NOW Magazine | Future may hold a 40 per cent hike in cost of dietary basics – ... - The Diigo Meta page

• 09 Jan 08
  

  Steve Leckie

  ethanol food_prices subsidies

  • 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.

  • 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.

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