Gee, More Good News (Not)

What will happen first? Will my water stocks and my fertilizer stocks rebound off their current lows since the Crash of 2008 or will I be killed by a mad, ravaging mob bent on destroying anything and everything just for the hell of it? If this is the future, I don't want to play anymore... Oy - talk about irony - this story is from the Irish Times . com: Thursday, March 19, 2009 Scarce food, water, energy will bring global mayhem by 2030, says scientist IAN SAMPLE A “PERFECT STORM” of food shortages, scarce water and insufficient energy resources threaten to unleash unrest, cross-border conflicts and mass migration as people flee the worst-affected regions, the British government’s chief scientist will warn at a conference today. World upheavals will come to a head in 2030, Prof John Beddington will tell environmental groups and politicians at the government’s Sustainable Development UK conference in Westminster. The growing population and success in alleviating poverty in developing countries will trigger a surge in demand for food, water and energy over the next two decades, at a time when governments must also make major progress in combating climate change. “We head into a perfect storm in 2030, because all of these things are operating on the same timeframe,” said Prof Beddington. “If we don’t address this, we can expect major destabilisation, an increase in rioting and potentially significant problems with international migration, as people move out to avoid food and water shortages.” [Not to mention mass migration as coastal areas slowly fall to salt-water poisoning and sink, inch by inch, below the encroaching oceans due to global warming which cannot now be reversed no matter what we do.] Food prices for staple crops such as wheat and maize have recently settled after a sharp rise last year, when production failed to keep up with demand. But, according to Prof Beddington, global food reserves are so low – at 14 per cent of annual consumption – a long drought or big flood could see prices rapidly escalate again. Most of the food reserve is grain in transit, he said. “Our food reserves are at a 50-year low but, by 2030, we need to be producing 50 per cent more food. At the same time, we will need 50 per cent more energy and 30 per cent more fresh water. There are dramatic problems out there, particularly with water and food, but energy also, and they are all intimately connected. You can’t think about dealing with one without considering the others.” Before taking over from Sir David King as chief scientist last year, Prof Beddington was professor of applied population biology at Imperial College London. He is an expert on the sustainable use of renewable resources. In Britain, a global food shortage would drive up import costs and make food more expensive. Some parts of the country are predicted to become less able to grow crops as higher temperatures become the norm. Most climate models suggest the south-east of England will be especially vulnerable to water shortages, particularly in the summer. Prof Beddington’s speech will add to pressure on governments after last week’s climate change conference in Copenhagen, where scientists warned that the impact of global warming has been substantially underestimated by the UN’s Intergovernmental Panel on Climate Change. The latest research suggests that sea level rises, glacier melting and the risk of forest fires are at, or beyond, what was considered the worst-case scenario in 2007. Prof Beddington will say shifts in climate will see northern Europe and other high-latitude regions become key centres for food production. A technological push is needed to develop renewable energy supplies, boost crop yields and better utilise existing water supplies. Prof Beddington will use the speech to urge Europe to involve independent scientists more directly in its policymaking, using recent appointments by Barack Obama in the US as an example of how senior scientists have been brought into the political fold. Shortly after taking office, the president announced what many see as a “dream team” of scientists, including two Nobel laureates, to advise on science, energy and the environment. – (Guardian service) So - guess I won't be retiring to Las Vegas after all, I'll stick here next to Lake Michigan and farm my backyard -- after I install automated machine gun towers. By 2030 it may be a balmy 80 degrees just about year round here...

Who's Telling the Truth?

Read this report from the Guardian.co.uk that blames the current world food crisis on biofuels, according to a "secret report" prepared by the World Bank: Secret report: biofuel caused food crisis Internal World Bank study delivers blow to plant energy drive Aditya Chakrabortty The Guardian, Friday July 4, 2008 Aside from the fact that this story - from an unnamed source, citing a "secret report" prepared by an unnamed "internationally respected economist" employed by the World Bank - sounds hinky in the extreme (did The Guardian borrow the headline from an old edition of The National Inquirer or World News Reports?), the article does plainly state that the current "crisis" has been developing since at least 2002 - six years. BUT - changing world-wide weather patterns have NOTHING to do with the current situation; local and international markets have NOTHING to do with the current situation; past and present governmental policies have NOTHING to do with the current situation (other than the aforementioned mandate for biofuels allegedly diverting massive amounts of food and land into corn production for ethanol). Oh - and did I mention, population increases and rising standards of living in developing "third world" countries also have NOTHING to do with increased demand for food stuffs. Then, read this article from today's Wall Street Journal. I don't normally "buy" most of what is written in WSJ's editorial pages, but this article at least acknowledges a host of other factors involved in a complicated dance that has led over at least the last ten years to the current food "crisis." The Rich World and the Food Crisis By ADAM LERRICKJuly 8, 2008; Page A21 Leaders of the G-8 nations are gathered this week in Toyako, Japan, to root out the culprits in a food crisis that has moved hundreds of millions from subsistence to starvation. They need look no further than an old group photo. The G-8 countries' interventions have distorted global agricultural markets to the paralysis point. Politicians legislate price supports to enrich farm voters. Lobbies extort tariffs to block cheap food imports and subsidies to underwrite food exports at prices that destroy competitors in poor countries. Conservationists have agitated to set aside productive land and pay farmers not to grow. And now green energy advocates push ethanol quotas and tax credits that divert food into fuel. Don't blame speculators for the food crisis: It was already here when they arrived. Rather thank them for a wake-up call. Financial markets are driving today's prices to match expectations of tomorrow's values – the consensus of countless investors and producers is that the era of surpluses and cheap food is over. Yet even a credible promise that G-8 protectionist policies will be reversed would raise output down the road and drop prices at the corner grocery counter overnight. The new famine is not about a crisis in global supply. Markets are full of food that developing-nation consumers cannot afford to buy. Prices for rice, corn, wheat and soy beans, the staple crops for world sustenance, have doubled in a single year. This pinches families in developed countries who allocate 15% of their income to food. In poor countries, where many spend 75% of their earnings to eat, real wages have been cut by a life-changing one-third. A decade of progress in reducing poverty is being erased. In response, countries whose people are being hit hard are adopting policies that mortgage their economic future. From Mexico and Indonesia to Egypt and Côte d'Ivoire, governments have responded to protest and riots with backward measures that keep domestic prices down but choke off incentives to plant and harvest more. One-third of the world's population now lives under food price controls. Subsidies to keep rice and bread on the table are eating up scarce funds. Schools will not open, roads and ports will not be built, electricity will not power expansion. Central banks are giving up growth to contain an inflation imported from abroad. National food security is the new overriding concern. India and Vietnam, the world's second and third biggest exporters of rice, have banned foreign sales. Wheat suppliers from Australia to Argentina are restricting shipments. In China, massive new export tariffs keep fertilizer at home to lessen farming costs. For a decade, the world's demand for food has grown faster than the supply. Throughout the developing world, hundreds of millions of people have migrated from the country where they fed themselves to the city where they must buy their food. A new middle class is eating more and eating better. Seven pounds of grain are required to produce a single pound of meat; China, India and Brazil are eating 40% more beef than in 2000. Global food stocks have collapsed to a 50-day reserve, their lowest level in half a century. Even as the mountains of grain in government warehouses have eroded, G-8 members have been holding back supply. Poor farmers have been deprived of a livelihood. Who will plant when rich world producers – protected from imports and guaranteed a subsidized gain on exports – dump crops on world markets, pushing global prices below the real cost of production? In the name of conservation, U.S. farmers have been bribed to keep fields fallow – 36 million acres of cropland, the size of Iowa, at a taxpayer cost of $2 billion a year. In Europe, large farmers have been compelled to leave 10% of their holdings idle. Food and fuel have been placed in competition for crops and land. A 10% content mandate for every gallon of gas, and $7 billion of subsidies, now divert one-third of the U.S. corn crop to ethanol, and have driven soybean acreage to its lowest level in more than a decade. Even aid is tainted. The U.S. provides one-half of world food relief, but is the only major donor that gives in kind and not in cash. Thousands of tons of cereals are transported by barge along the Mississippi, navigated across two oceans on high-cost American ships and delivered by truck in Africa – where stockpiles of local grain are rotting for want of buyers. The same $2 billion worth of aid spent buying local foodstuffs would increase benefits for poor consumers dramatically and build a market for the crops of farmers. While a myopic U.S. Congress indulges in the biggest farm bill ever, and France proposes to pay old-style farmers more to overproduce, high prices are breaking the G-8 grip on food. In Ethiopia's Rift valley, farmers are pooling funds to buy $75,000 John Deere harvesters. Swedish and English entrepreneurs are assembling small land holdings in Ukraine and Russia to build world-class cereal producers. In Sudan, Abu Dhabi's sovereign fund is planting 70,000 acres with corn and wheat. Monsanto has promised new modified seeds that will double crop yields and, this time, finicky European bans will not prevail. When the dust settles, there will be a time of plenty in developing lands – and far fewer Porsche dealerships in the U.S. farm belt. Mr. Lerrick is a visiting scholar at the American Enterprise Institute. This op-ed is based on a speech he delivered at the 2008 AEI world forum. This article blames it all on the wealthy nations - presuambly the United States and the countries of the EU. So, I'd like to know what countries are "dumping" food on the world markets below cost? If this is happening, how come people can't afford food? Would not "dumping" of food on the world market depress prices - that is what the author is, in fact, arguing. But that's not happening now, is it. So that argument flies out the window. The author acknowledges that there is plenty of food to go around, even with "one third of USA's corn crop" diverted to ethanol production. It's not a matter of supply he says, it's a matter of price, particularly in the so-called "poor" countries. This "crisis" did not develop overnight, and government policies that placate people rioting in the streets for cheap bread will only subsidize irrational behavior.

India's Growth Outstrips Crops

From The New York Times. I don't know - is this the best way? Genetically engineered crops that can't survive without lots of artificial fertilizers and more water than supplied by rainfall? Water that people need to drink to live, but we're polluting it with chemicals from artificial fertilizers? I just don't know. I don't think anyone knows. But we'd better be coming up with some answers - quick. By 2012 there will be 7 billion people on the planet. Where will they all live? In already crowded India and China? What will they eat? How will they live? So here we are, reading articles about the lack of food supply because of "increased demand" etc. etc. But no one is talking about what is really going on. The Food Chain By SOMINI SENGUPTA Published: June 22, 2008 JALANDHAR, India — With the right technology and policies, India could help feed the world. Instead, it can barely feed itself. India’s supply of arable land is second only to that of the United States, its economy is one of the fastest growing in the world, and its industrial innovation is legendary. But when it comes to agriculture, its output lags far behind potential. For some staples, India must turn to already stretched international markets, exacerbating a global food crisis. It was not supposed to be this way. Forty years ago, a giant development effort known as the Green Revolution drove hunger from an India synonymous with famine and want. Now, after a decade of neglect, this country is growing faster than its ability to produce more rice and wheat. The problem has grown so dire that Prime Minister Manmohan Singh has called for a Second Green Revolution “so that the specter of food shortages is banished from the horizon once again.” And while Mr. Singh worries about feeding the poor, India’s growing affluent population demands not only more food but also a greater variety. Today Indian agriculture is a double tragedy. “Both in rice and wheat, India has a large untapped reservoir. It can make a major contribution to the world food crisis,” said M. S. Swaminathan, a plant geneticist who helped bring the Green Revolution to India. India’s own people are paying as well. Farmers, most subsisting on small, rain-fed plots, are disproportionately poor, and inflation has soared past 11 percent, the highest in 13 years. Experts blame the agriculture slowdown on a variety of factors. The Green Revolution introduced high-yielding varieties of rice and wheat, expanded the use of irrigation, pesticides and fertilizers, and transformed the northwestern plains into India’s breadbasket. Between 1968 and 1998, the production of cereals in India more than doubled. But since the 1980s, the government has not expanded irrigation and access to loans for farmers, or to advance agricultural research. Groundwater has been depleted at alarming rates. The Peterson Institute for International Economics in Washington says changes in temperature and rain patterns could diminish India’s agricultural output by 30 percent by the 2080s. Family farms have shrunk in size and quantity, and a few years ago mounting debt began to drive some farmers to suicide. Now many find it more profitable to sell their land to developers of industrial buildings. Among farmers who stay on their land, many are experimenting with growing high-value fruits and vegetables that prosperous Indians are craving, but there are few refrigerated trucks to transport their produce to modern supermarkets. A long and inefficient supply chain means that the average farmer receives less than a fifth of the price the consumer pays, a World Bank study found, far less than farmers in, say, Thailand or the United States. Surinder Singh Chawla knows the system is broken. Mr. Chawla, 62, bore witness to the Green Revolution — and its demise. Once, his family grew wheat and potatoes on 20 acres. They looked to the sky for rains. They used cow manure for fertilizer. Then came the Mexican semi-dwarf wheat seedlings that the revolution helped introduce to India. Mr. Chawla’s wheat yields soared. A few years later, the same happened with new high-yield rice seeds. Increasingly prosperous, Mr. Chawla finally bought his first tractor in 1980. But he has since witnessed with horror the ills the revolution wrought: in a common occurrence here, the water table under his land has sunk by 100 feet over three decades as he and other farmers irrigated their fields. By the 1980s, government investment in canals fed by rivers had tapered off, and wells became the principal source of irrigation, helped by a shortsighted government policy of free electricity to pump water. Here in Punjab, more than three-fourths of the districts extract more groundwater than is replenished by nature. Between 1980 and 2002, the government continued to heavily subsidize fertilizers and food grains for the poor, but reduced its total investment in agriculture. Public spending on farming shrank by roughly a third, according to an analysis of government data by the Center for Policy Alternatives in New Delhi. Today only 40 percent of Indian farms are irrigated. “When there is no water, there is nothing,” Mr. Chawla said. And he sees more trouble on the way. The summers are hotter than he remembers. The rains are more fickle. Last summer, he wanted to ease out of growing rice, a water-intensive crop. Rest of article.

The Recession Diet

Peanut butter and jelly instead of Hamburger Helper and dog food mixed with human food instead of beef stew. Why aren't we having food riots here in the United States? From The New York Times By MICHAEL BARBARO and ERIC DASH Published: April 27, 2008 Stung by rising gasoline and food prices, Americans are finding creative ways to cut costs on routine items like groceries and clothing, forcing retailers, restaurants and manufacturers to decode the tastes of a suddenly thrifty public. Spending data and interviews around the country show that middle- and working-class consumers are starting to switch from name brands to cheaper alternatives, to eat in instead of dining out and to fly at unusual hours to shave dollars off airfares. Though seemingly small, the daily trade-offs they are making — more pasta and less red meat, more video rentals and fewer movie tickets — amount to an important shift in consumer behavior. In Ohio, Holly Levitsky is replacing the Lucky Charms cereal in her kitchen with Millville Marshmallows and Stars, a less expensive store brand. In New Hampshire, George Goulet is no longer booking hotel rooms at the Hilton, favoring the lower-cost Hampton Inn. And in Michigan, Jennifer Olden is buying Gain laundry detergent instead of the full-price Tide. Behind the belt-tightening — and brand-swapping — is the collision of several economic forces that are pinching people’s budgets or, at least, leaving them in little mood to splurge. The price of household necessities has surged, with milk topping $4 a gallon in many stores and regular gasoline closing in on $3.60 a gallon nationwide. Burt Flickinger, a longtime retail consultant, said the last time he saw such significant changes in consumer buying patterns was the late 1970s, when runaway inflation prompted Americans to “switch from red meat to pork to poultry to pasta — then to peanut butter and jelly.” “It hasn’t gotten to human food mixed with pet food yet,” he said, “but it is certainly headed in that direction.” Rest of article.

We Live In Frightening Times

(Photo: Hunger in Hyderabad, India, 2008. "Villagers near the city of Hyderabad recently jostled for rice that was being sold by government officials." Kirshnendu Halder/Reuters, (c) The New York Times Company.)

Welcome to the 21st century. Food shortages leads to price increases leads to hunger leads to civil unrest leads to - revolutions - or societal collapse. We've seen societal collapse in the ancient (and not so ancient) past due to droughts, shifting rivers, volcanic eruptions that disrupted the growing seasons for 2-3-4 years due to increased suspended particulate, leading to famine and starvation. What resulted was NOT pretty.

So, what will be the responses of modern-day national governments? Price controls and rationing? Mass starvation? I remember Biafra and the hopeless, overwhelmed feeling you get when confronted with such a castastrophe unfolding before your eyes on television. So, you gave then and give what money you can now and don't see that it's making any difference. Millions died. Millions are still dying every year due to malnutrition.

The "extra" I used to have from which to give to charity has disappeared. My salary increase for 2008 was 3% - and that has to hold me until my next "review" at the beginning of 2009. My utility bills are going up by 20 to 30% even as I type this and my grocery bill has increased by a good 10 to 15% just over the past 6 months. So, there is no "extra" anymore to give to charity.

I do not understand why people keep having children whom they cannot possible feed? I do not understand this kind of mindset, popping out babies like there is no tomorrow - and very likely will not be for many millions of children. Children - always the most helpless are the victims. I suspect we're just beginning to see the tip of the iceberg here...

Here are a few of the recent articles about the "suddenly upon us" food crisis:

(More than 20,000) Mongolians flood capital to protest food prices
Friday April 18, 9:40 am ET
Thousands of Mongolians stage protest in capital over rising food prices

***If they're protesting in Mongolia, there must be food shortages and rising prices next store in China, too, particularly at the rate that illegal developers have been gobbling up farm land with the wink wink collusion of the local Communists who pay no attention to whatever is going on in Bejing. Will we hear about that unrest - probably not, given the Communist government's control of the media. This is really ironic, given the fact that some Chinese are protesting the western media's alleged bias against China in the coverage on Tibet and have gone so far as to put up a website decrying that bias and pointing out alleged instances of bias (no doubt complete with Photoshopped pictures to support their version of the "facts.") Of course those Chinese (whoever they are - supposedly students here in the US) say nothing about their own country's 1984 control of the media and mass brainwashing of the Chinese people. They have no access to free and unfettered media so how could anyone living in China possibly have an informed opinion on anything? So then, will they starve quietly into their graves and solve a large part of the world's problem of "excess population" (a term used in by Scrooge in Dickens' "A Christmas Carol")? Somehow, I don't think so...***

The Food Chain
A Drought in Australia, a Global Shortage of Rice
By KEITH BRADSHER
Published: April 17, 2008
The collapse of Australia’s rice production is one of several factors contributing to a doubling of rice prices in the last three months — increases that have led the world’s largest exporters to restrict exports severely, spurred panicked hoarding in Hong Kong and the Philippines, and set off violent protests in countries including Cameroon, Egypt, Ethiopia, Haiti, Indonesia, Italy, Ivory Coast, Mauritania, the Philippines, Thailand, Uzbekistan and Yemen.

U.N. Panel Urges Changes to Feed Poor While Saving Environment
By STEVEN ERLANGER
Published: April 16, 2008
“Modern agriculture will have to change radically if the international community wants to cope with growing populations and climate change, while avoiding social fragmentation and irreversible deterioration of the environment...”

The prices of basic food like rice, wheat and corn have been rising sharply, setting off violent popular protests in countries including Haiti, Egypt, Cameroon, Ivory Coast, Mauritania, Ethiopia, Uzbekistan, Yemen, the Philippines, Thailand, Indonesia and Italy. The unrest has resulted in tens of deaths and helped lead to the dismissal on Saturday of the Haitian prime minister, Jacques-Édouard Alexis, and the increasing cost of subsidizing bread prices is a major worry for key American allies like President Hosni Mubarak of Egypt.

Across Globe, Empty Bellies Bring Rising Anger
By MARC LACEY
Published: April 18, 2008
“This is a perfect storm,” President Elías Antonio Saca of El Salvador said Wednesday at the World Economic Forum on Latin America in Cancún, Mexico. “How long can we withstand the situation? We have to feed our people, and commodities are becoming scarce. This scandalous storm might become a hurricane that could upset not only our economies but also the stability of our countries.”

The Haunting Spectre

This is a frightening article. The implications are staggering. Price of rice continues record surge Philippines to crack down on hoarding Glenys Sim and Danielle Rossingh, Bloomberg News Published: Wednesday, April 09, 2008 Rice climbed to a record price for a fourth day as the Philippines, the biggest importer, announced plans to buy one million tons and some of the world's largest exporters cut sales to ensure they could feed their own people. Rice, the staple food for half the world, rose as much as 2.9 per cent to $21.60 per 100 pounds in Chicago, double the price from a year ago. Philippine President Gloria Arroyo announced two rice tenders yesterday and pledged to crack down on hoarding. Anyone found guilty of "stealing rice from the people" will be jailed, she said. "We're in for a tough time," Roland Jansen, chief executive officer of Pfaffikon, Switzerland-based Mother Earth Investments AG, said in an interview with Bloomberg Television from Zurich. Unless prices decline, "you will have huge problems of daily nutrition for half the planet." Mother Earth holds about four per cent of its $100 million funds in the grain. China, Egypt, Vietnam and India, accounting for more than one-third of global rice exports, curbed sales this year to protect domestic stockpiles. The World Bank in Washington says 33 nations from Mexico to Yemen may face "social unrest" after food and energy costs increased for six consecutive years. The Philippines, which imports about 15 per cent of its rice, is tightening controls over domestic sales and buying more overseas. The government's rice tenders are in April and May. "I am leading the charge" against any officials and businessmen who divert supplies or distort the price of the staple food, Ms. Arroyo said in a televised speech yesterday. Rice seeding in the United States is behind last year's pace because of flooding in growing regions, the Department of Agriculture says. Farmers in six states have planted 11 per cent of their crop versus 21 per cent a year earlier. "The need to avert social tensions from high food prices" has made "food sufficiency even more urgent," Abah Ofon, a soft-commodities analyst with Standard Chartered Plc, said in a report. Food importers may not be able to meet their needs because of the export limits, said Mr. Ofon, who is based in Dubai. Stockpiles are at their lowest since the 1980s and demand for the grain has gained 40 per cent in the past two decades, he said. © The Ottawa Citizen 2008

Downer Post - Don't Read If You're Depressed

Just what I need - more bad news. NOT! I'm already feeling the prize pinch at the supermarket. Milk over $3 a gallon, yikes! A simple loaf of poofed-up cheapo white bread is $1.69, yikes! Eggs over $2 a dozen for medium size, yikes! And meat - forget about meat, darlings! The worst hamburger on the shelf goes for close to $2 a pound. Nothing has been spared; pasta is up, rice is up; potatoes and all other vegetables - forgetaboutit! Unsalted peanuts that I feed to my squirrel population are holding steady at $1.79 a pound. Guess I may be eating more peanuts in the future... Well, welcome to the future, which is here, now. From the Guardian Unlimited Global food crisis looms as climate change and fuel shortages bite Soaring crop prices and demand for biofuels raise fears of political instability John Vidal, environment editor The Guardian Saturday November 3 2007 Empty shelves in Caracas. Food riots in West Bengal and Mexico. Warnings of hunger in Jamaica, Nepal, the Philippines and sub-Saharan Africa. Soaring prices for basic foods are beginning to lead to political instability, with governments being forced to step in to artificially control the cost of bread, maize, rice and dairy products. Record world prices for most staple foods have led to 18% food price inflation in China, 13% in Indonesia and Pakistan, and 10% or more in Latin America, Russia and India, according to the UN Food and Agricultural Organisation (FAO). Wheat has doubled in price, maize is nearly 50% higher than a year ago and rice is 20% more expensive, says the UN. Next week the FAO is expected to say that global food reserves are at their lowest in 25 years and that prices will remain high for years. Last week the Kremlin forced Russian companies to freeze the price of milk, bread and other foods until January 31, for fear of a public backlash with a parliamentary election looming. "The price of goods has risen sharply and that has hit the poor particularly hard," said Oleg Savelyev, of the Levada Centre polling institute. India, Yemen, Mexico, Burkina Faso and several other countries have had, or been close to, food riots in the last year, something not seen in decades of low global food commodity prices. Meanwhile, there are shortages of beef, chicken and milk in Venezuela and other countries as governments try to keep a lid on food price inflation. Boycotts have become commonplace. Argentinians shunned tomatoes during the recent presidential election campaign when they became more expensive than meat. Italians organised a one-day boycott of pasta in protest at rising prices. German leftwing politicians have called for an increase in welfare benefits so that people can cope with price rises. "If you combine the increase of the oil prices and the increase of food prices then you have the elements of a very serious [social] crisis in the future," said Jacques Diouf, head of the FAO, in London last week. The price rises are a result of record oil prices, US farmers switching out of cereals to grow biofuel crops, extreme weather and growing demand from countries India and China, the UN said yesterday. "There is no one cause but a lot of things are coming together to lead to this. It's hard to separate out the factors," said Ali Gurkan, head of the FAO's Food Outlook programme, yesterday. He said cereal stocks had been declining for more than a decade but now stood at around 57 days, which made global food supplies vulnerable to an international crisis or big natural disaster such as a drought or flood. "Any unforeseen flood or crisis can make prices rise very quickly. I do not think we should panic but we should be very careful about what may happen," he warned. Lester Brown, president of the Washington-based Worldwatch Institute thinktank, said: "The competition for grain between the world's 800 million motorists, who want to maintain their mobility, and its 2 billion poorest people, who are simply trying to survive, is emerging as an epic issue." Last year, he said, US farmers distorted the world market for cereals by growing 14m tonnes, or 20% of the whole maize crop, for ethanol for vehicles. This took millions of hectares of land out of food production and nearly doubled the price of maize. Mr Bush this year called for steep rises in ethanol production as part of plans to reduce petrol demand by 20% by 2017. Maize is a staple food in many countries which import from the US, including Japan, Egypt, and Mexico. US exports are 70% of the world total, and are used widely for animal feed. The shortages have disrupted livestock and poultry industries worldwide. "The use of food as a source of fuel may have serious implications for the demand for food if the expansion of biofuels continues," said a spokesman for the International Monetary Fund last week. The outlook is widely expected to worsen as agro-industries prepare to switch to highly profitable biofuels. according to Grain, a Barcelona-based food resources group. Its research suggests that the Indian government is committed to planting 14m hectares (35m acres) of land with jatropha, an exotic bush from which biodiesel can be manufactured. Brazil intends to grow 120m hectares for biofuels, and Africa as much as 400m hectares in the next few years. Much of the growth, the countries say, would be on unproductive land, but many millions of people are expected to be forced off the land. This week Oxfam warned the EU that its policy of substituting 10% of all car fuel with biofuels threatened to displace poor farmers. The food crisis is being compounded by growing populations, extreme weather and ecological stress, according to a number of recent reports. This week the UN Environment Programme said the planet's water, land, air, plants, animals and fish stocks were all in "inexorable decline". According to the UN's World Food Programme (WFP) 57 countries, including 29 in Africa, 19 in Asia and nine in Latin America, have been hit by catastrophic floods. Harvests have been affected by drought and heatwaves in south Asia, Europe, China, Sudan, Mozambique and Uruguay. This week the Australian government said drought had slashed predictions of winter harvests by nearly 40%, or 4m tonnes. "It is likely to be even smaller than the disastrous drought-ravaged 2006-07 harvest and the worst in more than a decade," said the Bureau of Agricultural and Resource Economics. According to Josette Sheeran, director of the WFP, "There are 854 million hungry people in the world and 4 million more join their ranks every year. We are facing the tightest food supplies in recent history. For the world's most vulnerable, food is simply being priced out of their reach." Food for thought Possible scenarios Experts describe various scenarios for the precarious food supply balance in coming years. An optimistic version would see markets automatically readjust to shortages, as higher prices make it more profitable once again to grow crops for people rather than cars. There are hopes that new crop varieties and technologies will help crops adapt to capricious climactic conditions. And if people move on to a path of eating less meat, more land can be freed up for human food rather than animal feed. A slowdown in population growth would naturally ease pressures on the food market, while the cultivation of hitherto unproductive land could also help supply. But fears for even tighter conditions revolve around deepening climate change, which generates worsening floods and droughts, diminishing food supplies. If the price of oil rises further it will make fertilisers and transport more expensive, and at the same time make it more profitable to grow biofuel crops. Supply will be further restricted if fish stocks continue to decline due to overfishing, and if soils become exhausted and erosion decreases the arable area.