Update 40: May 5 , 2004-9
Copyright © 2004 Earth Policy Institute
WORLD FOOD SECURITY DETERIORATING:
Food Crunch in 2005 Now Likely
Closing the gap in the world grain harvest this
year following four consecutive grain harvest shortfalls, each larger
than the one before, will not be easy. The grain shortfall of 105 million
tons in 2003 is easily the largest on record, amounting to 5 percent of
annual world consumption of 1,930 million tons.
The four harvest shortfalls have dropped world carryover stocks of grain
to the lowest level in 30 years, amounting to only 59 days of consumption.
Wheat and corn prices are at 7-year highs. Rice prices are at 5-year highs.
(See data at www.earth-policy.org/Updates/Update40_data.htm.)
Can the world's farmers close the gap this year? In addition to the usual
uncertainties farmers face, they must now contend with two newer trends—falling
water tables and rising temperatures. If there is another large shortfall,
grain prices will continue the rise of recent months, driving up food
prices worldwide.
The production gain we need this year is huge. To start, we need to increase
world grain output enough in 2004 to eliminate last year's shortfall of
105 million tons. In addition, we need 15 million tons to feed the 74
million people who will be added to world population this year. With the
grain left in the bin as this year's harvest begins at the dangerously
low level of 59 days of consumption, we also need to rebuild to the 70-day
level that is considered the minimum needed for food security. If we try
to do just half of that rebuilding this year, going up to 65 days of consumption,
we will need another 30 million tons.
There we have it. Maintaining the current precarious balance between production
and consumption will require this year's grain harvest to grow by 120
million tons. But modestly boosting food security will require a total
gain of 150 million tons. Unfortunately, the chances of increasing it
by even 120 million tons appear to be less than one in ten. A fifth consecutive
year in which the harvest falls short of consumption seems likely. The
question is, how much will it fall short and how will it affect world
food prices?
In estimating this year's grain harvest, we know more about the prospect
for the wheat crop than we do for rice or corn simply because the harvest
is dominated by the northern hemisphere's winter wheat, which was planted
last fall. Among major producers, the planted area compared with 2003
is down in China, the United States, Russia, and the Ukraine, but up in
India and the European Union with little change in area overall. Given
the expected recovery of wheat yields in Europe and India from the heat-
and drought-reduced levels of last year, this year's world wheat crop
could easily be up by 35 million tons.
Because rice is water dependent, neither the planted area nor yields vary
much from year to year. The only big increase this year is likely to come
in China, where the government is making an all-out effort—including
higher government procurement prices—to
reverse a four-year decline in the rice area. Early estimates indicate
China's rice crop could rise from 115 million tons to 122 million tons
this year. Allowing for modest gains in other rice-producing countries,
an increase of 12 million tons over last year's harvest appears within
reach.
Estimating the world harvest of corn, used mostly for feed, starts with
the United States—which
accounts for 40 percent of the crop. The U.S. area planted to corn is
expected to be roughly the same as last year. Since the U.S. corn harvest
is largely rainfed, and thus vulnerable to both heat and drought, yield
can vary widely. It is doubtful that American farmers can match last year's
record corn yield, but we will optimistically assume they can and that
better crops elsewhere will be enough to raise the 2004 world corn crop
by 10 million tons.
For the minor grains—barley,
rye, oats, sorghum, and millet—where
production has been falling in recent years, we will assume a 3-million-ton
gain.
Combining the estimated increases of 35 million tons for wheat, 12 million
tons for rice, 10 million tons for corn, and 3 million tons for other
grains gives an increase of 60 million tons over last year's harvest.
This is an improvement, but it would still be 60 million tons short of
what we need to close the gap. And if we include the goal of modestly
rebuilding stocks, we will be short by 90 million tons.
As noted earlier, falling water tables and rising temperatures are making
it more difficult for farmers to expand grain production. Water tables
are falling and wells are going dry under the North China Plain, which
produces a third of China's corn and half of its wheat; in most states
in India, including the Punjab, its breadbasket; and under the southern
Great Plains and southwest of the United States. In addition, farmers
in all three countries are losing water to cities. Beyond this, in dozens
of smaller countries farmers are also losing irrigation water to aquifer
depletion and to cities.
Record or near-record temperatures have withered crops in key food-producing
regions of the world in each of the last two years. Since 1970, the earth's
average temperature has risen 0.6 degrees Celsius. Three of the four warmest
years on record came during the last four years—years
of crop shortfalls. This year's average global temperature will almost
certainly be above the norm (defined as the average for 1950-80). What
we do not know yet is how much above it will be and which food-producing
regions will be most affected.
If the estimated 2004 shortfall of 60 million tons materializes, it will
take the world into uncharted territory. Either grain stocks will drop
by 12 days of consumption, falling to an all-time low of 47 days, or food
prices will rise and force a reduction in consumption—something
that will be particularly difficult for the 3 billion people who live
on less than $2 a day. In reality, the shortfall will be covered by some
combination of declining stocks and rising prices.
A shortfall on the scale projected almost guarantees the emergence of
a politics of food scarcity in 2005 of the sort that occurred in the early
1970s, when exporting countries such as the United States restricted grain
exports in order to curb the rise in domestic food prices.
There are already early signs of this. In September 2002, Canada—on
the heels of a heat-reduced harvest—announced
it would limit wheat exports to assure that domestic needs were satisfied.
Two months later, Australia, also experiencing a drought-reduced harvest,
limited exports to its traditional customers only. In mid-2003, the European
Union stopped issuing grain export certificates for several months. And
in January 2004, Russia imposed an export tax on wheat to combat rising
bread prices.
The risk is that a year from now, lower grain stocks and soaring food
prices could destabilize governments in low-income grain-importing countries
on a scale that would disrupt global economic progress. If this lowers
the Nikkei stock index, the Dow Jones 500, and other key indicators, we
may realize that our economic future depends on a worldwide effort to
stabilize population, raise water productivity, and stabilize climate—and
at wartime speed.
Copyright © 2004 Earth Policy Institute
FOR ADDITIONAL INFORMATION
From Earth Policy Institute
Lester R. Brown, Plan
B: Rescuing a Planet Under Stress and a Civilization in Trouble
(New York: W.W. Norton & Company, 2003).
Lester R. Brown, Janet Larsen, and Bernie Fischlowitz-Roberts,
The Earth Policy Reader (New York: W.W. Norton & Company, 2002).
Lester R. Brown, Eco-Economy: Building
an Economy for the Earth (New York: W.W. Norton & Company, 2001).
Lester R. Brown, "World Food Prices Rising: Environmental
Neglect Shrinking Harvests in Key Countries," Eco-Economy
Update, 28 April 2004.
Lester R. Brown, "China's Shrinking Grain Harvest," Eco-Economy
Update, 10 March 2004.
Lester R. Brown, "Wakeup Call on the Food Front," Eco-Economy Update, 16 December 2003.
Lester R. Brown, "World Facing Fourth Consecutive Grain Harvest Shortfall," Eco-Economy Update, 17 September 2003.
Lester R. Brown, "China Loosing War With Advancing Deserts," Eco-Economy Update, 5 August 2003.
From Other Sources
U.S. Department of Agriculture, World Agricultural
Supply and Demand Estimates, http://www.usda.gov/oce/waob/wasde/latest.pdf
LINKS
United Nations Food and Agriculture Organization
http://www.fao.org
United States Department of Agriculture
http://www.usda.gov
