Peak Food and Japan Part 1 – Price Rises and Causes

And so it begins…

The World Food Programme (WFP) announced in March that the number of people they can help will fall greatly this year, due to the recent and sustained increase in the price of food. They are appealing to governments around the world to up their funding to meet their needs. A recent Al Jazeera programme highlighted the startling reality of the situation:

The WFP says at least $500 million is needed immediately.

Since last June, the cost of fuel and food worldwide has shot up by 55 per cent on average.

That spells bad news for more than 73 million people worldwide who rely on the UN for food handouts.

The deadline given for receiving the funding is May 1^st. If they do not meet this target then many of the people reliant on the charity of others for their food will starve.

That’s right, whilst in a country such as the United Kingdom, recent grain price increases have raised the cost of bread and are putting pressure on pig farmers, elsewhere people will die.

Starvation is a wholly preventable condition. This is so much so that in the world’s wealthiest countries you are more likely to hear stories about obesity than hunger. In fact, according to the health secretary in Britain, obesity is a “potential crisis on the scale of climate change”.

Rising food prices is no short-term worry, either. For example, according to a recent article in The Guardian, rice prices are predicted to carry on rising at least until the end of next year:

“The real danger with rising rice prices is that the ‘working poor’ will simply be pushed into the category of ‘poor’ who will look to us to feed them,” said Paul Risley, spokesman for WFP Asia. “There are hundreds of millions living at, or just below, the poverty line of $1-a-day, spending 70% of their day-labour wages on food.

“If food costs double they’ve no opportunity to increase their earnings and no alternative but to reduce what they and their families eat.”

I fear that the situation is even more serious that it is made out by these worrying reports. In particular, there is reason to believe that Japan is extremely ill-equipped to deal with the current crisis, and will actually be, in the medium to long-term, one of the most severely affected countries in the world. I will be concentrating on the effects and challenges Japan will face with regards to its food supply, but want to begin with a quick overview of the causes behind the price rises.

In a typical report from the the BBC, they give the following explanation:

The change has been blamed on poor harvests, population growth, rising energy and grain prices, the effects of climate change, and a shift to biofuel crops.

This sentence sweeps under the carpet so many unpalatable truths with regards to why the world is in the situation it is, and how the developed countries are largely to blame.

Environmental damage and the water crisis

Poor harvests, as mentioned in the BBC report, are not simply a result of freak weather patterns. Our consumption-based economic system with its ongoing expansion of industrial methods causes mass environmental devastation and global warming, reducing the capability of the land to support us. These problems are having an effect on availability and prices, as droughts cripple important food producing regions. Jacques Diouf, head of the UN Food and Agriculture Organization, was interviewd by the International Herald Tribune:

Already “unusual weather events,” linked to climate change – such as droughts, floods and storms – have decreased production in important exporting countries like Australia and Ukraine, Diouf said.

In Australia, the situation is immediately apparent, where the usually plentiful grain stocks have run dry.

Dry is an apt word, as one of the most important factors in the poor harvests suffered across the world is probably the current and impending water crises. Modern agricultural and food transportation methods use an inordinate amount of water. For example, a 50g bag of mixed salad, grown in Kenya and shipped to the United Kingdom, requires 50 litres of water in an area where it is already scarce. Instead of using what is naturally sustainable, our economic system demands that companies strive for what is cheapest.

The damage done to our rivers and oceans by the ever-expanding mechanized and chemical food industry is also having an effect on the quality of our water. Chemical fertilizers are washed into the waterways, causing increased toxicity and algal blooms. These changes can have fatal consequences for fish populations, thus reducing the availability of yet another food-source.

Biofuels – a crime against humanity?

From the above mentioned BBC report, with its list of causes, comes this throwaway line:

Although one UN official has called the increasing use of crops for fuel rather than food a crime against humanity, Mr Ban said there was a need to balance the positive and negative aspects of biofuels.

These “positive aspects”, those of apparently allowing the continuation of car-driven consumer lifestyles, despite the catastrophe that is man-made climate change dramatically unfolding before our eyes, mean that biofuels have come to be seen by many as a miracle solution to the rising price of oil.

The game is up. People have come to realise that the production of these fuels, created from organic matter such as sugar cane or corn, is pushing out food’s traditional use, that of sustenance, and replacing it with that other, more environmentally friendly one, replacing oil in vehicles.

This has been the pinnacle of all that is wrong in relying on the markets to solve every problem humankind faces. Food now equals energy. This seems like a simple enough statement, for of course food equals energy. We need it to live, work and play.

The problem now is that food has competing demands made of it. If someone is more willing and capable of buying corn to power their Sports Utility Vehicle than you are of buying it for bread, then you go hungry. Coupled with the afore-mentioned crop failures in large parts of the world last year, there just isn’t enough to go around any more, as this cartoon from Investor’s Business Daily cynically makes clear:

What about supply and demand? Surely this is how our markets work? Unfortunately, even if we used all of our agricultural land for growing biofuels, it would still not be enough to power our fleets of cars.

Thus we have the situation whereby if biofuels are cheaper than regular oil-derived fuel, there +will+ be a food shortage.

The current situation has only been possible because governments are subsidizing biofuel production as part of a drive to bring down carbon emissions. Never mind that these fuels are actually worse for the environment than using oil, stimulating mass destruction of the rainforests which were acting as a natural carbon sink.

Eventually biofuels will become cheaper than oil even without these subsidies and then it will be a real market-driven competition between lifestyles and plain old life. There is nothing that can stop this oil price rise, as it looking increasingly more likely that we have reached the point of peak oil production.

The OPEC countries are failing to increase their oil outputs even though not doing so could help cause recession in their largest customer, the United States. It is suggested by analysts that OPEC think that the downturn in the US is inevitable, and so they do not want to increase production as demand and this prices will drop anyway. However, there are fears that they are not increasing it because they simply do not have the reserves to accomplish the task. As more oil is extracted from the big fields in Saudi Arabia, what is left is more expensive and energy intensive to extract. A good source of current study and thinking on “Peak Oil” is The Oil Drum.

Some governments, such as those in the European Union are considering cutting down on biofuels, due to the impact on food prices:

“EU leaders pledged last year to increase the proportion of biofuels used in petrol- and diesel-consuming land transport to 10 percent by 2020, but concern that this is pushing up food prices has led the bloc to say it may reconsider its strategy.”

However, others, such as resource-poor Japan, are continuing to push for more of their fuel to be sourced from agriculture.

There are further criticisms to be made of biofuel, and its relative, biomass power, in terms of sustainability. Rather than the nutrients in the plants returning to the soil from where they grow, they are burnt. These points are explored in this recent blog post by Dr. Glen Barry, an ecologist and conservation biologist, with special regard to the recent move to derive bio-energy from trees and forest waste, rather than corn:

Forest waste is a euphemism for the materials left over when industrial forestry decimates a forest. The branches, bark, saw dust, etc. represent nutrients that are best returned to virtually mined soils to make new forests. There is certainly not enough such “waste” lying around unused to power industrial society. Just what the world’s beleaguered natural old-growth and regenerating forest ecosystems need, another potentially limitless draw upon their growth, diversity and regeneration.

Why we are eating oil reserves

The food-energy market duality, whereby increases in food prices are linked to those in fossil fuel prices, is not just caused by biofuels. The machinery needed for large-scale industrial farming is run on oil. The fertilizers needed to replenish the land after destructive agricultural techniques have taken their toll is derived from natural gas. The mass transportation of food which is vital for supplying supermarkets, towns, cities and the world food markets is powered by fuel and the roads are made out of bitumen, another oil derivative. As all of these things increase in cost, the effect on food production is destined to be drastic.

Even though the financial experts admit that oil and food prices are now linked, rather than looking at how unsustainabile this situation is, they choose to blame other countries who are rich in natural resources; they’re blocking us from getting at their oil cheaply and that’s why we can’t produce enough food. Jeff Currie is Goldman Sachs’ “oil guru” and in this interview with The Daily Telegraph he blames what the paper calls “nationalist petro-states” for not allowing inward investments into energy projects:

“The political environment is extremely hostile. The world is looking like the 17th century under mercantilism when countries saw economics as a zero-sum game. They exported as much as they could to get gold, and erected enormous barriers. China looks like that, so does Russia, the Mid-East and most of Africa and Latin America,” he said.

Currie’s contempt for countries such as Venezuela, who are attempting to protect their resources for the benefit of their own country, is apparent in his use of the word “mercantilism”, a rhetorical attack on people who do not proscribe to a completely free market for important commodities such as energy and food. This, despite the United States being very protective over their own resources, shown in the blocking of the attempted Chinese takeover of American oil company Unocal in 2005.

Most of these “petro-states” actually do have huge investments from the West. For example, despite ExxonMobil’s recently failed attempt to cripple the Venezuelan state oil company PDVSA, most of the other large oil firms have agreed a partnership role in the country.

Let’s blame it on the Chinese

This is part of a trend where, instead of criticising ourselves, the mainstream media find a foreign target, a sort of new “Yellow Peril”. China (and to a lesser extent India) continue their development and increase in population unabated. The devastating consequences this will have on the world turns out to be an easy target for those who have already undergone this transformation.

This is highlighted by the constant mention of China in all media explanations of the recent food price increases. It is never made fundamentally clear that the country is simply following in the steps of its role-models, the developed world, into an unsustainable system of constant growth and greater and greater consumption. The switching of their diets into one that is more meat and dairy heavy is often commented upon, but not juxtaposed with the suggestion that the western diet is completely unsuited to the limited planet we live on.

Furthermore, the media do not mention how and why productivity is failing to keep pace with development this time, as it is too dangerous an idea to suggest to the masses that constant growth is not possible, and development as we know it was only ever realistic for a minority.

While China at present uses only a quarter of the oil that the United States does, this use is constantly increasing and putting pressure on dwindling reserves, causing political and economic clashes such as the above-mentioned move on Unocal.

So, as the food crisis continues, a recent BBC “Q&A” on the topic is also quite happy to blame the situation on the Chinese and Indians getting richer.

“To put it bluntly, rich people eat more than poor people, and all this economic growth is generating a whole new tier of middle-class consumers.”

Again, it fails to bring to the reader’s attention that this might mean their own countries and lifestyles are unsustainable, and the answers given also keep the biofuels debacle as a minor issue, not as a plain symptom of how our society is failing the world. Furthermore, there is no questioning of the culpability of international trade agreements and “globalization” in ensuring that the Western powers have preferential access to the world markets, damaging developing agricultural industries.

A developed China is problematic for the developed world, not only as imports from their factories become more expensive, but also in terms of their decreasing food exportation, as I will talk about later with special reference to Japan. In fact, as Tim Lang, Professor of Food at City University says in this BBC World Service programme, China has already been forced to pull out of grain-based biofuels due to the impact it was having on local food prices, and the social unrest this would have caused. The country is continuing to strive for other means of creating biofuels, but this still shows how the developing world is used as a guinea pig for our twisted experiments on sustaining the unsustainable.

Lang suggests a mass diet change will be beginning of the solution to the food crisis, but this will not be done until we are forced into it financially.

The Profit

In the end, everything comes back to profit. Governments know that consumers in poor countries cannot affect markets, and so are willing to see them starve. Better that than to make the very unpopular move of asking their own people to change their fundamental lifestyle habits. As part of this drive for wealth, small farmers in rich and poor countries alike go out of business while supermarkets, with their wasteful mass transportation of food, and dubious sourcing policies, have massive and increasing profit margins.

The term “agflation”, agriculture inflation, has been coined to describe the increasing food prices. I see it as a return to an elitist system which is willing to let people starve for the benefit of a few. Did we ever leave such a system?

It has also been described as Neo-Malthusian, a reference to that famous economist from the 19^th century, so often cited to wash one’s pampered hands of a situation involving human suffering. This time around it is the markets which are a “natural” check; not hindered of course by our preferential trade agreements, subsequent destruction of foreign agricultural industry, the basing of the world economy on a non-renewable resource, the bastardisation of basic foodstuffs to be used a fuel for unnecessary transportation, and above all, our willingness to consume, consume, consume, because we are told it is vital for sustaining the world as we know it.

Consuming the planet

Conspicuous consumption, including that of food, continues unabated in the developed countries of the world. It can no longer be claimed that it doesn’t make a difference, that there is plenty to go around.

This year, our lifestyles are directly causing other people to starve. Is this connection made by the BBC and associates in their reports?

Of course not; we will scoff at suggestions that we should cut down our use of fossil fuels in food production. This would involve people learning how to farm again, a reversal of urbanisation that would be impossible to imagine for the average man on the street. This would be coupled with a reduction in the service sector as the dominant force in our economy, again an anathema to those who dream of constant growth. That this “growth” will actually entail a minority of people becoming obscenely rich while the rest of the world fights over the scraps, as is beginning to happen with the continuing rise of inequality, is conveniently ignored.

Furthermore, we will continue to eat beef even though it uses 10 times as much grain energy as just eating the grain in the first place would. What cheek for someone suggest that the western use of food is not sustainable? Of course we can let the rainforests be destroyed for the sake of our hamburgers and people carriers.

Population pressures

And thus when the beef farmers go out of business due to their unsustainable business model, we will all blame the rest of the world for increasing in population. How dare they? It seems simple enough; there are more people to feed and so there is less food. The countries where this growth is occurring are the ones which will starve first, naturally. This fallacy too often goes unchallenged. It is lazy, xenophobic analysis, a simple way for the developed world to once again wash their hands of the mass starvation which is about to engulf the world. The fact is, in terms of energy use, in 2003 one American was the equivalent of over 8 people from a developing country.

As energy equals food, you can begin to see why it is that the world is beginning to creak under the strain of constant growth and “development”. The fact that fails to grasp people is that, at our increasing levels of consumption and economic growth, we are actually increasing the amount of energy used comparably to a rapidly expanding population.

Let me put it this way. First Europe increased by head, and now it is increasing its consumption by demanding constant growth. It all means the same thing; humans are using more and more resources. Population increase is natural in a developing country, and whilst the effects of this might be an increase in demand for food and oil, which change actually causes the most increase?

This interesting article by the BBC’s Mark Tully, highlights this hypocrisy in relation to analysis of India’s population, and how poverty is the real driver behind the growth:

That Indians are not opposed to family planning on religious or any other cultural grounds is shown by the fact that they take to small families enthusiastically when they are firmly in the cash economy.

The problem lies with those Indians who are not.

Is it possible to evolve a situation which combines the good points of development; healthcare, education and social security, with a sustainable lifestyle that does not require growth in our consumption to replace the reduced requirement for large families?

In Part 2 I will be looking at the consequences of the increasing food prices on the poor countries of the world.