"Wheat prices have risen by 130 percent since March of last year, and soy prices have risen 87 percent, the United Nations said, with food now representing 60 percent to 80 percent of consumer spending in developing countries. In general, the World Bank has said that food prices have climbed about 83 percent worldwide over the past three years.The Times article reports that this has "set off violent protests in Haiti, Egypt, Uzbekistan, Yemen, the Philippines, Thailand, Indonesia and even Italy." A perfect storm of bad policies in several arenas has produced this disaster that is already well under way. These are generally policies that continue to be supported by both Democrats and Republicans in congress. That situation is going to have to change, and fast, because the perfect storm is still building in size, power and threat. If it was a hurricane, like Katrina, it would still be out at sea, but threatening to soon hit land. In the US, where food costs represent the lowest percentage of income than anywhere else, the "bite" has not been nearly as bad, at 4% increase overall, in the costs of food. But that could and will change as the confluence of factors causing it worsen. The NY Times article says,
"Major agricultural countries must urgently change their policies to avoid a social explosion from rising food prices, a panel of United Nations experts warned Tuesday, adding their voices to new concerns about the proper balance between saving the environment and feeding the poor. "Modern agriculture will have to change radically if the international community wants to cope with growing populations and climate change, while avoiding social fragmentation and irreversible deterioration of the environment," said Salvatore Arico, a biodiversity specialist with the United Nations Educational, Scientific and Cultural Organization, or Unesco, summarizing the report by about 400 experts. The report tries to provide a comprehensive view on how to produce food that is less dependent on fossil fuels; favors locally available resources, natural fertilizers and traditional seeds; and tries to preserve the soil and water supply.Decreasing the Dollar's Value; good for exports and balance of trade, bad for Food Prices in the US and Worldwide. In the US, as is the case for any countries whose currencies ride with the dollar, food prices are rising as the value of the dollar continues to plummet. There are two reasons this impacts the US. The biggest one is that the price of US food looks cheaper and cheaper as the Euro and other currencies rise in value in proportion to the dollar, making US Wheat and other food exports more attractive to foreign nations. That raises the prices in the US and makes less food available. For foreign nations whose currencies are tied to the dollar, they are competing with other currencies now worth more, and that is driving up their costs for food, and potentially could motivate them to abandon the dollar. That will surely accelerate the dollar's decline and food prices in the US. Cellulosic Ethanol, mostly from Corn-- a rotten idea Then we have ethanol from corn. This failed idea is still being subsidized and encouraged as a good solution to the energy crisis. It will go down in history as one of the monumental bad ideas. What seems like a good idea has turned out to be a disastrous one that has raised corn and corn product prices, like that ubiquitous sweetener, corn syrup, massively. And farmers, to take advantage of the higher prices that corn brings, are converting wheat and other crop fields to corn fields, thus decreasing availability and raising prices for other foods. Lester Brown, president of the Earth Policy Institute, reported, in 2006, that the ethanol to fill one SUV's gas tank requires enough corn to feed a person for a full year, saying,
" it is a battle between the world's 800 million automobile owners, who want to maintain their mobility, and the world's 2 billion poorest people, who simply want to survive. Whenever the food value of a crop drops below its fuel value, the market will convert it into fuel. Ultimately, this dynamic risks driving up world food prices, destabilizing governments in low-income nations and disrupting global economic growth."Yet Obama and Hillary still support funding more ethanol production, according to their website policy pages. While the McCain website does not even include Energy as an issue, David Brooks, in the NY Times, reported, in February,
"In 2000, McCain ran for president and reiterated his longstanding opposition to ethanol subsidies. Though it crippled his chances in Iowa, he argued that ethanol was a wasteful giveaway. A recent study in the journal Science has shown that when you take all impacts into consideration, ethanol consumption increases greenhouse gas emissions compared with regular gasoline. Unlike, say, Barack Obama, McCain still opposes ethanol subsidies." The R-Sqared Energy blog discusses how the Iowa caucuses influence presidential candidate ethanol policy;The prominence of the Iowa presidential caucuses also plays a major role. The Iowa caucuses are held prior to the elections in most other states, and presidential candidates hope to do well there and gain momentum going into the rest of the campaign season. Since Iowa is the heart of ethanol production country in the U.S., candidates pander to the voters there who have greatly benefited from U.S. ethanol policies. In order to win Iowa, you must support ethanol policy. Presidential hopefuls Hillary Clinton and John McCain provide perfect examples of the Iowa influence. Longtime critics of U.S. ethanol policy - both changed their positions during the most recent presidential campaign. In 2003, McCain had come out strongly against U.S. ethanol policy:Today's NY Times article on the UN Report also states,"Ethanol is a product that would not exist if Congress didn't create an artificial market for it. No one would be willing to buy it. Yet thanks to agricultural subsidies and ethanol producer subsidies, it is now a very big business - tens of billions of dollars that have enriched a handful of corporate interests - primarily one big corporation, ADM. Ethanol does nothing to reduce fuel consumption, nothing to increase our energy independence, nothing to improve air quality."Contrast that with his statements in 2006 as he prepared for a presidential run:"I support ethanol and I think it is a vital, a vital alternative energy source not only because of our dependency on foreign oil but its greenhouse gas reduction effects."Thus, while the world wakes up to the overall social and environmental ramifications of a broad expansion of ethanol policy, the U.S. is unlikely to deviate from the current policy. If there was a major Midwestern drought that caused the corn crop to fail, it might cause a reevaluation of the policy as corn supplies disappeared. But barring some sort of catastrophe that impacts ordinary Americans, the policy of turning food into fuel will continue unabated in the U.S."" The European Union has been rethinking its emphasis on the use of biofuels, even as the European Commission on Monday rejected an appeal from an advisory panel to suspend its goal of having 10 percent of its transportation fuel made from biofuel by 2020. That goal is seen as an integral part of the European Union's pledge to reduce carbon dioxide emissions by 20 percent by that year, as part of the effort to reduce global warming. The United Nations special rapporteur for the right to food, Jean Ziegler, has said biofuels are "a crime against humanity" because they raise global food prices. But Barbara Helfferich, spokeswoman for the European Union environment commissioner, Stavros Dimas, said, "You can't change a political objective without risking a debate on all the other objectives" of climate change and energy reform."The Iowa caucuses are over. Will any candidate have the courage to risk Iowa's ire in November? People in Africa will starve if they don't. This is not hyperbole. Bush won Iowa in 2004, 50% to 49%. That makes it a tossup state. Courage and integrity WILL prevail, but, unless both parties give up this bad policy, Iowa may win and the world will lose. Other challenges facing the food supply and prices include Natural seeds vs "Killer field" patented seeds that won't grow a second crop, as this OpEdNews.com article on the Killing Fields reports:they don't discriminate. They target babies, the elderly, teenagers, young adults, middle-age housewives, and businessmen alike. They poison livestock, pets, and wildlife, and the people behind them deny complicity in the carnage. Who or what are these silent, deadly killers? They are the beautiful, green, uniform, and seemingly beneficial, killing fields of genetically modified (GMO) crops. The people behind them are the U.S. government, the Rockefellers, Monsanto, Dow, DuPont, and Syngenta.They make GMO corn, by the way-- the brewing of another perfect storm? Good Old Fashioned Farmer Welfare-- Farm Subsidies Paying Farmers NOT to Grow Crops This is another bipartisan bit of foolish cowardice that panders to farmers and the huge farm conglomerates. Those subsidies have to go. It's no old wives tale, now, to say that people are starving. Farm subsidies are part of the perfect storm and they are leading to global instability and will surely contribute to more food riots and worse. It's unlikely that Obama or Hillary will take this issue on in the primaries, but after they are over, the ending of farm subsidies should be a part of the Democratic party's platform. Fat chance. The way to make it happen is to start rewarding farmers for growing food that they sell to domestic markets. As food prices rise, there will be a need to subsidize food for the poor in the US. Perhaps the way to do it is to subsidize farmers who GROW food and sell it to bakers and food processors and packagers at reduced prices for US citizens who cannot afford the rising prices. That would retain the idea of farm subsidization, but encourage more food production, not less. Another Bad Idea; Subsidizing Food Prices for Export The Times article also reports,"Other critics, however, have pointed to the way the European Union subsidizes its agricultural exports, which is to get rid of European surpluses to keep European farmers happy, while selling at a price well below the cost of production -- thus undermining the ordinary market for local food production in Africa."This issue of food can only get bigger and bigger as the cornucopia of factors contributing to the food crisis perfect storm continue to worsen and increase in complexity. Since the US has evolved to be the "breadbasket of the world," the problems that develop will often be blamed on the USA. That makes the food crisis a diplomatic crisis as well. I've long said that the conflict in the Middle East is the most difficult problem in the world. This incredibly complex, multidimensional food crisis could, eventually, surpass it. There will be no easy choices for the presidential candidates to make. Any decision to take responsible action to address the food crisis will extract a political price at the ballot box and in debates. As always, in 20th century America, megacorporations will play a heavy role, forcing candidates to decide between cutting profits or preventing human suffering. The human factor often loses in these contests. The future is on the line. Let us hope that the candidates' courage to do the right thing will rise to play a pivotal role as well.
