DWINDLING oil stocks and EU trade and energy policies threaten food price hikes – and could cause the UK to be vulnerable to food shortages for the first time since the Second World War, according to a new report by Green Party Euro-MP Caroline Lucas.
The report calls on the Government to establish a Royal Commission on Food Security to examine the issue – and for the UK ‘s Competition Commission to consider its findings in its ongoing investigation of the supermarkets’ dominance of the food retailing sector.
From the introduction to the report:
“When the price of oil climbed above $50/barrel in late 2004, public attention began to focus on the adequacy of world oil supplies – and specifically on when production would peak and begin to decline. Analysts are far from a consensus on this issue, but several prominent ones now believe that the oil peak is imminent.” 1 US Department of Energy, 2005
Over recent months, there has been much speculation about the causes of higher oil prices, and over the likelihood of whether or not they will continue. Commentary has focused on the geopolitical instability in the Middle East; increasing dependence on Russia; governments in Latin America retaking control of their oil industries; and supply bottle necks such as refining capacity.
The geological constraints on future energy supply, known as peak oil – the point at which oil production stops rising and begins its inevitable long-term decline – have received much less attention, however. Yet while the majority of constraints on access to oil could potentially be overcome through political or economic means, the geological reality of ever-dwindling fossil-fuel supplies is non-negotiable.
While it has taken 145 years to consume half of the 2-2.5 trillion barrels of conventional oil supplies generally regarded as the total available, it is likely that, given the huge increases of demand from China and India in particular, the other half will be largely consumed within the next 40 years. Some 98% of global crude oil comes from 45 nations, over half of which may already have peaked in oil production, including seven of the 11 OPEC nations. Major oil field discoveries fell to zero for the first time in 2003, while the excess capacity held by OPEC nations has dwindled, from an average of 30% to about 1% of global demand today.2 World oil and gas production is declining at an average of 4-6% a year, while demand is growing at 2-3% a year. The implications of this, for every aspect of our lives today, are overwhelming. Some analysis has begun on the impacts on our transport systems, and on how we heat our homes. Very little has so far focused on the implications for our food systems. This report makes the case that, unless we take urgent action, as oil security deteriorates, so too will food security. It is fast becoming the case that decisions made by government departments of energy, on whether to continue promoting fossil fuels or to shift to renewable energy sources, could have a greater effect on long-term food security than any actions taken by departments of agriculture.
The amount of energy is concentrated in even a small amount of oil or gas is extraordinary. A barrel of oil contains the energy-equivalent of almost 25,000 hours of human labour. A single gallon of petrol contains the energy-equivalent of 500 hours of human labour. And across the world, food production systems make use of this stored energy from fossil fuels on a massive scale.
The industrialisation of farming accelerated dramatically in industrialised countries after World War Two, and began in many poorer countries as a result of the Green Revolution of the 1950s and 1960s. These trends transformed food production around the globe, with world grain harvests increasing by 250%. Yet this reliance on fossil fuels – in the form of fertilisers (which accounts for around a third of agricultural energy consumption), pesticides, and hydrocarbon-fuelled farm machinery and irrigation systems – means that industrialised farming consumes 50 times the energy input of traditional agriculture; in the most extreme cases, energy consumption by agriculture has increased 100 fold or more. It has been estimated, for example, that 95% of all of our food products require the use of oil.3 Just to farm a single cow and deliver it to market requires 6 barrels of oil, enough to drive a car from New York to Los Angeles.4 This report details the extent to which 21st century food systems are dependent on intensive energy use, and examines why they are particularly vulnerable to the impact of high energy prices on the fertilisers, pesticides, plastics, aviation fuel, ‘warehousing on wheels’ and ‘just in time delivery’ systems, central to the UK’s supermarket dominated food system. We caught a glimpse of just how dependent the supply of even the most basic foods have become on petroleum during the blockades at oil refineries and distribution depots in September 2000, when the protest by farmers and road hauliers against higher fuel taxes triggered a national “fuel crisis.” Within days, the supermarkets began to ration sales of bread, milk and sugar. The chief executive of Sainsbury’s, one of the largest retailers in the UK, wrote to the Prime Minister to warn that the petrol crisis was threatening Britain’s food stocks and that stores were likely to be out of food in “days rather than weeks.”5
Much of our food system is staggeringly inefficient: overall – including energy costs for farm machinery, transportation, processing and feedstocks for agricultural chemicals – the modern food system consumes roughly ten calories of fossil-fuel energy for every calorie of food energy produced.6 Processing is particularly energy-dependent. Next time you reach for a typical 450 gram box of breakfast cereal, for example, you might pause to consider that it could have required over 7000 kilocalories of energy for processing, while the cereal itself provides only 1,100 kilocalories of food energy.7
The UK’s dependence on food imports makes us particularly vulnerable to rising energy prices.
We currently rely on imports to provide almost one third of the food consumed in the UK, and have one of the lowest self-sufficiency ratios in the EU.8 Although the UK has been a net importer of food for a long time, imports are currently growing at a significant rate. DEFRA figures show that imports in tonnes increased by 38% from 1988 to 2002. For some types of food, the increase has been even more dramatic. Imports of fruit have doubled, for example, while imports of vegetables have tripled. Half of all vegetables and 95% of all fruit consumed in the UK now come from overseas.9
Our report examines the reality of our energy intensive food system through case studies to examine how a range of increased oil and natural gas costs will affect the price of some of the most basic everyday food commodities. We demonstrate how a £3 whole chicken could almost double in price, or treble, if the costs of shopping by car, storage and cooking in the home are included. For the ingredients of a typical stir-fry, the transport costs associated with the ingredients alone would increase by between £1.70 and £3.95.
The effect of rising oil prices on food production is only half the story, however. Its effect on the demand for food commodities is also extremely significant. Since virtually all the crops we currently grow for food can also be converted into automobile fuel, either in ethanol distilleries or bio-diesel refineries, high oil prices will open a vast new market for farm products. Those buying commodities for fuel producers will be competing directly with food processors for supplies of wheat, corn, soybean, sugarcane, and other key crops. As Lester Brown has observed, the price of oil is setting the price for food simply because if the fuel value of a commodity exceeds its value as food, it will be converted into fuel – “in effect, supermarkets and service stations are now competing for the same commodities.”10
The implications of this are even graver, considering we are already facing a world of potential grain shortages. In China, for example, the grain harvest fell by 34 million tons, or 9%, between 1998 and 2005. There is a real risk that a combination of China’s increasing reliance on world markets for major imports, together with a growing diversion of farm commodities to biofuels, will result in grain prices being driven so high that many low-income developing countries will simply not be able to import enough grain.11 This in turn could lead to escalating food prices and political instability on a global scale. In a world which faces the annual addition of more than 70 million people to a world population of over 6 billion, at a time when water tables are falling, temperatures are rising as a result of climate change, and oil supplies will soon be shrinking, the need for decisive action could not be more urgent.
The report ends by outlining the comprehensive changes necessary to ensure that the food needs of each and every nation are fully met. This will involve a radical shift to a low energy, low input, increasingly organic and localised food and agricultural system, and will demand fundamental changes in energy policy and in the rules of world trade. For the EU, it will also require a radical change in the direction and scope of the Common Agricultural Policy and the Single Market, which currently prioritise international competitiveness over national food security. One of the key elements of the EU’s energy security strategy, the large-scale development of biofuels, will also need to be reviewed, since ironically this strategy could itself also pose a threat to food security, as land is transferred out of food production in order to grow crops for fuel. Finally, in the UK, we are calling for a Royal Commission on Food Security, in order to raise much greater political awareness of the urgent need to decouple our food system from dependence on fossil fuels. These are ambitious demands. Yet the scale of the crisis we face requires no less.
1 US Dept of Energy, Energy Information Administration, Select Crude Oil spot prices at www.eia.doe.gov/emeu/international/crude1.html, updated 28 July 2005. Alfred J. Cavallo, Oil; Caveat Empty, Bulletin of the Atomic Scientists, vol 61, no.3 (May/June 2005).
3 Chris Skrebowski, Joining the Dots, Presentation to Energy Institute Conference, London, 10 November 2004.
4 The price of steak, National Geographic, June 2004.
5 Elliot, V. 2000, Panic buyers force stores to ration food, The Times. September 14th 2000.
6 Grazing Lands: RCA Issue Brief #6, US department of Agriculture, National Resources Conservations Service, November 1995.
7 Danielle Murray, Rising oil prices will impact food supplies, 13 September 2005.
8 DEFRA, The Validity of Food Miles as an indicator of Sustainable Development, July 2005, p.19
9 DEFRA, op cit
10 Lester Brown, Plan B 2.0: Rescuing a Planet under stress and a civilisation in trouble, Norton 2006