believe that no matter how productive or clever

we are, the sheer size and demands of earth’s 21st-century population will overwhelm our ability to sustain it. If the pessimists are correct, food will become an increasingly precious commodity, with food riots, massive starvation, and even wars spreading across the globe. “Continuing with current trends would mean the earth’s haves and have-nots splitting further apart,” said British environmental scientist Robert Watson. “It would leave us facing a world nobody would want to inhabit.”