There’s a perfect storm building for food prices. You
don’t have to scan the horizon to see the signs; the clouds are developing all
around us - at a faster rate than anyone expected.
It’s a lethal cloudscape of high energy prices and
climate change that threatens to send prices soaring – but this may not be a
bad thing: Provided the world’s poorest are insulated from its effects.
Today’s historically low food prices will end soon
with significant and, for some, catastrophically high, rises in the years
ahead. That means food policy-makers and food companies should plan now how
best to mitigate the effects of this building storm.
It’s a readjustment many companies and government
bodies at various junctures in the food supply are welcoming – if its
resonances can be contained within the developed world. With the hyper
competition that typifies many western retail markets driving food prices to
historic lows, a reality check spurred by an energy crisis and environmental
concerns is no bad thing.
The food industry must remain profitable or the
innovation required to feed ever-more mouths (nearly 10 billion by 2150) won’t
be forthcoming.
Increased energy
Search at the storm’s heart and you will find high
energy prices. Last week the price of crude oil reached $80 a barrel following
US statistics revealing a sharp fall in
News like that can only sharpen the
And acres devoted to fuel crops are, by definition,
not being tilled for food.
Earlier this year the United States Department of
Agriculture published an outlook suggesting that for the period 2007-08, global
consumption of wheat exceeded production by 14.7m tons, leaving global wheat
stocks at their lowest in 30 years.
In
In
Dr Sushil Pandi of the International Rice Research
Institute has warned: “Shortfalls in production and subsequent price rises are
being exacerbated by increasing competition for land, labour and water for
biofuel production.”
It’s not just competition for land, high energy prices
are having a powerful impact on the costs of food transport. Increasingly
Western distribution systems depend on transporting food vast distances from
producer to consumers.
In some cases, food is shipped around the world simply
for processing, to take advantage of low labour costs, and then shipped back
again for consumption. These practices appear increasingly unsustainable.
Climate change
Meanwhile, there is the greatest threat of all –
climate change. Its precise impact is impossible to predict. But William Cline,
senior fellow at the Institute for International Economics and the Center for
Global Development in
Time is running out for policy-makers and food
companies to plan a response to these threats. A good starting point is UN secretary
general Ban Ki-moon’s call for a “single global vision” to address the problems
of world hunger. In a chilling warning he said there can be “no food security
without climate security.”
As part of that process food companies can and should
reduce their energy consumption to sustainable levels. This applies both to the
production of food and to its distribution.
It may be innovation in this area that offers the
greatest hope for food production to maintain a price befitting to its true
costs – and to the benefit of individuals and the planet they inhabit.
The perfect storm for food prices may be impossible to
avoid. But it could be a good thing if it makes Western nations value food more
appropriately.
Mike Stones has written on food and farming
topics for 20 years. He lives in Southern France and co-owns a small family
arable farm in northern