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Feeding the Beast: Food Prices Destabilizing Effect

March 7, 2011


More reasons to embrace Plan ‘B’. Don’t know what that is? Stock your pantry, become more self-reliant, invest in a rainwater barrel or two, plant a garden, get a bycycle or hybrid vehicle.

Today’s NY Times reports: Food Prices Hit Record High, Spurring Worries About Global Unrest. FAO officials say the world can expect further price rises if oil prices continue climbing.

“Unexpected oil price spikes could further exacerbate an already precarious situation in food markets,” FAO’s director of trade and markets, David Hallam, said in his agency’s report. “This adds even more uncertainty concerning the price outlook just as plantings for crops in some of the major growing regions are about to start.”

Feeding the Beast
As we have seen in the Middle East, people living on $2 a day simply cannot endure the current food price increases. With the Libyan oil crisis escalating oil production has now shutdown and global oil prices are shooting up. This will further destabilize economies all over the world, including our own.

It is a circular situation: Poverty in many nations is perpetuated by corrupt oppressive governments; ADD the global financial collapse AND consequential destabilized economies AND bad weather AND food prices have increased WHICH has led to social upheaval WHICH has led to a spike in oil prices WHICH will lead to higher prices WHICH will lead to more unrest….. ad infinitum. And that’s just in the Middle East. Once Europe starts to falter, all bets are off. World crisis will ensue. History shows Europe has engaged in wars every century for over two thousand years. They are on the brink and what happened in the last two wars affected the United States in a big way – world war.

In today’s Guardian UK, Jonathan Watts reports in Middle East unrest adds to pressure on world food prices:

Two links are apparent. First, modern agriculture is massively dependent on fossil fuels, which are used for farm machinery, fertiliser production and crop transportation. Secondly, the rise of biofuels means that many food crops are in direct competition for land with ethanol plantations.

The relationship is not necessarily one-way, particularly when other climate factors are at play. The recent surge in wheat, corn and soy prices – which prompted UN warnings of approaching danger levels – was also due to last year’s dry spell in Russia and floods in Australia. The most recent increase was attributed to a drought in China that threatens the winter wheat crop.

But whether it is climate change or social protest that shakes the commodity markets, the jolts appear to affect the values of both kilowatts and calories – albeit sometimes with a slight lag. Different forms of energy consumption are converging – as well as growing – thanks to a rising global population and the increasing affluence of emerging economies like China and India.

That should prove food for thought as we watch the compelling spectacle of change in the Middle East. Egypt nudged prices upwards (due more to the importance of the Suez canal to tanker traffic than its own oil output). Libya, the world’s 12th biggest oil exporter at 1.1m barrels per day, adds momentum.

Entire Guardian UK article, click here

For more information go to World Food Situations on the FAO site, click here

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