The real cost of global food
Global food prices are soaring again; the price of corn and wheat surged by almost 50 per cent in recent months. There is growing fear that, like 2008, this will lead to riots and social unrest in poorer countries. While we, in the West, wonder what we will have for dinner, almost half of humanity is unsure whether it will have any dinner at all.
Increased volatility in food prices is a recent phenomenon. Since the 1970s, the real prices of staples had been falling. The Green Revolution may not have delivered quality food but it did help to improve crop yields through intensive production methods, extensive use of fertilisers and improved pest control.
Its price has been undue nutritional deficiency and environmental degradation. Now it seems that the era of cheap food, like that of cheap oil, is coming to an end.
If so many people are unable to get sufficient food today, what will the situation be like in 40 years time when there will be an estimated 2,000 million stomachs to fill? But perhaps the world will not get there.
Over 200 years ago, Thomas Malthus argued that the supply of food will limit population growth. The paradox is that countries like the US and Brazil are using their abundant crops to create biofuels to drive their cars.
Almost 40 per cent of US maize goes to produce ethanol, which accounts for eight per cent of the fuel used by vehicles in America.
Despite the fact that biofuels have been proven to be inefficient, over the last decade the global production of ethanol has swelled fivefold. The economics of food cannot compete with the economics of energy.
Although speculation and bad weather are partly to blame for the current spike in food prices, there is also a longer-term dietary shift from cereals to meat. The growing middle class in emerging economies is consuming more meat.
This propensity to eat more meat, symbolised by the increased popularity of McDonald’s in these societies, has turned China into a heavy importer of food.
The impact of climate change on food production is relatively unknown. What is certain is that modern farming is a major culprit, through greenhouse-gas emissions and deforestation, for global warming. This creates a vicious circle as global warming disrupts the world’s water and natural cycles leading to lower crop yields and higher prices.
Water remains the biggest challenge in feeding the world. Agriculture already takes up 70 per cent of global water consumption. Meat production guzzles 10 times more water than growing vegetables, with one third of the world’s arable land being used to grow crops for animal feed. It is unlikely that new land, more fertilisers and better irrigation will lead to dramatic improvements in food production to satisfy the increasing demand for meat.
Various analysts dismiss these concerns as they believe that better management of the food supply chain will go a long way to meet demand. In poorer countries, a third of the food produced is lost due to the lack of adequate pest control and proper storage and transport facilities. In richer ones, between 30 and 50 per cent of all food gets thrown away.
Others believe that the ultimate solution will be provided by technology, especially genetic modification of both plants and livestock.
They point out Brazil’s success in becoming the first tropical agricultural superpower. Brazil invested heavily in research and encouraged huge commercial farming.
Indian Amartya Sen, 1998 Economics Nobel Prize winner, notes that the food challenge is essentially a democratic and economic problem. Humanity already has the capacity to produce all the food it needs but not every person can afford to buy a fair share to meet his needs. Increasing global food output is not sufficient; there has to be the political will to ensure sustainability and distribution in a socially responsible manner.
Agriculture in Malta is being largely neglected. We have come to believe that we are too advanced economically to bother about a sector that accounts for less than two per cent of GDP and has become dominated by part-time activity.
Our agriculture is bedevilled by water considerations, lack of strategic direction, poor marketing and obsolete distribution systems.
Unless urgent measures are taken, the sector will soon be wiped out by dumped exports of other countries. Yet, even in a globalised environment, agriculture retains a unique strategic, economic, social and environmental importance. This is all so sad.
Our society, including the Government and the agricultural community, is to blame for this state of affairs. There has been little education, regulation and enforcement. Above all, we lack a social conscience. Irresponsible borehole drilling led to excessive groundwater extraction and unduly high salinity in our water tables.
The careless use of nitrates, in agriculture and animal husbandry, has polluted our aquifers, turning Malta into a nitrate vulnerable zone and was obliged to ask the EU to extend the deadline for its legal obligation to reduce nitrate levels till 2027. British geologist Gordon Knox warned about the collapse of local agriculture by 2025.
The world may have significant challenges in ensuring adequate food supplies at reasonable prices and Malta should wake up to this emerging reality before it is too late. Today, we have the energy-poor, tomorrow the food-poor.