Grain Drain: Get Ready for Peak Grain
Now’s the time to brace yourself for major price hikes in food, as peak grains join the lineup of lifestyle-changing events along with peak oil and peak water.
Unless this year’s harvest is unexpectedly different from six out of the last seven years, the world’s ever-decreasing number of farmers do not produce enough staple grains to feed the world’s ever-increasing number of people. That’s been a crisis of quiet desperation over the past decade for the 15,000 people who die each day from hunger-related causes. It’s about to cause a problem for people who assumed that the sheer unavailability of food basics, usually seen as a problem of dire poverty, would never cause a problem for them.
Whenever there’s a shortfall in the amount of food produced in any given year, it’s possible to dip into an international cupboard or “reserve” of grains (wheat, rice and corn, for example) left over from previous years of good harvests. Tabs have been kept on the size of that reserve by the U.S. Department of Agriculture since the end of World War 11. Few people looked at these tables until Lester Brown cried the alarm a few months ago, a short while after Darin Qualman, brilliant researcher with Canada’s National Farmers Union, one of the few farm organizations which thinks agriculture policy should be about feeding people, not finding new ways to raise commodity prices by getting rid of farm surplus.
The world’s grain reserve has been dipped into for six of the last seven years, and is now at its lowest point since the early 1970s. There’s enough in the cupboard to keep people alive on basic grains for 57 days. Two months of survival foods is all that separates mass starvation from drought, plagues of locusts and other pests, or wars and violence that disrupt farming, all of which are more plentiful than food.
To put the 57 days into geopolitical perspective, China’s shortfall in wheat is greater than the entire wheat production of Canada, one of the world’s breadbaskets. Since the World Trade Organization prohibits government intervention that keeps any items off the free trade ledger, there’s no law that says that 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 for milk and meat produced from livestock fed a grain-based diet. If such a chain reaction happens this year, wheat could fetch $21 a bushel, again about six times its current price. It might fetch even more, given that there are two other pressing demands for grains that were not as forceful during the 1970s. Those happy days pre-dated modern fads such as using grains as a feedstock for ethanol, now touted as an alternative to petroleum fuels for cars, and pre-dated factory barns that bring grains to an animal’s stall, thereby eliminating farm workers who tended livestock while they grazed in fields on pasture grasses.
Look forward to two new questions at the supermarket cash register: Will that be cash or chargex? Will that be for food basics, meat or car fuel? University ethics classes and church elders can also 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 alongside price hikes for oil, contributing to the runaway inflation that defined the decade’s economic challenge. The 1970s experience shows that seemingly small blips in food reserves and availability can lead to major shocks in the economy and society. Probably because the food marketplace brings together two unorganized and relatively desperate forces -- at one end, about two billion basically unorganized food producers who don’t want to postpone selling in case they get stuck holding a bag of perishable food, and at the other end, about six billion unorganized consumers who don’t want to go hungry until food prices come down – reactions to changes in food availability and price are volatile, and have high impact.
The 1970s drop in world food reserves was accompanied by many eventful trends from which the world has yet to fully recover. 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 are among the legacies of this decline of food reserves. The modern international food movement, coming on the heels of the world environment movement of the 1960s, also emerged out of the food crisis of those years.
Even modest price changes can carry 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 two dollars a day, pennies can make a life and death difference. There’ll be an echo of that desperation in wealthy North America, where about ten per cent of the population – mostly single-parent families and recent immigrants – faces some form of food insecurity. About half of the people in this group can’t afford today’s food prices and rely on friends or foodbanks when they run out of money, which is at least once a month. People in this group may start running out of food twice a month. People in the second group, who now make ends meet without relying on charity by using budget tricks that rely on cheap foods, will find they can’t get by without at least one trip to the foodbank. That means demand on foodbanks, frequently at the breaking point today, will triple. This is the stuff of food riots, which were also commonplace during the 1970s.
If looming food shortages – quite a shift from obsessing about obesity, isn’t it – make it on the radar of government officials charged with safeguarding public health, a raft of new policy issues will need to be addressed. A big question mark has to be put on ethanol fuels, except those made from crop wastes.
Food sovereignty, the right of a people to set their own food policies, emerges as a precondition of food security, and should put the world free trade agenda on hold. Planning measures that prohibit urban sprawl onto good farmland – Ontario’s greenbelt is an excellent example – become axiomatic. So do government-guaranteed minimal prices for farmers producing basic foods, the same kinds of guarantees now provided all self-regulating professions such as doctors and lawyers, as well as apprenticed tradesmen and tax-drivers, all of whom would have problems working if they didn’t eat. And so do measures that promote food production in cities, not just as a healthy hobby but as a public health essential. A garden on top of every garage, a veggie stew in every pot… we will see this and more in the years ahead.
The latest report from a government forecasting body has described the nation's key winter crops of being in the grip of a severe drought, one which will whip more than $6 billion off farm production, and the bureau of agricultural and resource economics has made another substantial cut in its estimates of production from the nation's major crops of wheat, barley and canola, only one month after its last forecast.Submitter Rod Campbell-Ross adds:
The failure of the Australian grains crop further reduces the worlds food stock piles. The "drought" in Australia is a symptom of a major redistribution of rainfall within Australia. Rainfall has decreased in the South East in many areas by half, but has increased by the same amount in the Northwest over the last 50 years (Australian Bureau of Meteorology). PM John Howard defends his lack of action on Kyoto quoting cost, but refuses to acknowledge the rainfall redistribution or that it could be a result of climate change.-BA