SA weathers storm, but food prices still set to double by 2030
Traditionally the cost of staple foods has gradually inflated over time, and future cost scenarios have taken this approach. But a report released by Oxfam today has factored in the rapid changes in price that come about due to climate-related crop failures. Their most conservative scenarios see food prices doubling by 2030. Half of this increase will be down to changes in average temperatures and rainfall patterns, it said.
The report, Extreme Weather, Extreme Prices, said that for the moment South Africa is secure. While this is a good thing, it leaves the country vulnerable to local crop failures. "Weather-related shocks could have a devastating impact on local production, prices and ultimately levels of consumption," it said.
It is these short-term changes that are the big problem. Gradual changes allow the poorest and most vulnerable to adapt, but the report said rapid changes are likely to throw them out of the pot, considering that 935-million people already go to bed hungry every day.
In the normal run of things a local failure would force South Africa onto the global market. But this market is already showing the problems of a global food-trading system.
The World Bank's records show that 80% of the world's grains come from five countries. These have all experienced crop failures since 2007. The largest spike in food costs was recorded after the first of these – a drought in the United States – drove food prices to their highest ever levels. When drought hit Russia it closed exports, shrinking the market and pushing up prices again.
This spike was battered down by the global recession in late 2008, but the food-price graph is rapidly racing up to meet its previous high.
As a result the United Nations, with its feeding programmes around the world, had to extend its reach. In its last report it said $7.8-billion was needed to feed people in Yemen, Zimbabwe, Kenya, Afghanistan, the DRC, Sudan, Somalia, South Sudan, and the Sahel region of West Africa.
The report also noted that a 10% increase in the cost of major foodstuffs would add $200-million a year to their aid programmes around the world.
Oxfam's climate change policy advisor, Tim Gore, said the world's poorest already spend 75% of their income on food. "We will all feel the impact as prices spike, but the poorest people will be hit hardest," he said.
Data collected by the Studies in Poverty and Inequality Institute, a Johannesburg-based NGO, found that there was a 35% increase in the average price of maize meal from March 2011 to February this year. This represented a change from R22 for a 5kg bag, to R33.54 a year later.
And Oxfam's Gore said this will only increase, "As emissions continue to soar, extreme weather in the US and elsewhere provides a glimpse of our future food system in a warming world."
His solution is for governments to immediately slash their greenhouse gas emissions and invest in small-scale agriculture.
And in this there is a window of opportunity for South Africa, said Inge Kotze, senior manager of sustainable agriculture for the World Wide Fund for Nature. At the moment the country is lucky because it is mostly self-sufficient and does not often import basic foodstuffs.
With agricultural land making up 80% of all land, and huge funding potentially emerging from the Green Climate Fund, there is a chance for quick and critical change to be affected. "We need to get back to the basics and understand our resources, then create a collective blueprint so all the pillars of sustainable development work together in the future. Only then can we mitigate the results of climate changes on agriculture," she said.
Price and production shock
But for the immediate future, the country is treading a fine line. "In South Africa we already have huge problems with the food, water and energy nexus," she said. Each one of these has had a price and production shock in the last few years, or will have one soon. On their own these three areas would be troubling, but with the accelerated effects of climate change on top she said it almost heralds a "perfect storm".
In July alone the large-scale drought in the US increased worldwide maize prices by 23%. Wheat prices are expected to go up 19% as Russia's harvests are also lower than expected.
This has driven the two UN agencies that deal with food – the World Food Programme and the Food and Agriculture Agency – to issue a joint statement, warning that the current crisis has to be resolved, and advising that big steps be taken to ensure that similar ones do not occur in the future.
"We need to act urgently to make sure that these price shocks do not turn into a catastrophe, hurting tens of millions over the coming months," it said.
The solution for the agencies is to promote sustainable food production in poor countries, which are currently importing food. "We need to invest more in agriculture and social protection, including programmes that help poor people access food that has become unaffordable in their local markets."
Without this, Kofi Annan, former UN secretary general, said, "We will see farmers across Africa forced to leave their land. The result will be mass migration, growing food shortages, loss of social cohesions and even political instability."
Other major predictions in the Oxfam report:
- A drought in the United States in 2030 could raise the price of maize by 140%, above the average price which will have already doubled by then.
- Drought and flooding in Southern Africa could drive the price of maize and other coarse grains up by 120%. This would mean a 25kg bag of corn meal would go to R355.
- Drought in India and flooding in South East Asia could see the world price of rise increase by 22%.