The following post was originally published on Agri-Pulse’s opinion page.
Last week, The U.S. Department of Agriculture, in its newest crop forecast, estimated that world output for crops is projected to fall 2.1% after droughts in Ukraine, Russia and other parts of Europe, and heavy rains in parts of the U.S., Canada and Australia. Even more concerning, a recent drought in China’s major wheat producing areas threatens to push world food prices beyond their current high levels. This all adds to a worry about how the rising cost of food is affecting the poor around the world. And China being the world’s largest wheat producer, the country’s potential need to import large quantities of food – if it does face such shortages – would have monumental impacts on world food supplies.
All the major crops have supply problems. As many agriculture and food economists have noted, production is not keeping up with demand, exacerbating the global food crisis. The price of corn jumped almost 90% in the last year, soybeans are up over 50%, and wheat is the highest in years. While many farmers have benefited by this bullish price and supply situation, others in the livestock and food processing industries, as well as some consumers, will no doubt face some economic stress if this trend continues, which it likely will. And our export numbers, and ethanol demand, will no doubt have a further impact on price and supply. Along with rising energy prices, there will be a material impact on inflation as well.
These factors will have a great impact on the short term, especially overseas. Certainly poor countries like Tunisia, Egypt, Yemen, Jordan, Indonesia and a host of others in South Asia and sub-Saharan Africa will, in the very short term, face these problems in a much more acute and emergency situation than we will in the United States, and there is no question that food shortages, prices, volatility and availability have and will continue to impact political stability in those countries. The riots and demonstrations in the streets of Tunisia and Egypt were in part caused by the economic instability caused by unpredictable and volatile food prices and supplies. And this trend will become a more malignant part of the world’s geopolitical challenges. The ability of the US to “manage” these foreign policy issues, especially to promote democracy and otherwise protect our national security interests, is directly impacted by the food problems mentioned above. Hopefully, our policy experts at the highest levels of government understand this and it is at the top of their agenda.
All these are short term problems. But longer term, we face a projected population growth of the equivalent of two Chinas over the next 40 years: 2.6 billion more people. In addition, nearly 40% the world’s population lives on less than $2.00 per day, and there is a general expectation that their incomes will rise (hopefully) and they will eat more meat, dairy products, fruits vegetables and edible oils, pointing to a huge increase in world food demand.
Complicating this situation: There is not a large amount of additional arable land that can be cultivated sustainably, or additional quantities of water to accommodate this growing demand – unless we in the U.S. and elsewhere make significant investments in research to double food system productivity and develop water saving technologies. Or, unless we rush headlong into practices that could destroy the environment.
The world faces a whole host of challenges, from energy security, to health security, to a reduction in armed conflicts around the world. It is a matter of high national interest to address these food issues in both the short and long term, especially using our technological genius to find ways to increase yields of food products using less water without impacting vulnerable natural resources. And our policy makers in both the public and private sectors need to take note that food insecurity, and feeding a world of now and in the future, is paramount to domestic and global security and freedom for all of us.