Global Food: “When its gone its gone”
As the BBC looks at the impact of rising food prices around the world, Heba Saleh reports from Cairo where soaring costs hit the country’s poor – and the government that subsidizes their bread.
… a drastic increase in food prices sparked deadly rioting over the last three days. Protesters in the capitol are calling for President Rene Preval to step down. United Nations troops have restored some calm, and the U.S. Coast Guard is on alert for a migrant exodus.
Let Them Eat Ethanol! by Sharon Smith / April 11th, 2008
The Bureau of Labor Statistics calculates that food inflation is running at a 6.7% seasonally adjusted annual rate through the first four months of 2007 — three times the core rate and more than three times last year’s 2.1% increase. OK, 6.7% doesn’t match the 40% increase in gas prices. But it’s almost as troubling.
Is it real? If you’ve been grocery shopping lately, you know the answer.
Here’s another sobering set of facts. As reported recently in the Wall Street Journal commodity “cash prices” section, wholesale prices of key food items have risen dramatically from a year ago:
The reasons why
Factors driving higher food prices are unlikely to go away any time soon:
- Ethanol. The ethanol boom has driven corn prices up 70% in a year. Now more land is planted in corn, and soybeans, wheat, oats, and barley are all up from 5% to 35%. Plus, higher corn prices mean higher prices for animals in the food chain that eat it – such as chickens, cows, and hogs. Corn is also a key ingredient in a long list of processed foods like breakfast cereal, and so far, producers have been able to pass these cost increases on – another sign of a fundamentally inflationary environment.
- Higher distribution costs. Energy hits on two fronts: It costs more to process food and it costs more to move it all to market.
- World demand. The “China effect” on energy prices has been well documented. But it also affects food. Food exports have grown as living standards in China, India and other growing economies have risen. That’s good for the economy but not for prices.
But as income growth slows and food prices increase, this happy long-term trend may be coming to an end.
What to do
That means we’ll all have to watch our food expenditures more closely. Short of growing your own, try the following:
- Change shopping patterns. Like it or not, buying bulk packaged items in warehouse clubs and discount grocers can save a lot — $200 a month or more for a family of four. For many it will be worthwhile to stock up at the discounter, and then add specialty items from the grocery store.
- Find substitutes. Generic or store-branded products have been around for years and, with quality improvements, they’ve become more credible substitutes for many staples. Less fancy meat cuts such as “flat iron” and “petite sirloin” steaks can fill in for more expensive cuts.
- Eat a little less. There’s more than one reason to cut back, but I’ll stick to costs. If you have children, it doesn’t hurt to implement a “when it’s gone, it’s gone” policy and buy only once a week to encourage conservation of apples, juice boxes, etc. especially during idle summer breaks.
Bottom line: Our inflation worries, long tied to energy, housing, health care and higher education costs, have expanded into everyday food needs. Now, just like we do for energy, we’ll learn to keep our eyes open, watch prices, and adjust behavior accordingly. Jennifer Openshaw
Asian nations have taken steps to stem rising prices of rice and palm oil. Corn and wheat prices have spiked as well.
Rising global food prices have already caused political fallout; one analyst, in an United Press International editorial, says that Pakistan’s food ration cards contributed to the unpopularity of President Pervez Musharraf.
In Asia this week, rice prices surged to a 20-year high in the latest sign of global food inflation. Governments are concerned that rice shortages will strain social cohesion, possibly leading to social unrest. Economists such as Nobel laureate Amartya Sen have described rice as a critical component of food and overall human security in developing countries in Asia. The rising prices may create policy challenges in Asia, reports the Financial Times.
In the Philippines, consumer prices rose at the fastest pace in 16 months in February, driven by rising food prices, Bloomberg reports. Prices of rice, corn, pork, and cooking oil rose last month, according to the Filipino Bureau of Agricultural Statistics. Food prices accounted for half of the price rise.
Rising oil and food prices in the Philippines has led to overall cost of living increases that have driven nearly 4 million people back into poverty, Agence France-Presse reports. The number of Filipinos living on just a dollar a day rose from 23.8 million in 2003 to 27.6 million in 2006, according to a survey from the Economic Planning Ministry. Overall prices rose by 22 percent between 2003 and 2006.
These cost increases associated with use of food crops for fuel has been called agflation, according to The Economist.
The European Union responded to rising food costs on Tuesday with an announcement of its biggest-ever food aid package – €160 million ($243 million) – to help alleviate hunger in Africa, Asia, and the Middle East, reports Agence France-Presse.
What does it take? First world nations are about to get a reality check. Getting a taste, or lack thereof, of what the majority of the world is experiencing will be painful. A minority of Americans truly experience hunger due to social, mental or “underprivileged” educational circumstances. These exceptions in America will increase exponentially, in the near future, if the world does not calm down and return to the business of sustainability. Returning to ‘yesteryear’ values and resources is a not a goal. Today, resources are dwindling and consumers are slow learners. The first order of business is realizing, “when it’s gone, it’s gone”. The sad factor remains; the ability to recover is directly related to the world climate. Potable water is dwindling. Agricultural land is dwindling. Oxygen creating forests are burning. The world’s ability to co-exist is dwindling. All focus on repair is countered by the distraction of war over non-renewable fossil fuel mentality. The desperation of the ‘old way’ is being played out with violence and destruction. To survive, the ‘old way’ of consume, consume, more and more, must be reined in. The challenge of ‘keeping up’ or ‘outdoing’ the neighbors has imperiled the entire globe.
Meanwhile, as everyone’s physical and mental health diminishes, everyone’s ability to address the monumental challenge of survival is stretched. World technology is very capable of making a positive difference turning this condition around. There is a minority of brave pioneers putting their money where the need is. They are greatly outnumbered by ‘old way’ die hards. The trend will be slow to change until the die hards feel enough personal pain, in their wallets and stomachs, to get their attention.
On a personal level, you and I must really think about how our personal behavior contributes to the ‘old way’ or the sustainable way. The ‘how to’ instructions are easily located websites and books.