The Return (aka. World Food Crisis...and Canada)

I call this post "The Return" because it has been nearly a year (10 months, 13 days to be precise) since I last blogged. I apologize to my faithful reader for my neglect. I add, in parentheses, "aka. World Food Prices...and Canada" because that's what this post is actually about. My interest spawned from an article in Time magazine and is the latest in an exchange of emails with a friend. Enjoy!

After your response I decided to do a little more research into the subject. I think I did perhaps overstate the roll of biofuels, but nevertheless was correct that they are a major factor today, and will be an increasingly impactful factor in the years to come. Second and third generation biofuels (such as the switchgrass that you mention, and algea) are perhaps a decade away (though my money says much sooner). This article at http://www.wikipedia.org/ was a very good starting point for me in my research: (http://en.wikipedia.org/wiki/2007-2008_world_food_price_crisis).

The UN's Food and Agriculture Organization (FAO) states that "the very tight situation of the current 2007/08 season has led to a steady rise in world prices of all cereals, pushing up the food import bill of many importing countries and generating widespread sharp increases in domestic food prices." This suggests that, world-wide, supply is a major aspect of the current crisis. Further in the same report, the FAO claims that, "World wheat stocks by the close of seasons in 2008 are forecast at 144 million tonnes, down 9 percent from their already reduced opening level." These reduced supply numbers, combined with increased diversion from food to fuel (100 million tonnes of cereals, or about 5% of total production, will be used for biofuels according to the FAO), are significant. I believe 5% is meaningful, especially if, as the FAO claims, world supply is already down. These figures indicate that supply and demand is a major factor in world food prices and that (as you suggested) market speculation is exaggerating this big problem into a crisis (1).

I also somewhat suspect that you are arguing more based on the situation in Canada, which I assume is somewhat less dire than the international situation. In fact the FAO projects an 5% increase in wheat production from 2007 to 2008 in Canada (2). But while production is projected to increase, cereals stocks are projected to be at barely half the level they were in 2006: 8.5 million tonnes in 2008 versus 16.2 million tonnes in 2006 (3).

I guess my only argument would be that this is a world food crisis, not simply a Canadian one. If the Canadian government is interested in taking up this cause (as it must), it needs to think globally, not just nationally. That means it needs to consider global factors. Especially since Canadians (for the most part) can afford to pay a bit more for food - the roughly 1.1 billion people living in extreme poverty, who are most affected by this price increase, simply cannot.

(I hope this friend doesn't mind!)