Feeding the world

The current difficulties that have engulfed several countries of North Africa and the Middle East have monopolised world attention for the past few months. However, what has had less media ‘airplay’ is the role that high food prices have played in stoking the fires of discontent. It is instructive to remember that the protests in Tunisia and Algeria that started the whole ball rolling began with food riots.

Prices for basic foods such as sugars, cereals and edible oils were at or near record levels this February, according to the UN Food and Agriculture Organisation. Their ‘weighted basket’ index of wholesale food prices is now at its highest level for 21 years – even higher than in the 2007-08 price spike. Wheat prices have risen by 74% over the past year, coffee by 94%, and corn by 88%, while sugar has risen 14% in price. In 2008, as global food prices reached their previous peak and countries around the world began to impose export bans on rice and other food crops, there were riots in dozens of different nations, in one of which – Haiti – the government was toppled. Are we about to see the same thing this year? There seems little doubt that the cost of living is contributing to the current anger and unrest in the Middle East, and could easily spread elsewhere. Other countries ‘at risk’ include much of sub-Saharan Africa, Central America, and Central Asia.

A major difference this year is that rice prices have so far not risen as fast as other food crops, helping to keep a lid on tensions in southern and eastern Asia. Last year was a bad one for food production, and especially grains. Rain in Canada, drought in Russia, a hard winter in the US which lowered yields on winter wheat and disastrous flooding in Australia all played their part in the shortage of grain, exacerbated by low global stocks still not replenished from previous crises. Wheat production will be down 4.3% in 2010-11 compared to the previous year, while demand has increased by 1.2%. There are worries about stockpiling and speculation driving prices higher still. In advance of northern hemisphere harvests, April and May this year could be particularly difficult months.

However, regardless of what happens this year, for the longer term food price inflation will be a major issue for countries around the globe to tackle, as the world’s population steadily rises towards 9 billion, and arable land resources are slowly eroded. The ultimate answer will have to come from a variety of factors, including further improvements in agricultural productivity, food distribution systems and greater nutrient use efficiency. Many have suggested, for example, that Africa needs its own ‘green revolution’ comparable to the one that India went through in the second half of the 20th century.

Fertilizers, especially nitrogen fertilizers, of course have a role to play in this situation. Regardless of gains that are made from increased efficiency of fertilizer use via balanced nutrition and micronutrients, some of the extra food will have to come from increased application in regions where fertilizer use is currently low. Achieving this will be a delicate balance between the interests of industry, farmers and consumers, to ensure that the first two are sufficiently rewarded to induce them to produce more, without placing too high a burden on the latter.

Energy markets also play their part. Fertilizer production consumes 1.2% of world energy use, according to the International Fertilizer Industry Association (IFA), and 94% of that energy goes into the production of ammonia, the most energy-hungry process and yet one of the most vital – at a rough estimate 50% of all people alive today owe their existence to the Haber-Bosch process. Moves towards carbon pricing in the fertilizer industry must also recognise the crucial contribution that ammonia producers make to global food security. Riots over food prices and collapsing governments can only serve to emphasise the urgency of the task in hand.