Foods are the new oil, land is the new gold

by Nairi Porter, Cape Town, South Africa

Food riots will become part of people's everyday life, environmental analyst Lester Brown says in his book Full Planet, Empty Plates: The New Geopolitics of Food Scarcity.

The UN Food & Agriculture Organization recently reported that the food prices have started rising again, now reaching a 6-month record. And they are approaching the levels last reached at the beginning of the 2008 financial crisis. And of course the high food prices were one of the main factors for the riots in the Middle East that caused the Arab spring. Sure, there are no indications for new mass riots because of the food prices for the time being, but Brown predicts that sooner or later this will happen.

There is much truth in that, I think. On one side, the demand on the food market is constantly growing due to the increasing Earth population. Every year about 80 million people are added to that number, and what's more, now that more and more people are moving to a higher social segment (with the advent of the middle class in the emerging economies), more than 3 billion people will be consuming more meat, dairy products and eggs - all products that require intensive use of grain cultures. The growing affluence overall could substitute population growth as a main factor for the rising food prices.

Meanwhile, about 1/3 of the corn that is produced in the US goes for the production of ethanol, which is used as a biofuel. Nowadays more grain is used for making fuel for cars than fodder for livestock, Brown explains. This is already causing major concerns, which have prompted the UN to call for the suspension of biofuel production.

As for the supply on the food market, this year's severe droughts in America, Russia, Ukraine, Pakistan and Kazakhstan has drastically cut the grain yields at a time when the production of many crops is stagnating in many of the countries that are the main consumers. The rice yields in Japan haven't increased, the same is valid for the wheat production in France, Germany and Britain. And there are no prospects for a change in this situation soon.

All of this leads to increasing food prices in the US, and bigger consumption of grain cultures imported from China, while the consumption of soybeans keeps increasing worldwide, in the conditions of serious shortage. In countries like Ethiopia, India, Nigeria, Peru and DR Congo the effect is even more dramatic. There are millions of families around the world preparing for a hunger onslaught in the following months and years. They couldn't afford to buy enough food at these steeper prices, and they will not be able to maintain the levels of consumption they have had until now. And this is bound to cause social unrest, and not just in the Middle East.

This, combined with the emergence of the so called "water wars", the struggle for water resources turning into hot conflict in many corners of the world, promises times of trouble ahead. An example of the latter is the row between Iraq and Turkey, where Ankara is planning to build a series of dams along the Tigris and Euphrates, which has caused big concerns across the border, and has even made the UN weigh in, accusing Turkey's plans of violating human rights. Or the severe water shortages in Afghanistan and some parts of China (particularly the urban regions). There are vast regions where climate change is expected to cause up to a 40% drop in annual precipitation and groundwater flow (especially in the Mediterranean and the Balkans), rivers shrinking to unprecedented levels for most of the year while turning into short-lived torrents for very tiny periods in the transitional seasons (which are fast disappearing).

I hope there won't come a day when we would realise that food, water and air have become more precious than oil and gold, but on the other hand, in a sense they already have - after all, one can neither eat gold nor drink oil, although they could try buying food and water with those. If anyone was willing to sell it anyway.

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Further update from Nairi Porter

Fertile land for raising crops is in high demand.

The players want to rule over their patches of crops and increase accessibility to that resource rich interior, completely untouched until now.

Africa has still much to give to the world, the plump cow that she is. A similar land-rush is occurring in South America. It is yet unclear if Africa is going to benefit from this increase in food production, or it will rather suffer from it. One thing is for sure, population across the continent is expected to skyrocket in the coming decades.