The Other Crunch: Let Them Eat - ... ?

When it comes to global commodity crises, real or imagined, until quite recently talk has been of energy, water and high-value metals: and it has been easy to take ones eye off the meat-ball, so to say. Hands up – food prices didn’t get a mention in our predictions for 2008: but it’s food that is the first true global commodity flashpoint of the new century.

In retrospect, how obvious this is and how parochial have been the concerns over energy and metals - the rich man’s ‘necessities’. But meagre incomes are spent predominantly on food, with pitifully little room for manoeuvre. We can take a tenfold rise in oil prices (since 1998!) more or less in our stride, and even become blasé about commodity prices (we may even have invested in them …) They cannot easily take a doubling in the price of wheat and rice.

Of course commodity prices are interlinked, and this we did foresee: that the lunacy which is EC biofuels policy would soon unravel. Biofuels for power generation may be primarily woodchips and chickenshit (and diseased carcasses): but biofuels for transportation compete directly and brutally with food production and rainforests. As we noted here last month, the grand EU enviro-energy plan entails that more than half the renewables we are ‘legally bound’ to use will come from biofuels.

It’s an ill wind … and some very powerful (and greedy) lobbies are limbering up for a big, big payday. The French and US farmers, the GM crop manufacturers: all will strangely find high prices insufficient motivation, and will demand ever more protection, promotion and subsidy for their ‘help’ in solving the food crisis.

A rethink by the EC on biofuels would be a start – we’ll return to this in future - but there are only rumblings at present. Heaven help those on a dollar or two per day.

ND