Santa Fe, New Mexico – It’s counter-intuitive, I know, but cheap food has been one of the leading causes of global poverty, hunger, disease and pollution.
That’s why one of the biggest stories of 2007 is also one of the best: food prices are shooting up.
The price hikes, in the range of 4 per cent across North America, are just the beginning of long-term “agflationary” pressures, which go far beyond short-term shifts caused by the sudden demand for corn ethanol to feed the cars of the world.
With some transitional tinkering in government policy, more expensive food can benefit almost everyone. And people may as well start tinkering, because prices won’t be coming back down any time soon.
My guide through the food maze is Miley Gonzalez, secretary of agriculture for New Mexico and chair of the NAFTA planning committee for farm-based regions.
It happens that he’s bunking at the same place in Santa Fe where I’m hiding out to make a writing deadline. When he takes me out for a dinner of “real” New Mexican food at Adelita’s, I break my vegan diet to try out his suggestion of cow lips and cheeks.
Though it gets little rain, New Mexico is a serious food player, strong in beef, dairy, chili peppers. Other key products are pecans, bio-diesel fuel, onions and a local cuisine that’s got adventurous eaters fired up.
Gonzalez can see a lot of trends from down here. Salsa has trounced catsup across North America. Local milk and beef ride the population explosion worldwide. Dairy is newly fashionable among the coffee-drinking urban hip, as in lattes.
Meat and eggs provide the protein and fat many of the newly affluent in China and India want to clog their arteries with; it’s what’s known as the “nutrition transition.”
Asia “likes our protein,” Gonzalez says, which raises demand for grains, 70 per cent of the feed livestock are raised on. For seven of the past eight years, more grain has been consumed than is produced, drawing on world grain reserves to the point where supply is only 53 days ahead of demand, much less than was safeguarded in Biblical times.
Also on the demand side, ethanol from corn is using up a sixth of the 2007 U.S. crop, creating some scarcity and raising prices. When corn prices jump, the impact leapfrogs through the food chain, from beef (15 pounds for one pound of meat) to sweeteners.
Whether it’s for corn ethanol or a better crop, fewer acres for food and more for fuel and fiber are an inevitability of peak oil times, and that means prices are heading north.
Then come new pressures on the “supply side.” A third of the world’s fisheries are depleted. Drought is more common.
Australia, usually the world’s third-largest wheat exporter and a major supplier of China and South America, has been sidelined by drought.
China’s annual shortfall in wheat production, due to soil erosion and lack of irrigation water from dried-up aquifers, equals the entire Canadian harvest, according to a report in Asia Pacific Food Technology.
And then there’s an important but under-noticed report from March 2007 by Christopher Field of the department of global ecology at Stanford University.
Field blames declines in grain production between 1989 and 2002 on global warming; every 1 degree increase in temperature led to 3 to 5 per cent declines in yield, resulting in a 40 million ton loss.
Over the last 50 years, North Americans and some Europeans have got used to food costing something like 10 to 15 per cent of their earnings. If reports from ING Group consultants are right, price hikes of 40 per cent are expected to be the new normal.
This trend doesn’t seem like good news for the poor, until we remember that about 2 billion of the world’s poorest people are farmers about to see their first days free of cutthroat competition since the formation of the World Trade Organization in 1992.
If prices respond to supply-and-demand pressures, there will also be a long-awaited reordering of social service priorities. Governments will at last have to respond to the needs of the urban poor by providing more affordable housing and higher minimum wages and social allowances. It’s time cheap food stopped substituting for rational social policy.
Diets will get healthier when the farm sector no longer needs to find ways of getting rid of crops in wasteful, negative ways like turning potatoes into potato chips, wheat into donuts or corn into factory-barn meat larded with fat and antibiotics. Living off the fat of the land is risking the lives of a billion overweight people.
Odd though it seems at first swallow, pricey food stirred with good social and health policy may turn out to be the best money we never saved.