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Grain Drain

Wayne Roberts, Now Toronto
Get ready for Peak Grain. Two months of global food reserves is all that’s separating us from mass starvation.

Brace yourself for crises at the cash register. Major price hikes for food are coming, as Peak Grains join the lineup of life-changing events such as Peak Oil and Peak Water. Unless this year’s harvest is unexpectedly different from six out of the last seven, the world’s ever-decreasing number of farmers will not produce enough staple grains to feed its ever-increasing number of people.

Quite a shift from obsessing about obesity, isn’t it?

…The international cupboard or “reserve” of grains (wheat, rice and corn, for example), he showed, is now at its lowest point since the early 1970s.

While there’s been a crisis of quiet desperation over at least a decade for the 15,000 people who die each day from hunger-related causes, shortages and high prices are about to become everyone’s problem.

Turns out that if massive disaster strikes, there’s enough in the global cupboard to keep people alive on basic grains for 57 days. Two months of survival food is all that separates us from mass starvation due to drought, plagues of locusts and other pests, or the wars and violence that disrupt farming, all of which are more plentiful than food.

And since the World Trade Organization prohibits government intervention that keeps any items off the free trade ledger, there’s no law that says Canadians, or any other people, get first dibs on their own food production.

To put the 57 days in historical perspective, the world price for wheat went up six-fold in 1973, the last time reserves were this low. Wheat prices ricocheted through the food supply chain in many ways, from higher prices for cereal and breads eaten directly by humans to the cost of milk and meat from livestock fed a grain-based diet.

If such a chain reaction happens this year, wheat could fetch $21 a bushel, about six times its current price. It might cost even more, given that there are now two other pressing demands for grains that were less forceful during the 70s.

Those happy days predated modern fads such as using grains for ethanol, now touted as an alternative to petroleum fuels for cars, and predated the factory barns that bring grains to an animal’s stall, thereby eliminating grazing on pasture grasses.

University ethics classes and church elders can ponder the moral dilemmas imposed on the wealthy when they choose fuel and meat while others starve.

Historians will also recall that 1970s food prices went up because of price hikes for oil, contributing to the runaway inflation that defined the decade’s economic challenge. That experience shows that seemingly small blips in food reserves and availability can lead to major shocks in the economy and society.

The drop in world food reserves back then was also accompanied by trends from which the world has yet to fully recover. Legacies include traumatic famines across Africa, Afghanistan and Bangladesh, the emergence of hard right politics in conventional parties as governments prepared for a crackdown on unions that were blamed for the inflationary spiral, and tight money policies that doubled unemployment levels.

Even modest price changes can have a big wallop this time, too, especially in a world that’s already suffering from crisis overload. For a third of the world’s people who subsist on less than $2 a day, even a few pennies increase in food prices can make a life-and-death difference.
(20 July 2006)
Excellent article, worth reading in full. Wayne Roberts is the Project Co-ordinator of the Toronto Food Policy Council, who have a peak oil aware food security policy. The Food Policy Charter stands as a great example to all cities. -AF

Wheat price soars as world granaries run low

Kevin Morrison, The Australian
A “PERFECT storm” of record northern summer temperatures, low global grain stocks and the expected growth in biofuels has seen wheat prices rise to 10-year highs and may lead to increases in the cost of bread and pasta.

Corn and barley prices are also likely to rise, which may in turn push up the cost of beer and breakfast cereals.

The US has had the warmest year on record and Europe has experienced a heatwave that has damaged grain crops at a time when worldwide grain inventories are at relatively low levels.

In Britain, which this week experienced its hottest July day, crops have matured now, forcing some wheat farmers to start harvesting in mid-July, a month earlier than normal – the earliest UK wheat harvest since the 1976 heatwave.

The UK barley crop is also affected by the heat and in turn is expected to push up the price of malt, a key ingredient for beer. The Italian farmers body Coldiretti warned that hot, dry weather had caused E100 million ($168 million) worth of damage to crops in northern Italy as yields – the amount of wheat or corn grown per hectare – would fall by up to 9 per cent.

The US Department of Agriculture said that growing conditions for the US spring wheat crop were the worst in 18 years because there was not enough moisture to germinate seeds…

The concern about wheat production comes at a time when global production is projected to fall short of demand this season, which would make it the fifth of the past six years where demand has exceeded supply.

The US Department of Agriculture is expected to announce record low wheat inventories next year, which will come ahead of a sharp lift in wheat demand by the biofuel industry over the next two years as more ethanol plants using wheat as an ingredient open in Europe.
(22 July 2006)
To view past grain trends, check out the FAO’s Food Outlook publications, and new Crop Prospects and Food Situation. Unfortunately since last year the Food Outlook categories have been mixed up so it’s difficult to compare to past editions. -AF

India grows a grain crisis
Raja M, Asia Times
The Indian economy, cruising smartly at an 8.4% annual growth rate – second-fastest after China – suffered a worrying bump with a food-grain shortage that led to the government confirming plans this month to import more than 3 million tons of wheat.

With a global tender, India began its wheat-importing process for the first time in six years, prompting leading agri-scientists such as Professor M S Swaminathan to express concerns about India’s future food security. The genial, balding Swaminathan, called the father of India’s “Green Revolution” and included in a Time magazine list of the 20 most influential 20th-century Asians, attributed the disquieting situation to decreasing agricultural productivity in the past 10 years.

Amid chest-thumping about the current buoyant gross domestic product, the grain shortfall ought to fan serious anxiety about India’s future self-sufficiency for a billion-plus population.
(21 July 2006)
This decrease in agricultural productivity comes during a time in which petrochemicals and patent seed varieties have been aggressively and disasterously promoted in India, at the expense of traditional farming techniques and biodiversity. Annually hundreds of of Indian farmers have been committing suicide due to unservicable debt and crop failings. See The Suicide Economy Of Corporate Globalisation by Vandana Shiva. -AF

Zimbabwe: ‘Power Cuts Could Reduce Wheat Yield’

The Herald (Harare),
POWER cuts currently being experienced in the country might reduce the expected winter wheat yield, the Department of Agricultural Research and Extension Services (Arex) has warned.

Arex director Dr Shadreck Mlambo yesterday said the winter crop had been badly affected by the power cuts and hinted that this might significantly result in reduced yield.

Dr Mlambo said the power cuts were disturbing irrigation operations on the farms, hence affecting crop growth.

“The crop is suffering badly from these power cuts. That is likely to have an adverse effect on the yield,” Dr Mlambo said.

The revelations come as a major setback to the winter wheat programme after farmers failed to meet the targeted 110 000 hectares.

A validation exercise report of the 2006 winter wheat programme revealed that of the targeted hectarage, only 53 percent was planted in the country’s eight provinces, translating into 57 835,8 hectares.

The report cited the shortage of critical inputs such as fertilizer, load shedding, erratic supply of fuel and delayed payment for grain delivered to the Grain Marketing Board as some of the factors leading to the missing of the targeted hectarage.

This means the estimated production will be about 218 046 tonnes and implies a deficit of 168 954 tonnes. Zimbabwe consumes about 400 000 tonnes of wheat annually.
(21 July 2006)

Not everyone’s on board with ethanol
One critic: The grain needed to fill an SUV’s tank could feed a person for a year

GREG EDWARDS, Richmond Times-Dispatch
Ethanol entered the energy picture in a big way in Virginia this year when it replaced another additive used to make gasoline burn cleaner.

The fuel is not without its detractors, however.

One claim, which the industry feels has been rebutted by government and academic researchers, is that ethanol production consumes more energy than it produces. Another is that the use of grain for fuel threatens the food supply and will drive up food prices.

Lester Brown of the Earth Policy Institute, recently observed that the U.S. Department of Agriculture projects world grain use will grow by 20 million tons this year. Of this, he said, 14 million tons will go for fuel in this country.

The grain needed to fill a 25-gallon SUV tank will feed one person for a year, Brown says. Livestock and poultry growers fear they won’t have enough grain for feed, and countries that import U.S. grain are worried about their corn supply, he said.
(24 July 2006)

Food crisis in Lebanon

FAO, Relief Web
A humanitarian crisis unfolds as the conflict between Israel and political factions in Lebanon escalates. Food, fuel and medical supplies are disrupted, and large parts of the country’s infrastructure lay in ruins. An estimated 500 000 Lebanese have already been displaced, and a further 200 000 are estimated to have fled into neighboring countries.
(21 July 2006)