Rising prices threaten millions with starvation, despite bumper crops

Geoffrey Lean, The Independent 2 Mar 08;

There has never been anything remotely like the food crisis that is now increasingly gripping the world, threatening millions with starvation. For it is happening at a time of bumper crops.

All the familiar signs of impending disaster are here, and in spades. Across the developing world already hungry people are now having to eat even less. Food stocks have plunged to record lows. Food prices have scaled new heights. Food riots are spreading around the globe. Yet the world is still harvesting record amounts of grain.

Three times over the past 60 years prices have soared in the same way. But each was the result of poor harvests, and each was reversed when good crops returned. This crisis is being caused not by shrinking supplies but by skyrocketing demand.

"This is the new face of hunger," said Josette Sheeran, the executive director of the UN's World Food Programme. "There is food on the shelves, but people are priced out of the market." Indeed, so great are the price rises that both her organisation and the US government's Agency for International Development, which buy their supplies on the open market, are having to draw up plans to cut back their aid.

Wheat prices have doubled in a year – and in just one day last week they shot up by 25 per cent. Stocks are lower than at any time since records began.

The chief reason for the escalating demand is the mushrooming middle class in developing countries, especially China and India, now growing by 50 million people a year. As people get better off they demand more meat, which mops up grain supplies, since it takes some 8lbs (3.5kg) of cereals to produce 1lb (450g) of beef.

Now cars, as well as cows, are out-competing hungry people, through the increasing use of corn for biofuels. By next year, predicts Lester Brown, president of the Washington-based Earth Policy Institute, almost a third of the US corn crop – which has traditionally helped to feed 100 nations – will go for fuel. Mr Brown points out that, in an increasingly fuel-scarce world, the price of corn will henceforth be tied to the mounting price of oil.

Already, 25 million people in India are believed to have cut their meals from two to one a day. The calorie intake from an average meal in El Salvador has fallen by half in less than two years. Riots have broken out from Mexico to Mauritania.

And if this is happening when harvests are good, what can we expect when they next fail? Global warming is making this ever more likely, and climatologists predict big crop reductions in poor countries. A supply crisis on top of a demand one – that is a recipe for catastrophe.