Indonesians queue up to buy cooking oil at discounted price in April 11. Indonesia's poor are particularly affected by the rising prices worldwide. (Dita Alangkara/AP)
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Fatal food riots in Haiti. Violent food-price protests in Egypt and Ivory Coast. Rice so valuable it is transported in armoured convoys. Soldiers guarding fields and warehouses. Export bans to keep local populations from starving.
For the first time in decades, the Globe and Mail's Eric Reguly wrote Saturday Why costs are climbing, the spectre of widespread hunger for millions looms as food prices explode.
"Two words not in common currency in recent years — famine and starvation — are now being raised as distinct possibilities in the poorest, food-importing countries."
Over the weekend in Washington, ministers representing 185 countries agreed. They said that soaring food prices threaten global calamity and pledged to co-operate on a solution to save the world's poorest people from starvation.
We are pleased that Mr. Reguly was online to answer questions about his story. Your questions and his answers appear at the bottom of this page.
Mr. Reguly joined the Globe in 1997, writing the paper's main business column from Toronto. Last April, he became the Globe's European business correspondent, based in Rome. Eric has won several awards for his work, including, in 2007, the Hyman Solomon Award for Excellence in Public Policy Journalism.
Editor's Note: globeandmail.com editors will read and allow or reject each question/comment. Comments/questions may be edited for length or clarity. HTML is not allowed. We will not publish questions/comments that include personal attacks on participants in these discussions, that make false or unsubstantiated allegations, that purport to quote people or reports where the purported quote or fact cannot be easily verified, or questions/comments that include vulgar language or libellous statements. Preference will be given to readers who submit questions/comments using their full name and home town, rather than a pseudonym.
Estanislao (Stan) Oziewicz, Foreign Editor, globeandmail.com: Eric, thank you indeed for taking the time to answers questions about your Saturday article which, judging by the comments/rants, was extremely widely read. Many of those comments put the blame on rising prices squarely on the push to produce biofuels. As your article pointed out, many factors have to be taken into account. Are biofuels the chief culprit? And, Eric, you live in Rome, capital of a country that treats food with enormous respect. What kind of debate, at the consumer level, is going on in Italy and the rest of Europe about this issue?
Mr. Reguly: Stan, thanks for the first question. There is no doubt biofuels are pushing up price. The only question is by how much. The International Food Policy Research Institute in Washington suggests biofuel production accounts for a quarter to a third of recent food-price increase. The United Nations Food and Agriculture Organization (FAO) in Rome has a more modest estimate of 10 per cent to 15 per cent. I would treat the FAO figures with some skepticism, because its 191 member states include countries that produce biofuel and those that do not. If the FAO were to single out biofuels as the culprit, it would risk alienating the biofuel-producing countries (and the funds the deliver to the agency).
I have no idea whether biofuels are the chief culprit. But logic says they are at least partly to blame because of the competition for arable land.
Italy is very concerned about high food prices — there was a half-hearted pasta strike in the autumn. But I don't think Italians realized that biofuels are partly responsible for their expensive food. When they figure this out, they will, I am sure, learn to hate the biofuel industry.
Bradley Hill, Moose Jaw, Saskatchewan: Your article, and related ones, have prompted a number of comments regarding biofuels that are either incorrect or misguided. There is a longterm debate that does need to occur regarding the best use of the land. However, biofuels is certainly not the primary reason, nor would it rank in the top five reasons for why the world is feeling its food supply pinched. The primary reason is a true shortage due to four concurrent weather-related crop failures in South America, North America, Australia and Europe. This has been a rare event, but is a reminder in our instant access society that we still need to make the food. The amount of sugar and corn ( the two only real commodities used for ethanol) have merely eaten into the surplus production and have not displaced any food. It is certainly a welcome sight in the agricultural community to see the value of these commodities in line with other food products and in a balance that actually indicates what value people are willing to put on food.
The run-up in the price of rice and wheat has absolutely nothing to do with biofuels production. These are a combination of speculative buying and actual tight supplies. The biofuels industry is minuscule compared to the oil and gas industry, and the use of grain is truly an interim phase in its development. But to call for the end of the development of this renewable fuel while the world continues to demand more energy, would be a case of 'Be careful what you wish for.' Do not expect the biofuels development to go away, as it has developed into the new farm program. Make no mistake, either, that the famine that is experienced in parts of the world is more to do with the corruption and repression by a few in those parts of the world and less to do with actual shortages. Africa has been and continues to be a grossly under-utilized region in the production of food, not because of arable land, but because of the political corruption that will not allow for sustained development. Do you agree?
Mr. Reguly: Bradley, let me answer your points individually.
Yes, drought in Australia has hurt exports of cereals. On the other hand, the fall in exports doesn't fully explain the soaring prices. Note that prices are up in spite of larger harvests. World cereal production is expected to rise this year by 2.8 per cent to a record high. Rice production is expected to rise 1.8 per cent. The problem is that demand is rising faster than production.
Regarding your point about speculative buying: I don't buy it. Speculators don't actually take delivery of the commodity and stuff it into a silo or warehouse. Since it's not taken out of the market and consumed, how is the price affected? Sure, speculators can add short-term volatility, but I doubt they can affect prices over the medium to long term.
Your point on Africa is well taken. I have heard that international aid and development agencies have shied away from pumping money into African agriculture for fear the funds would be looted. But the agencies now have much tighter controls on the projects. I think the main reason agriculture development money went lacking in the last two decades was simply because the world was awash in cheap food. It was more cost effective to import than to grow your own. Obviously, that was a big mistake in retrospect.
Russell Barth, Ottawa: Hemp is the answer. Hemp produces more ethanol per acre than corn, and does so at a lower cost and with less damage to the soil. Also, one acre of hemp can produce up to 1,000 gallons of methanol in just four months. In warmer climates, like the southern U.S., that could mean 3,000 gallons per acre, per year. If the U.S. were to sow just 10 per cent of its current farmland as hemp, for example, it wouldn't need to buy any foreign oil.
What about food? The hemp tops go to food, and the stalks go for fuel, fibre and building materials, so it is like growing two crops in one field. Hemp will even grow on damaged, exhausted or marginal soil, so we don't need to use our prime farmland to grow car fuel. We could even reclaim thousands of acres of unused and abandoned land, and create jobs. Hemp doesn't need the chemical fertilizers and pesticides that other crops need, which saves fuel and lowers soil runoff pollution. Hemp fuel burns clean, which would lower air pollution and reduce associated health and environmental issues. Hemp also refreshes the soil, so putting it into rotation with other crops will actually heal — not deplete — the soil.
So why do we keep using corn for fuel when hemp is cheaper, better, healthier and cleaner? Because governments don't want to 'send the wrong message to youth' about marijuana, and because if there were small hemp methanol-producing facilities in every small town in North America, Big Oil would lose its total control over the prices of everything. Care to comment, Mr. Reguly?
Mr. Reguly: Russell, thanks. I know little about hemp as a biofuel. But the idea of using a non-food plant for biofuel production has got to be the way to go. Look at Brazilian ethanol, which is made from sugarcane. It has so many advantages over corn. Sugarcane, unlike corn, does not require irrigation or fertilizer. Unlike corn, it grows quickly and year round in the tropical or near-tropical Brazilian climate. Using corn for ethanol is just plain wrong on so many levels. I'd like to learn more about hemp fuels.
Mr. Oziewicz: Jacob Kasperowicz, from Canada, commenting on your Saturday article, said: "Global population increasing but most of the world's population has never seen an abundance of food. Altering the landscape in developed and developing countries has wiped out productive farmland. Global warming has altered weather patterns but in today's world we can use technology to work through such changes. Then there is the myth of biofuels, which use 1.5 gallons of fossil fuels to refine 1 gallon of bio and is siphoning off precious food resources. But, by far, the biggest problem is the manner in which food is wasted in developed and developing countries. North Americans, excluding Mexicans, are the biggest culprits. Go to any restaurant and you will see people nibble on each item on their plate to be fashionable and the remainder goes into the garbage. For real waste, check-out your local buffet style restaurant and watch parents pile mounds of food on the plate of a six-year-old who picks at a few items, discards the balance and returns to the trough for more. That's just the tip of our wasteful ways and a key factor to consider as food supplies dwindle. We all have a stake in this and many will learn the hard way that the party is over." Eric, is food waste a factor in the rising price of food commodities?
Jasmine Dobosiewicz, from Ottawa: How is that no one saw this coming? I cannot imagine an issue as big as this would have been impossible to foresee. I am deeply disturbed that it must reach the point of deadly riots for nations to realize there is a problem elsewhere in the world and to decide it is time to do something. Now that we all know people are going to start dying soon in large enough numbers for them to be reported (people have already started dying from this, but no one stops to care about them since the numbers are low enough to fall under the annual death toll), pressure will be placed on the United Nations to 'fix it.' Well, to fix it we all have to donate more money. Who wants to pay more to fix a problem that does not affect us directly? Chances are, not many people. I am hoping Canada will be a good enough global citizen to step up and do what we we can to help, but this will require aid from a lot of countries. Also, we should probably increase our own grain production. It is too late to fix this problem now, but better late than never. Maybe we will be able to save a few thousand lives in 30 years. This cynicism that comes with being a 19-year old business student in Ottawa. How do you see it, Eric?
Mr. Reguly: Jasmine, thanks for the question. Actually some smart people saw it coming. The UN's Food and Agriculture Organization warned a year ago that soaring food prices would trigger pain in some countries. It was right. Commodity traders and brokers knew three or four years ago that prices for wheat and other cereals were trending up, and they bought. As soon as food (like corn) started to compete with oil in the fuel market, it was inevitable that food-commodity prices would rise more or less in step with oil.
Rising fuel prices pose a huge moral problem for Canada, the United States and Europe. Each, of course, will increase their food-aid budgets. The United States just donated US$200-million to food aid. At the same time, the governments of these countries are throwing billions of dollars at biofuels such as corn-based ethanol, which diverts arable land away from food production and raises food prices. How's that for official hypocrisy?
Take John McCain. In 2000, he called biofuel subsidies an "outrageous agribusiness boondoggle." Today, the presidential hopeful calls ethanol a "vital alternative energy source."
Ending biofuel subidies would accomplish two things: It would save the taxpayer a fortune and it would reduce the output of biofuels, putting downward pressure on prices. Sadly, don't expect this to happen.
Mr. Oziewicz, globeandmail.com Foreign Editor: Eric, thanks again for engaging in this debate. It was most helpful. Now you can go to dinner with your family. But before you go, any final thoughts on this subject?
Mr. Reguly: Stan, thank you for moderating. My final thought is that the food crisis won't go away quickly, even if the media loses interest in it (as in inevitably will). Food prices went down for two decades before they reversed course five or six years ago. They could keep rising for years, as the world adds the equivalent of two Canada's to its population every year, as wealthier Asian consumers demand more meat in their diet (it takes 6 kilos of grain to product 1 kilo of beef), as increasing amounts of food are turned into fuel, and as climate change brings on extreme weather. Sadly, famine could strike before the right policies are put into place reduce the food shortages. I appreciate all the readers' interest in this topic.
