The storm is coming. One of the great dependables of modern life – cheap food – may be about to disappear.
If a growing number of economists and scientists are to be believed, we are witnessing a historic transition: from an era when the basics of life have been getting ever more affordable, to a new period when they are ever more expensive.
For those of us in Britain, the severity of the situation is not yet fully apparent. Indeed, we are still living in something of a fool’s parad ise. A century ago, people in this country spent more than half their incomes on food; for the poorer classes, that proportion was even greater. One of the most extraordinary phenomena since has been the relentless fall in the cost of feeding ourselves. Today, our shopping baskets now account for just 11 per cent of our average budget.
Globally, food is still cheap: but new data from the World Bank shows that it may not remain that way for long. A combination of factors – not all related to simple supply and demand – has seen basic prices for crops including wheat, soya and maize rise by tens of percentage points. Some foods are a third dearer in real terms than they were five years ago; after two decades of almost laughably cheap food (remember those 20p loaves of bread and £2 chickens?) supermarket shoppers are starting to feel the pinch.
In the rich world, it takes a while for food-price inflation to have an effect. But in poorer regions even modest rises can have massive consequences: it was a spike in the price of bread as much as political dissent that sparked the Arab Spring, for example.
Is disaster inevitable? Ever since the days of Thomas Malthus, who famously predicted in the 18th century that population increases would far outstrip gains in food production, those who have foreseen global famine have been proved relentlessly wrong. As the world’s population has doubled and almost redoubled (in 1900 there were about 1.7 billion people alive; this now stands at a little over seven billion), the era of mass starvation has stubbornly failed to arrive.
Today, the global population is rising by 1 per cent a year – an extra Britain to be fed every nine years. By 2060, even the most optimistic predictions see it peaking at 10 billion. That is a problem because nearly all the land that can be used to grow food is now being used for just that. If Malthus’s predictions are not to come true, three centuries late, humanity will have to pull a huge rabbit out of the hat.
How have we got away with it so far? Shortly after Malthus made his grim prediction, we saw the first Agricultural Revolution – the systematic application of science and technology to farming. New varieties of crops, an understanding of crop rotation and the development of mechanisation saw yields soar. Hunger was also averted by the development of a global trade in food, spurred by the advent of steam ships and refrigeration.
Still, the population kept rising – but along came a saviour in the form of Norman Borlaug, one of the most important human beings ever to have lived. Hitler will always be famous for killing millions; yet Dr Borlaug, an American food scientist, saved billions, and yet relatively few of us have heard of him. In the 1960s, he bred new varieties of wheat and rice and other crops, a breakthrough now called the Green Revolution. If it hadn’t been for him, then Asia and perhaps South America would have seen serious famine in the 1970s.
Now we are reaching the limits of the Green Revolution – and demand keeps rising. In fact, the rise is accelerating. As China, India and Brazil get rich, they want to consume far more meat. That is terrible news for food prices and the environment alike. More demand for beef does not just mean that the price of steak goes up (although it will). It also pushes up the price of bread. Crops grown to feed people directly currently take up just 4 per cent of the Earth’s available land surface; but crops to feed cattle, sheep, pigs and chickens account for 30 per cent – seven times as much.
Next, there is the effect of the climate. A devastating heatwave this summer has reduced crop yields in the United States by 30 per cent in some states. Maize and grain prices jumped by $100 a ton as a result. If the extraordinary heatwave that hit Moscow in 2010 had been centred on Chicago, America’s 400-million-ton grain crop would have been reduced to 240 million, a huge dent in the global food supply. We cannot necessarily blame the outbreak of heatwaves on climate change – but most climatologists agree that such devastating events, particularly in the food-producing heartlands of America and Asia, will become more common over the next 80 years as temperatures rise by an average 3C.
Then there is the biofuel disaster. In a classic instance of the law of unintended consequences, America’s drive to reduce oil dependency and cut carbon emissions has led to huge amounts of farmland being given over to growing crops for petrol rather than human or animal feed. Last year, 120 million tons of corn was turned into gasoline – which in turn drove up the price of all kinds of food. Biofuels can be made from grasses, wheat, sugar or corn, and the energy companies love them. But their knock-on effect has been to add a few pence to the price of your shopping basket – and most scientists agree that in terms of CO2 emissions, their production is actually “dirtier” than simply using conventional fossil fuels.
Finally, there is the pernicious effect of speculation. About 80 per cent of the global food trade is now speculative, and firms such as Goldman Sachs, Merrill Lynch, Deutsche Bank have spent billions gambling on the price of food, artificially driving up prices.
With all of these factors pushing up prices, how can we possibly avoid a price crunch – or even famine? First, we could try to push down the number of mouths to feed. But that isn’t going to happen. Even if fertility rates in Africa and Asia plummeted to European levels tomorrow, there is enough inertia in the demographic engine to ensure that we will have billions more people to feed come what may.
Alternatively, we could go veggie. If we cut meat consumption by 50 per cent, that would release an area of farmland bigger than the United States for extra food production. But that won’t happen either. In fact, demand for meat is expected to double by 2050.
So what can we do? Well, first of all, more land will have to be used for food production. That means that, by 2060, we can expect to see the loss of most of the remaining African wilderness. But in the end, if the storm is to be averted, we are probably going to have to turn to technology once again. That is the main reason why opposition to GM crop research is rapidly starting to look anachronistic and inhumane.
Few people realise that transgenic varieties of common staples, such as Golden Rice (a GM variety rich in vitamin A, developed more than a decade ago) and new strains of fungal-resistant wheat created in British labs, are e ither ready to use or nearly so. The only reason we are not seeing a GM revolution is the persistent opposition by environmental groups...
Meat Trade News Daily Supporting British Pig Farmers
Source: Argentine Beef Packers S.A.
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