NOT ENOUGH FOOD?

Four years ago, Dennis Avery warned that, as Western governments fell head over heels for biofuels, passing laws forcing consumers to buy them, "U.S. farmers, who should be exporting food to densely populated Asian countries with rising incomes, will instead turn their corn into ethanol . . . without benefit to the environment."

As growers worldwide cashed in for biofuels, he predicted in 2006, there would erupt a "clash between food and forests." Farmers would clear new swaths of land for fuel crops, predicted Mr. Avery, president of the Center for Global Food Issues, affiliated with Washington's Hudson Institute. "I knew it would be bad, but never so quickly". In barely a half-decade, biofuels have turned from the darling of environmentalists and policymakers - confident that petrol made from corn, soybeans or other plants would not just relieve us of our dependency on Arab oil, but reduce CO2 emissions in the process - to the target of blame for massive economic upheaval and environmental destruction.

The UN's Special Rapporteur on the Right to Food labeled biofuels a "crime against humanity," for burning crops that could be used to fight hunger, as fuel. "The farms have been put to biofuel production creating a shortage of food and therefore creating a problem of high prices," said Jakaya Mrisho Kikwete, president of the African Union. As he spoke, violent demonstrations over rising food costs in Haiti had killed five people and wounded 40 more, mirroring similar riots in Mexico, Egypt and Cameroon.

It hasn't helped that green groups now say the promise of lower carbon emissions has not materialized -- or at least the reductions (corn-based ethanol is said to produce between zero and 30% less CO2 than good old fashioned fossil fuels) don't justify the devastating ripple effects -- while the powerful push for more plant energy has led to a rapid rise in environmentally-stressful fertilizer usage, and worldwide deforestation.

Canada and the U.S. have not yet flagged in their support for corn-based fuel (Ottawa plans for roughly half our fuel supply to contain 10% ethanol by 2010; the U.S. requires fuel producers to quintuple their biofuel usage by 2022). The federal government shored up half a billion dollar in ethanol subsidies.

The industry itself insists it's being unfairly fingered for problems it hasn't caused, though Gordon Quaiattini, Canadian Renewable Fuels Association president admits he is suddenly facing a major public relations problem. "We need to get the facts out, and we probably haven't done a very good job in doing that. Rising food prices come from energy prices. All those skeptical academic studies are flawed. Conspiracy theorists, I suspect, would argue that maybe it's the oil industry promoting some of this stuff. I don't have hard evidence of that, but I have anecdotal evidence" he says. Even biofuel critics agree there are positive varieties of the stuff, namely Brazilian sugarcane cellulosic ethanol. But Brazilian growing conditions can't be replicated in other climates. Brazil itself can't solely supply the world's biofuel, even if it burns down every acre of rainforests.

Fatal food riots in Haiti. Violent food-price protests in Egypt and Ivory Coast. Rice so valuable it is transported in armoured convoys. Soldiers guarding fields and warehouses. Export bans to keep local populations from starving.

For the first time in decades, the spectre of widespread hunger for millions looms as food prices explode. Two words not in common currency in recent years — famine and starvation — are now being raised as distinct possibilities in the poorest, food-importing countries.

Unlike past food crises, solved largely by throwing aid at hungry stomachs and boosting agricultural productivity, this one won't go away quickly. Prices are soaring and stand every chance of staying high because this crisis is different.

A swelling global population, soaring energy prices, the clamouring for meat from the rising Asian middle class, competition from biofuels and hot money pouring into the commodity markets are all factors that make this crisis unique and potentially calamitous. Even with concerted global action it will take years to fix the problem.

In February, stockpiles of wheat hit a 60-year low in the United States as prices soared. Almost all other commodities, from rice and soybeans to sugar and corn, have posted triple-digit price increases in the past year or two.

Yesterday in Rome, Jacques Diouf, director-general of the United Nations Food and Agriculture Organization, said the cereal-import bill for the poorest countries is expected to rise 56 per cent this year, on top of the 37 per cent recorded last year. The UN's donor countries, he said, need to come up with as much as $1.7-billion (U.S.) to implement quick-fix food programs, such as topping up the World Food Programme, whose emergency food-buying power has been clobbered by the rising prices. Its budget shortfall, the difference between the food it intended to buy and can now afford, is $500-million.

Sir John Holmes, the UN's top humanitarian official and emergency relief co-ordinator, said this week that soaring food prices threaten political stability. The UN and national governments are especially worried about potentially violent situations in Africa's increasingly crowded urban areas.

How did it come to this? Surging food prices, now at 30-year highs, are actually a relatively new phenomenon. In the mid-1970s, prices began to fall as the green revolution around the world made farms dramatically more productive, thanks to improvements in irrigation and the widespread use of fertilizers, mechanized farm equipment and genetically engineered crops. If there was a crisis, it was food surpluses — too much food chasing too few stomachs — and dropping produce prices had often disastrous effects on farm incomes.

By 2001, the surpluses began to shrink and prices reversed. In the past year, the price curve has gone vertical. The UN's food index rose 45% in the past nine months alone, but some prices have climbed faster. Wheat went up 108% in the past 12 months; corn rose 66%.

The price of Thai medium-quality rice, a global benchmark, has more than doubled since the end of 2007. This week it reached a record $854 a tonne, which helps explain why World Food Programme trucks carrying rice in certain parts of Africa have come under attack.

Food prices in the first three months of 2008 reached their highest level in almost 30 years, the UN says. That's double-digit inflation prompting countries such as Egypt, Vietnam and India to eliminate or reduce rice exports to keep a lid on prices and prevent rioting. But, by reducing global supply, this only increases prices for food-importing countries, many of them in West Africa.

Throughout history, the world has seen food shortages and famines triggered by drought, war, pestilence, crop failures and regional overpopulation. In the Chinese famine between 1958 and 1961, an estimated 30 million people died from malnutrition. In the late 1960s and early 1970s, severe food shortages hit India and parts of southeast Asia. Only the shipment of hundreds of thousands of tonnes of grain from the U.S. prevented a humanitarian disaster. Drought, violent conflict, economic incompetence, misfortune and corruption created deadly famines in Ethiopia and Sudan in the first half of the 1980s.

The food shortages were alleviated through aid or investment in farming and crop productivity. The UN and agriculture experts predict years of pain and severe shortages, possibly famine in the worst-hit countries. The reason: High prices are likely to persist for years.

Swelling population explains only part of the problem. The world's population, estimated at 6.6 billion, has doubled since 1965. But population growth rates are falling and there is enough food to feed everyone on the planet. Why millions may go hungry is because prices are so high, food is becoming unaffordable in some parts of the world. African countries exist on the equivalent of $1 a day. As much as 70% of that income goes to food purchases, compared with about 15% in the U.S. and Canada. As prices, but not incomes, rise, malnutrition sets in.

The dramatic price rises have been driven by factors absent in previous food shortages. They include turning food into fuel, climate change, high oil and natural gas prices (which boost trucking and fertilizer costs), greater consumption of meat and dairy products as incomes rise and investment funds, whose billions of dollars of firepower can magnify price increases.

Driven by fears of global warming, biofuel has become big business in the U.S., Canada and the European Union. The incentive to produce the fuels is overwhelming because they are subsidized by taxpayers and come with content mandates.

Next week, Britain will require gasoline and diesel sold at the pumps be mixed with 2.5-per-cent biofuel, rising to 5.75 per cent by 2010 and 10 per cent by 2020, in line with European Union directives. Ontario's ethanol-content mandate is 5 per cent. As the content requirements rise, more land is devoted to growing crops for fuel, such as corn-based ethanol. In the EU 15 per cent of the arable land is expected to be devoured by biofuel production by 2020.

Economist Dr. Hazell has said that filling an SUV tank once with ethanol consumes more maize than the typical African eats in a year.

Severe weather has clobbered crop production among some big exporting countries. Drought in Australia, the third largest wheat exporter after the U.S. and Canada, has pushed wheat production down by half since the 2005-06 crop year. Statistics Canada said Canadian wheat production fell 20.6 per last year. Exports, as a result, are expected to fall by six million tonnes in the 2007-08 year.

The UN has predicted that climate change could reduce production in developing countries by 9 to 21 per cent by 2080 and that sub-Saharan Africa could lose more than 30 per cent of its main crop, maize. Southern Asia could see millet, maize and rice production fall by 10 per cent. The challenge is to offset the losses with higher crop yields on arable land less affected by climate change.

Mr. Ofon, of Standard Chartered Bank, said rising demand in the face of production shortfalls does not fully explain the dramatic price increases. Investors are the other driver. They have discovered they can make money from food commodities as easily as they can in oil, gold or nickel. But Mr. Currie of Goldman Sachs dismisses the theory that funds are pushing prices higher than they would be otherwise. The rally in food prices is being caused by demand exceeding production, resulting in dwindling food stockpiles.

New irrigation systems are inevitable in Africa and have the potential to boost crop production dramatically. The problem with using more fertilizer is cost. Fertilizers such as urea are derived from natural gas, and gas prices have climbed, too. The price of urea has almost tripled since 2003, to $400 a tonne.

The Food and Agriculture Organization yesterday forecast a 2.6-per-cent rise in cereal production in 2008.

Cutting back on ethanol production alone would go some way to restoring supply-demand balance in the food markets. "If we decide to do something about it, we can just use less food for fuel," he said.

But everyone — analysts, economists, agriculture experts, the UN — thinks it's impossible to boost production quickly, because of land and water shortages and competition from biofuels.

Agriculture Secretary Arthur Yap on Saturday ordered the National Food Authority (NFA) to intensify the distribution of government-subsidized rice stocks in the country’s 12 highly populated areas to help ongoing efforts to stabilize the staple’s price and make affordably priced rice available to the “poorest of the poor.”

Yap said the areas where he ordered the NFA to increase the distribution of government-subsidized rice sold at P18.25 per kilo are Metro Manila, Baguio City, Lucena City, Legaspi City, Albay, Tacloban City, Bacolod City, Cebu City, Dumaguete City, Davao City, Cagayan de Oro, Zamboanga City and General Santos City.

Yap also said a food production masterplan is being formulated by the Agriculture department with experts from the Philippine Rice Research Institute (Philrice) and the University of the Philippines in Los Baños, along with the recently-formed Eminent Persons Group, which was formed to help oversee the implementation of Malaca­ñang’s P43.7-billion package of intervention measures for the country’s agriculture sector.