Re: SC45

http://www.nugget.ca/webapp/sitepages/content.asp?contentid=605195&catname=Editorial&classif=

End of cheap-food era bad news for poor

The era of cheap food is over. The price of corn (maize) has doubled in a year, and wheat futures are at their highest in a decade. The food price index in India has risen 11 per cent in one year, and in Mexico in January there were riots after the price of corn flour (used in making the staple food of the poor, tortillas) went up fourfold. Even in the developed countries food prices are going up, and they are not going to come down again.

Cheap food lasted for only 50 years. Before the Second World War most families in the developed countries spent a third or more of their income on food (as the poor majority in developing countries still do). But after the war a series of radical changes, from mechanization to the Green Revolution, raised agricultural productivity hugely and caused a long, steep fall in the real price of food. For the global middle class, it was the Good Old Days, with food taking only one-tenth of their income.

It will probably be back up to a quarter within a decade, and it may go much higher than that, because we are entering a period when three separate factors are converging to drive food prices up. The first is simply demand. Not only is the global population continuing to grow (about an extra Turkey or Vietnam every year), but as Asian economies race ahead more and more people in those populous countries are starting to eat significant amounts of meat.

Early this month, in its annual assessment of farming trends, the United Nations predicted that by 2016, less than 10 years from now, people in the developing countries will be eating 30 per cent more beef, 50 per cent more pig meat and 25 per cent more poultry. The animals will need a great deal of grain, and meeting that demand will require shifting huge amounts of grain-growing land from human to animal consumption - so the price of grain and of meat will both go up.........

..........In the early stages of this process, higher food prices will help millions of farmers who have been scraping along on poor returns for their effort because political power lies in the cities, but later it gets uglier. The price of food relative to average income is heading for levels that have not been seen since the early 19th century, and it will not come down again in our lifetimes..........