We Are Not Alone: The Global Food Crisis

Written on Friday, April 18th, 2008 at 2:14 pm | by Nick

With the rice shortage the biggest issue in The Philippine media today, it almost has us thinking that The Philippines is alone in this problem. But what some, and maybe even what many, do not realize, is that The Philippines is only the tip of the iceberg. We are not alone, and our rice crisis, is actually a Global Food crisis. A complicated, and multidimensional problem that is not only about our Philippine government, but involves other nations, the “free” markets, the energy crisis, and the need of independent nations to feed their own.

Thus, we have a Philippine Rice Shortage, an Asian Food Crisis, and a Global Food Crisis occurring simultaneously. I reiterate, we are not alone.

According to the World Bank, 33 countries are facing social unrest because or rising energy and food costs.

Everything is related in the new global world, and energy prices will have an effect on food prices because of the need to transport said food staples. The price of oil has hit an all time high, and is currently hovering around $115 per barrel. This is not an accident why we also have a food crisis in our hands.

But, as food shortage go, so does the politics of each nation, and the knee jerk reaction to keep food within the confines of ones own nation, and thus exporting of rice to other nations are suffering. We see this with countries such as China, Thailand, India, and Vietnam. Sources of rice, but whose government also feel a need to clamp down on exports, lest they wake up starving as well.

Then there is the growing popularity of biofuels, and the diversion of products such as corn, towards a nation’s need for energy.

And the simple fact that production is down.

We are not alone, and we are facing a crisis similar to other African countries and our Asian neighbors. Our staple is rice, it is by far the most affordable food for the poor, but due to the rise in prices, this may change dramatically, where even the millions of poor Filipino families, will no longer have enough to buy such a basic commodity.

With poverty still a tragic fact in The Philippines, where and who can we turn to when rice is too expensive?

Food and Agricultural Organization of The United Nations

According to the Food and Agricultural Organization of The United Nations, (FAO), there are a multitude of factors as to why there is a current rise in Food prices.

(1) low levels of world stocks (especially for wheat and maize) following two years of below-average harvests in Europe in 2006 and 2007;

(2) crop failures in major producing countries like Australia in 2006 and 2007;

(3) rapidly growing demand for grain-based biofuel production supported by subsidies;

(4) gradual changes in agricultural policies of the OECD countries, where reduced levels of subsidies have led to lower surplus production;

(5) strong economic growth in developing countries and expanding world population.

In addition, agricultural markets are becoming increasingly intertwined with non-agricultural markets (energy, manufacturing, finance, etc.). Climate change and resource constraints (water supply in particular) are also influencing overall food supply and demand.

OUR GROWING POPULATION

As DJB points out, lack of Family planning, due to religious beliefs, and the church’s vehement damnation of birth control may have fueled our surging population, above those of our neighbors.

And people need food to survive, the more people, the more food that is needed. Sounds like Logic 101 to me.

The government will react to the current crisis, because of political survival. They should have made solutions long before, but because of self preservation, and the need for development, we lost focus on the number one need of human beings — Food… And for Filipinos, this means rice.

Agriculture, for all its worth, has taken a backseat for a while now, because of the nation’s need to develop “infrastructures” such as roads, NBN, railways, and so on. While this may have been the need of the government, they lost focus on the need of the millions of Filipinos who languish in poverty, and whose short, medium, and long term goal is not technology, but food.

The Domino Effect of Hoarding

In a recent interview of Javier Blas of The Financial Times, he relays to us, the imminent effect and possible disaster, should exporting nations keep on halting rice exports, and effectively hoard the supplies for the rest of the world, especially Africa and Southeast Asian countries such as The Philippines. Locally, we are concerned with hoarders in our own backyard, but globally, we are seeing entire nations do the same.

Here is part of that interview with Javier Blas,

BLAS: I think there are two or three factors here. The first one is that until very recently, food prices were rising, but it was mostly concentrated on the wheat market, corn and soybeans, but the new factor now is rice. Rice prices are rising, and rice is a much more political, agricultural commodity. It is the staple for about three billion people in the planet, and between one and a half and two billion people basically eat rice and that’s it.

VIGELAND: You mentioned the price of rice, and can you give us some context for how much those prices have spiked recently?

BLAS: It’s absolutely incredible, the increase. In 2005, you were to buy a ton of rice, it’d cost about $250 a ton. That moves to about $300 in 2006, and $350 in 2007. That’s on average, but at the end of last year we began to see a price increase, and price basically in December, January, December 2007, January 2008, was close to $500.

VIGELAND: Jeez.

BLAS: Today, $860.

VIGELAND: Eight hundred and sixty dollars a ton?

BLAS: Yes.

VIGELAND: So, in the last three or four months, the price of rice has doubled?

BLAS: Yes, indeed.

VIGELAND: Is there an element of a domino effect here, almost a panicked domino, where one country decides to halt exports, and so then another does, and then another does, and so on and so on?

BLAS: I think that what you are saying is a key point of the crisis now. This is a panicked domino effect, where everyday we see a couple of more countries banning exports just because they want to insulate the country from other international markets.

VIGELAND: What happens if, say six months down the road, this trend continues?

BLAS: If this continues for six months, the global food market is going to close. Countries who rely on the global food market are going to be unable to purchase their needs. That means that hunger is going to increase in those countries, and the key, critical regions to be hit, it will be Africa and Southeast Asia, but even some advanced countries in Europe.

Solutions To This Crisis

There are solutions that must be implemented in order for us to grow as a nation, as well as provide enough food to sustain growth in other areas of our economy.

As The FAO suggests, technology is key in tacking the issue of food prices. This thought is also shared in a recent article in The Inquirer,

I’m also keen in the following comment made by CVJ in Rom’s blog,

It’s true, rice supply is finite but a number of things can be done to build up domestic capacity in terms of policies like allocating more land (by preventing land conversions) or protecting domestic producers (by preventing smuggling), improving the income of farmers (via Land Reform) and improving yield per land (by planting higher yield rice). The thing is, we left ourselves dependent on the forces of supply and demand via the worldwide commodity market which leaves us in a weak position to deal with global price and/or supply shocks.

I think the summation is nice, improving yield per land is the goal of technology, land reform is basically providing enough land for our farmers, and the rest of the statement is quite obvious.

Indeed, the solutions are there, but are our politicians up to the challenge? This is a crisis that The Philippines isn’t facing alone, but no one can help us except ourselves. In a crisis such as this, sometimes its every nation for themselves, clearly exporting nations such as Vietnam are already displaying this. It’s good to reach out to other nations because we depend on their supply, but we can’t be bailed out forever, and this is the reason to push for being independent and not dependent on other countries for our rice needs.

For further reading, I suggest you read an article in Newsweek regarding how you should be angry about the crisis that we’re in, and the policies that lead us to this situation.

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About The Author: Nick is a passionate Filipino, and a political junkie. His personal blog is at Tingog - The Voice of The Filipino. He is the founder and Editor not Chief of FilipinoVoices.com. He has been blogging since 2006.

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Comments

3 Responses to “We Are Not Alone: The Global Food Crisis”

  1. cvj on April 18th, 2008 5:14 pm

    Thanks Nick for the mention. I think the rice crisis, at least in the Philippines, is the result of two kinds of fundamentalisms. As DJB and Rom has mentioned previously, it’s because of relgious fundamentalism that has prevented us from implementing a proper population control program. The other is market fundamentalism which has discouraged us from building up our local capability to produce rice. The ‘leave it to the markets’ attitude fails to take into account such ‘perfect storm’ (or as Manolo is now fond of calling it, ‘black swan’) contingencies.

  2. Nick on April 18th, 2008 7:00 pm

    black swan, nice term… it’s the perfect storm, and yet many countries just could not prepare for it. The articles that I have cited in the above post, definitely have that one theme in common. That this crisis is not because of one thing alone…

    It just so happens, that the two aspects that Gloria is concentrating on is the current moratorium on the conversion of Agricultural land, and the problem of hoarding.

    I guess her government does not partake in this blame??

  3. cvj on April 19th, 2008 1:55 am

    It’s been Gloria’s modus operandi to take the credit and deflect the blame. During the relatively good economic times, she took credit for the growth in GDP that rightfully should be attributed to the growth of OFW remittances. Now that there is a looming crisis, they suddenly discover that there is a world out there and blame the rice crisis on external forces. Typical empty suit management style which make you wonder what the move-on crowd has been trying to protect all along.

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