Paddock talk: Food crisis threatens stability

All signs point to a period of rising commodity prices for agricultural products.

The Food and Agriculture Organisation of the United Nations (FAO) reports prices for wheat, maize (corn) and rice increased by 26% from June to November in 2010, with their food price index reaching an all-time high in December.

All of this is good news for the New Zealand producer, right? While not a major exporter of cereal grains, the rising price of those commodities also affects the price of the proteins (milk and meat) that form the basis of our farming sector.

The price for dry milk powder in Fonterra's auction, while somewhat volatile, remains at a reasonably high level and is rising since the September 2010 auction.

Lamb prices are also resurgent following the dire situation of two years ago.

If this is the case, why does the international press seem fixated on a coming food crisis rather than the long-awaited benefits to struggling farmers?

The fear is, that as food prices rise to levels equivalent to those during the 2007-08 food crisis, poor consumers in the developing world will once again have cause to riot and threaten the political stability of these countries.

Financial security is also threatened as the global food import bill surpasses $US1 trillion ($NZ1.3 trillion).

The UN Food Programme, which supplies food aid for starving populations, has been forced to seek additional funding from cash-strapped economies dealing with the global recession.

Already in 2010, the FAO calculated the number of hungry people in the world to exceed one billion.

That's approximately the equivalent of 250 New Zealand populations without enough food to meet their nutritional requirements for a healthy life.

With the rising cost of food, this number is sure to grow.

The rising prices are also seen as an indicator of the reduced capacity to meet global food demand, as climate-related events impact on harvests in various places, including Australia, Russia and India.

Some commentators see the conditions in the food system as a warning of imminent global famine.

The inability to produce sufficient amounts of food to keep it affordable for the world's poor is also the result of the natural limits to what can be produced.

While economic modelling suggests higher prices should encourage increased production by offering greater rewards to more intensive practices and increased farmland, the yield improvements of Green Revolution technologies have reached a peak in many places.

There is still the promise of sustainable intensification of small-scale production in many developing countries as well as the potential for further scientific innovation, but these do not solve the issues of farmland converted to residential and urban use, severe soil degradation in formerly productive regions or the increasingly challenging climatic volatility associated with global climate change.

In New Zealand, we can easily ignore many of these threats to global food security.

We can hardly be blamed for the rising cost of grains.

That's the fault of farming subsidies in Europe and the United States, not to mention the ever increasing amount of grain fed into biofuel production (by some estimates, enough to feed 350 million people for a year).

And besides, it's all about our competitive position in markets, right?

As efficient producers of milk and meat, we should just quietly take advantage of the situation.

After all, we feed the wealthy, not the poor.

As much as I would like to celebrate the potential benefit of rising food prices to the New Zealand farmer and economy, I also shudder at the moral implications of relying solely on market competition to justify how we engage with the global food system.

Too often it seems that the reliance on the market to adjudicate what is just keeps us from recognising the ethical issues of inequality in the global food system.

 - Chris Rosin is a research fellow at the Centre for the Study of Agriculture and Environment at the University of Otago.

 

Add a Comment