September – 01/09/2008

The other day in Edinburgh, together with Annabel Goldie and John Scott, we launched the Scottish Conservative Party’s Food Security Dossier tackling all of the issues of rising food prices and food scarcity.

Gordon Brown insists that we are in the middle of a food cost crisis and not a food supply crisis and has written to PM Fukuda of Japan asking for a concerted international response through the G8, the IMF and the World Bank. Nevertheless there are an estimated 850 million people worldwide who are suffering from hunger and who have good grounds to disagree with our beleaguered PM.

Certainly the world has the ability to produce enough food globally. The planet can feed 12 billion people and we are currently only at 6.2 billion. But the food that we produce is not getting to the world’s poorest people and patterns of hunger and the people affected are continually changing. The World Bank predicts that by 2030, food demand will double as the world population increases by an additional two billion people. An extra 6 million people are born every month. That’s like adding the population of Scotland every four weeks to the global tally. By 2030 the world population will have expanded by such an extent that we will require a 50% increase in food production to meet anticipated demand. By 2080 global food production would need to double. But the reality is that global food production is declining rather than expanding.

According to the OECD, food prices will continue to rise by as much as 20% to 50% over the next decade. With recent hunger riots in over 40 countries, the food crisis is by no means a new phenomenon. Soaring prices and food shortages have caused riots in Egypt, Cameroon, Cote d’Ivoire, Senegal, Burkino Faso, Ethiopia, Indonesia, Madagascar, the Philippines and Haiti in the past two months alone. In Pakistan and Thailand the army has been deployed to guard against the seizure of food from fields and warehouses.

The hike in prices means the World Food Programme is cutting food handout rations to some 73 million people in 78 countries. The threat of malnutrition on a massive scale is looming. Prices are likely to remain high for at least 10 years. The age old patterns of famine are changing and the rich nations of the world are now going to have to feed people we didn’t expect to have to feed. Two-thirds of developing countries are net food importers and are extremely vulnerable to volatile world food prices.

There are growing demands globally for immediate action including food aid, help to build up the agricultural capacity of developing countries and the introduction of longer term remedies, including an end to farming subsidies in rich countries and the achievement of a fair WTO deal in Doha.

Of the 850 million people suffering from hunger today, about 820 million live in developing countries, the very countries expected to be most affected by climate change. At the Food Security Summit held from 3-5 June 2008 in Rome, the UN said it will provide £613m to 75 million people in the 60 nations hardest hit by the food crisis. According to figures released at the summit, it is estimated that £7.6bn – £10.2bn would be needed each year to boost food production to combat hunger.

With food price inflation now exceeding 6%, we must recognise the role of our primary producers in ensuring the long-term capacity and capability of our food supply. We must encourage the development of local supply chains through public procurement and address the imbalance in power between the big supermarket giants and food producers. The EU also needs to reduce the regulatory burden on farmers and ensure that primary producers operate on a level playing field with foreign competitors.

Diets are changing radically in nations such as China, India, Brazil and Russia, where economic growth has boosted meat consumption. In China, it is up by 150 per cent since 1980. In India, it has risen by 40 per cent in the past 15 years. The demand for meat from across all developing countries has doubled since 1980. Unsurprisingly, farmers are following this trend by making the switch from grain to livestock to meet this intense market shift in demand. Of course calorie for calorie, you need more grain if you eat it transformed into meat than you do if you eat it turned into bread. You need three kilos of grain to produce a kilo of pork and eight to produce a kilo of beef. As a result, farmers now feed 250 million more tonnes of grain to their animals than they did twenty years ago. This in turn has caused a crunch in global grain stocks.

Simultaneously, floods in central China this year displaced millions of people and devastated rice and corn crops. Overall China’s grain harvest has fallen by 10 per cent over the past seven years. Last year, Australia experienced its worst drought for more than a century, causing the wheat harvest to fall by 60 per cent. The UK wheat harvest is expected to be 10 per cent down this year, partly because of flooding.
The global price of wheat has risen by 130 per cent in the past year although it has steadied again recently. Rice has rocketed by 74 per cent in the same period. It went up by more than 10 per cent in a single day (on 30th May this year) to an all-time high as African and Asian importers competed for the diminishing supply on international markets in an attempt to head off mounting social unrest. The International Rice Research Institute has warned that prices will keep going up.
Meanwhile a new phenomenon has appeared on the international scene. Where formerly import tariffs were a common barrier to trade and a way for governments to protect their indigenous producers, now export tariffs are becoming commonplace. China and India have introduced export tariffs on rice, Russia has introduced an export tariff on grain and Argentina, long one of the world’s major exporters of beef, has introduced an export tariff on beef set at 45%. Argentinean farmers have been involved in widespread protests at this measure, brought in by their government to ensure the maintenance of dwindling food supplies for their own population.

And all of this is taking place against a global shortage of fish and marine products as wild fish stocks collapse due to over-exploitation and pollution in virtually all of the earth’s oceans. Earlier this year, the total output of global fish farms exceeded the tonnage of wild fish caught for the first time ever. Nevertheless, even a burgeoning increase in farmed fish will not meet rising demand for marine products.

The credit crunch and the roller-coaster ride of the world’s stock markets has added another volatile ingredient to this toxic mix of rising prices, falling food stocks, inadequate distribution networks and climate change. The EU needs to stand up to the plate and help the world’s 850 million starving people.