Saturday, February 14, 2009

Droughts and food - are we heading for a food crunch?

The nexus between climate change, peak oil and food production has been one of my interests for a while. Is it really possible we could see a "food crunch" sooner rather than later? Part of me finds this hard to believe. The shops are full of beautiful produce, and while food prices have been going up, they are still quite moderate.

On the other hand, as those affected by the floods in Queensland can attest to, the plethora of produce in our supermarkets can be a bit of a mirage which will vanish very quickly if there is a disruption to supplies. In our "just in time" culture, few people have food reserves at home or know how to preserve food. Are we more vulnerable than we imagine?

Parts of Australia, which is a major food producer and net food exporter, have been in drought for a long time. Even in my carefully tended to garden I am experiencing a significant crop reduction due to the heat wave. However, food is a global commodity, and the whole idea of international markets is that if one part of the world experiences difficulties in production, another part will supply the shortfall. Prices may go up, and that would be catastrophic for the many poor people in the world who are already struggling to survive. But could there really be a "food crunch" similar to the current "credit crunch"?

This morning I came across this article on global food production on Market Oracle. The following two graphics (quoted from the above mentioned article) show how most of the world's main food producing areas are currently affected by drought. It should make us all stop and think.





According to Market Oracle, the credit crunch, low commodity prices, drought conditions and low food reserves now all point towards a dramatic fall in global food production for 2009. The author predicts that many countries will respond to a jump in food prices with currency appreciation:

"Appreciating a currency is the fastest way to control food inflation. A more valuable currency allows a nation to monopolize more global resources (ie: the overvalued dollar allows the US to consume 25% of the world's oil despite having only 4% of the world's population). If China were to selloff its US reserves, its enormous population would start sucking up the world's food supply like the US has been doing with oil. "

That sounds very serious to me. Obviously, there is not much any individual can do about grain output and major crop failures, but I think I will go back into my garden and try to grow more food. I hope you will, too.

3 comments:

  1. This scares me too. I have not grown a vegetable garden since we moved here almost 6 years ago. Time, plus our ground is hard dry clay, only a rotary ho could fix. You need to truck in loam and spend money on getting the ground ready for planting. I have been regretting not doing it sooner! Now with the worlds economic crisis I have been getting more nervous and planning on building a garden and collecting out materials. Though, I think I will be trucking in loam and set up watcher collection on our shed roof in the next few weeks as the weather hopefully cools..

    I really enjoy your blog, I haven't logged in and said Hello before.

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  2. Wow, what an eye-opening graphic! I have to mention every time I read an article like this I compulsively buy 20 pounds of wheat berries.

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  3. At the Global Creative Leadership Summit last week, panelists discussed "Global Commodity Crunch: Food, Water, Oil, Energy, Trade?"

    After Financial Times journalist John Authers introduced the panel, Badr Jafar examined the issue of oil shortages from an industry perspective, explaining that the “roller coaster” of oil prices in 2008 was precipitated both by oil speculation and the depletion of reserves. As demand for oil steadily increases in China and elsewhere in Asia, the threat of a serious shortage continues to loom portentously. Going forward, investments to increase capacity must come from public-private partnerships, too little of which currently exist, he says.

    Watch a video clip of the panel at:
    http://www.creativeleadershipsummit.org/?q=node/795

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