Thursday, October 16, 2008

Food Crisis on the Way

Submitted by Richard Heinberg on October 15, 2008 - 2:39pm.

dust bowlA perfect storm is brewing in the global food system, and North Americans and Europeans may not be spared this time.

Contributing factors:

The economic crash is still unfolding (no need for explanation here, just pick up any newspaper). It is inherently deflationary in nature because trillions of electronic dollars and euros are simply vanishing on a weekly basis. Efforts by central banks and the US Treasury to re-inflate the system are so far proving ineffective. This ultimately means less money in the pockets of consumers. If things go badly, it will mean NO money in the pockets of a great many would-be consumers.

Meanwhile input costs to farmers are at an all-time high, despite the recent fall in oil and natural gas prices. Moreover, farmers need loans in the course of their normal operations, and loans are hard to get now. That means many farmers just won’t plant as much as they ordinarily would. Many will decide they just can’t afford their hobby any more and go looking for work that actually pays.

On top of this we have the trends that have already led to high food prices in recent months—biofuels mandates, weather impacts (and crop failures) due to climate change, and higher transport costs for farm inputs and outputs.

Meanwhile, farmers’ incomes are not rising—just the opposite. Even though food prices are leading the inflation index, none of the expanding portion of the food dollar is finding its way into the pockets of the people who make the whole system go.

Michael Pollan’s excellent article in the most recent New York Times Sunday Magazine describes what we should be doing to avert a looming food crisis. Every nation and every state and region needs to be formulating a food plan along these lines.

Otherwise, we will be leaving our food system to the vagaries of the market, as we are doing with our energy system (see my previous commentary). The consequences are likely to be similar: less food to go around, extremely volatile prices, and farmers dropping out just when we need more of them.

The time available for the formulation and implementation of an effective policy response is very brief indeed.

Time to start planning next year’s garden.

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