Market Oracle recently published an article entitled “Grain Markets Panic Buying, Export Controls, and Food Riots.” In this article, author Joseph Dancy reports that “Long term global demand and supply trends in the agricultural sector remain very favorable for investors. New and expanding biofuel facilities, growing global population, and the upgrading of diets in many Asian countries continues to increase demand for grains at a rapid pace.”
Thus, people who not only have enough money to eat but even enough “extra” money to invest, may profit handsomely from the growing food shortage. However, those hundreds of millions of poor and even middle class people who have barely enough money to buy their food, let alone money to invest, may soon face levels of hunger, starvation, and even famine that are unprecedented in human history.
Growth in the world’s food supply is currently restricted by recent export controls by many grain producing countries, drought in several producing regions, and the lack of readily available acreage suitable for expanding farming operations. Western agriculture methods are also incredibly energy intensive, which increases the cost of expanding supplies.
Mr. Dancy reports that the following developments occurred in the agricultural sector just last month:
The collapse of Australia ’s rice production has helped double of price of rice in just the last three months. Price increases have led the world’s largest exporters to restrict exports, spurred panicked hoarding in Hong Kong and the Philippines, and set off violent protests in countries including Cameroon, Egypt, Ethiopia, Haiti, Indonesia, Italy, Ivory Coast, Mauritania , the Philippines , Thailand , Uzbekistan and Yemen .
U.S. restaurants and other large-scale customers are buying so much rice that Costco, Sam’s Club and other wholesalers have put limits on the amounts they sell. This has resulted in some individual stores in places like California reportedly running out of rice. Global shifts in the commodity markets have caused the prices of corn, wheat, rice and soybeans to hit record levels.
The price of rice, the staple food for half the world, is double the price a year ago and a fivefold increase from 2001.
The cost (in dollars) of staple foods are at least 50% higher than they were this time last year. The UN has declared, “We consider that the dramatic escalation in food prices worldwide has evolved into an unprecedented challenge of global proportions that has become a crisis for the world’s most vulnerable, including the urban poor. ”
The price of some fertilizers has nearly tripled in price in the last year. Some Midwest dealers ran out of fertilizer last fall, and continue to restrict sales because of a limited supply. Supplies are expected to remain tight for years.
Stem rust is the most feared of all wheat diseases. It can turn a healthy crop of wheat into a tangled mass of stems that produce little or no grain. It has caused major famines since the beginning of history. A new strain of stem rust, called Ug99 was discovered in Uganda in 1999, and is much more devastating than those that, 50 years ago, destroyed the American wheat crop. Agricultural scientists have been unable to find an effective defense against it. After being restricted to East Africa, Ug99 has now been identified in Yemen.
Agricultural meteorologist Elwynn Taylor estimates the odds of a major American drought at 1 in 3, about double the usual risk. A major drought typically strikes the Midwest every 18 or 19 years. The last one hit in 1988. Taylor noted the average length of time between major Midwest droughts is 18.6 years. “The longest gap between major droughts in 800 years is 23 years, so if we don’t have a drought by 2011, we’ll break an 800 year-old record,” Taylor said “We’re overdue,” he noted.
In many areas of the Midwest the corn planting schedules are well behind schedule, raising the potential for a shortfall.
Since January of 2007, the price of wheat has gone up 200% and corn 150%.
Desperate poor have already rioted in 34 countries this year. Thomas Malthus predicted in the early 1800s that population would grow faster than food supplies and that ultimately, millions of people would starve. We may soon reach “Peak Food”…the point at which the world can produce no more food while the human population keeps growing.
Last week, the U.S. Senate approved the latest farm bill by the largest margin since 1973. There is something in the farm bill for almost every scoundrel and bounder in the country. Poor people get more free food. Rich people get more subsidies. The total cost of the bill is $307 billion over five years.
UNITED NATIONS, May 19 (IPS) – Vicente Garcia-Delgado, the U.N. representative for CIVICUS, warned, “A rolling tsunami of social unrest is underway as we speak—hungry people are desperate people capable of taking desperate actions. This tsunami is rapidly enveloping the global South, and it won’t take much longer before it knocks at the door of the global North.”
A UN forum on the world food crisis stressed that over 800 million people are now at risk of starvation and 100 million have joined the ranks of the extremely poor in just the last few months and are now living on less than a dollar a day.
While the U.S. government assures us that the inflation rate is only about 4.5%, the UN’s food price index rose by 9 percent in 2006 and 23 percent in 2007. As of March this year, wheat and maize prices were 130 and 30 percent higher than a year earlier. Rice prices have more than doubled since late January.
The UN’s Garcia-Delgado said, “Governments must not fall prey to the temptation to seek unilateral solutions based on defensive or militaristic non-solutions. It would be extremely dangerous to look at the current crisis strictly from a national perspective. A knee-jerk resort to a ‘fortress America‘ or a ‘fortress Europe‘ type of mentality would only exacerbate the risks of social and political chaos and will not work.”
Asma Lateef, director of Bread for the World Institute, said that rising global food prices are driven by at least four structural changes. One factor is growing demand for food; secondly, competition for land use and diversion of crops posed by biofuels; third, weather-related crop failures possibly associated with climate change; and fourth, rising oil prices, as all contributing to food inflation.
I am fascinated to see that Ms Lateef does not suggests that “food inflation” can be traced to dollar inflation—which can be traced to the fact that our dollars are no longer backed by gold, silver or oil and thus intrinsically worthless.
Lateef also said, “Special lines of credit and guarantees should be also made available to enable net food importing countries to meet the needs of poor people and continue to purchase food on international markets, in ways that do not raise debt burdens . . . .”
“Fat”(if you’ll excuse the pun) chance.
Lateef is asking that the wealthy, grain-producing nations give the poor nations credit (that does not raise debt burdens on the poor) for debts that will never be repaid for grain that may already be in short supply in the grain-producing countries. In other words, Lateef is asking for free food for hundreds of millions.
Lateef’s request is a fantasy. There may be a handful of “gestures” that offer “special lines of credit” to the starving nations, but those gestures can’t and won’t be sufficient to provide enough grain to feed 800 million or more who are starving. Who will make these “gestures”? The US? We’re already broke. Our food supplies are still ample but increasingly expensive. What politician is going to offer more than a handful of grain giveaways in this economic climate? If we don’t feed the world’s poor, who will?
What can’t be paid, won’t be paid. What can’t be provided, won’t be provided.
The era of easy promises is gone. We are now in a world where real money is king. Mere paper “promises to pay” will be increasingly viewed with contempt.
My guess is that we’ll witness 100 million people die from famine over the next 12 to 24 months. My guess is that we’ll see global political instability on a scale that exceeds WWII as millions riot and overthrow their government for failing to provide food. My guess is that we’ll see global free trade impaired and decimated as the wealthy, agriculturally-productive nations retreat into the “fortress Europe” and “fortress America” mentality. My guess is that we shall see the hungriest nations begin to invade their neighbors by means of illegal aliens or overt war. (I can’t help wondering, What nation is both a significant source of grain and is also close enough to China to be subject to a land invasion? Taiwan, perhaps?)
We are fast-approaching an era of famine and political instability that will afflict the entire globe. Here in the USA, I don’t expect people to die from starvation, nor do I expect a shooting revolution—however, both of these consequences are possible if the food distribution system breaks down. But if the food distribution system holds together, prices and unemployment are going to rise, financial and political stress is going to rise, the dollar will fail and die, and most people’s hold on any semblance of prosperity will grow increasingly tenuous.
Serious troubles likely to last for several years are headed our way. Prudent people should prepare.
We are sitting on the edge of a global catastrophe. It is irrational to suppose that any of us will escape absolutely unscathed. What do you need? Food, guns, gold. Friends you can rely on. And a solid association with God.
This is no game. Buckle up.
And if the previously described problems with the global food supply weren’t bad enough, even the bees are disappearing.
According to NaturalNews, the ongoing phenomenon of mysterious honeybee deaths is starting to raise alarm in the food industry, which depends heavily on bees to pollinate 130 different crops, which supply $15 billion worth of food and ingredients each year. One-third of the U.S. food supply depends on honeybee pollination.
In late 2006, beekeepers in the United States began to notice that unusual numbers of honeybees were dying during the winter. Beekeepers reported losing between 30 and 90 percent of their bees, in contrast to the usual 20 to 25 percent. The phenomenon, which continued through last winter, remains unexplained.
NaturalNews: “A global famine is not out of the question, especially when you combine the loss of honeybee populations with the situation of rapidly deteriorating soil quality across the world’s farmlands. . . . . Eventually humans will live in balance with nature. The question is whether we will consciously create that balance as a mature species, or if we will be starved into submission by a global ecosystem that refuses to support such a large population of human beings.”
Note that the previous quote is from NaturalNews—which I suspect should be a fairly benign, non-political publication. But when even the tree-huggers begin to talk about “a large population . . . starved into submission,” we are seeing faint evidence that some very pacifistic people recognize that tens of millions—maybe hundreds of millions—of people may not only soon die from starvation, but that such losses might not only be inevitable, but perhaps even desirable.
Too many people plus not enough food means that some of the people—lots of the people—have to die. That logic and inevitability creates a recognition of a fundamental “truth” that overwhelms sentiment and inspires a system of values where the deaths of others may be recognized as beneficial. This points to a shift in global values wherein we move from even the pretext of liberal “do-gooder-ism” into a system of values based on ruthless objectivity. In such system, if you want something, you’d better be able to pay for it or do without. No more Mister Nice Guy. No more easy credit. The world will no longer accept a promise to pay as if it were a payment. They will demand payment for food, and if you can’t pay—not promise to pay with legal tender or debt instruments, but actually pay with something tangible like gold or silver—you may starve.
NaturalNews: “The alarm bells are ringing, folks. We have reached the limit of the planet’s ability to absorb our pollution and environmental devastation. I sadly predict the human species is not mature enough to make the necessary forward-thinking changes, and that it will only learn from disaster. That disaster is coming. Prepare to live in a world where food becomes desperately scarce. Prepare to see the human population collapse in almost precisely the same way the honeybee populations are collapsing. As go the insects, so go humans.”
I remember growing up in the 1950s and 1960s in northern Illinois. In the summer, if anyone wanted to go in or out of our house at night, we could only turn the porch light on for a minute or two and hustle into or out of the house. Why? Because scores, maybe hundreds of bugs would quickly swarm to any night light, so if we turned on the porch light for more than a minute or so before we opened the door, when we finally opened the door, we’d have scores of bugs fly into the house.
I remember clearly, that in the summertime, there wasn’t a streetlight in the entire town that wasn’t surrounded by a cloud of hundreds, maybe thousands of insects, every single summer night.
And you couldn’t drive your car for 15 minutes without getting the windshield and front bumper, grill and radiator coated with the sticky bodies of dead bugs.
Today, I live on Texas and we can turn lights on all night around the house and hardly ever attract a flying bug. I doubt that I’ve seen a street light in twenty years that attracted more than a handful of insects. We can drive hundreds of miles and barely ever see an insect smash into the windshield. If I had to guess, I’d say that the flying insect population has been cut by 99%—maybe 99.9%—since I was a kid.
I don’t much like insects but there is something very disturbing about living in a world where flying insects no longer flourish. Given the loss of all those flying “pests” over the past 50 years, it’s no surprise that the honey bees are also disappearing. And if honey bees are crucial to one-third of our supply of food—and disappearing at a time when food is already in short supply—I see just another dot in a constellation of problems that seems almost inescapable.
Connect the dots. Make up your own mind. See if you agree with me that we are heading toward trouble that may be catastrophic.
Again, this is no game.