The world grain prices have doubled since early 2007 because of by two factors. The first is an accelerating growth in demand. Each night, there are 219,000 additional people to feed at the global dinner table. This adds up to a new group of 1,533,000 people needing food every week. Since economic models have long shown the relationship of supply and the demand, you can probably guess what the second factor is that is driving grain prices up -- the increasing difficulty of rapidly expanding production.
This situation will focus attention on a very important question – What is the role of government? Obviously, any government with a growing number of starving citizens will have to do something. Will it find ways to get food into the hands of its citizens or will certain officials use the situation to make fortunes for themselves? Lester R. Brown, in his article “The New Geopolitics of Food” reveals examples of both types of governments.
“The politically troubled Arab Middle East is the first geographic region where grain production has peaked and begun to decline because of water shortages, even as populations continue to grow. Grain production is already going down in Syria and Iraq and may soon decline in Yemen. But the largest food bubbles are in India and China. . . .
Fearing they might not be able to buy needed grain from the market, some of the more affluent countries, led by Saudi Arabia, South Korea, and China, took the unusual step in 2008 of buying or leasing land in other countries on which to grow grain for themselves. Most of these land acquisitions are in Africa, where some governments lease cropland for less than $1 per acre per year. Among the principal destinations were Ethiopia and Sudan, countries where millions of people are being sustained with food from the U.N. World Food Program. That the governments of these two countries are willing to sell land to foreign interests when their own people are hungry is a sad commentary on their leadership. . . .
A 2010 World Bank analysis of these "land grabs" reported that a total of nearly 140 million acres were involved -- an area that exceeds the cropland devoted to corn and wheat combined in the United States. Such acquisitions also typically involve water rights, meaning that land grabs potentially affect all downstream countries as well. Any water extracted from the upper Nile River basin to irrigate crops in Ethiopia or Sudan, for instance, will now not reach Egypt, upending the delicate water politics of the Nile by adding new countries with which Egypt must negotiate. . . .
Many of the land deals have been made in secret, and in most cases, the land involved was already in use by villagers when it was sold or leased. Often those already farming the land were neither consulted about nor even informed of the new arrangements. And because there typically are no formal land titles in many developing-country villages, the farmers who lost their land have had little backing to bring their cases to court.
Local hostility toward such land grabs is the rule, not the exception. In 2007, as food prices were starting to rise, China signed an agreement with the Philippines to lease 2.5 million acres of land slated for food crops that would be shipped home. Once word leaked, the public outcry -- much of it from Filipino farmers -- forced Manila to suspend the agreement. A similar uproar rocked Madagascar, where a South Korean firm, Daewoo Logistics, had pursued rights to more than 3 million acres of land. Word of the deal helped stoke a political furor that toppled the government and forced cancellation of the agreement. . . .
And this rich country-poor country divide could grow even more pronounced -- and soon. This January, a new stage in the scramble among importing countries to secure food began to unfold when South Korea, which imports 70 percent of its grain, announced that it was creating a new public-private entity that will be responsible for acquiring part of this grain. With an initial office in Chicago, the plan is to bypass the large international trading firms by buying grain directly from U.S. farmers. As the Koreans acquire their own grain elevators, they may well sign multiyear delivery contracts with farmers, agreeing to buy specified quantities of wheat, corn, or soybeans at a fixed price. . . .
The world now needs to focus not only on agricultural policy, but on a structure that integrates it with energy, population, and water policies, each of which directly affects food security. But that is not happening. Instead, as land and water become scarcer, as the Earth's temperature rises, and as world food security deteriorates, a dangerous geopolitics of food scarcity is emerging. Land grabbing, water grabbing, and buying grain directly from farmers in exporting countries are now integral parts of a global power struggle for food security.”
Reading Brown’s article reminded me the book, Cities of Salt, written by Abdelrahman Munif, a Jordanian-born economist and prominent Arabic-language novelist. The story chronicles the transformation of a traditional Middle Eastern desert society following the discovery of oil. The lives of the citizens of a Bedouin community are changed forever because of the sudden intrusion of foreigners, when oil is discovered in a remote oasis. The people who had been living on the land for generations were neither consulted prior to the arrival of the foreigners, nor did they benefit from the huge profits made by those who took the oil from beneath the sands under their lands. Cities of Salt was banned in Saudi Arabia, and Munif's Saudi passport was withdrawn.
Oil is one thing, but food I quite another. How will a country full of hungry people act when they live across the fence from huge fields of lush food crops that they know will end up on the tables of people living in foreign lands? Who will provide the labor to raise the crops? How tempting will it be to sabotage the agricultural equipment or torch ripe grain fields? What will they do when crops are harvested and the time comes to ship the food out? Will starving villagers simply stand along the roads and permit trucks laden with food headed for port cities to pass by? Is that what you would do if your children were starving?
Making billions of dollars of profits by speculating in oil futures has clearly harmed the lives of millions of people around the earth – and decreased the quality of life for many Americans. What will happen if speculators do the same thing with food futures? This will affect your life and the lives of your children. This is a situation that requires your attention. Don’t sit on the sidelines and do nothing – or you may find yourself standing on the roadside watching truckloads of food drive by.
Read Lester Brown’s article at - http://www.foreignpolicy.com/articles/2011/04/25/the_new_geopolitics_of_food
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