Food prices' global impact

Published: Monday, March 31 2008 12:32 a.m. MDT

For most Americans, rising food prices mean shopping smarter — clipping coupons, buying produce that is in season and taking advantage of sales. Even then, consumers could face a decade of rising food prices, according estimates by the United Nations Food and Agriculture Organization.

Elsewhere in the world, rising food prices can spell civil unrest. Recently, rising food prices have sparked riots in two West African nations. Human rights activists say 100 people died in riots there. Some nations are extending government bailouts and raising public salaries to stave off further violence. Some nations are dipping into food reserves to help keep down prices, which is risky since there are already low supplies of some commodities, let alone spare to restore reserves.

Part of the challenge is that some crops, such as corn, are being used to produce ethanol. That means there is less corn available for items such as cereal or tortillas, which are staples in Latin American countries. It also means feed prices for livestock and poultry have increased. Ethanol producers say they, too, are saddled with high corn prices.

To address these issues, some farmers have switched from growing other crops to corn, which is fetching record high prices. Last year, American farmers produced more corn than ever — 13.1 billion bushels — as more land was put into production and the corn belt experienced ideal weather.

Although the use of ethanol is increasing, its positive aspects are blunted by the fact that fossil fuels are consumed in its production and harvest. Plus, it removes corn and soybeans from the food supply, which has a ripple effect. Poultry producers that have shuttered their operations blame rising corn prices. In some nations, beef is viewed as an indulgence.

The issue of the United States government providing subsidies for ethanol production needs to be revisited. Without question, the United States needs to take affirmative steps to curb its dependence of foreign oil. But producing ethanol with food has a significant, worldwide ripple effect. Higher prices of commodities such as corn and soybeans means many consumers around the world are forced to cut their food consumption. In Third World countries where food is already scarce, it means malnutrition. It can mean civil unrest.

For the U.N. World Food Program, rising food and fuel prices have resulted in a $500 million shortfall in funding this year to feed 89 million needy people.

Steps need to be taken to right this course. For the near future, more research must be placed in ethanol production from plants that are not food staples. For that matter, more investment is needed to eventually eliminate motor vehicles that burn petroleum products and ethanol. Such a change would literally change world politics for the better.

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