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Chapter 10. Redefining Security: Introduction
In each of the first four years of this new century, world grain production has fallen short of consumption. The shortfalls in 2002 and 2003, the largest on record, and the smaller ones in 2000 and 2001 were covered by drawing down stocks. These four consecutive shortfalls in the world grain harvest have dropped stocks to their lowest level in 30 years. When there are no longer any stocks to draw down, the only option will be to reduce consumption. 1
In early 2004, world grain prices were up some 20 percent over previous years. Soybean prices were double the levels of a year earlier. The combination of stronger prices at planting time and the best weather in a decade raised the 2004 grain harvest by 124 million tons to 1,965 million tons, up 7 percent. For the first time in five years, production matched consumption, but only barely. Even with this exceptional harvest, the world was still unable to rebuild depleted grain stocks. 2
The immediate question is, Will the 2005 harvest be sufficient to meet growing world demand, or will it again fall short? If the latter, then world grain stocks will drop to their lowest level ever—and the world will be in uncharted territory on the food front.
The risk is that another large shortfall could drive prices off the top of the chart, leading to widespread political instability in low-income countries that import part of their grain. Such political instability could disrupt global economic progress, forcing world leaders to recognize that they can no longer neglect the population and environmental trends that have created harvest shortfalls in four out of the last five years. While terrorism will no doubt remain an important policy issue, the threat posed by growing food insecurity may dwarf it in terms of the number of lives lost and the extent of economic disruption.
1. U.S. Department of Agriculture (USDA), Production, Supply, and Distribution, electronic database, at www.fas.usda.gov/psd, updated 13 August 2004.
2. Ibid.; world grain and soy prices from International Monetary Fund (IMF), International Financial Statistics, electronic database, various years.
Copyright © 2004 Earth Policy Institute