The Risk of Asian Food Crisis

Among Asia's 1.9 billion working people, the UN ILO estimates that the most vulnerable workers and their dependents, especially in the so-called informal sector, can attain as much as 35 per centof the national population and 55 per cent of the total working population in some countries. These are low wage groups, often spending over 40 per cent of their total income on food.

When food prices rise very sharply as in 2007-2008, this creates serious hardship and can cause dangerous political and social tensions. While international traded food prices fell sharply in 2008-2009 along with oil, metals, minerals and other commodity prices, food price recovery since early 2010 has already caused the World Bank to sound the alarm. In its World Politics Review of March 18, and again more recently, the IBRD says that food prices in Asia are already higher than they were in 2007, before they surged up in 2008, and they could soon increase again.

Food price declines since their peak are also only relative. The Asian Development Bank's president Kuroda has many times noted that Asian region food prices in early 2010 were still 85 per cent higher than average prices in 2003. To be sure, the World Bank mostly identifies oil prices as the cause for rising traded food prices, but it now also includes the supply/demand factor, urbanization, higher prices for infrastructures and supplies to farming, including water and transport, the slowing down of yield and productivity gains, and other factors. These certainly include a shortage of investment in agriculture, but until very recently the IBRD, IMF and other economic and finance agencies believed 2010 would not experience weather and climate stress.

The FAO's chief Jacques Diouf told delegates at the July conference in Manila on International Food Security that despite the fall of food prices in 2009, the number of malnourished and under-nourished people in Asia is estimated by his organization at 642 million. This is at least 60 million more than in 2008, despite lower traded food prices in 2009. For Diouf, the biggest problem is insufficient and badly managed investment in agriculture and food industries. FAO's Asia Pacific director Hiroyuki Konuma told reporters at the conference that world farm investments need to run at US$ 200 billion a year for the next 40 years, and that US$ 120 bn per year of this spending needs to be in Asia. Today, as the FAO indicates, there is at least US$ 40bn a year that is missing from Asian spending. For the FAO this shows only one thing: due to under-investment it is certain there will be future food crises in Asia, as well as in Africa.

Many researchers and analysts, and some major organizations like FAO point out that governments in Asia have been lulled into complacency by farm-yield breakthroughs, from Green Revolution hybrid crops and increased fertilizer and irrigation water supplies. Through the long period of about 35 years, from 1965-2000, farming yields increased very fast and to high levels, but from the late 1990s this has slowed down a lot. In particular farming yields for rice and wheat, and soybeans, are no longer growing at a uniform and high rate; in some major producer and exporter countries they have declined over the last 10 years. Without a return to the increased production which the Green Revolution enabled on fixed or even declining total food growing areas, with annual growth of total food grains output at 5 per cent or 6 per cent a year, every year, it is more and more certain there will be rising food prices, more food shortages, and increased human suffering for low income groups in Asian countries.

To be sure, this concerns "normal conditions", and excludes the stress factor of sudden climate and weather crisis. Today in Pakistan, Russia, Ukraine, North Korea, Afghanistan, India, China and Philippines there is a combination of serious economic difficulties including inflation, extreme weather events, and social turmoil (civil war in Afghanistan) that when combined create an outlook for the most serious food crisis in Asia since the 1970s.

We can be certain there is no magic "silver bullet" solution for the coming food crises the world will face, starting with food shortage in the world's highest population region, Asia. The hope of finding "quick fix" solutions was satisfied by the trio of Green Revolution, fertilizers, irrigation for many years, but this has worn off. It has declined for many reasons, due to many different causes that when combined pull down and reduce food-yield growth - and can lead to actual declines in food output per unit area of land. We can for example look at urbanization, road building and industrialization, which are all linked and which all tend to destroy the better agricultural land, in low lying areas and near the sea.

Some urban planners and architects, who usually have only small knowledge of agriculture and food production, recommend "Vertical Farming", using hydroponics in high rise buildings, and similar gimmicks, but the capital costs and operating problems for this "quick fix" will be very high. Arguments that traditional food and farming methods should be restored and improved with small and targeted "doses" of high tech are more likely to provide working solutions, in some Asian countries. These and other proposed solutions will however not change the serious outlook for 2010-2011. The major economies, led by China and India will likely take strong measures to limit food exports, and the biggest food importers including Indonesia, Bangladesh, Pakistan and Philippines may encounter serious situations

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