Supplies, Supplies!

We’ve seen it in the states – wildfires consuming timberland in the Western states, parched earth and never-ending drought in the Heartland, floods farther north and in the east – and our scientific community is telling us that this is just the beginning. In my recent blog – Don’t Give Me that Crop! – I looked at drought-slammed farmers in West Texas (just one of so many affected communities) who survive pretty much on federal entitlements disguised as crop insurance. Sure there are pockets of good news. The ozone hole at the bottom of the planet is a bit smaller, and global pollution rates are slowing, but the overall trends are not positive.

When you aggregate these little stories into “The Big Picture,” the macro-vectors are downright scary. As global populations expand, as new higher-end consumers in developing countries become developed and upgrade their demands on the food chain, it is clear that this planet is going to have to create a rather substantial new-growth agricultural capacity to feed these new demanding mouths. And until that full supply of goods is provided, the most basic economic law of supply and demand will tell you that prices for foodstuffs have nowhere to go but up… and up… and up.

“[New] warnings come in a leaked draft of a report under development by a United Nations panel, the Intergovernmental Panel on Climate Change. The document is not final and could change before it is released in March… In a departure from an earlier assessment, the scientists concluded that rising temperatures will have some beneficial effects on crops in some places, but that globally they will make it harder for crops to thrive — perhaps reducing production over all by as much as 2 percent each decade for the rest of this century, compared with what it would be without climate change…

“The report also finds other sweeping impacts from climate change already occurring across the planet, and warns that these are likely to intensify as human emissions of greenhouse gases continue to rise. The scientists describe a natural world in turmoil as plants and animals colonize new areas to escape rising temperatures, and warn that many could become extinct.

“The warning on the food supply is the sharpest in tone the panel has issued. Its previous report, in 2007, was more hopeful. While it did warn of risks and potential losses in output, particularly in the tropics, that report found that gains in production at higher latitudes would most likely offset the losses and ensure an adequate global supply.” New York Times, November 1^st.

Adding fuel to the fire, so to speak, the economic muddle has impacted countries that seemed until recently to be on a track to provide better lives for their residents. Notably India and Brazil, two nations on the notorious BRICS list of hot economies, have suffered economic reverses that have skyrocketed the cost of basics. The poster child for this debacle in India, for example, is the humble onion, a very basic staple in the Subcontinental diet that has tripled in cost over the past few months. You may have noticed that your grocery bill has edged upward of late as well, and for those on food stamps in this country, the recent cut in overall benefit levels has been particularly painful.

As food supplies contract the projected 2% per decade, “demand is expected to rise as much as 14 percent each decade, the [U.N.] report found, as the world population is projected to grow to 9.6 billion in 2050, from 7.2 billion today, according to the United Nations, and as many of those people in developing countries acquire the money to eat richer diets.

“Any shortfall would lead to rising food prices that would hit the world’s poor hardest, as has already occurred from price increases of recent years. Research has found that climate change, particularly severe heat waves, was a factor in those price spikes.

“The agricultural risks ‘are greatest for tropical countries, given projected impacts that exceed adaptive capacity and higher poverty rates compared with temperate regions,’ the draft report finds.” NY Times. But what this means for the United States, where incomes are bulging at the top but plummeting at the bottom and contracting in the middle, is that our future life will require more money for basics, leaving less money for discretionary spending for the vast majority of Americans. The poor will be squeezed the hardest. It just seems so strange that despite this clear linkage to global climate change and a severely deteriorating quality of life at every level, there isn’t a greater groundswell for environmental controls.

I’m Peter Dekom, and I sure hope someone comes up with a rallying cry that will finally wake us all up!