Russian drought: When wheat withers, the world squirms
Russia imposed a ban on exports of wheat due to a severe drought, causing a spike in world prices. But the ban's most important effect may be to raise questions about long-term food security, especially if global warming continues.
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The importance of bread in that troika, and of keeping its price in check, may have been on Russian Prime Minister Vladmir Putin’s mind when he announced recently that Russia was suspending its wheat exports through the end of this year.
Russia’s worst drought in more than a century has cut the forecasted wheat harvest dramatically.
Mr. Putin’s abrupt decision in turn has roiled the world’s food commodity markets. Wheat prices shot up to near two-year highs and may go higher as buyers look elsewhere to make up the shortfall.
The good news is that, looking worldwide, wheat stocks are plentiful. In the US, the federal government projects the largest stocks in more than two decades, about 30 million tons, more than double the estimated exports that will be lost from Russia, the world’s No. 3 exporter. US farmers, who have been increasing their acreage devoted to wheat, stand to gain from a price surge.
Concerns that 2010 will be a repeat of the 2008 global food security crisis seem unfounded. Then the price of US corn (or maize, as it’s known elsewhere) shot up in response to government efforts to turn more and more corn into ethanol fuel, tightening the supply for animal feed and human consumption. Rice and wheat prices also took a leap that year for a variety of reasons still debated by economists (among them higher oil and fertilizer prices, growing demand for grain-fed meat, a poor harvest in some areas, and rising populations). That year saw rice riots in several countries, too.
For wealthy countries, where food budgets are only a fraction of family income (about 7 percent in the US), rising wheat prices would only be an annoyance for many. But in the developing world, where food buying can consume 80 percent of family income, any price rise can be potentially disastrous.
Russia is hardly the first country to ban grain exports to protect its domestic supply. In 2007, India and Vietnam, both major rice exporters, banned new foreign rice sales and added to the grain crisis.
But Russia’s move does again raise unresolved questions about food security. Many experts say the world must double its food production by midcentury to accommodate a nearly 50 percent increase in population, from more than 6 billion today to more than 9 billion.
Among the questions: Should countries concentrate on food self-sufficiency to reduce the risks of trusting such a basic need to foreign sources? Or are exports from the most-efficient producers the best way to feed the world?
If the latter, can international markets be made free of unseen manipulation and the normal but troublesome dips and spikes?
In recent years countries such as China, Saudi Arabia, and South Korea have been buying up huge swaths of cropland abroad – often in Africa – to feed their own people while avoiding the vagaries of buying on world markets. While that’s not inherently wrong, the practice runs the risk of the world watching as food is exported from poor countries already unable to feed their own people. That’s a formula for discontent and possible conflict.
Should genetically modified (GM) grain be used to develop hardier crops, such as more drought-resistant strains? Unfounded fears of “Frankenfood” seem to be lessening, and growing future food demands may add to the pressure to employ GM as part of a new “green revolution.”
Especially needed will be crops that can thrive in the hotter, drier world that many scientists say will be common in many parts of the world because of global warming.
Some are calling this new agricultural revolution the “blue-green” revolution, acknowledging that more efficient use of water will be a key element. Currently more than 500 gallons of water are needed to produce 2,000 calories of food, enough to feed just one person for one day.
The troika of land, bread, and peace are more intertwined than ever. To foster a peaceful world, the land must yield enough grain for all to eat.