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The Food Bubble Economy

January 10, 2005

The food bubble facing imminent collapse

Plan B: Rescuing a Planet under Stress and a Civilization in TroubleGlobal warming is happening; and at a much faster, more abrupt rate than projected by the International Panel on Climate Change (IPCC) (see "Abrupt climate change happening", SiS 20).

The news media have been filled with reports of heat waves, floods, droughts, hurricanes, accelerated melting of the polar ice caps and sea levels rising. And yet, they may be missing the most serious consequence of climate change that’s staring us in the face: a collapse of food production on a global scale; or as Lester Brown of Earth Policy Institute puts it, "the bursting of the food bubble".

The economy must be restructured at "wartime speed", Lester Brown says, because we have built an "environmental bubble economy", where economic output is artificially inflated by over-consumption of the earth’s natural resources. He adds: "the destruction wrought by terrorists is likely to be small compared with the worldwide suffering if the environmental bubble economy collapses."

This same warning was first put forward no less forcefully by Edward Goldsmith and colleagues in A Blueprint for Survival published in 1972, and echoed by many since; notably Paul Hawken’s The Ecology of Commerce (1993) and David Korten’s When Corporations Rule the World (1995).

What’s new in Lester Brown’s message is that the most vulnerable economic sector may be food. Food production is facing imminent collapse unless the urgent problems of water shortage, overpopulation and rising temperatures are tackled right away. (And no, he does not think GM crops are the answer to feeding the world.)

Water is fast running out

The world is fast running out of water after decades of unsustainable over-pumping of aquifers to expand food production to feed a growing world population. Water tables have fallen sharply and rapidly in scores of countries including China, India and the United States, which together produce nearly half of the world’s grain. Other more populous countries with depleted aquifers include Pakistan, Iran and Mexico. As water tables fall, rivers fail to reach the sea, lakes disappear and wells dry up.

Conventional industrial agriculture is extremely water-intensive. It takes 1000 tonnes of water to produce a tonne of grain. Worldwide, 70 % of all the water diverted from rivers or pumped from underground is used for irrigation; 20% is used by industry and 10% for residential purposes.

Growing needs of industry is diverting irrigation water from agriculture, and countries are turning to grain imports to make up for the shortfall. A person drinks 4 litres of water a day and an additional 2 000 litres is needed to produce the food eaten. In rich countries where grain is consumed to feed livestock, the water needed to produce food per person can easily reach 4 000 litres a day.

Water shortages are generating conflicts between upstream and downstream claimants.

Crops cease to produce at high temperatures

Another challenge facing farmers to keep up productivity is global warming. The 16 warmest years since record -keeping began in 1880 all occurred from1980 onwards, the three warmest years were 1998, 2001 and 2003. Crops are facing heat stresses that are without precedent.

As the temperature rises above 34 C, photosynthesis slows down, dropping to zero for many crops at 37 C. At that temperature, corn plants in the US Corn Belt suffer from heat shock and dehydration, shrinking the harvest. Researchers at the International Rice Research Institute in the Philippines and the US Department of Agriculture developed a rule of thumb that each deg C rise in temperature above the optimum during the growing season reduces grain yields by 10%. Thus, according to projections of the IPCC – which some say is already an underestimate - grain harvests in tropical regions could be reduced by an average of 5-11 percent by 2020 and 11-46 percent by 2050.

Research at Ohio State University indicates that as temperature rises, photosynthesis increases until 20C, and then plateaus until 35C when it begins to decline, ceasing entirely at 40C. At that temperature, the plant is in thermal shock, simply trying to survive.

The most vulnerable part of the life cycle is at fertilization. Corn silk dries out rapidly in the heat, and prevents pollen tubes from reaching the kernels. Similarly, the fertility of rice falls from 100% at 34C to nearly zero at 40C. In north India, a 1C rise in temperature did not reduce wheat yields, but a 2C rise lowered yields at almost all of 10 sites. There was a decline in irrigated wheat yields ranging from 37 to 58% from heat alone; and when increased CO2 was factored in – which tends to increase photosynthesis - the decline ranged from 8 to 38%.

Grain production has been dropping

The problems of water shortage and increased temperatures are already hitting grain yields. Grain production has been declining in some smaller countries; but it is now falling in China, the most populous country in the world. Over the past five years, China’s grain harvest has dropped from 390 million to 340 million tonnes – a drop equal to the grain harvest of Canada.

Sooner or later, says Lester Brown, China will enter the world grain market for imports, and that will cause food prices to rise, especially as world grain reserves are at an all time low.

In 2002, the world grain harvest of 1 807 million tonnes fell short of the world grain consumption by 100 million tonnes, or 5 percent. This shortfall, the largest on record, marked the third consecutive year of grain deficits, bringing stocks to the lowest level in a generation.

In such a situation, the first to suffer will the world’s poorest and hungriest. The United Nations Food and Agriculture Organisation (FAO) latest estimates, based on data from the years 1998-2000, put the number of undernourished people in the world at 840 million. But since 1998-2000, world grain production has fallen 5 percent, suggesting that the ranks of the hungry may be swelling.

"Food is fast becoming a national security issue as growth in the world harvest slows and as falling water tables and rising temperatures hint at future shortages," says Lester Brown.

More than 100 countries now import wheat. Some 40 countries import rice. Iran and Egypt rely on imports for 40 percent of their grain supply. Algeria, Japan, South Korea and Taiwan import 70% or more. Israel and Yemen import more than 90%. And just 6 countries - the US, Canada, France Australia, Argentina and Thailand - supply 90% of grain exports. The US alone controls almost half of world grain exports.

China importing grain to make up for its deficits could destabilize world grain market overnight. When the former Soviet Union bought grain from the world market in 1972 for roughly a tenth of its grain supply following a bad harvest, the world wheat prices climbed from $1.90 to $4.89 a bushel.

"Ecological meltdown"

The problem of declining food production is dwarfed by the ecological impacts of the over-exploitation of resources to keep production high. China is singled out for "ecological meltdown".

Since 1980, China’s economy has expanded more than fourfold. Income has also expanded by nearly fourfold lifting more people out of poverty faster than at any time in history. But this has resulted in over-ploughing, over-grazing, over-cutting of forests and over-pumping of aquifers.

With a population of 1.3 billion and 400 million cattle, sheep and goats, "weighing heavily on the land" and grazing flocks stripping the land of protective vegetation, a dust bowl has been created on a scale not seen before. China is at war with expanding deserts. Old deserts are advancing and new deserts forming. With little vegetation remaining in parts of northern and western China, the strong winds of late winter and early spring can remove millions of tonnes of topsoil in a single day, soil that would take centuries to replace. The Gobi Desert expanded by 52 400 square kilometres between 1994 and 1999, and is now within 150 miles of Beijing.

Millions of rural Chinese may be uprooted and forced to migrate eastward as the deserts claim their land. Desertification has already driven villagers from their homes in Gansu, Inner Mongolia and Ningxia provinces. Unfortunately, they do not have an obvious place to escape to within China. Such ‘environmental refugees’ will be increasingly common.

China’s dust storms are spreading beyond its borders. On April 12, 2002, South Korea was engulfed by a huge dust storm from China that shut down schools and cancelled flights, and clinics were overrun with people having difficulty breathing. Koreans have come to dread the arrival of what they now call "the fifth season" of dust storms from China.

Plan B for survival

Plan A – business as usual – must be replaced by plan B as a matter of urgency if we are to avoid the food bubble bursting, and with it, famine on a global scale, disease epidemics, social and political unrest, and wars.

Plan B means shifting from a carbon-based energy economy to a hydrogen-based one to stabilize climate change. Iceland is the first country to adopt that as its national plan. Denmark and Germany are leading in wind-generated energy; Japan in solar cells. The evolution of fuel cells and availability of hydrogen generators will contribute to building a climate-benign hydrogen economy. The Netherlands has shown what can be achieved by phasing out motorcars in favour of bicycles. The Canadian province of Ontario is phasing out coal. It is replacing its five coal-fired power plants with gas-fired plants, wind-farms and making efficiency gains; the net result is to reduce carbon emissions equivalent to taking 4 million cars off the road.

Plan B means stabilizing world population at around 7.5 billion, as some 34 countries in the world have already stabilized their populations. It means increasing the productivity of water in agriculture, for example, by drip-irrigation pioneered in Israel. It means halting soil erosion by replanting trees, adopting minimum-till, no-till and other soil-conservation practices.

Finally, it means restructuring the entire economy by creating an "honest market", one that "tells the ecological truth", by including the indirect costs of goods and services into the prices, that values nature’s services properly and respect the sustainable-yield thresholds of natural systems such as fisheries, forests, rangelands and aquifers.

For petrol, calculating the true costs to society means including the medical costs of treating people made ill from polluted air, the costs of acid rain in damages to lakes, forests, crops and buildings, and most of all from global warming. Various studies have produced estimates of petrol prices raised to $3.30, or even $8.64 a gallon if drivers were to pay some of the indirect costs, including the military costs of protecting petroleum supply lines and ensuring access to Middle Eastern oil.

An example of valuing nature’s services is the decision of the Chinese government to ban all tree cutting in the Yangtze River basin after the flooding in 1998, which inflicted $30 billion worth of damages. The ban was justified by according to standing trees a worth three times that of cut trees.

A further measure is to shift taxation – lowering income taxes while raising taxes on environmentally destructive activities.

Sustainable agriculture left out

While most of the measures in plan B are laudable, they do not add up to the radical "restructuring" of the bubble economy called for.

Edward Goldsmith, Paul Hawken, David Korten and others have argued convincingly that the fatal error of our bubble economy is that it is predicated on unlimited growth. A major part of the solution may well involve abandoning unlimited growth as a matter of policy and as an index of progress and well-being, for an alternative economic model that emphasizes stability, autonomy and self-renewal at every level. But that’s not going to happen so long as the dominant model of economic globalisation of the World Trade Organisation (WTO) holds sway.

Another weakness of plan B is that after having painted a dire picture of the unsustainable food bubble created by decades of industrial monoculture, Lester Brown nevertheless fails to call for a comprehensive shift to sustainable agriculture that would tackle the problems he has mentioned head on, as well as ones he hasn’t mentioned, the most obvious being that industrial monoculture is extremely energy inefficient and dependent on fossil fuel, which too, is fast running out.

Organic and agroecological farming, by contrast, are proving productive, energy and resource efficient and environmentally friendly; they are able to provide food security for the poorest farmers, to protect biodiversity, to regenerate degraded land, and to turn soil from a carbon source back into a carbon sink. They are the key to delivering health to the nation, whether rich or poor (as described in articles in successive issues of Science in Society; also The Case for a GM Free Sustainable World.).

It is nothing short of scandalous that out of the £500 million allocated to implementing the UK government’s Strategy for Sustainable Farming and Food (Department for Environment, Food and Rural Affairs, London www.defra.gov/farm/sustain/newstrategy/strategy.pdf), only £5 million was earmarked for supporting organic agriculture.

The reason is that adopting truly sustainable agriculture would entail major conceptual and structural changes to the food production and delivery system that many governments, including the UK, are not prepared to face up to. These include rejecting global "competitiveness" and "efficiency" as artificially defined by the WTO to perpetuate the iniquitous exploitation of the world poor by the rich that has added untold misery to the lives of Third World farmers and food miles to agricultural produce shipped across the globe. They include, instead, supporting local production and consumption and shortening the food-supply chain to ensure that farmers get a fair price for their produce and consumers get the benefit of fresh, nutritious and health-promoting food while reducing global carbon dioxide emission.

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