Global food prices have jumped 29% in the past year, triggering international imbalances and driving over 44 million new people into poverty and hunger according to a new report released by World Bank. The rising cost of food is not just local news, but a concern shared by every individual on the face of the planet.
In a world of shifting economic tides and new developing middle classes in large countries like China and India, a new wave of American-style “over-consumers” are entering the food market, which is already under massive strains due to recent crop failures internationally.
Every economy – regardless of its pseudo-model, strengths or weaknesses – must, by principle, be based on the availability of food. Food is the first and foundational level of any economic pyramid anywhere in the world. Whether it is imported or produced locally, it must exist before any sustainable economic growth can occur.
People without food don’t work, they don’t play, they don’t care about politics or what cars they drive. Without a sustainable food supply, the people will die and the economy will fail.
Corn futures, a staple of the Western world, have doubled in the past 6 months from $3.50 to $7.00 per bushel, driven on by increasing corn for ethanol, massive crop failures, and growing international demand from developing countries.
The USDA reported that by August of this year U.S. corn reserves will have fallen to only 5.5% of the total annual demand, with over 40% of U.S. corn production going into ethanol fuels.
What this means in laymen’s terms is that if corn crops were to fail this year, then only 5.5% of the people who depend on corn for personal consumption, animal feed or industry would be able to acquire it from our national reserves, including international buyers.
What many reports and analysts fail to realize and explain is that food products like corn affect more than just corn. Corn is what we feed our cattle, chickens, hogs, and other livestock. What if only 5% of the cows had food next year? What would happen to your beef prices at the grocery store or the cost of a McDonalds cheeseburger? If corn based ethanol suddenly fell off of the market, what would that do to fuel prices worldwide? These are the questions that need to be asked and answered.
The real problem is that this is not just a corn shortage. The World Bank and USDA reports are recording record price jumps across the board of western staple crops like wheat and soybeans.
World Bank stated that the prices for fats and oils rose 22% and wheat and sugar rose 20% between October and January, a ninety day period. Prices for soybeans also jumped.
To break down the jargon, a rise in price means that there has been a rise in demand, a decrease in supply or both. In sustainable economics, a rise in demand without an equal rise in supply is the same thing as a decrease in supply and vice versa. This means that when you hear reports about rising food costs, you are actually hearing about food shortages.
The agencies responsible for these reports understand that through wording they can manipulate most readers who don’t understand the principles behind economics, which helps them to avoid creating panic. Doublespeak, such as discussing “rising prices” instead of “food shortages”, is simply a population management tool.
Global food insecurity is an issue that must be discussed and handled through international cooperation and unity of purpose if any sustainable solutions are to become a reality. Until then, the USDA and World Bank seem to agree that the situation is only getting worse.
One thing is for sure when comprehensively examining the evidence – the amount of money promised or invested into food security programs is not the measure by which successful implementation and its impact can be expected. To date, the World Bank and UN with their subsidiary NGO’s have spent billions of dollars in agricultural programs, food distribution and equipment while global food insecurity continues to rise at alarming rates.
In the end, they have little or nothing to show for their efforts time and time again, except for promises of more of the same.
In contrast, small organizations like the SCEI-1BLOOD International NGO, operated by Food Security Ambassador Dr. Kenneth D. Jackson, have created unprecedented food security programs bringing war torn impoverished nations in West Africa close to food sufficiency in less than a decade. These programs began in places where there was virtually no sustainable agricultural development and where the World Bank and UN NGOs had spent many years with their food programs to no avail.
With less than a handful of seed rice ten years ago and a comparatively miniscule budget, the SCEI-1BLOOD model has blossomed into a massive multinational program operating the largest farms those countries have ever seen and conservatively harvesting 6.5 million bushels this season.
This example demonstrates that the solution to the growing global food crisis is in the agricultural and political model implemented and how it is operated, rather than how many billions of dollars are funneled through a system that has already proven beyond a doubt that it is either incapable or unwilling to provide the solutions to global hunger.
To date, the World Bank and UN financial promises and aid have gone towards buying food and distributing it to third world beneficiaries through its many charities and NGO’s. While this does feed people for a day, the food that the World Bank and UN are buying for donations is coming from the currently depleted global reserves and strained food markets, which is actually adding to the rise in prices and decreased food supply.
Unless these programs shift their primary focus from food distribution and management to agricultural development and long term food sustainability and sufficiency, their solutions will only continue to compound the problems already facing the world. Until then, the more money they throw at it, the worse it will get.
The World Bank and UN are both very aware of SCEI-1BLOOD operations and have witnessed firsthand the possibility of creating a truly food-secure world. They have seen the successes that have occurred where they have failed.
Knowing this, we should be curious as to why the organizations that the world looks to for solutions are ignoring the writing on the wall and are refusing to implement proven solutions.
This Economic Examiner in particular is here to break down and provide the news in a way that can be understood by people without degrees in economics, while remaining as concise and accurate as possible as a service to glowbass.com readers and in the true definition and spirit behind journalistic integrity.
The Macon Economic Development Examiner will continue to report and translate this story as new information emerges.