The expanding appetite of a hungry world transforms food mountains into molehills

Grain shortages: Cuts in subsidies, bad weather and Chinese imports have combined to curb huge cereal surpluses and threaten a crisis

Imagine a cube just over 1,100 feet high. That was the volume of the European Union's surplus grain - the infamous mountain - when it last reached a peak after the 1993 harvest.

That 30-million-tonne store had shrunk to 4.8 million tonnes last month. The mountain, scattered through hundreds of warehouses, has dwindled to a foothill. Last year the earth's people and their animals ate more cereals, our most basic and important foodstuff, than we grew. The United Nation's Food and Agriculture Organisation (FAO) says 1995 harvests of wheat, barley, maize, rice and other grains were 3 per cent lower than in 1994.

Yet each year the global population of 5.6 billion rises by 90 million. So food stocks have been rapidly drawn down in Europe and across the world. They will continue to fall until June, when the northern hemisphere's anxiously anticipated harvests start coming in. By then, international traders reckon, stocks will have sunk to180 million tonnes, enough to cover 47 days at current consumption levels. This is unprecedentedly low; the FAO secretariat thinks it is ''well below ... the minimum necessary for world food security''.

Naturally, prices have soared. Late last year the benchmark price for internationally traded wheat rose to just over $200 a tonne, a 20-year high, and has hovered there since. The 1995 world market price of rice was 50 per cent up on 1994.

There are three reasons why a global oversupply lasting nearly 20 years is turning towards deficit. First, the United States and the European Union reformed their support to farmers in the early 1990s to cut crop surpluses. They did so to control the vast subsidies taxpayers and consumers were paying and to reduce their dumping of cheap grain on world markets, which made a nonsense of aspirations for freer and fairer world trade.

After much arable land had been taken out of production, the second reason came into play - weather. Through 1994 and last year, heat waves, droughts or heavy rainfall at the wrong time caused poor harvests in some of the most important grain-growing regions.

And thirdly, there is China. Over the past three years its cereal purchases have grown by two-thirds, while exports have plummeted. In 1993 they were in balance but this year the world's most populous country will be a huge net importer, of 20 million tonnes, a tenth of total international cereal flows. China's increasingly affluent, urban and still growing population is changing its diet and wants more chicken, pork and beer, which accelerates the demand for grain. Farmland is being gobbled up by new homes, streets and workplaces, a trend across much of Asia.

There is little dispute about the causes of today's shortage; the debate is over whether this is part of ordinary, cyclical fluctuations in supply versus demand, or whether it signals a hungrier world hitting environmental limits, finding it harder and harder to feed its growing billions.

Most traders expect prices to remain high for at least a year but then expect normal service to be resumed. Farmers will respond to shortage and high prices as they always have done, by growing on more land, more productively. Stocks will recover to some extent, although they may never be as enormous as the earlier grain mountains. The long-term trend of growing more food each passing year will resume.

The European Union has already decided to cut the quantity of cereal land put into set-aside from 12 to 10 per cent this year. And 7.5 per cent of US maize-growing land taken out of production last year is going back under the plough. If shortages continue, the US could grow cereal on a large part of the 56,000 square miles of ex-cropland placed in the Conservation Reserve Programme under 10-year contracts. Much of this land is, however, prone to erosion.

Within two decades, genetic engineering should boost yields and increase resistance to disease and weed-killing herbicides. This could bring production gains larger than those achieved in the 1960s "Green Revolution", when new strains helped poor countries such as India to achieve food self-sufficiency.

And in developing countries, forests will continue to be logged and burnt and swamps drained to grow more crops, wiping out entire plant and animal species and the way of life of indigenous tribes.

But Lester Brown, director of a Washington-based environmental think- tank the Worldwatch Institute, points out that the fertility of huge tracts of once fertile land has already been lost - damaged by erosion and irrigation schemes in the struggle to keep up with demand. ''Achieving a stable balance between food and people may now depend heavily on policies that can dramatically slow population growth in the next few years,'' he says.

He finds three reasons why farmers may no longer be able to match rising demand. Heaping on ever more fertiliser will bring smaller and smaller yield rises. Water shortages will worsen. Some countries, including the hugely productive US, are in effect mining water to irrigate their crops. Within a few decades, boreholes can extract centuries' worth of rainfall stored in aquifers.

There is also the wild card of climate change, caused by the accumulation of heat-trapping pollutants in the atmosphere. Most climatologists agree that this has already caused a very slight global warming. But they do not yet know how it will alter rainfall, temperature and storm patterns in the major crop growing regions of the world.

For the foreseeable future, the developed nations can and will grow more food for exports - their own consumption is at near-saturation level. They have ample resources and technology to do so.

But more people will go hungry around the world if developing countries fail to achieve similar increases in crop production, or if they cannot afford to import food from the West.

Many poor nations with fast- growing populations, such as the entire North African region from Morocco to Egypt, have come to depend heavily on food imports. The UN's Food and Agriculture Organisation says the recent rise in prices will heap $3bn on the annual trade deficit of 88 poor countries which are net cereal importers. Often these imports are used to feed the urban poor at subsidised prices.

There have been no reports of famines and riots caused by the current global cereals squeeze. Yet the usual localised and deadly food emergencies continue around the world, as they have done through all the years of global plenty. Most are due to civil wars in desperately poor countries, with local crop failures the other main reason.

There are grounds for optimism. Cereal production rose by more than 3 per cent last year in those low-income countries which are net cereal importers. Zimbabwe, which has suffered years of drought, expects a bumper maize harvest next month and may resume exports for the first time in five years.

Jules Pretty, of the London based International Institute for Environment and Development, has studied 95 successful farming projects in eastern and southern Africa, the continent which has the greatest difficulty feeding itself. He came away impressed and optimistic about these ''islands of success among a sea of failure".

''The small farmers in these countries could certainly double or treble their food production without genetic engineering or heavy investments in pesticides or fertiliser,'' he says.

The main factors in achieving this are using appropriate technology - small-scale, inexpensive, adapted for local conditions and experience, encouraging farmers to work in groups and reforming the way in which state authorities, banks and international investing and aid-giving bodies deal with these groups.

There may be troubles ahead as population growth races on; global environmental limits must eventually be hit. Such limits may already be working in countries like Egypt, which relies entirely on the flow of one river to grow food in a limited, densely populated irrigated area. But worldwide, it is probable that much more food can and will be grown.

shortages continue, the US could grow cereal on a large part of the 56,000 square miles of ex-cropland placed in the Conservation Reserve Programme under 10-year contracts. Much of this land is, however, prone to erosion.

Within two decades, genetic engineering should boost yields and increase resistance to disease and weed-killing herbicides. This could bring production gains larger than those achieved in the 1960s "Green Revolution", when new strains helped poor countries such as India to achieve food self-sufficiency.

And in developing countries, forests will continue to be logged and burnt and sw amps drained to grow more crops, wiping out entire plant and animal species and the way of life of indigenous tribes.

But Lester Brown, director of a Washington-based environmental think- tank the Worldwatch Institute, points out that the fertility of huge tracts of once fertile land has already been lost - damaged by erosion and irrigation schemes in the struggle to keep up with demand. ''Achieving a stable balance between food and people may now depend heavily on policies that can dramatically slow population growth in the next few years,'' he says.

He finds three reasons why farmers may no longer be able to match rising demand. Heaping on ever more fertiliser will bring smaller and smaller yield rises. Water shortages will worsen. Some countries, including the hugely productive US, are in effect mining water to irrigate their crops. Within a few decades, boreholes can extract centuries' worth of rainfall stored in aquifers.

There is also the wild card of climate change, caused by the accumulation of heat-trapping pollutants in the atmosphere. Most climatologists agree that this has already caused a very slight global warming. But they do not yet know how it will alter rainfall, temperature and storm patterns in the major crop growing regions of the world.

For the foreseeable future, the developed nations can and will grow more food for exports - their own consumption is at near-saturation level. They have ample resources and technology to do so.

But more people will go hungry around the world if developing countries fail to achieve similar increases in crop production, or if they cannot afford to import food from the West.

Many poor nations with fast- growing populations, such as the entire North African region from Morocco to Egypt, have come to depend heavily on food imports. The UN's Food and Agriculture Organisation says the recent rise in prices will heap $3bn on the annual trade deficit of 88 poor countries which are net cereal importers. Often these imports are used to feed the urban poor at subsidised prices.

There have been no reports of famines and riots caused by the current global cereals squeeze. Yet the usual localised and deadly food emergencies continue around the world, as they have done through all the years of global plenty. Most are due to civil wars in desperately poor countries, with local crop failures the other main reason.

There are grounds for optimism. Cereal production rose by more than 3 per cent last year in those low-income countries which are net cereal importers. Zimbabwe, which has suffered years of drought, expects a bumper maize harvest next month and may resume exports for the first time in five years.

Jules Pretty, of the London based International Institute for Environment and Development, has studied 95 successful farming projects in eastern and southern Africa, the continent which has the greatest difficulty feeding itself. He came away impressed and optimistic about these ''islands of success among a sea of failure".

''The small farmers in these countries could certainly double or treble their food production without genetic engineering or heavy investments in pesticides or fertiliser,'' he says.

The main factors in achieving this are using appropriate technology - small-scale, inexpensive, adapted for local conditions and experience, encouraging farmers to work in groups and reforming the way in which state authorities, banks and international investing and aid-giving bodies deal with these groups.

There may be troubles ahead as population growth races on; global environmental limits must eventually be hit. Such limits may already be working in countries like Egypt, which relies entirely on the flow of one river to grow food in a limited, densely populated irrigated area. But worldwide, it is probable that much more food can and will be grown.