In the early 1800’s, Thomas Robert Malthus expressed his views on population growth and stated that the world will return to subsistence-level conditions as a result of population growth outpacing agricultural production. His theory was later named Malthusian Catastrophe. His theories were widely criticized because it failed to foresee the improvements in agricultural technology. Better seeds, effective fertilizers and pesticides, and enhanced irrigation systems vastly improved crop yields and avoided the catastrophe. However, with over 6 billion people occupying the earth today and crop yield improvement declining, Malthus’ ideas are gaining prominence in the 21st century.
World grain consumption, the total of corn, wheat, and rice, has increased tremendously over the years. In 2007 the world consumed 2,098 metric tons of grain compared to just 815 million metric tons in 1960. Thankfully, production has kept pace with the rising consumption. However, economists and market specialists all around the world have been concerned about whether the production will keep up with rising consumption. Lately, there have been signs that show that it is not. Since 2000, the world has a deficit in grain (consumption is higher than production) every year except 2004. The chart below shows how the world has gone from a surplus to deficit since the last decade. The sharp turnaround spells trouble.
With deficits increasing, grain prices have double or even tripled in some instances since last year. Wheat prices averaged around $3.75 per bushel in 2006 and rose to around $7.50 per bushel in 2007. Similarly, corn prices have risen from about $2.25 per bushel in 2006 to over $4 a bushel in 2007.
There have been numerous incidences reported of riots because of food shortages and higher prices all around the world. In April 2008, rioting in Haiti left five people dead including a U.N. peacekeeper and forced the resignation of Haiti’s Prime Minister. A United Nation food expert called this phenomenon the “silent tsunami”. Over 100 people worldwide have been pushed into deeper poverty because of rising food prices. In May, President Bush asked Congress for $770 million in overseas food aid. The aid, though substantial, is only a short-term solution. Policy makers all around the world are trying to find a longer term solution but few have done so unsuccessfully.
According to Lester Brown of Earth Policy Institute, the cumulative effect of the food shortages around the world will threaten food security. If the situation is not resolved quickly, he predicts that “social unrest and political instability will spread, and the number of failing states will likely increase dramatically, threatening the very stability of civilization itself.” These are dire predictions, and I hope that world leaders will heed his warnings and act!