Fifteen years ago experts were saying that world food prices would rise because farmers would be unable to feed the world, writes Nicholas Watts.
At about that time the USA was falling out with Hugo Chavez, the Venezuelan president, where a lot of their oil supplies came from. The USA thought it ought to produce more of its own oil so as corn prices were fairly low it set about turning grain into ethanol. In four years they were using more than 100 million tons of corn annually to make ethanol. At about the same time they started fracking, and the global price of oil rose to record prices.
Taking more than 100 million tons of grain off the world market pushed grain prices to record levels and showed good profits in farming worldwide. The world’s farmers increased production. Since then there have been a few droughts and floods around the world, which have spiked grain prices, but the world’s farmers are now growing too much produce. The world is awash with food despite nearly every country producing ethanol, bio-diesel, bio-gas and having solar panels on farmland.
Last month world wheat prices were at their lowest since 2006. The price of oil is, of course, low as well, which to most people is a good thing, thanks to fracking in North America. Farmers usually make more profit when the price of oil is high as the price of grain is also linked to the price of oil. I wonder how many farmers would like the price of oil to rise?