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Subject: WORLD FOOD STOCKS DWINDLING RAPIDLY, UN WARNS
Date: Tue, 1 Jan 2008 06:40:54 -0500

WORLD FOOD STOCKS DWINDLING RAPIDLY, UN WARNS
International Herald Tribune, December 17, 2007
WORLD FOOD STOCKS DWINDLING RAPIDLY, UN WARNS
[Rachel's introduction: The world food supply is dwindling rapidly and
food prices are soaring to historic levels, the top food and agriculture
official of the United Nations warned Dec. 17.]
By Elisabeth Rosenthal
ROME: In an "unforeseen and unprecedented" shift, the world food
supply is dwindling rapidly and food prices are soaring to historic
levels, the top food and agriculture official of the United Nations
warned Monday.
The changes created "a very serious risk that fewer people will be able
to get food," particularly in the developing world, said Jacques Diouf,
head of the UN Food and Agriculture Organization.
The agency's food price index rose by more than 40 percent this year,
compared with 9 percent the year before -- a rate that was already
unacceptable, he said. New figures show that the total cost of
foodstuffs imported by the neediest countries rose 25 percent, to $107
million, in the last year.
At the same time, reserves of cereals are severely depleted, FAO
records show. World wheat stores declined 11 percent this year, to the
lowest level since 1980. That corresponds to 12 weeks of the world's
total consumption -- much less than the average of 18 weeks
consumption in storage during the period 2000-2005. There are only
8 weeks of corn left, down from 11 weeks in the earlier period.
Prices of wheat and oilseeds are at record highs, Diouf said Monday.
Wheat prices have risen by $130 per ton, or 52 percent, since a year
ago. U.S. wheat futures broke $10 a bushel for the first time Monday,
the agricultural equivalent of $100 a barrel oil. (Page 16)
Diouf blamed a confluence of recent supply and demand factors for the
crisis, and he predicted that those factors were here to stay. On the
supply side, these include the early effects of global warming, which
has decreased crop yields in some crucial places, and a shift away from
farming for human consumption toward crops for biofuels and cattle
feed. Demand for grain is increasing with the world population, and
more is diverted to feed cattle as the population of upwardly mobile
meat-eaters grows.
"We're concerned that we are facing the perfect storm for the world's
hungry," said Josette Sheeran, executive director of the World Food
Program, in a telephone interview. She said that her agency's food
procurement costs had gone up 50 percent in the past 5 years and that
some poor people are being "priced out of the food market."
To make matters worse, high oil prices have doubled shipping costs in
the past year, putting enormous stress on poor nations that need to
import food as well as the humanitarian agencies that provide it.
"You can debate why this is all happening, but what's most important
to us is that it's a long-term trend, reversing decades of decreasing
food prices," Sheeran said.
Climate specialists say that the vulnerability will only increase as
further effects of climate change are felt. "If there's a significant change
in climate in one of our high production areas, if there is a disease that
effects a major crop, we are in a very risky situation," said Mark
Howden of the Commonwealth Scientific and Industrial Research
Organization in Canberra.
Already "unusual weather events," linked to climate change -- such as
droughts, floods and storms -- have decreased production in
important exporting countries like Australia and Ukraine, Diouf said.
In Southern Australia, a significant reduction in rainfall in the past few
years led some farmers to sell their land and move to Tasmania, where
water is more reliable, said Howden, one of the authors of a recent
series of papers in the Procedings of the National Academy of Sciences
on climate change and the world food supply.
"In the U.S., Australia, and Europe, there's a very substantial capacity to
adapt to the effects on food -- with money, technology, research and
development," Howden said. "In the developing world, there isn't."
Sheeran said, that on a recent trip to Mali, she was told that food
stocks were at an all time low. The World Food Program feeds millions
of children in schools and people with HIV/AIDS. Poor nutrition in these
groups increased the risk serious disease and death.
Diouf suggested that all countries and international agencies would
have to "revisit" agricultural and aid policies they had adopted "in a
different economic environment." For example, with food and oil prices
approaching record, it may not make sense to send food aid to poorer
countries, but instead to focus on helping farmers grow food locally.
FAO plans to start a new initiative that will offer farmers in poor
countries vouchers that can be redeemed for seeds and fertilizer, and
will try to help them adapt to climate change.
The recent scientific papers concluded that farmers could adjust to 1
degree Celsius (1.8 degrees Fahrenheit) to 3 degrees Celsius (5.4
degrees) of warming by switching to more resilient species, changing
planting times, or storing water for irrigation, for example.
But that after that, "all bets are off," said Francesco Tubiello, of
Columbia University Earth Institute. "Many people assume that we will
never have a problem with food production on a global scale, but there
is a strong potential for negative surprises."
In Europe, officials said they were already adjusting policies to the
reality of higher prices. The European Union recently suspended a "set-
aside" of land for next year -- a longstanding program that essentially
paid farmers to leave 10 percent of their land untilled as a way to
increase farm prices and reduce surpluses. Also, starting in January,
import tariffs on all cereal will be eliminated for six months, to make it
easier for European countries to buy grain from elsewhere. But that
may make it even harder for poor countries to obtain the grain they
need.
In an effort to promote free markets, the European Union has been in
the process of reducing farm subsidies and this has accelerated the
process.
"It's much easier to do with the new economics," said Michael Mann a
spokesman for the EU agriculture commission. "We saw this coming to
a certain extent, but we are surprised at how quickly it is happening."
But he noted that farm prices the last few decades have been lower
than at any time in history, so the change seems extremely dramatic.
Diouf noted that there had been "tension and political unrest related to
food markets" in a number of poor countries this year, including
Morocco, Senegal and Mauritania. "We need to play a catalytic role to
quickly boost crop production in the most affected countries," he said.
Part of the current problem is an outgrowth of prosperity. More people
in the world now eat meat, diverting grain from humans to livestock. A
more complicated issue is the use of crops to make biofuels, which are
often heavily subsidized. A major factor in rising corn prices globally is
that many farmers in the United States are now selling their corn to
make subsidized ethanol.
Mann said the European Union had intentionally set low targets for
biofuel use -- 10 per cent by 2020 -- to limit food price rises and that
it plans to import some biofuel. "We don't want all our farmers
switching from food to biofuel," he said.
Copyright 2007 The International Herald Tribune