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Food or fuel? World faces growing hunger

By Paul Titus

Along with climate change, peak oil, and terrorism the high cost of food is now squarely on the menu of global concerns, and church groups are among those raising their voices for the problem to be addressed.

Indeed, the forces are inter-related. The high cost of petroleum – and the fertilisers derived from it – is a cause of higher food prices. And concerns about climate change are driving developed countries to divert resources to bio-fuels, pushing up the cost of maize and other grains.

Other factors pushing up the price of grain are population growth and the steadily growing economies in the developing world. The result, according to the United Nation’s Food and Agriculture Organisation (FAO), is that global consumption will likely to outstrip grain production for the next 10 years. Australian grain exporter CBH Ltd’s chief executive Imre Mencshelyi predicts food prices will treble in the next three to five years.

Every year the FAO marks World Food Day on October 16th. This year the theme of World Food Day was that sufficient healthy food is an inherent human right. The FAO says hunger and malnutrition are caused not just by a lack of food, but by poverty and income inequalities. The right to food is thus linked to other human rights, such as the rights to education, work and health.

Christian World Service campaigns coordinator Gillian Southey says for most Westerners, hunger is something that happens overseas but the FAO estimates 854 million people around the world do not have enough to eat each day. This is more than one in 10 people and in sub-Saharan Africa the figure is one in three.

“Unfortunately the number of those who are unable to consume sufficient calories to meet their daily needs is likely to rise given the increased demand for energy,” Gillian says.

“Land that could be used to provide much needed food is being diverted into the production of crops like corn that can be used to produce ethanol. The immediate effect is a rise in food costs.

“It has been estimated that global corn prices will rise by up to 20 percent by 2010 and 41 percent by 2020. In the rush to reduce the global dependency on oil and ensure that those of us who are better off can continue to use more energy, little thought has been given to who will bear the cost.

“People with money will be able to purchase fuel made from crops that others can no longer afford to eat. Drivers of cars will be able to pay more for the same crops than the people who need to eat them.”

Gillian says climate change is real and the need to develop renewable energy urgent but so too is global hunger. It is not fair to make more people hungry and increase global disparity for the sake of economic growth.

Director of Lincoln University’s Agribusiness and Economics Research Dr Caroline Saunders specialises in sustainable economic development. She cautions that the impact of bio-fuels will be complex and may not have such dramatic consequences. The real issue for people who face food shortages is the unequal distribution of wealth we already have. Caroline and a group of colleagues used economic modelling to estimate the impact of increased use of maize for ethanol production in the United States. The US is responsible for 60 percent of the world’s corn exports, most of which is used as livestock feed. “The cost of corn may increase 25 to 30 percent but the model shows the cost of milk and meat is likely to increase only 1 to 3 percent. Corn is only one of a whole suite of inputs required to raise livestock, and it is not a huge cost compared to others such as fertiliser and machinery,” Caroline says. Countries like New Zealand, Australia and Brazil that use pasture rather than grain to feed livestock will in fact benefit from the higher prices.

Another variable to consider is technology. The Lincoln group’s models suggests a modest increase in the efficiency of ethanol production of 10 percent (one percent a year for a decade) would mean corn for ethanol could be produced with nearly no impact on prices for livestock products.

Even more significant would be the development of ‘cellulosic’ technologies which would allow the conversion of stalks, leaves, grasses, and even trees into ethanol, and thus lessen the pressure on grain prices.

Nevertheless, Caroline says higher prices for corn and other grains will hurt some groups of people in developing countries. While small scale farmers may benefit from higher prices, people in poor urban centres are likely to suffer.

Other experts suggest higher food prices may have some positive effects in the long term. German news magazine Der Spiegel quotes Campaign for Renewable Energy researcher and bio-fuels expert Bjoern Pieprzyk as saying higher food should encourage more production in underutilized areas like Russia and Africa, ultimately helping poor farmers compete.

But, as Gillian says, this does not change the fact that global food distribution systems are dominated by corporate interests and are contributing to increased hunger and dislocation in many developing countries. Many forces are at work that could create more starving people, force millions to migrate to rich countries, and heighten global tensions.

For these reasons CWS has joined the Ecumenical Advocacy Alliance. The Alliance calls for

1: trade practices that further the right to food and sustainable agriculture;

2: global policies and trade rules that ensure everyone has access to essential services;

3: regulation of transnational corporations to ensure they help eradicate poverty, promote human rights, and protect the environment.

For more information visit cws.org.nz.