01.04.2013 Our Earth

The New World of Food

Australia has a key role to play in food security, suggests Adrian Glamorgan

The Arab Spring began with food riots. In fact, food prices predicted the Arab Spring.

In December 2010, Marco Lagi of the New England Complex Systems Institute wrote to the US government, sharing research that when the UN Food and Agricultural Organisation food price index crossed a certain threshold, social unrest would begin. Northern Africa had just crossed that line. Four days later, Mohamed Bouazizi self immolated in Tunisia, and food riots turned into a wider campaign for democracy in North Africa and the Middle East.

Hungry people riot. Once dictators can no longer guarantee subsidised food prices, their people have nothing to lose. Syria went untouched by the Arab Spring - until food prices shot up.

In Britain, food prices have increased by a third since 2007. The World Development Movement has warned that the era of cheap food is "definitely over". If so, that food index threshold and the issue of food security is going to matter much more to social planners, the military, and governments than commonly realised.

The World Food Summit in 1996 defined food security as existing "when all people at all times have access to sufficient, safe, nutritious food to maintain a healthy and active life". Food security is built on "food availability", "food access" (being able to farm or pay for the food) and "food use", an understanding of nutrition and sanitation.

While the increasing consumption of "prestige" processed food increases costs to world consumers (directly and through lifestyle diseases such as diabetes), our attention this month is less on food use than availability and access.

Climate change is affecting food availability. UK Chief Scientist, Professor Sir John Beddington said in January 2013 that world agriculture was being affected by "major changes" in weather patterns, leading to food supplies being "extremely fragile". Weather patterns shift, storms are more severe, seasons are being disrupted affecting insects and their predators, and rain just doesn't come - or does when it shouldn't.

This change in climate is having a big impact on crops. Droughts in various rice bowls have led to a 10 to 20% loss in rice yields over the last 10 years, with impact from north Africa through the Middle East to the Indian subcontinent. In 2012, 80% of the US was subject to heatwaves, damaging yields across the country; Eastern Europe felt the sharp scythe of a heatwave, and crops failed. World crop production by 2050 could fall by an estimated 20-40%.

In a market already made volatile by climate change, there is more to come. Desertification is cutting access to arable land. But there is another way food access is being sorely affected: speculators. As Bertolt Brecht said, famines don't just happen, they're caused by the grain trade.

For more than a century, some farmers have sold their food crops well in advance, attracting a guaranteed price, giving them some kind of certainty and finance to get the seeds sown. When the crop is finally harvested, the farmer receives the long-promised price, not whatever the actual harvest price is all around them. It suited parts of agriculture and the food industry to do this. But some traders started to sell their contracts to people with no connection to agriculture or the food industry. The 'futures' market was born. Financial traders played with spot prices, pushing up food prices for short-term gains.

The World Development Movement says that speculators holding basic food staples contracts (such as wheat or rice) have grown from 12% of the food market in 1996, to 61% now. They gamble on outcomes, play derivatives, and make millions of dollars in profits. They dominate the food trade right now.

When staple food prices shot up through this kind of speculation in 2007-2008, millions more went to sleep each night with an ache in their belly. The World Development Movement stated that, "gambling on hunger in financial markets" was "dangerous, immoral and indefensible". But an induced food crisis has proved to be highly profitable. With software now that can buy and sell within microseconds, the futures market is a game tragically played at the poor's expense. If people go hungry, well, that is collateral damage. If anything, it guarantees the price will go even higher. And, should a commodity return to a lower wholesale price, supermarket prices rarely reflect this. Food speculation ratchets up the base retail price.

So food availability is being reduced through climate change, and food access (access to land or money) is being reduced through unregulated international speculation causing higher prices.

It's no surprise that countries throughout East and South Asia, but especially China, are becoming increasingly interested in avoiding social turmoil. Food security is becoming a key long-term focus of governments. While they seek to secure their long term food resources, Australian governments sense an economic opportunity.

For where better to suggest to these near neighbours, than northern Australia? The fifth Northern Australia Ministerial Forum at Kununurra last November agreed, "that the development of agriculture in northern Australia is a rapidly emerging policy priority across the north, supporting national and international food security and regional development more broadly." Perhaps it's a sign of the times that the winner of Canberra's centenary design competition imagining how an Australian national capital might look if created today, located a new northern capital situated on the shores of Lake Argyle in Western Australia.

Open up the North. Sell expanses of land to foreign investors. Make them pay, surprisingly willingly, for the infrastructure costs. Dam it. Irrigate it. Spray it. Grow vast monocultures. Develop GM varieties. The North is a big place - Asia's new food bowl.

Australia, which has always been at the end of the world, as far as trade and geopolitics is concerned, now has a foregrounded relevance in a revitalised Asian Century. After all, unlike most countries, we are a net food exporter. There will be 10 billion people to feed around the world sometime between 2040 and 2080, and Australia will find a way of making a return.

Exhilaration levels are high. The next Northern Australia Ministerial Forum will be in Cairns, also to host a high level delegation of Chinese Provincial Ministers, inspired by a report entitled: "Feeding the Future: A Joint Australia-China Report on Strengthening Investment and Technological Cooperation in Agriculture to Enhance Food Security."

Yet a few are asking about where we fit into this bold new world. Increasingly, there are concerns about our food sovereignty, and the environmental consequences of northern development. The North evokes grand visions. Big Ideas. But notable failures, too. Our naïve larrikinism is endearing to many abroad, but it is also an innocence, easily abused.

Once, the United States was pre-eminent. But after a decade of overly adventurous wars costing billions of dollars and many lost opportunities, and internal banking deregulation tipping the country and then almost every other nation into Global Financial Collapse (GFC), the world economy is restructuring. The United States - down, but not out - is being joined on the world scene by Brazil, Russia, India and China ("BRIC"), and countries such as South Korea, Mexico and Indonesia are also emerging with their own economic strength. As discussed last month, this will eventually switch the end interests of the powerful regulators of commerce on the world scene, the International Monetary Fund and the World Bank. We may foster American bases, in fact if not name, along northern Australia or in Cockburn Sound, but it is another naivete in an increasingly complex future to think that our own interests will be served this way.

Technocrats (like Beddington) rush in to say genetically modified food is the answer. Countries like China look to northern Australia and propose an Asian Food Bowl. Political leaders say we will make money. But there is little attention paid to the fact that selling the productivity of our farms to other countries will deprive us of that security ourselves. We cannot eat money. And there is little attention to what damming rivers, irrigating fields, introducing GM foods and terra-forming northern landscapes will do to our environment.

In 1788, the English at Sydney Cove almost starved. The first crop was foolishly planted in summer, and failed to germinate, the seeds overheated from the long journey out. They failed to understand. Only a tight dictatorship by Governor Arthur Phillip helped save the settlement from starvation.

The following year in France, a July hailstorm destroyed crops across the country, leaving the worst harvest in almost half a century. The foolish few in the palace danced with the little money that was left. The year after that, 1789, brought riots, social unrest, and revolution. And then the tumbrils came.

Read Part One of Adrian's examination of the Global Food Crisis in "Feeding the Seven Billion" - NOVA, March 2013 Vol 20 No 1

Adrian Glamorgan

Adrian Glamorgan is a passionate advocate of social change and environmentalism