I’ve posted before about the need for a paradigm shift in agriculture policy (see here and here). There is an article by Jeffrey D Sachs in the June 2008 issue of Scientific American which picks up on this theme – although to my mind he doesn’t go far enough. As the article isn’t (yet) online, here is an edited version:
Surging Food Prices and Global Stability
Misguided policies favor biofuels and animal feed over grain for hungry peopleThe recent surge in world food prices is already creating havoc in poor countries, and worse is to come. Food riots are spreading across Africa, although many have gone unreported in the international press. Moreover, the surge in wheat, maize and rice prices … has not yet fully percolated into the shops and … the budgets of relief organizations … In early 2006 a metric ton of wheat cost around $375 on the commodity exchanges. In March 2008 it stood at more than $900 …
Several factors are at play in the skyrocketing prices … World incomes have been growing at around 5% annually in recent years … leading to an increased global demand for food … The rising demand for meat exacerbates the pressures on grain and oilseed prices because several kilograms of animal feed are required to produce each kilogram of meat. The grain supply has also been disrupted by climate shocks …
An even bigger blow has been the US decision to subsidize the conversion of maize into ethanol to blend with gasoline. This wrongheaded policy … gives a 51% tax credit for each gallon of ethanol blended into gasoline. The Energy Policy Act of 2005 mandates a minimum of 7.5 billion gallons of domestic renewable-fuel production … overwhelmingly … corn-based ethanol, by 2012. Consequently, up to a third of the US’s Midwestern maize crop this year will be converted to ethanol, causing a cascade of price increases … (Worse still, use of ethanol instead of gasoline does little to reduce net carbon emissions once the energy-intensive full cycle of ethanol production is taken into account.)
The food price increases are pummelling poor food-importing regions … Several countries … have cut off their rice exports in response to high prices at home … Even small changes in food prices can push the poor into hunger and destitution … some of the greatest famines in history were caused not by massive declines in grain production but rather by losses in the purchasing power of the poor.
… measures should be taken in response to the food price crisis. First, the world should … fund a massive increase in Africa’s food production. The needed technologies are available – high-yield seeds, fertilizer, small-scale irrigation – but the financing is not. The new African green revolution would initially subsidize peasant farmers’ access to better technologies [… and …] help farm communities establish long-term microfinance institutions …
Second, the US should end its misguided corn-to-ethanol subsidies … Third, the world should support longer-term research into higher agricultural production. Shockingly, the Bush administration is proposing to sharply cut the US funding for tropical agriculture studies … just when that work is most urgently needed …
