Meat Industry INSIGHTS Newsletter

970832 Do High Grain Prices Signal Food Scarcity?

August 16, 1997

The grain price increases of the mid-1990s suggest the world is moving into an era of food scarcity, the think tank Worldwatch Institute said in a report that cited hurdles to boosting food output.

"All the key food security indicators signal a shift from surplus to scarcity," said the report.

In the report and in an interview, institute president Lester Brown said food-importing nations should ponder how to ensure there is enough food for their citizens without risky reliance on outside sources.

"It's the risk of being grain-dependent," Brown said.

The nations of East Asia, northern Africa and the Middle East import at least half of their grain. There is a limited number of large-volume grain exporters -- Argentina, Australia, Canada, the European Union and the United States.

"Food scarcity may provide the environmental wake-up call the world has long needed," said the report entitled "The Agricultural Link."

"Rising food prices may indicate the urgency of reversing the trends of environmental degradation before resulting political instability reaches the point where economic progress is no longer possible," it said.

World corn and wheat prices reached record levels in early 1995 when short crops and high demand sharply reduced the size of global stockpiles. Prices have retreated somewhat.

Even with the forecast large crops this year, the world will see the third year in a row when stockpiles equal less than 60 days of use, "well below the 70-day minimum needed to cushion even one poor harvest," the report said.

"It means regardless of what happens ... we're going to be close to the edge," Brown said.

The report listed several possible constraints on expansion of food production -- urban demands for water now used for irrigation, land lost to erosion and urban sprawl, and stagnant yields -- to suggest food would be the first area where economic demands would collide with environmental limits.

It may be time, the report said, to reconsider use of land for nonessential crops. An end to tobacco cultivation would free 12.5 million acres (5 million hectares), enough to grow 15 million metric tons of grain. In the event of a world food emergency, a "meat tax" on consumption of livestock products would mean more grain for direct human consumption.

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