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7 Reasons Food Shortages Will Become a Global Crisis

     

Food inflation is here and it’s here to stay. We can see it getting worse every time we buy groceries. Basic food commodities like wheat, corn, soybeans, and rice have been skyrocketing since July, 2010 to record highs. These sustained price increases are only expected to continue as food production shortfalls really begin to take their toll this year and beyond.

This summer Russia banned exports of wheat to ensure their nation’s supply, which sparked complaints of protectionism. The U.S. agriculture community is already talking about rationing corn over ethanol mandates versus supply concerns. We’ve seen nothing yet in terms of food protectionism.

Global food shortages have forced emergency meetings at the U.N. Food and Agriculture Organization where they claim “urgent action” is needed. They point to extreme weather as the main contributing factor to the growing food shortages. However, commodity speculation has also been targeted as one of the culprits.

It seems that the crisis would also present the perfect opportunity and the justification for the large GMO food companies to force their products into skeptical markets like in Europe and Japan, as recently leaked cables suggest. One thing is for sure; food shortages will likely continue to get worse and eventually become a full-scale global food crisis.

Here are seven reasons why food shortages are here to stay on a worldwide scale:

1. Extreme Weather: Extreme weather has been a major problem for global food; from summer droughts and heat waves that devastated Russia’s wheat crop to the ongoing catastrophes from ‘biblical flooding’ in Australia and Pakistan. And it doesn’t end there. An extreme winter cold snap and snow has struck the whole of Europe and the United States. Staple crops are failing in all of these regions making an already fragile harvest in 2010 even more critical into 2011. Based on the recent past, extreme weather conditions are only likely to continue and perhaps worsen in the coming years.

2. Bee Colony Collapse: The Guardian reported this week on the USDA’s study on bee colony decline in the United States: “The abundance of four common species of bumblebee in the US has dropped by 96% in just the past few decades.” It is generally understood that bees pollinate around 90% of the world’s commercial crops. Obviously, if these numbers are remotely close to accurate, then our natural food supply is in serious trouble. Luckily for us, the GMO giants have seeds that don’t require open pollination to bear fruit.

3. Collapsing Dollar: Commodity speculation has resulted in massive food inflation that is already creating crisis levels in poor regions in the world. Food commodity prices have soared to record highs mainly because they trade in the ever-weakening dollar. Traders will point to the circumstances described in this article to justify their gambles, but also that food represents a tangible investment in an era of worthless paper. Because the debt problems in the United States are only getting worse, and nations such as China and Russia are dropping the dollar as their trade vehicle, the dollar will continue to weaken, further driving all commodity prices higher.

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January 8, 2011