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High Rice Cost Creating Fears of Asia Unrest

Keith Bradsher, New York Times
Rising prices and a growing fear of scarcity have prompted some of the world’s largest rice producers to announce drastic limits on the amount of rice they export.

The price of rice, a staple in the diets of nearly half the world’s population, has almost doubled on international markets in the last three months. That has pinched the budgets of millions of poor Asians and raised fears of civil unrest.

Shortages and high prices for all kinds of food have caused tensions and even violence around the world in recent months. Since January, thousands of troops have been deployed in Pakistan to guard trucks carrying wheat and flour. Protests have erupted in Indonesia over soybean shortages, and China has put price controls on cooking oil, grain, meat, milk and eggs.

Food riots have erupted in recent months in Guinea, Mauritania, Mexico, Morocco, Senegal, Uzbekistan and Yemen. But the moves by rice-exporting nations over the last two days – meant to ensure scarce supplies will meet domestic needs – drove prices on the world market even higher this week.
(29 March 2008)
UPDATE: (Just added)

India rice export prices up again

Ethirajan Anbarasan , BBC
India has raised the minimum price at which it exports non-basmati rice in a renewed effort to discourage exports and control domestic food costs.

This is the second time in a month that India has raised its minimum price for exporting rice. The price has gone up from $650 to $1,000 per tonne for non-basmati rice.

India is the second-largest rice producer in the world. It usually exports more than four million tonnes of rice a year.

… India ended its reliance on food imports in the 1970s, largely to the government’s so-called Green Revolution.

But two years ago, it imported wheat for the first time in six years following a significant drop in its stockpiles. The government wants to avoid a similar situation for its rice stocks. The problem is an international one, as global rice stocks have reached a 25-year low.
(28 March 2008)
Suggested by contributor Dr. Larry Hughes.

Jeffrey J. Brown (“westexas) writes:
I think that we are going to increasingly see bilateral trade between food and energy exporters. It’s not a good time to be both a major food and a major energy importer. See Jump in rice price fuels fears of unrest (Financial Times, March 28)

Rice prices jumped 30 per cent to an all-time high on Thursday, raising fears of fresh outbreaks of social unrest across Asia where the grain is a staple food for more than 2.5bn people.

The increase came after Egypt, a leading exporter, imposed a formal ban on selling rice abroad to keep local prices down, and the Philippines announced plans for a major purchase of the grain in the international market to boost supplies. Global rice stocks are at their lowest since 1976.

Only a radical change of diet can halt looming food crises

Rosie Boycott, The Guardian
Costs are high now, but rising oil prices will bring enormous problems for a world with appetites that it simply can’t sustain

This time last year it cost me about £7.50 a month to feed a pig on my small farm in Somerset; today it’s nearer £15. In a year, wheat prices have doubled, leading not only to increased bread prices, but also to demonstrations by pig farmers, who are going out of business as fast as you can fry bacon.

Almost all the food we eat – 95% – is oil-dependent, so as oil prices rise, the cost of food does too. Oil is central to fertilisers, mechanised production, transportation and packaging. However, between 1950 – when mechanisation and fertilisers transformed farming into agribusiness – and 1984, world grain production increased by 250%. The consequent cheapness of food kept inflation down and allowed for the postwar consumer boom.

For years experts have been asking what will we eat when the crises of climate change and oil depletion converge, with the possible end of our globalised food supply. … Cheap oil has let the west regard the whole world as its farmyard, always seeking the cheapest place to produce and process. But last year’s rate of factory-gate inflation was the highest for more than 16 years, with increases ranging from 7.5% for bread to 15% for milk, cheese and eggs and 60% for rice. Overall food inflation is 6.6%, in a year when oil prices have risen by 70%. No wonder those on the bottom of the ladder are starting to feel the strain.

… We have become a meat-eating world, and in developing countries meat is seen as a sign of prosperity. However, while it takes 2kg of grain to produce 1kg of chicken, 7kg of grain is needed to make 1kg of beef. When I was a child, my family ate meat maybe once a week: now it is considered a daily prerequisite. The average Briton eats 80kg of meat a year, while the equivalent figure for Americans is 124kg – but the startling, and frightening, change is taking place in China. In 1962, there was just 4kg of meat in the average Chinese diet; by 2005 that figure was 60kg and rising.
Rosie Boycott is a writer and broadcaster
(28 March 2008)
UK readers are probably familiar with Rosie Boycott. She has been a media figure since the 70s. Last year she published “Our Farm: A Year in the Life of a Smallholding”. In a review, Josh Lacey wrote:

When the Daily Express was sold to Richard Desmond, Rosie Boycott lost her job as editor and started drinking. She crashed her car, smashed up her legs and was told that she might never walk again. Our Farm describes how she put her life together again, but does much more too: it’s a kind of autobiography, a snapshot of rural life, a discussion of the way that supermarkets are slowly strangling this country and, most importantly, a description of a love affair. The object of her affections is plump, cute, cunning, clever and destined to end up inside a sausage.

Further back, she was a high-power editor and Labour supporter:

She had a glittering career editing Esquire, the Independent on Sunday and the Independent. But it all went wrong at the Express when she found herself working for porn publisher Richard Desmond. Now, after a long gagging order, she tells Simon Hattenstone what really happened (Guardian)


Betting the Farm

Sam Hurst, Gourmet
Washington has created a tangled web of subsidies that determines the way our food is grown. One South Dakota family demonstrates why you should care about the Farm Bill.

Recommended by Tom Philpott at Gristmill who writes:
While I was struggling yet again with a way to articulate my admittedly tortured position on the Farm Bill — which has generated controversy in green circles — I came upon a lucid piece in Gourmet, of all places, that treats the issue with the complexity it deserves.

The article, by North Dakota buffalo rancher Sam Hurst, is no knee-jerk screed against subsidies. The author understands how farming works, and he focuses on something often left out in simplistic pieces on subsidies: the tortured history of U.S. farming over the past century.

He does so through the story of one farm family that abandoned the commodity market in the 1980s and now runs a diversified organic operation.

Everyone who cares about food should read the piece in its entirety; for now, I want to point to the alternative vision for farm policy Hurt points to at the end. He finds it in an interview with Thomas Dobbs, an agricultural economist at South Dakota State University and a sometime Gristmill blogger.

Here’s Hurt:

For Dobbs, the current Congressional debate that focuses on limiting commodity payments to rich farmers is a distraction. “Of course, close the loopholes. But people will always find new ones. Caps may work for a short time, but people will always find a way to get around them.” What is lost in the caps debate, says Dobbs, is the opportunity to shift the entire paradigm of federal farm policy from subsidies and price supports to conservation, stewardship, and support for [innovative farmers].

He and others call the new approach “multi functionality.” It is an idea that has been hidden and underfunded in different titles and sections of federal farm policy for more than a decade but has never been promoted as a unifying principle …

Under current federal policy, farmers receive “direct payments” each year, no matter what crops they grow or how they grow them. A multifunctional approach would build on and rechannel those payments, along with other crop-support subsidies, toward sustainable social and conservation goals. “Instead of tying payments to crops and yields, we should tie them to the services that farmers provide for the public.” In the past, “public services” has meant cheap food at the supermarket, but Dobbs believes it is time to rethink the whole idea. “Pay farmers to reduce synthetic fertilizers and pesticides. Pay them to enhance wildlife, diversify their crops, build soil, and restore wetlands. Pay them to develop local markets for their products, especially fresh food.
(April 2008)

Food prices rising across the world

If you’re seeing your grocery bill go up, you’re not alone.

From subsistence farmers eating rice in Ecuador to gourmets feasting on escargot in France, consumers worldwide face rising food prices in what analysts call a perfect storm of conditions. Freak weather is a factor. But so are dramatic changes in the global economy, including higher oil prices, lower food reserves and growing consumer demand in China and India.

The world’s poorest nations still harbor the greatest hunger risk. Clashes over bread in Egypt killed at least two people last week, and similar food riots broke out in Burkina Faso and Cameroon this month.

But food protests now crop up even in Italy. And while the price of spaghetti has doubled in Haiti, the cost of miso is packing a hit in Japan.

“It’s not likely that prices will go back to as low as we’re used to,” said Abdolreza Abbassian, economist and secretary of the Intergovernmental Group for Grains for the U.N. Food and Agriculture Organization. “Currently if you’re in Haiti, unless the government is subsidizing consumers, consumers have no choice but to cut consumption. It’s a very brutal scenario, but that’s what it is.”
(25 March 2008)
Suggested by Big Gav of Peak Energy.

Prices climb as fertiliser famine looms

Dan Buglass, The Scotsman
SUPPLIES of fertiliser are extremely tight and look set to become even shorter with world demand exceeding production.

This time last year UK manufacturers had large stocks of ammonium nitrate (AN) in store and were working flat out using relatively cheap gas to build up stocks of fertilisers in advance. This year there are virtually no stocks of AN and gas is much more expensive.

Global nitrogen is currently in deficit, a situation that is unlikely to change for at least three years. There has been a recent increase in the price of AN and a further rise is forecast for May. The annual requirement for AN in the UK is in the region of two million tonnes, but following the closure of several plants, domestic production now meets for only 50 per cent of demand.
(26 March 2008)