Lester R. Brown anticipates 2005 food crunch
After four consecutive grain harvest shortfalls -- each worse than the year before -- the world is looking at a possible food crunch next year, according to author and Earth Policy Institute president Lester R. Brown. The four harvest shortfalls have dropped world carryover stocks of grain to the lowest level in 30 years, with the grain shortfall in 2003 being the largest on record at 105 million tons or five percent of annual world consumption which is 1,930 million tons. This, combined with seven-year highs in wheat and corn prices, means the production gain needed this year is tremendous.
To stave off a potential crunch, a few measures must be taken: increase world grain output in 2004 to compensate for the 2003 shortfall as well as the estimated addition of 74 million people to the world population this year; rebuild grain stores to the 70-day level of consumption, the minimum necessary for food security; and counteract two growing problems for farmers, falling water tables and rising temperatures.
If harvests fall short of consumption again this year, world food prices could seriously be affected, says Brown. "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," Brown wrote in a report.
A shortfall of this magnitude could throw food politics back to the early 1970s, when exporting countries like the United States put restrictions on grain exports to slow the rise in domestic food prices. Brown cited examples of such instances already in motion. For example, Canada announced in September 2002, after a heat-reduced harvest, that it would limit wheat exports to meet domestic needs. Australia followed suit two months later, only exporting to traditional customers. In mid-2003, the European Union stopped issuing grain export certificates for months, and in January 2004, Russia imposed an export tax on wheat to fight rising breat 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," wrote Brown.
