Natural disasters push up food prices

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Floods in Pakistan and wildfires in Russia this summer are having a major impact on world grain supplies. That has many worried that prices for food staples will sky-rocket. Anchor Marco Werman speaks with Lester Brown of “Earth Policy Institute” about how rising food prices may threaten global stability.

• Earth Policy Institute

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MARCO WERMAN: Besides up-ending the lives of millions of Pakistanis, the floods have also destroyed a fifth of the country’s crops. Meantime, in Russia, widespread wildfires have devastated the harvest there, prompting the Russian government to extend its ban on wheat exports.  That ban is being blamed, in part, for a 5% increase in food prices worldwide over the last two months.

Lester Brown is with Earth Policy Institute.  He’s written about how rising food prices can be one of the biggest threats to global stability.

And speaking of food and global stability, Mr. Brown, there were also food riots in Mozambique this week, in which seven people, including two children, died.  So something’s going on globally with food prices, and I’d like you to connect the dots for us between, say, these wildfires in Russia and food riots in Mozambique.

LESTER BROWN: There’s several things at work here.  Greater climate instability or volatility is a role; the heat wave in Russia; and then we have tightening water supplies in all the major food producing countries such as China, India and the United States.  And rising demand.  I mean, there will be 216,000 people at the dinner table tonight who weren’t there last night; plus the enormous diversion of grain to produce fuel for cars in the U.S. – and you’ve got a recipe for rising food prices and potential growth in political instability in many low income countries around the world.

WERMAN: Such as Mozambique.

BROWN: Exactly.

WERMAN: The U.N. Food Agency, the FAO, has called a special meeting for later this month to discuss the recent rise in global food prices.  But what can really be done to stabilize the global food market?  Or is the planet just going to have to get used to high prices or, at the very least, these radical periodic price fluctuations.

BROWN: We’ve got an entirely new situation that we’re facing now.  For one thing, we have three sources of additional demand for grain to deal with each year.  Historically, there was just population growth.  And then in the last half of the last century we began to feed a lot of grain to livestock, and the feedlot phenomenon developed in the U.S. and elsewhere in the world.  So there are about 3 billion people in the world today trying to move up the food chain and consume more grain-intensive livestock products.  That’s the second source of stress.  The third is the growing use of crops such as corn and palm oil and so forth, to produce fuel for cars.  So that’s putting a lot of pressure on the world’s farmers.  And that’s why prices are going up.  At the same time, we’re facing greater climate instability and tightening water supplies in a lot of countries.

WERMAN: Well, the United States is not immune to climate change.  But U.S. farmers are experiencing the highest grain prices in a long while, and they have large surpluses.  So how is this country seemingly skating through this crisis?

BROWN: Well, farmers are looking at this very favorably, of course, for their incomes they have a good harvest this year and they have strong prices, so it’s a great combination.  But U.S. consumers are going to be affected by this, with the wheat prices up 60% and corn and soybean prices following wheat upward – and that’s a real threat not to political stability in the U.S. – but in low income countries, where people are already spending most of their income on food – to have grain prices go up by 30, 40, 60%, can be destabilizing as they’ve seen in Mozambique in the last day or two.

WERMAN: Lester Brown is President of Earth Policy Institute.  His latest book is called, Plan B, 4.0, Mobilizing to Save Civilization. Mr. Brown, very good to speak with you.  Thanks a lot.

BROWN: My pleasure, Marco.

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