What is in this article?:
- Nervous global food market eyes US corn crop
- With 2008 food-price riots in developing nations still fresh, analysts are wary of where this year’s diminishing U.S. corn yields might lead.
With the 2008 food-price riots in developing nations still fresh in mind, non-governmental agency analysts are wary of where this year’s diminishing U.S. corn yields might lead. With much of U.S. farm country under a punishing drought -- along with reports that world food prices have gone up some 6 percent in the last few weeks -- corn prices have spiked.
Following several consecutive USDA reports showing corn stocks and yields dipping, the U.S. ethanol production quota is under fire and waivers have been requested from the EPA. The ethanol industry’s advocates have pushed back hard against the idea that such a waiver would ameliorate the tight supply of corn.
While U.S. row crops bake in the field, the potential repercussions are being considered. Also in the mix are concerns that countries, citing the need to protect homegrown food stores, could refuse to export commodities like India and Russia did in 2010. This would only exacerbate the problem of rising food prices.
Farm Press spoke with food price expert Gawain Kripke, director of policy and research for Oxfam America, shortly before the release of the latest Food Price Index report from the UN’s Food and Agriculture Organization (FAO). Kripke spoke about the food-deficient hot spots being watched, why the world’s poor are especially vulnerable to rising food prices, and why the situation is on a “knife’s edge.”
Among Kripke’s comments:
On the FAO Food Price Index…
“There are several food price indexes and each take slightly different approaches – how they weight oils versus cereals and other things -- and get slightly different results. But they’re generally pretty consistent in their findings.
“The FAO’s is generally the most widely-used internationally looking at food prices globally. It looks at key commodities in international markets and where prices are.
“The index is a big signal to markets, policymakers and countries thinking about food prices and what is going to happen in the future. When these are released, everyone pays attention.”
“What we know is things look rough – not only in the United States but in several other important markets. (Those include) central Asia, Russia and India.
“With production down and demand still increasing and recovering from the recession, expectations are we’ll see increases in food prices, commodity prices. That’s worrisome.
“It feels as though we’re on the knife’s edge of a crisis. We had a crisis in 2007 and 2008 and it hasn’t felt the same yet in 2012. But we only need a few more pieces of bad news before we might see some real panic.”
When you say “panic” are you worried about government instability? Mass migration?
“In 2007 and 2008, we saw a significant amount of civil disturbances. Food riots occurred in more than 30 countries around the world. It was probably a contributing factor in at least two government overthrows.
“(Government instability) is a possibility if things get worse.
“More importantly and generally, though, poor people already face terrible stress. Almost one billion people already don’t get enough food to eat. But if food prices continue to rise, that means poor people will be stretched even thinner to meet basic nutritional needs. In many cases, they’ll have to go without.
“For us, that’s a crisis. It may not be a crisis for many others but a billion hungry people is a daily crisis and it only gets worse with rising food prices.”
When you say “poor” what differentiates someone in that category exactly? Someone making less than $2 per day?
“Most definitions have to do with cash income. The World Bank definition is (a salary) of $1.25 per day to describe absolute poverty. A broader definition allows for $2 per day.
“By those definitions, there are somewhere between 1.5 billion to 2.5 billion people that are poor.
“That level of poverty that those in the United States can’t (fathom) but is prevalent in many countries in south Asia and Africa. For those people, they’ll spend 50 to 60 percent of what little income they have on food.
“So, when food prices go up 10 percent, 20 percent or 50 percent, those people must make terrible choices about their consumption. That means less food, less medicine, or they can’t pay school fees for their kids.
“Food prices have a really huge impact on poor people. It’s a disproportionate impact because they spend more of their income on food.
“In America, we spend something like 10 percent on average of our income on food. Here, food prices increases might be a nuisance and a hassle. But for most Americans, we won’t live or die, go to school or not, get healthcare or not, based on food prices.
“For close to one billion people, though, that isn’t the case.”