I read a lot of news. I read magazines. I follow news blogs. I make a very concerted effort to keep up with what’s going on in the world, and to get the information from several perspectives.
And yet somehow I’ve found myself thinking, quite frequently, over the last month that this whole “food shortage” thing somehow “snuck up” on me. It seems like in order for it to be as serious as it is at this point, that there should have been more forewarning, and more signs at less serious levels of the problem.
I’m not saying the signs weren’t there, just that even with my efforts to stay tuned in they missed me.
Here’s just a few examples of the pieces that have be causing me this dissonance:
Food crisis threatens security, says UN chief
The UN secretary general issued a gloomy warning yesterday that the deepening global food crisis, in which rapidly rising prices have triggered riots and threatened hunger in dozens of countries, could have grave implications for international security, economic growth and social progress.
Food Protests Start in Bangladesh and South Africa
“In Bangladesh at least 15,000 garment factory workers went on strike earlier today to call for higher wages to cover the soaring price of food. In South Africa, the country’s main union has kicked off a series of protests over increasing food prices. In recent weeks food riots have also erupted in Haiti, Niger, Senegal, Cameroon and Burkina Faso. Protests have flared in Morocco, Mauritania, Ivory Coast, Egypt, Mexico and Yemen….Here in the United States, food inflation has reached the highest level in seventeen years, and analysts expect it to get worse.
U.N. Panel Urges Changes to Feed Poor While Saving Environment
The prices of basic food like rice, wheat and corn have been rising sharply, setting off violent popular protests in countries including Haiti, Egypt, Cameroon, Ivory Coast, Mauritania, Ethiopia, Uzbekistan, Yemen, the Philippines, Thailand, Indonesia and Italy. The unrest has resulted in tens of deaths and helped lead to the dismissal on Saturday of the Haitian prime minister, Jacques-Édouard Alexis, and the increasing cost of subsidizing bread prices is a major worry for key American allies like President Hosni Mubarak of Egypt.
Japan: Where has all the butter gone?
Where is the butter? — cry Japanese consumers who have been hunting everywhere for the dairy product. The drastic reduction in raw milk production, complicated by hikes in the price of grain as well as changes in the global patterns of dairy product consumption, have caused a serious butter shortage in Japan. Empty shelves in the dairy section of grocery stores across the country have not seen a shipment of butter for days, and stores are posting signs apologizing for the shortage.
Global warming rage lets global hunger grow
A new Cold War is taking shape, around energy and food. The world intelligentsia has been asleep at the wheel. While we rage over global warming, global hunger has swept in under the radar screen.
A Drought in Australia, a Global Shortage of Rice
The Deniliquin mill, the largest rice mill in the Southern Hemisphere, once processed enough grain to meet the needs of 20 million people around the world. But six long years of drought have taken a toll, reducing Australia’s rice crop by 98 percent and leading to the mothballing of the mill last December.
UN report demands urgent action on soaring food prices
The global food crisis became official yesterday when the UN called for urgent intergovernmental action and farming reforms to tackle the soaring prices that are plunging millions of people into potentially deadly poverty.
Grains Gone Wild
But it’s not clear how much can be done. Cheap food, like cheap oil, may be a thing of the past.
The Krugman piece above makes it clear that consequences are going to be global, not just localized to countries that North Americans don’t typically care about. In fact, the effects are already being felt locally, where panic, stockpiling, and in some odd cases peer-to-peer exporting, are causing temporary shortages and rationing.
Toronto feeling effects of global rice shortage
The ripples of the global rice shortage have reached Toronto, as many of the city’s immigrants are under pressure to dig deeper into shallow pockets to send more money and bags of rice home to relatives in the hardest-hit countries.
Food Rationing Confronts Breadbasket of the World
Many parts of America, long considered the breadbasket of the world, are now confronting a once unthinkable phenomenon: food rationing. Major retailers in New York, in areas of New England, and on the West Coast are limiting purchases of flour, rice, and cooking oil as demand outstrips supply. There are also anecdotal reports that some consumers are hoarding grain stocks.
World food crisis hits home
Media reports are starting to trickle in about grocers limiting some food purchases, while Costco Wholesale Corp. is seeing higher-than-usual demand for staple foods such as rice and flour as consumers appear to be stocking up.
I’m not particularly sensitive to pricing for grocery items, but apparently a shift is already underway there across North America:
Recession Diet Just One Way to Tighten Belt
Spending data and interviews around the country show that middle- and working-class consumers are starting to switch from name brands to cheaper alternatives, to eat in instead of dining out and to fly at unusual hours to shave dollars off airfares.Though seemingly small, the daily trade-offs they are making — more pasta and less red meat, more video rentals and fewer movie tickets — amount to an important shift in consumer behavior.
Just for the record, I’m not going to be surprised when the energy shortages hit. I’ve seen some warnings of that coming:
China down to 12 days worth of coal
CHINA only has enough coal for 12 days of consumption, three days less than a month ago, state media reported Wednesday, sounding the alarm bells over the nation’s most important source of energy.In certain parts of China, such as densely populated Hebei province in the north, reserves are down to less than a week, Xinhua news agency reported, citing the China Electricity Regulatory Commission.
(Ironically the normal government move when one kind of fuel is in short supply is to loosen regulation on dirtier methods. One wonders what you can do when you’re already down to burning filthy Australian coal, and you’re running out.)
The rising cost of gasoline is already having an effect in North America also. This might actually be a good thing, if it gets more public transit infrastructure in place, or leads to more research into more sustainable consumer vehicle engines and fuel systems:
Gas May Finally Cost Too Much
For years analysts have been surprised that gasoline consumption continued to rise even as prices kept climbing. Now that consumption has finally slowed, it remains to be seen if Americans are driving less just because the economy is doing poorly or if they are altering their behavior in a lasting way. Certainly consumers seem to be at a psychological turning point. Fuel prices are rising faster than incomes and show no sign of slowing down. Being green is trendy, and the war in Iraq has fanned concerns about U.S. dependence on oil from abroad.
Also interesting, when considering how both grain and oil move from supplier to demand area is the current shift in economic policies worldwide that are making the world less “flat”. For the economics wonks, there’s a good Brad Setser piece at RGE Monitor that lays it out in pretty clear English:
Borders still matter; “the world isn’t as flat as it used to be”
But with food prices rising, more and more countries seem to be adopting the same policies for their rice and wheat that Saudi Arabia and Russia have adopted for their oil. They only export what cannot be sold domestically at a price well below the world market price. That helps domestic consumers at the expense of domestic producers.It also is a way – per Rodrik (“if you are Thailand or Argentina, where other goods are scarce relative to food, freer trade means higher relative prices of food, not lower”) — of assuring that the consumers in a food exporting country aren’t made worse off by trade.
Actually, in the current case, it is more a way of assuring that consumers in exporting countries aren’t made worse off from a shock to the global terms of trade that dramatically increased the global price of a commodity. But the principle is the same.
Such policies have produced a more fragmented world. Beef is cheaper in Argentina than in the rest of world. Rice is cheaper in rice-exporting economies than many rice-importing economies. Oil is cheaper in oil-exporting economies. And so on.
