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The new food crisis

Written By: - Date published: 9:57 am, August 13th, 2010 - 19 comments
Categories: climate change, Economy, energy, food - Tags:

Climate change, peak oil, resource exhaustion, and over-population are combing to cause a new food crisis. The human population runs on grass seeds – grains supply half the calories we consume directly and feed much of our live-stock. The prices of those are skyrocketing.

There’s not enough for the number of mouths. The land is becoming less productive. Fertilisers are running out. Oil prices are driving up production costs. Now, in Russia the worst drought in a century has slashed grain production, forcing the government to impose an export ban (the drought has also triggered forest fires at Chernobyl, sending radioactive ash into the atmosphere).

The WTO is pleading for other major exporters to not close off their trade but if they don’t their people will go hungry while their grain goes abroad to feed the rich. Ukraine is imposing its own export controls, and other major exporters may follow.

It’s not just the grain market that is in trouble. Food prices across the board are rising fast and are projected to keep on rising – quite simply, supply is not keeping up with demand.

The grim irony to Russia being the centre of a new food crisis is that for years they have been quietly talking of climate change as an opportunity. Russian leaders have said the melting permafrost will open up huge new areas for farming. The reality is that the soil under the permafrost, having been frozen for tens of thousands of years, is next to useless and their existing farmland is suffering drought and fire.

The last food crisis was in 2007-08, the same time as the last oil shock. They ended only when the world went into recession. Once again, we have emerging food and oil crises, and the world economy is staring at recession.

This is no coincidence. Recession is just an effect of these fundamental constraints. We’re about to slam into the limits of growth again.

19 comments on “The new food crisis”

  1. Herodotus 1

    Marty G you forgot to mention the ability of trading rooms playing games with peoples lives as they speculate on the price. Just watch the futures markets as they have had all the resources thrown at them to be able to hedge for movements. With these shortages and the happenngs in Pakistan, we could very well see a few moving uo the suoer wealth rankings but with blood on their hands as a consequence.

  2. Lanthanide 2

    All that pessimism and misery and you haven’t even added in Wheat Rust yet!

    http://www.economist.com/node/16481593

    “IT IS sometimes called the “polio of agriculture’: a terrifying but almost forgotten disease. Wheat rust is not just back after a 50-year absence, but spreading in new and scary forms. In some ways it is worse than child-crippling polio, still lingering in parts of Nigeria. Wheat rust has spread silently and speedily by 5,000 miles in a decade. It is now camped at the gates of one of the world’s breadbaskets, Punjab. In June scientists announced the discovery of two new strains in South Africa, the most important food producer yet infected.

    Wheat rust once spurred the Green Revolution, the huge increase in crop yields that started in the 1940s. Now it could threaten those great gains. Norman Borlaug, the great American agronomist who died last year, conducted his original research into wheat rust. After ten years of painstaking crossbreeding, he isolated a gene, Sr31 (Sr for stem rust) that resisted P. graminis. By wonderful good fortune, Sr31 also boosted yields (and not only because plants were impervious to rust). Farmers everywhere adopted his seeds enthusiastically, saving millions of lives. So fast did his new varieties spread that by the 1970s, stem rust seemed to have been wiped out.”

  3. vto 3

    Japan only produces 40% of its food requirements………….. another ticking time bomb perhaps

  4. randal 4

    reality sandwiches for dinner then?

  5. prism 5

    I like to buy a cappucino once a week, it’s gone up from $3.50 to $4.40 – reason cost of milk up. While I drank I flicked through DomPost – something in business section about Mark Hotchins Allied Farmers and Hanover Finance (I think that’s the name). Problem was about share swap but one lot came with hidden debt and now finance payments due may not be met.

    Seems like much of the money in NZ is going to smart sh”s like this guy, the business leaders travel between destinations in their isolation bubbles, and we may end up with food protests like other countries we considered ourselves to be superior to. Often those countries have a top class who have captured most of the wealth, and that’s the way stats show that NZ is trending.

    We can’t even grow bananas, our favourite food just like monkeys, so we can’t become a banana republic, and we can’t make nests in the trees like monkeys do either. Lord Rutherford – ‘We haven’t the money so we’ve got to think (for once)’.

  6. tc 6

    Gwnne Dyers excellent ‘Climate wars’ outlines this scenario and details that the US has had a high level gov’t funded group making contingency plans around mass migrations of people in search of food as they consider that a security threat.

    Italian tomatoe crop predicted to be 10-20% down also…mamma mia.

    • Draco T Bastard 6.1

      And that is something that we haven’t been doing and will need to do. There’s a very good reason why I say that we will be closing our borders in the near future – There’s no way we can support the influx of millions of people as food refugees start looking for a place to live that can be reached by boat. We will only have one choice and that will be to stop them landing. We will also need better defensive operations – something that can stop an invasion fleet without relying on imported weapons.

  7. Zaphod Beeblebrox 7

    WTF is milk so expensive in NZ?. In Aus 2 litres are $A3.40. I know Fonterra are our biggest company and dairy farmers are gods but why to we all ahve to suffer financially for a company that makes millions in profit?

  8. KJT 8

    Ask why you can build a house in Australia for the same or less than here even though the cost of labour is 3 times higher over there.

    • Zaphod Beeblebrox 8.1

      And builders over there have to have proper qualifications and be registered. Just a guess but that might have something to do with the fact that houses over there don’t leak.

    • Lanthanide 8.2

      Yes, the building supplies are so ridiculously overpriced here, someone must be making a killing.

      You can go to a store and pay $4 for a little piece of metal in a specific shape that you need that can’t have cost any more than 0.001 cent to make.

      • loota 8.2.1

        No wonder Fletcher Buildings is the share to buy

        • Herodotus 8.2.1.1

          It has nothing to do with houses now in NZ having to be double glazed adding $6-10k per house. Water hook ups in Ak costing $1k in 2006 and now $5-6k currently within Manukau Area alone. A house that took 4 months to build and get code of compliance now taking 8-10 months or that councils now charge development contributions ranging from $6-$30+k. And remmber all these council costs then have GStT charged on top. Thanks to the govt that enabled these just add costs not thinking of how NZ voters are and have been struggling to keep a family unit going. But I forget how removed Mps are with the rest if us. I g=bet most no not even know how much it costs to keep a family clothed, fed and housed.

          • Zaphod Beeblebrox 8.2.1.1.1

            The fact that its almost impossible to build anything over 2 storeys anywhere can’t help as well. Saw an advertisement for a gated subdivision in Avondale (presumably reasonably expensive land) and it was all single storey stuff. Why wouldn’t the developer make a bit of money and make it 2 or 3 storeys. In Melb or Syd it would be 4 storeys. Would make development contributions and water connections a lot cheaper if we were allowed to build stuff to any scale.

          • KJT 8.2.1.1.2

            Herod.
            They have similar charges in Australia. Including sales taxes.
            Reserve fees etc are nothing to do with the cost of building the house, but they have those in Aus too.
            It has to do with the fact that you can buy the same building materials. (A lot of which, framing etc, often are NZ sourced) for a lot less over there.

            • Herodotus 8.2.1.1.2.1

              We use timber framing, Aust double bricks. We have smaller scale of economies, just look at the no and locations of brick/masonry works are. Our block machines are smaller are run part of the day 1-2 shifts. KRT kitechen and bathrooms are sourced overseas, we had an industry but much of that has closed down, Steel costs for mesh just keeps going up, it was like watching the petrol pump just winding up the numbers. Roughly building costs have gone up from about $1300m2 to over $2000 for a 2 story house. Then add the cost of funding, realestate fees. From a cost + perspective houseing is as cheep as we in NZ have experienced since the late 80′s.
              Most councils limit the heights of buildings to 9m and some developers limit to 8m in height with a traditioanal pitch roof limits to 2 levels.
              Land for a low populated country is expensive, yet much of that is because of the lack (My perspective) of ability to plan, they cannot fund infrastructure (as they have no money) With fragmented land ownership this procludes then individual developers to proceed as they will require 3rd party land to build stormwater ponds, infrastructure to their development, the lack of easily developed land in Auck. Much of what is to be developed is tricky and requiring expensive geotechnical work, that many do not see or are aware of the cost. e.g shearkeys to keep land stable $1m for each key to be dugup and then recompacted with suitable fill.. the only thing keeping developement costs down is very aggressive sub contractors earthworks and civils. This is short term as many are hard pressed financially.
              We also have a market unable to afford new housing and banks unwilling to lend developers and potential house owners.
              rant finished !!! developers are even selling their European cars !!! the 2 seater versions anyway

  9. David 9

    Last time I checked the stats (a few years ago now) there was more than twice as much food (in terms of kilojoules) produced each year than was needed to give everyone on the planet a decent diet. The problem is that not everyone can afford it. I’m sceptical too about the notion of “over-population”…

    I reconmend two articles from Australia: “Population control — a political weapon for conservatives”
    http://www.greenleft.org.au/node/44864

    “The battle for the world food system: an interview with Raj Patel”
    http://vimeo.com/12258201

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  • Resignation rates among cops soar
    The number of frontline officers quitting the police force is at a four-year high, with more than 350 walking off the job in the past year, Labour’s Police spokesperson Jacinda Ardern says. “Since 2009 resignation rates among sworn staff have...
    Labour | 17-04
  • Service for victims of sexual violence pushed out in cold
    The Green Party is calling on Housing New Zealand to revisit its decision to evict an essential community organisation in Christchurch with only eight weeks notice.Yesterday at the Select Committee inquiry into funding for sexual violence support services the organisation...
    Greens | 17-04
  • Legal high ban worthy of wider pick-up
    Auckland Council’s ban on using legal highs in a public place is an excellent idea that should be replicated around New Zealand, says Labour’s Associate Health Spokesperson Iain Lees-Galloway. “Auckland Council has implemented a by-law banning the use of psychoactive...
    Labour | 17-04
  • Smith sells state P-houses to first home buyers
    Nick Smith must reassure worried first home buyers that any Housing NZ houses sold under his First Home policy will be tested for P contamination after revelations that three out of seven properties sold in Wanganui tested positive for methamphetamine,...
    Labour | 17-04
  • PM’s China visit assisted Oravida, not Fonterra
    Questions must now be asked whether it was Fonterra or Oravida who really benefited from the Prime Minister’s recent visit to China, Labour’s Primary Industries spokesperson Damien O’Connor says. “Before his departure, John Key said he would wait until all...
    Labour | 16-04
  • New Zealand’s use of ozone depleting gases increases
    A new Government report highlights that the amount of ozone depleting gases New Zealand is using is increasing, the Green Party said today.The report tabled in Parliament yesterday shows that total use of ozone depleting gases in New Zealand has...
    Greens | 16-04
  • Manufacturing Upgrade
    Labour is determined to support and grow our manufacturing sector. These policies grew out of the findings of the 2013 Parliamentary Inquiry into Manufacturing.  ...
    Labour | 16-04
  • Collins must admit misleading Parliament
    ACC Minister Judith Collins must front up and admit she has misled Parliament over ACC’s policy to stop paying compensation to clients who refused to fill in its privacy form, Labour’s ACC spokesperson Iain Lees-Galloway says. “Judith Collins claimed Labour...
    Labour | 16-04
  • English confirms he has no plan to raise wages
    Finance Minister Bill English has confirmed he has absolutely no plans to lift wages, Labour’s spokesperson on Labour Issues, Andrew Little says. “Bill English told the Chamber of Commerce yesterday that workers could expect a rise in average income of...
    Labour | 16-04
  • Govt careless and callous about threatened birds
    The National Government is increasing the threat to two of the world's most threatened and unique birds by opening up Victoria Forest Park to petroleum drilling, the Green Party said today.Scientists have recently published a ranking of the 100 most...
    Greens | 16-04
  • Genesis: The biggest fire sale of them all
    National has finished its asset sales with a massive bonfire of a fire sale, showing once and for all how much of a disaster this programme was, says Labour’s SOEs spokesperson Clayton Cosgrove. “Just 68,000 Kiwis bought shares in Genesis,...
    Labour | 16-04
  • Interest rates rise but only smokes increasing
    Mortgage rate rises are making life harder for homeowners, and many of them will be surprised the latest CPI figures show inflation would be zero were it not for tobacco tax hikes, says Labour’s Finance spokesperson David Parker. “New Zealanders...
    Labour | 16-04
  • Term One Report Card for Hekia Parata
    Assignment Teacher’s Comments Grade      ...
    Labour | 16-04
  • Hekia Parata kept exam book errors from schools
    Schools will be appalled to learn Education Minister Hekia Parata knew since January that hundreds of exam booklets had been returned to the wrong students but said nothing about it, Labour’s Education Spokesperson Chris Hipkins says. “Exams are stressful enough...
    Labour | 15-04
  • What has ACC Minister been doing?
    The ACC Minister needs to front up and explain what, if any, changes she has made to the broken culture of ACC rather than denying that she has any part to play in the dysfunction of her Ministry, the Green...
    Greens | 15-04
  • Promise of jam tomorrow takes the cake
    A claim by Minister of Finance Bill English that average wages will climb by $7,500 over the next four years is a cynical promise of jam tomorrow by a government whose record on wage growth is atrocious, Labour spokesperson on...
    Labour | 15-04
  • Judith Collins has to fess up on ACC blunder
    ACC Minster Judith Collins must front up and tell New Zealand how many people who refused to hand over their private details to ACC have been denied cover, says Labour’s ACC Spokesperson Iain Lees-Galloway. “The legality of ACC’s privacy waver,...
    Labour | 15-04
  • Board of Inquiry conditions will save rivers in New Zealand
    The Ruataniwha dam decision released today has protected the Tukituki River and dashed the Government’s hope of the “one nutrient model” (TRIM) being adopted nationwide, says Labour’s Conservation spokesperson Ruth Dyson. “It is a massive victory for those in the...
    Labour | 15-04
  • Labour turns wheels for cycling safety
    With more than a million New Zealanders now using cycling as an attractive alternative means of transport it is past time their safety was taken seriously, Labour’s Transport spokesperson Darien Fenton says. Due to speak to a cycling rally at...
    Labour | 15-04
  • SPEECH: Institute of Directors
    LEADING AND MANAGING OUR ECONOMIC FUTURE David Cunliffe MP, Labour Leader Speech to the Institute of Directors 15 April 2014, Auckland It's a privilege to be speaking here. The Institute of Directors has a proud history of developing New Zealand's...
    Labour | 15-04
  • More Oravida endorsements from John Key
    The use of a picture of John Key in an advertisement for Oravida’s scampi products in a Chinese airline magazine is further evidence of an unhealthily cosy relationship between the National Party and this company, Labour Leader David Cunliffe says....
    Labour | 15-04
  • Workers at Canterbury Yarns need redundancy support
    Workers faced with redundancy at Canterbury Yarns need a redundancy support co-ordinator, Green Party industrial relations spokesperson Denise Roche said today.Last week, Canterbury Yarns was placed in receivership. Canterbury Yarns joins a long list of New Zealand manufacturers who have...
    Greens | 14-04
  • Making the holidays easier for Kiwi drivers
    The next Labour Government will make the holidays easier and journeys quicker for Kiwi families driving on the roads, says Labour Leader David Cunliffe. “There’s nothing Kiwis like more than getting on the road and going on holiday. But on...
    Labour | 14-04