Food shortages feed instability

Severe drought in some of the most important food-producing regions of the United States and in parts of Europe has led to a spike in prices for key agricultural commodities.

The World Bank’s Food Price Watch reported recently that during June and July, the price of corn and wheat increased by 25 per cent, while soybeans increased by 17 per cent.

Importantly, prices for rice declined slightly.

Pressure on food supplies has also led to questions about the amount of corn grown in the United States for ethanol fuel production.

The USA is the world’s largest corn producer and exporter.

In 2001 about 7.5% of the US corn crop was used to make ethanol but it is forecast to reach 40 per cent this year.

That represents an estimated 38 million hectares of corn crops.

Part of the difficulty in reversing this trend is that ethanol production has been mandated by law making it a difficult task to return this farmland to food production.

World Bank Group President Jim Yong Kim warned that rising food prices are “… threatening the health and well-being of millions of people. Africa and the Middle East are particularly vulnerable, but so are people in other countries where the prices of grains have gone up abruptly.”

This is a concerning development as it will add to the underlying causes of social unrest in many countries.

French President Francois Hollande has called for global leaders to build “strategic food stockpiles” as a buffer against wild swings in prices.

High food prices were one of the factors that triggered the first wave of uprisings against repressive regimes in North Africa and the Middle East.

Rising food prices may not be the primary driver but will add to the underlying volatility in parts of North Africa and the Middle East.

The level of civil unrest during the Arab Spring has not abated.

In recent days more than 200,000 people marched in protests in Yemen calling for the prosecution of former long-time dictator Ali Abdullah Saleh.

In an unrelated incident the Yemeni Defence Minister narrowly avoided assassination when a car bomb was detonated near his convoy killing at least 12 people.

Violent protests also broke out in the Palestinian West Bank, with thousands of people calling for the resignation of senior officials, citing their frustration at high prices and unpaid wages.

The ruling Jordanian Royal family is also struggling to respond to a wave of protests in several major cities with rising prices for fuel and food and the detention of activists as the major cause.

USA embassies have been attacked in recent days in Egypt and Libya with mobs angry at what they claimed was a USA film that insulted the Prophet Mohammad.

Tragically the US Ambassador to Libya and three others were killed yesterday during a riot in Benghazi.

Recent analysis by the US Center for Strategic and International Studies identified the key drivers of instability in North Africa and the Middle East, finding that while there is no single cause, poverty and food prices are serious issues because “…the region has an exceptionally high spending on food as a percent of total income.”

Other key drivers are ethnic, religious and tribal divisionsmany within national borders, corruption, repressive regimes, wealth disparity and a failure in some countries to more equitably share the wealth of oil revenues.

While there is understandably a focus on the civil war under way in Syria and the increasing savagery of both sides, the world cannot take its focus away from other nations that, for a range of reasons including food security, could also slide into chaos and armed conflict.