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Issue #1557      25 July 2012

The causes of spiralling food prices

In the US, one of the largest producers of wheat, soy and corn, the Department of Agriculture has recorded a 12 percent decrease in yield per acre due to “scarce rainfall coupled with record-breaking temperatures”.

This has global repercussions, even in developed nations. In Australia, for instance, a parcel of soy meal – one of the main ingredients of chicken feed – was quoted at AU$460. But as of July 9 the price is AU$645. Indeed, the Sustainable Consumption Institute in the UK claims food that families now take for granted could become too expensive if global temperatures rise in line with the current trends and reach 4 degrees Celsius.

In the developing world where food expenditure makes up a larger proportion of daily budgets, the effects can be devastating. In 2008, and again in 2011, record global food prices contributed to a steep rise in poverty and hunger, as well as sparking rioting and political instability around the world.

So why, in 2012, do we continue to experience a situation where food prices are increasingly volatile, and where so many people are denied their fundamental right to food? We would argue that there are five fundamental causes:

Climate change represents the ultimate threat to food security. There is strong scientific consensus that the intensity and frequency of extreme weather events, such as the drought currently afflicting the American mid-west, are likely to increase under climate change. On July 10, the National Oceanic and Atmospheric Administration concluded that last year’s record drought in Texas was made “roughly 20 times more likely” because of man made climate change, and said that anthropogenic warming had to be a factor in the drought. Enough said, really.

Inequality of income and access to resources, both within and between countries, is the biggest socio-economic driver behind hunger. Unequal access to resources means that huge areas of land are being used for rich consumers in distant markets, instead of food for local consumption.

Industrial farming has come at the expense of declining soil fertility, freshwater pollution and depletion, and loss of biodiversity, while also driving millions of farmers into debt and eroding rural communities’ ability to exert control over crucial resources such as land and seeds. Meanwhile, genetically engineered crops are not designed to feed the poor or to decrease prices, do not increase yields in a sustainable manner, and have failed under extreme fluctuations in temperature and moisture.

Loss and waste of food from harvest to table is a major issue. Enough food is already produced in the world to feed every human being on the planet comfortably, and further gains could be achieved to feed future generations through the application of agro-ecological farming practices. But current estimates suggest that as much as 30 percent of the food grown today is spoiled or wasted, an unacceptably high figure.

Financial speculation on commodity futures markets has greatly exacerbated the volatility of food prices. Prices on the futures markets for corn and wheat have already risen by 38 percent and 33 percent, respectively, over the past three weeks. If transmitted onto global markets, inflation of this magnitude could again have a disastrous impact on the millions of low-income households worldwide who spend a majority of their budget on food.

Greenpeace is calling on governments to take action to end this recurring nightmare. Key steps needed to prevent future food crises include cutting greenhouse gas emissions to slow climate change, scaling-up investment in more resilient and ecological agricultural practices, addressing inequalities in income and access to resources, and drastically cutting food waste from field to fork. Regulators must also be given the power to strictly limit the role of speculative capital in food commodity futures markets.

The weather will always be beyond human control. But measures to prevent runaway climate change that do impact weather, develop more sustainable farming systems, improve the economic position of poor food producers and consumers, and protect the most vulnerable from predatory speculative behaviour, definitely lie within our grasp.

* Dr Julian Oram is Senior Political Advisor, Sustainable Agriculture, at Greenpeace International  

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