Food supplies face a squeeze

Food prices to rocket, food supplies to fall short of demand and social instability to erupt on a global scale.

It’s a dire prediction that comes not from the “suspect” fringe groups of survivalists and environmentalists, but from the head of the International Food Policy Research Institute, the world’s largest alliance of agricultural researchers, economists, and policy experts

In an interview with the Guardian, Joachim von Braun said the growing appetite of China and other fast-developing nations has combined with the expansion of biofuel programmes in the United States and Europe to transform the global food situation.

“Demand is running away. The world has been consuming more than it produces for five years now. Stocks of grain - of rice, wheat and maize - are down at levels not seen since the early 80s.”

Von Braun warned the risks of food riots and malnutrition would surge in the next two years as the global supply of grain came under more pressure than at any time in 50 years.

He predicted recent pasta protests in Italy, tortilla rallies in Mexico and onion demonstrations in India were just the start of the social instability to come without a boost in production of staple foodstuffs.

Von Braun’s warning comes at a peculiar nexus for Britain.

On the one hand, the prices of staples are creeping higher with consumers paying higher prices for dairy and grain based products than at the beginning of the year.

On the other hand, farmers are facing record low prices for their produce in some areas, with pig farmers making a £30 loss per pig (Pig World magazine) and sheep farmers being forced to cull 250,000 lambs as foot-and-mouth has made them unmarketable.

British vegetable crops have suffered heavily thanks to floods and bad weather in the past year creating shortages but instead of farm prices going higher, the supermarkets continue to try to force prices down.

Bad weather in Europe - drought in some areas, floods in others - have reduced yields there, while in Australia the worst drought in 1,000 years has brought about a situation people thought would never happen - some crops may need to be imported to meet demand.

All this will impact on Britain’s ability to import cheap foods to make up any shortfalls in UK food production.

Back in August I wrote that:

Grain prices have doubled for farmers, while surging demand for biofuels combined floods in some parts of the world and drought in others have led to greatly reduced availability of cereals.

Wheat prices have hit record prices globally, corn prices hit a 10-year high back in January, global grain stockpiles are at their lowest levels in more than 20 years and demand from countries like India has soared.

That all means tremendous upward pressure on prices that will have to feed through to the end users of those cereals, whether they’re used to make bread, feed animals or turn into fuel.

If Von Braun’s predictions are correct, that’s only the tip of the iceberg waiting for us.

How will Western consumer societies respond to rising food prices, shortages of some foods and severe social unrest in poorer nations? Especially when it come on the back of rising oil prices, rising metals prices, a global credit crunch, and the ever increasing effects of climate change?