The Global Food Crisis February 2009 World Affairs Council Five questions

Global Food Crisis – question #1 What is the Global Food Crisis ?

Global Food Crisis – question #1 What is the Global Food Crisis ? May I have another?

Global Food Crisis – question #1 What is the Global Food Crisis ? A massive rise in the demand for foodstuffs. rice wheat corn (maize) soy beans A sudden rise in demand leads to a rise in price. eg. The price of rice has tripled in past year. Wheat, corn (maize), soybeans have risen in price Reduced food intake for poor people. ---for 100 million people in 30 countries. because they cannot pay the higher prices.

Global Food Crisis – question # 2 How are individuals affected? Depends upon how rich (or poor) you are : Americans spend 16% for food Indonesians spend 50% for food Vietnamese spend 65% for food Nigerians spend 73% for food How do they cope : - they cut back on food : number of meals, quantity, quality - they reduce other expenditures : health care, transportation, schooling -they die : 25,000 deaths per day.

Global Food Crisis – question # 3 How are nations affected? Food riots (Cameroon, Indonesia) Producers limit exports (Vietnam, Ukraine, Argentina) Governments become defensive or repressive -stockpiling or hoarding -rationing (Pakistan) -may collapse: Haiti Regional instability -risk of war

Global Food Crisis – question # 4 What causes this rise in demand and price? Rising costs of food production Population growth – 80 million per year Demand for biofuels-ethanol Crop failures (SE Australia, Ukraine, Iowa, China) Speculative investment Increased consumption of meat

Global Food Crisis – question # 4 What causes this sudden demand for food? Rising costs of food production Population growth – 80 million per year Increased consumption of meat Demand for biofuels-ethanol Crop failures (SE Australia, Ukraine, Iowa, China) Speculative investment No single one of these causes, but a simultaneous occurance of all of them! THE PERFECT STORM

Global Food Crisis – question # 4 CAUSES: Rising costs of food production Population growth – 80 million per year Demand for biofuels-ethanol Crop failures (SE Australia, Ukraine, Iowa, China) Speculative investment Increased consumption of meat

Global Food Crisis – question # 4 No single one of these causes, but a simultaneous occurrence of all six of them! THE PERFECT STORM

Global Food Crisis – question # 5 What’s to be done about it? Short term: feed the hungry -immediate food and cash handouts Middle term: stimulate farming overseas, make it worthwhile -stop subsidizing our farmers to produce cheap exports -give cash, not food, to overseas poor (e.g. CARE) -Gates and Buffet are giving money to stimulate farming Long term; produce more food!

Global Food Crisis – question # 5 HOW do you produce more food? 1. Increase acreage 2. Improve farming practices 3. Plant breeding 4. Genetic engineering

THOMAS MALTHUS

Global Food Crisis – five questions 1. What is the Global Food Crisis? 2. How are individuals affected? 3. How are nations affected? 4. What causes this sudden demand for food? 5. What’s to be done about it?

Global Food Crisis High prices is a temporary imbalance: -a new price equilibrium will be found -food prices have fallen in the past month! probably due to the Global Economic Crisis

Global Food Crisis My speculation: -lower prices tend to reflect the new equilibrium -this situation still is in a temporary imbalance -more food must be produced in poor areas -rich countries must help them do it.