Nayan Chanda, Straits Times 15 Apr 08;
WITH oil prices holding steady around US$100 (S$135) a barrel and the cost of food rising at an alarming pace, threatening hunger and protests, the world economy has reached a new ominous juncture.
Eighteenth-century economist Thomas Malthus, who predicted cycles of population growth outpacing resources and leading to catastrophic decline, is being invoked. Will the gathering food crisis finally prove Malthus right?
To agree, one must ignore the amazing track record of human ingenuity in overcoming the challenges to our survival. Yet the web of political, economic, ecological and environmental factors that have combined to bring about this crisis is daunting and unprecedented in its complexity.
Governments can restrict the export of grain, as India, Vietnam, Argentina and Egypt have done; scrap tariffs on food imports, as some African countries have; and everyone can accumulate emergency food stocks. All this will be a short-term fix, but fall short of resolving the crisis that has been building for decades.
Human development has evolved around the search for basic sources of energy - from food and fuel for cooking to the modern needs of powering transportation, lighting and heating homes. With the discovery of new continents, more land has come under the plough. Steam-powered boats allowed food grains to be shipped halfway across the globe to feed industrial workers. With technology, agricultural yields have risen.
As historian David Christian noted, by tapping millions of years of solar energy stored in the form of coal and oil, humans have found the equivalent of several new continents to exploit.
Malthus was thought to have been proven wrong as the world population has exploded, from one billion in 1900 to around 6.5 billion today. But all indications are that we are approaching the end of that happy growth phase.
World reserves of grain now stand at their lowest in 25 years, and with depleting levels of groundwater and the climate challenge, food yields are slowing. Traditional wheat exporters such as Australia, Canada and Argentina are expected to produce less, and only the United States will be able to step up its exports.
While the world's largest rice exporter, Thailand, promises not to cut back, the No.2 supplier Vietnam, hit by unseasonal weather, is not taking new export orders.
Global food exports are expected to drop 3.5 per cent from last year. An 80 per cent rise in grain price since 2005 (42 per cent last year) and poor weather forecasts have created a sense of crisis.
Africa and Asia have seen food-related protests. Hoarding by traders has raised prices. The World Bank warns that 33 countries face unrest because of surging prices, and urges rich nations to give US$500 million in emergency aid to the UN World Food Programme. But this still falls short of a long-term solution because, for the first time, the need of food production is brushing up against the imperative of energy production in a major way.
Already, 18 per cent of US grain output is being diverted to produce ethanol. With the US plan to produce 35 billion gallons of alternative fuels by 2017, the share of grain withdrawn from the food basket will rise further.
With the world population still growing at more than 1 per cent a year, we will need more farmlands and green revolutions. Experts speculate that, at best, 10 per cent more arable land may be found in Brazil and sub-Saharan Africa. But the vagaries of climate and a lack of investment complicate efforts to access farmlands in sub-Saharan Africa. And in Brazil, new farmland can be created only by clearing the Amazon rainforest, raising the risk of drought.
Increasing food output on existing land would require more intensive cultivation - and, yes, unpopular genetically modified crops. Industrial farming would certainly raise carbon emissions, thickening the canopy of greenhouse gas, which has grown silently since the Industrial Revolution.
A century of growth now confronts humanity with difficult zero-sum choices. Addressing these will require a global approach, taking into account the imperatives of growing more food, creating clean fuels and fighting climate change - all at the same time. A rather tall order, indeed.
The writer is director of publications at the Yale Centre for the Study of Globalisation and editor of YaleGlobal Online.
