Mary Dejevsky: There's no reason why the world should go hungry

Click to follow
The Independent Online

My own eureka moment on the rise in food prices came earlier this year when I submitted my latest internet grocery order. The bill for "my usuals", give or take a few items, was more than 10 per cent higher than before – yet there was no additional luxury, such as fresh duck or a favourite brand-name ice-cream, to jack up the total so exponentially. A month later the sum was more again; and so it has gone on.

Internet ordering is as good a gauge of price trends as any, because it is only time-effective if your order remains more or less constant. Your successive bills are probably as close as anything to those "like-for-like" comparisons, so beloved of certain supermarkets. I even felt reasonably sanguine about it, beguiled by the standard explanations.

If there were more and richer Indians and Chinese in the world enjoying better food, then it seemed churlish for people like me in the rich world to complain. If fear of climate change, coupled with higher oil prices, had convinced the US to buy up more of the world's maize to use for fuel, here again was a logic that could be understood.

And if one consequence of higher maize prices was rioting in Mexico and Haiti over unaffordable tortillas, then this was unfortunate, but it was all part of the same global chain of cause and effect. Rich and poor, we would all have to adjust to higher food prices; the market would eventually sort itself out.

Half a year on, I wonder. One reason is what I learnt at a recent gathering of European and Asian journalists in Thailand, which focused on rising food – especially rice – prices. Another stems from what is happening with farming in the US and Europe. The closer you look, the more it turns out that some of the most persuasive assumptions fuelling today's price rises are either not true at all, or a good deal more complex than we have been led to believe.

Take the bigger, richer populations in China and India. Yes, they are eating more. But rice production across Asia has increased over the past two decades to meet demand; better farming techniques, higher yields and freer markets have all played a part. The more nutritious diet now enjoyed by many Asians may mean that rice consumption will rise more slowly than, say, that of meat and vegetables, as diets become more varied.

What has unbalanced the rice market is not lack of supply in Asia, but demand in Africa, where it derives less from any growth in population or prosperity than from the old, old causes of drought, mismanagement and war.

There may be more reason to forecast higher prices of other cereals. Demand for wheat and maize, in particular, is rising, for all the reasons we have all been told. These cereals are a primary source of food in many parts of the world (those Mexican tortillas); they are in demand for fuel (bio-ethanol in the US and Latin America) – and as feed for the animals bred to satisfy the new meat-eaters.

But the market has not been left to its own devices. It has been unbalanced by the subsidies paid by the US government to its farmers as part of the drive to develop alternative fuel. If, as it appears, the bio-ethanol craze is past its peak, there will be no reason to bet that grain prices will soar indefinitely.

In Europe, subsidies similarly distort. Since the scandal of grain and meat mountains, farmers have been paid to keep vast tracts of their land uncultivated. The economics of it would now suggest that at least some of this land might be worth planting.

Overall, the assumption that a richer and more populous world will not be able to feed itself needs more critical examination than it is getting. Take the past: India and famine were once synonymous; that is no longer so. Take the present and the distorting demand for rice in Africa: the development of strains resistant to drought and salinity is well advanced, without resort to controversial genetically modified varieties. But the most effective remedy would be peace. Then take future concerns about farmland: huge acreages in Russia, Ukraine and parts of Central Asia are currently unfarmed, or farmed only inefficiently. As this land is bought up by investors and farmers – as is quietly happening – supply will surely rise to meet demand.

For all these reasons, I wonder whether the world is really running short of food. Or is it rather in thrall to a fevered market in which speculators gamble on stratospheric long-term price rises and so drive up prices today? When I press the button on my next online grocery order, I will think less about whether 1.3 billion Chinese are better nourished and more about whether a futures market in staple food crops belongs in a civilised world.

m.dejevsky@independent.co.uk

Comments