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High Food Prices: Challenges and Solutions
Erica Barnett, 16 Jan 08

In recent weeks, there have been a tremendous number of stories detailing the latest crisis in the world's food system: For much of the world's population, food--the most fundamental necessity of all our lives--is no longer affordable. What's more, food is more expensive, almost everywhere, than ever before. The evidence is overwhelming:

In September, the Economist reports, the world price of wheat rose to $400 a ton, the highest level on record. That's twice the inflation-adjusted average price of wheat for the past 25 years, and twice as high as it was in May. Last year, the price of corn also hit a record of $175 a ton--more than 50 percent above the average for the previous year. Other staples, such as rice, have also hit records, ricocheting off the price of other staples as farmers switch land to high-paying commodities from other uses. Interestingly, prices have reached record highs during a time of equally record abundance: cereal crop yields last year were higher than ever, an outcome the Economist attributes to two trends: Growing demand for meat in (increasingly wealthy) China and India (livestock production requires more crops for feed); and skyrocketing demand for corn-based ethanol. As farmers have shifted croplands to feed America's growing demand for ethanol, the cost of other crops goes up, and stockpiles go down; last year alone, the United States' grain stockpiles decreased some 53 tonsTK. Demand for ethanol, meanwhile, is fueled by a massive program of government subsidies, distorting food markets ever further. (Incidentally, the grain required to fill a 25-gallon SUV tank could feed a person for a year--that's a nice little stat to have on hand when arguing against government subsidies.)

In affluent countries like the US, the ready abundance of cheap, highly processed carbohydrates have pushed obesity and diabetes to epidemic proportions. As Mark Winne notes in his excellent new book Closing the Food Gap: Resetting the Table in the Land of Plenty (a book I hope to review in more detail here soon), food obsessions such as veganism, freeganism, organic, grass-fed, humane, and local are irrelevant bourgeois luxuries to the poor, who must deal with much more immediate concerns: "getting to a food store where the bananas weren't black," for example, or "having enough money to buy any food at all."

Indeed, according to a new report by the US Department of Agriculture, low-income households up to 130 percent of the US poverty line are generally unable to budget an adequate amount for fresh fruits and vegetables, and only after wages rise significantly will low-income people allocate more money to healthy foods, as opposed to frozen convenience foods and meats. (The report suggests these foods provide convenience and higher value than more time-consuming and energy-poor foods such as fresh produce.) Not surprisingly, surveys show that more nutritious foods are more expensive and less prominently displayed in grocery stores than their calorie-dense, but nutrient-light, substitutes--candy, crackers, and the like.

So what's the solution? The Economist suggests that, in developing countries hit hard by high staple-food prices, subsidizing wages is superior to subsidizing food purchases directly, because it helps farmers and distorts price signals less. Fair enough, but it strikes me that living wage movements and--much more importantly--an end to market-distorting government subsidies would go further in the long run than short-term price supports. Ending corn subsidies might push up corn prices in the short run, but it would force some sanity into the US food system, and help marginal and smaller-scale producers recover in a market that has benefited large factory farms to the detriment of family farmers.

How to deal with the fact that fresh produce costs so much compared to its processed caloric equivalent (and if THAT doesn't sound appetizing, I don't know what does)? One very promising answer lies in the field of urban agriculture--which, according to the Food and Agriculture Organization of the United Nations, already provides food to as many as 700 million city dwellers and could improve food security and even produce small amounts of surplus income (up to $3 a day) for the 60 percent of people in developing countries who will live in cities by 2030. Urban farming holds significant promise for city dwellers with little access to fresh, healthy food; the more you control your own food system, the more you control your health and wellbeing.

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What has held back urban farming is the lack of an economically viable model. SPIN-Farming provides one. Developed by Canadian farmer named Wally Satzewich, SPIN-Farming is a nontechncial, easy-to-learn, inexpensive-to-implement farming system that makes it possible to earn significant income from land under an acre in size. Minimal infrastructure, reliance on hand labor to accomplish most farming tasks, utilization of existing water sources to meet irrigation needs, and situating close to markets all keep investment and overhead costs low. SPIN therefore removes the 2 big barriers to entry for new farmers – they don’t need a lot of land or money. It is enabling a growing corps of first generation entrepreneurial farmers around the world to, literally, take matters into their own hands by establishing farm businesses wherever they live. Can thousands of backyards and front lawns be a solution to thousands of acres of monocrops? You bet!

Posted by: Roxanne Christensen on 17 Jan 08

Eating local and eating organic are middle class conceits, yes. But. There are a lot of middle class people out there. And by indulging in their conceit, they do a whole lot less damage, and contribute to the mainstreaming of this very useful model of agriculture. Eventually, the poor may also get to benefit from that.

What we need to do is simple: stop the biofuels madness. Stop all subsidies for first generation biofuels immediately. Scale down and reconsider support for research into second generation biofuels. There may be more useful things we can do with agricultural wastes (biogas, soil fertilisation, biomass electrical energy). There has to be a serious review.

We have entered the wrong path with biofuels, and as the policy process may have developed a dependency on that path, it has to come to a full stop, as soon as possible, before it gains further traction.

Posted by: nanne on 18 Jan 08

Veganism is not an elite option for the rich and middle class. Beans and rice or tortillas, peanut butter and bread, even falafel and pita provide for the caloric and protein base of many diets on an affordable basis. Produce to provide other diet needs can then be added as budgets allow.

If such diets are widely adopted in the US, the poor would also eat well and cheaply. Grain prices would likely fall without the need to convert massive amounts of grain production to meat production.

Posted by: Tom L on 21 Jan 08

Grow your own... Potatoes are fairly easy to grow and so is corn. Swap with your neighbors. When less of us are buying from big grocers the prices will drop...

Posted by: Jahnets on 25 Jan 08



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