Outpacing Resources

With oil prices holding steady around $100 a barrel and cost of food rising at an alarming pace, threatening hunger and protests, the world economy has reached a new ominous juncture. Eighteenth century economist Thomas Malthus, who predicted cycles of population growth outpacing resources and leading to catastrophic decline, is again being invoked. Will the gathering food crisis finally prove Malthus right?

To agree, one must ignore the amazing track record of human ingenuity in overcoming the myriad challenges to our survival. Yet the web of political, economic, ecological and environmental factors that have combined to bring about the current crisis is daunting and unprecedented in its complexity. Governments can restrict the export of grain, as India, Vietnam, Argentina and Egypt have done; scrap tariffs on food imports, as have some African countries, and everyone can accumulate emergency food stocks. All this will provide a short-term fix, but will fall short of resolving the crisis that has been building for decades.

Human development has evolved around the search for basic sources of energy — from food and fuel for cooking to the more modern needs of powering transportation, lighting and heating homes. With the discovery of new continents, more land has come under the plough; steam-powered boats allowed food grains to be shipped half way across the globe to feed industrial workers and with technology, agricultural yields have grown. As historian David Christian noted, by tapping millions of years of solar energy stored underground in the shape of coal and oil, humans have found the equivalent of several new continents to exploit. Malthus was thought to have been proved wrong as the world population has exploded, from 1 billion in 1900 to around 6.5 billion today. But all indications are that we are approaching the end of that happy growth phase.

World reserves of grain now stand at their lowest in 25 years and with depleting levels of groundwater, climate challenge and diminishing returns, food yields are slowing. Traditional wheat exporters, such as Australia, Canada and Argentina, are expected to produce less and only the US will be able to step up its export. While the world’s largest rice exporter Thailand promises not to cut back, the number two supplier Vietnam, hit by unseasonal weather, is not taking new export orders. India will sell only the more expensive basmati. Global food exports are expected to drop 3.5 per cent from last year. Coming on top of an 80 per cent rise in grain price since 2005 (42 per cent last year alone), poor weather forecasts have created a sense of crisis. A dozen countries in Africa and Asia have experienced food-related demonstrations. Hoarding by traders has raised prices and tempers. World Bank President Robert Zoellick warned that 33 countries faced unrest because of surging prices and urged rich nations to give $500 million in emergency aid to the UN World Food Programme. However valuable this may be in preventing starvation, it falls well short of providing a long-term solution. This is because for the first time, the need of food production is brushing with the imperative of energy production on the earth’s surface in a major way. Already 18 per cent of US grain production is being diverted to produce ethanol. With President Bush’s call to produce 35 billion gallons of alternative fuels by 2017, the share of grain withdrawn from the food basket will rise.

With the world population still growing at over 1 per cent a year, we will need more farmlands and green revolutions. Experts speculate that at best, 10 per cent more arable land may be found in Brazil and Sub-Saharan Africa. But climatalogical vagaries and a lack of investment complicate efforts to access farmlands in Sub-Saharan Africa. In Brazil, new farm land can only be created by clearing the Amazon rainforest, raising the risk of drought. Increasing food output on the existing land would require more intensive cultivation and, yes, unpopular genetically modified crops. Industrial farming would certainly increase carbon emissions, thickening the canopy of greenhouse gas, which has grown silently since the Industrial Revolution.

A century of growth now confronts humanity with difficult zero-sum choices. Addressing these will require a global approach, taking into account the imperatives of growing more food, creating clean fuels and fighting climate change all at the same time. A rather tall order, indeed.