George Kerevan: Time to bite back at the hand that feeds us

Published on 17/08/2012 00:00

The political strategies we employ to produce our food make no real sense when confronting famine problems, writes George Kerevan

TONIGHT there will be 209,000 more mouths to feed on planet Earth than there were yesterday. Yet last Friday, world grain prices hit a historic high as the worst drought in half a century gripped America, the world’s emergency breadbasket. The first round of the 21st-century Global Food War has begun.

The signal success of capitalism, over any previous mode of production, is that it has allowed the global population to increase exponentially. Unfortunately, the great capitalist growth machine has also destabilised the weather, sucked up the world’s finite supply of fresh water, and unleashed consumer demand faster than production can meet it – especially when it comes to emulating the West’s meaty, fatty, sugar-rich diet.

The political issue here is not starvation caused by too little food being produced. Even if that was true, starving people are usually too weak and demoralised to do anything but curl up and die. On the contrary, science and the agribusiness have done wonders in expanding food production. Growth in global agricultural output has remained above 2 per cent per annum for decades – more than enough to keep pace with population.

The actual food problem is more complex. It is a class issue. The rich world (including China) is consuming an ever-expanding proportion per capita of the Earth’s food resources. Meanwhile, the poor countries in Africa, the Middle East and South Asia have failed – for largely political and cultural reasons – to improve agricultural productivity.

Consider oil-rich Nigeria, the most populous country in Africa. Some 90 per cent of Nigerian agricultural output comes from subsistence peasant farms that have little access to fertilizers or irrigation. Result: Nigeria has become one of the world’s biggest importers of rice and wheat. Yet half that country’s estimated 98 million hectares of arable land lie fallow. Nigeria should be exporting food, not importing it.

Not that the rich world has cause to point the finger of blame. Take China. An unforeseen result of the “one child” policy is a generation of spoiled offspring who have taken to the Western meat-eating habit with relish. Result: more than half of the world’s pork is now produced and consumed in China. Unfortunately, it takes about 2.8 pounds of soybeans to produce one pound of pork. To rear pigs, the Chinese have to import soy and corn to feed them. Last year China imported $20 billion worth of agricultural products from US farmers.

China’s skyrocketing demand for soybeans – a food staple throughout the world – has sent the global price skyrocketing. Even US farmers can’t keep up – and that was before this year’s drought. No increase in agricultural productivity is going to fix that.

Meanwhile, back in America, they have found another new market for their agricultural produce – turning it into biofuel to run their SUVs. By Federal government mandate, some 40 per cent of US corn production is now used to make ethanol to put into cars, principally as an additive for higher-octane grades. Note: this ethanol is highly subsidised by the taxpayer.

The demand for ethanol has pushed up US grain prices, even in good years. This year’s drought has complicated things even more. Grain output is down nearly a fifth. Yet corn is still being diverted to make ethanol. So the grain available as a feedstuff for animals is very scarce, causing a crisis for livestock producers. They are now demanding the White House suspends the ethanol quota.

But this is election year and this week President Obama has been campaigning in Iowa, one of the main corn-growing states. Obama has a problem. If he cuts ethanol production, there is no immediate substitute as an additive in the high-octane grades. The refineries manufacturing other additives have been scrapped. Importing substitute additives will drive up petrol prices – not something Obama wants to do before the election. The best he could do was to announce the federal government will buy up the cattle and pigs US livestock farmers are having to sell, because they can’t afford the feedstuff. These animals will be used to feed the poor.

Here in Europe, we are in no position to laugh at America’s agricultural contortions. The EU has decided that bioenergy will provide fully half of all renewables by 2020, and 10 per cent of what goes in your car. As a result, the use of biodiesel in Europe is predicted to double. That would be fine if the basic feedstock used was bark, weeds and grass cuttings. But the vast infrastructure needed to collect such materials in bulk does not exist and I don’t see the investment for it coming any time soon. If the EU continues with its biofuel target, it will hoover up edible grains, pushing up global food prices even more. And that’s assuming decent weather.

The conclusion to this tale is that food prices are on a permanent up. There will be serious political consequences. Early last year, a spike in food prices touched off a popular revolt in Tunisia and that led to the Arab Spring. Expect more food wars to come. How do we get out of this mess, which is not primarily about food volumes but rather to do with misallocation of resources?

For a start, subsidised and legally mandated biofuel production has to end. That could take time, given the recent investment in refineries. But it is urgent. If you are concerned about the environment, it is better to tax carbon than to subsidise ethanol.

Second, forget pious Western do-goodism regarding debt reduction. Instead, set up a bank to give Africa’s farmers the capital they need to boost agricultural output and productivity.

Third, we need to give the Chinese a substitute for pork. Scientists are already working on synthetic meat grown from stem cells. Sounds horrible? But just think what they said to the first (probably female) farmer who crossed emmer and goat grass to invent wheat.