May 1, 2008 The Pump Handle 1Comment

The Washington Post is running a series on the global food crisis, and if you haven’t read it yet, it’s worth a look. 

In The New Economics of Hunger, Anthony Faiola explains how what started as an apparent blip in wheat prices has mushroomed into widespread hunger and unrest:

The convergence of events has thrown world food supply and demand out of whack and snowballed into civil turmoil. After hungry mobs and violent riots beset Port-au-Prince, Haitian Prime Minister Jacques-Édouard Alexis was forced to step down this month. At least 14 countries have been racked by food-related violence. In Malaysia, Prime Minister Abdullah Ahmad Badawi is struggling for political survival after a March rebuke from voters furious over food prices. In Bangladesh, more than 20,000 factory workers protesting food prices rampaged through the streets two weeks ago, injuring at least 50 people.

To quell unrest, countries including Indonesia are digging deep to boost food subsidies. The U.N. World Food Program has warned of an alarming surge in hunger in areas as far-flung as North Korea and West Africa. The crisis, it fears, will plunge more than 100 million of the world’s poorest people deeper into poverty, forced to spend more and more of their income on skyrocketing food bills.

In Where Every Meal is a Sacrifice, Faiola tells the story of Likbir Ould Mohamed Mahmoud, a day laborer and goatherd in Nouakchott, Mauritania:

Agriculturally challenged countries are left out in the cold. Mahmoud, whose family dwells just beyond the dunes in a desert shantytown here, earns roughly $1.50 a day to support his family of four. His wages have not risen. But over the past six months, the cost of the imported wheat his wife uses to make a chewy local bread has soared 67 percent, cooking oil is up 117 percent and rice 25 percent. Though those are the staples of life here, Mauritania, with only 0.2 percent of its land arable, produces scant amounts.

That is partly because there are fewer and fewer farmers. In a nation girdled by the encroaching Sahara, the slums of Nouakchott, the capital, are swelled with former tillers of soil who abandoned hard lives growing subsistence crops amid years of drought. City life was comparatively better, but in recent months as food prices have risen, those already living on the smallest of margins have despaired.

“I don’t know how I will feed my family,” Mahmoud said. “We just can’t afford it.”

In Emptying the Breadbasket, Dan Morgan looks at wheat farming in the United States – an iconic activity that farmers have been turning away from, with costly consequences for bakers who rely on the Great Plains crop:

The U.S. government stopped holding large stocks of wheat in the 1980s, but the United States, nearly alone among wheat producers, allows countries to shop here even when others have shut off exports.

This free-trade policy resulted in a run on the 2007 U.S. wheat crop this year by foreign buyers taking advantage of the favorable dollar exchange rate to stock up, even as Ukraine, Argentina and Kazakhstan blocked exports.

“It was a perfect storm,” said Jochum Wiersma, a grains specialist with the University of Minnesota.

Problems started last summer with poor European harvests and a disappointing winter wheat crop in the southern Great Plains. U.S. prices moved above $7 a bushel, then crossed $10 after Australia harvested yet another drought-damaged crop in December. As supplies of wheat ran low, foreign countries began grabbing limited stocks of premium wheat from the northern plains — the variety used to make the flour for Fleishman’s bagels. Morocco, its own harvest of wheat to make traditional couscous inadequate, jumped in with a purchase of 127,000 tons.

“With low stocks and a weak dollar, things fly off the shelf faster than they used to,” said David Brown, chairman of the American Bakers Association’s commodity task force. “There’s just not enough acreage coming back into production to replenish these stocks.”

In Siphoning off Corn for our Cars, Steven Mufson explores the shift in attitudes towards ethanol. Federal incentives for ethanol production have resulted in more corn being grown for fuel, and that’s raising prices for corn-fed livestock, corn syrup, and other ingredients central to the standard U.S. diet. There’s a growing realization that pushing ethanol wasn’t such a great policy decision:

Rising food prices have given Congress and the White House a sudden case of legislative indigestion. In 2005, the Republican-led Congress and President Bush backed a bill that required widespread ethanol use in motor fuels. Just four months ago, the Democratic-led Congress passed and Bush signed energy legislation that boosted the mandate for minimum corn-based ethanol use to 15 billion gallons, about 10 percent of motor fuel, by 2015. It was one of the most popular parts of the bill, appealing to farm-state lawmakers and to those worried about energy security and eager to substitute a home-grown energy source for a portion of U.S. petroleum imports. To help things along, motor-fuel blenders receive a 51 cent subsidy for every gallon of corn-based ethanol used through the end of 2010; this year, production could reach 8 billion gallons.

Now, however, the legislation is being criticized for making food more expensive while gasoline prices continue to climb. Rick Perry, a Republican who succeeded Bush as Texas governor, has asked the Environmental Protection Agency to waive half of the “misguided” ethanol requirements because of rising food costs; every penny increase in per-bushel corn prices costs his state’s livestock industry $6 million a year, he said.

Although ethanol was once promoted as a way to slow climate change, a study published in Science magazine Feb. 29 concluded that greenhouse-gas emissions from corn and even cellulosic ethanol “exceed or match those from fossil fuels and therefore produce no greenhouse benefits.” By encouraging an expansion of acreage, the study added, the use of U.S. cropland for ethanol could make climate conditions dramatically worse. And the runoff from increased use of fertilizers on expanded acreage would compound damage to waterways all the way to the Gulf of Mexico.

In Clipping, Scrimping, Saving,  Jane Black reports on the ways U.S. consumers are cutting back.  While our country’s situation isn’t nearly as dire as that of many other nations, people are obviously worried about food prices, and it’s showing up in the national statistics:

Since March 2007, according to the Bureau of Labor Statistics, the price of eggs has jumped 35 percent. A gallon of milk is up 23 percent. A loaf of white bread has climbed 16 percent. And a pound of ground chuck is up 8 percent. Overall, U.S. food prices in 2008 are expected to rise 4 to 5 percent, about double the increases of recent years. And while the total rise is far less drastic than elsewhere around the world, the sharp hike for staples means everyone is feeling the pinch.

“We are in shocking new territory,” said Todd Hale, senior vice president of consumer shopping and insights at Nielsen Consumer Panel Services. “With the exception of the very affluent, everyone is looking to save by altering where they shop, how they shop and the brands they buy.”

Take the uptick in coupon clipping. According to NCH Marketing Services, a coupon clearinghouse in Chicago, the number of grocery coupons redeemed in 2007 increased by 100 million, or 6 percent, to 1.8 billion. The rise reversed a seven-year decline. “Every year, manufacturers have made coupons more difficult to redeem by shortening the expiration date and increasing the purchase requirements. And every year, people redeemed them less,” said Charlie Brown, NCH’s vice president of marketing. “This tells me that consumers are now more determined to save money.”

Click here for the series main page. Together, these articles provide a good overview of what the current situation is, and hints at the kinds of agriculture policy changes needed.

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