Imagine my surprise at a session on the global food crisis hosted by MaRS - the College Street think tank linking governments, big business and high tech - when I discovered an economist with the RBC who thinks the way I do.
His name is John Johnston, he's with the RBC's Harbour Group and his job is to show investors how to make money off the bull market in food and farm stocks. But today (July 23) he's warning a roomful of suits to keep the current price inflation "in context."
Here's his shocker: relative to recent costs of other commodities and to food prices over the past 50 years, food prices haven't risen much in North America, if at all, he says.
Recognizing this, it seems to me, is the beginning of wisdom, because it disentangles price hikes from the emerging world hunger crisis.
Despite my disappointment that the publicly funded MaRS Collaboration Centre would host a meeting on global leadership and food without inviting one speaker from a health, enviro or anti-?hunger background (EaRTH to MaRS: collaboration is not just needed among business partners), hard-?headed investors at least have the virtue of liking to get their math straight.
Johnston's charts compare food price increases of 152 per cent over the past 10 years in the U.S. to the 294 per cent jump in the price of metals and 1,053 per cent leap in the price of oil.
Another of his visuals peers back down memory lane to 1947 to point out that $300 of today's meat, potatoes and veg cost only $100 then. But as he says, that doesn't begin to tell the story.
The fact is, he reminds us, a hard-?earned food dollar goes pretty far these days. Wage-?adjusted food prices - that is, the time it took a typical North American to earn the money to buy plenty of food - have fallen by 80 per cent since the good old days of 5 cent cigars and coffee.
It sounds counter?intuitive, I know, but the real food crisis gripping the world these days is not what everyone thinks it is. It's really more about the 80 per cent drop in real-?time food prices since 1947 than the modest, dare I say, "market correction" of recent years.
Humanitarians, greens, health advocates and lefties need to get this right or they will push the wrong policies.
The world's largest occupational group, by a country mile, is farming. Add food processing, distribution, preparation, serving and disposal and that's half the jobs in the world. Cheap food is what keeps "the other half" in poverty.
Poverty, not the rising cost of food, threatens with starvation the third of the world's people who earn less than $2 a day. Since there's still plenty of food to go around at this point, today's crisis is caused by lack of money, not lack of food.
The market, says Johnston, is "ruthlessly efficient.'' When the price of oil or metals goes up, people buy less oil and metal until prices go down, and demand and supply are matched. But if the world's hungry wait for prices to go down before they eat, they will die of starvation.
With food, says Johnston, "we want to separate the ruthless from the efficient." The most efficient way to do that is to find ways to raise incomes, not ways to suppress food prices, which only makes the poor poorer and hungrier.
Johnston is also something of an agnostic about the standard whipping boy of rising world food prices: corn ethanol. He attributes only about 10 per cent of the rise in food prices to the effect of taking food lands out of production to grow corn for fuel.
Yes, I know a "secret" report by economist Don Mitchell for the World Bank now making the eco rounds concludes biofuels, as well as related low grain inventories, speculation and food export bans, are responsible for 70 to 75 per cent of food price rises. If it were an official report, it would have little cred in green circles, but since it's "leaked," people forget the bank is motivated to deflect blame from its own failure to invest in poor nations' agriculture over the last 25 years.
My own guestimate is closer to Johnston's. Either way, there's little doubt government subsidies behind corn ethanol (the industry would die overnight without subsidies and tax breaks, in case anyone is into letting markets decide this issue) belong in the museum of stupid ideas.
In Europe and North America, about a third of the corn crop goes to car fuel. Every SUV tank filled with ethanol fuel uses enough resources to feed one starving child for a year, ethanol critics argue - a nice way to point out the ethics behind what governments do and don't subsidize, but not well reasoned in terms of food impacts.
Almost 40 per cent of corn goes to feed livestock, producing an excess of low-?cost, high-?fat meat, one of the causes of the other "world food crisis" known as obesity, which affects 1.6 billion people without causing complaints about corn abuse.
Another perverse waste of the corn crop is the cheap sweetener called fructose. Most junk foods and soda pops stay cheap and over-?consumed thanks to corn fructose, which takes up about 10 per cent of the corn crop without causing the slightest controversy about rampant diabetes or the diversion of food land from feeding the needy.
Of the dangerous tricks our psyches play on us, denial has been the big problem in terms of global warming. But in terms of the world food crisis, the trick to watch for is displaced aggression.
World price increases between March 2007 and March 08:
Rice 74 per cent
Soya 87 per cent
Wheat 130 per cent
Number of chronically hungry people in developing countries: 820 million
Percentage of the world's hungry who live in India: 50 per cent
Grain consumed per year by the average Indian: 178 kilos
Grain consumed per year by the average American: 1,046 kilos
Vegetable oil consumed per year by the average Indian: 11 kilos
Vegetable oil consumed by the average American per year: 41 kilos
Milk consumed per year by the average Indian: 38 kilos
Milk consumed per year by the average American: 78 kilos
Source: The Blame Game: Who Is Behind The World Food Price Crisis? (Oakland Institute)