SAUDI ARABIA, from next year, is planning to incrementally, and completely, phase out domestic wheat production over the next several years due to fears over water supplies, introducing plans to halt wheat production by 2016 because of concerns about the desert kingdom's scarce water resources, according to a US government agency.
According to the Financial Times Saudi Arabia will begin reducing production annually by 12.5 per cent from next year and will use imports to bridge the domestic consumption gap. As the Saudis gouges the West with its oil exports, some might wonder why is this a matter for concern? But perhaps we should not allow ourselves even a tiny bit of smugness.
For one, world food prices are already skyrocketing. The price of wheat alone has doubled in the last year, partly due to vehicles now competing with people for 'fuel'; partly due to developing nations like China becoming wealthier and demanding both more food, and more energy intensive foodstuffs, like meat and dairy that use significantly more land, water and fossil fuel resources; partly due to climate change reducing yields through droughts and floods; partly due to the continuing trend of soil erosion and desertification; and partly due to reduced yields from the use of genetically modified crops.
As the Financial Times article states, by 1991 the Kingdom of Saudi Arabia had become a net exporter of wheat. Turn those exports around, and make the Kingdom's almost 25 million people begin to completely rely on imports at a time where stresses on global food supplies are mounting, and the terms 'vulnerability' and 'political instability' begin to move to the fore.
Eric Brooks draws parallels between the peaking of global food production and the peaking of oil, and further outlines the worrying state of grain production around the world:
But here's the most worrisome parallel of all: Flattening productivity increases, limited land area, insatiable meat demand, population growth, ethanol, biodiesel and climate changethese factors are turning once major grain exporters such as Australia, the EU and China into minor exporters or even large grain importers. As one country after another's oil production peaked, there remained fewer and fewer net oil exporters they could rely on to fulfil their needs.
Now, just as most of the world imports much of its oil from a handful of OPEC nations, most countries source an increasing proportion of their grain from the United States, Canada and Latin America. As happened in the oil patch decades ago, most of the world now depends on just five or six countries in North America and South Americathe Persian Gulf of feed grain supplies.
At the same time, we see the list of countries that can be relied on to supply the rest of the world with feed grains steadily shrinking. Thanks to drought and biodiesel, China still imports rapeseed from Canada but no longer from the EU or Australia. The EU, once a grain exporter, now suffers serious feed grain deficits. On a recent tour of Europe to assess the severity of the situation, Ken Hobbie, USGC's president and CEO noted that, "The EU recently lifted all import tariffs and duties temporarily as a result of the ongoing grain shortages."
Chris Corry, USGC's senior director of international operations added that, "They have a real big problem over here with grain supplies. We are hearing that Europe will need 17 to 18 million metric tons of feed grains next year. That is how bad things are." For Asian countries, the EU's transformation into a net grain importer removes another major exporter from their supply chain equations.
As Europe vanishes off the feed grain export list, South America's corn exports are also fading. The USDA's December 13, 2007 Feed Outlook reports that, "Argentina's government has been keeping export registrations for corn closed, thereby limiting corn exports and keeping a lid on prices in Argentina." Apparently, even large grain exporters fear the consequences of today's global grain shortage.
At around the same time, the Korea Herald reported that "American corn achieved an 84 percent market share in South Korea." Byong Royal Min, the USGC director in Korea, said it was "a lack of corn supplies from South America that propelled the United States to this market leading position." Whether America can continue raising its ethanol production and remain a major corn exporter is itself in doubt.
Clearly, as the number of reliable feed grain exporters dwindles, large importers fear they are too dependent on a handful of large, powerful suppliers. Indeed, Chinese reluctance to import corn from the US dominated western hemisphere mirrors American anxiety about relying on Middle Eastern oil.
For a nation like Saudi Arabia to just give up growing its own grain (they do like Pita bread, after all), things are clearly getting desperate on the water front. Even without climate change, water stresses have been mounting worldwide (see also). Add climate change to the mix, and we can expect to see a growing number of nations making similar drastic decisions. Without a major change of direction, such growing national interdependencies will increase international tensions.
Some might assume that as the need for a reprioritization of basic food needs become more pronounced, the world will adjust its production systems to suit (think 'the invisible hand of the market') i.e. that people will begin to reduce the strain by moving away from meat based diets, for example. But, I would venture to say that the more likely scenario is that those who can afford to continue with the lifestyle they now have, will do so, and those that cannot afford to outbid wealthy nations like Saudi Arabia, the U.S., China, etc., will simply go without.We're seeing this already with food, oil, and climate change issues. People on the bottom rungs of the ladder are falling off while the wealthy continue lifestyles of excess.
Essentially, money talks. The Saudi situation is a case in point. It is already believed that Saudi Arabia is consuming large amounts of water through water injectionthey pump water into failing oil wells to force the oil out. Instead of growing food with the water, it may be getting used to postpone peak oil. Oil may well be more valuable to the nation than food, at least for the moment...
There are those who perceive solutions to these issues, and it is the hope of many that these solutions will finally begin to get the long-overdue attention they deserve. For example, Permaculture techniques have been shown to create food where before there was only desert. We know that converting agriculture to organic systems can considerably increase yields, even in dry regions. Re-vegetating formerly depleted soils, and re-greening regions has the knock-on effect of enabling land to filter and hold vast amounts of water. Conversely, contemporary agricultural practices use considerably more wateras the lack of soil structure inherent with industrialized systems causes water to rapidly leech away or run off.
The monoculture systems that globalised food production requires are less productive than bio-diverse systemssystems that not only enable local populations to provide for their own needs, but also do away with the fossil fuel inputs currently used for both food production and global transport (and lets not forget that chemical-based agricultural imputs contaminate the little water we have).
Peak oil, peak soil, peak water, population growth and climate change all add up to mounting pressure on our most basic needsfood and water. If we don't wake up soon, we may well see more nations being added to the list of countries unable to provide for their own needs. Perhaps the only (short term) winners in this scenario will be the trans-nationals and transport organisations that get to make a buck on every sale and transfer.
It's grim news for everybody. The global economy is just about coping with the sub-prime crisis, the fall of the dollar and oil at $102 a barrel. But the inflationary surge in the costs of food, which now dwarfs the rise in oil prices, could prove to be the final straw. World grain reserves are at their lowest levels since records were first kept back in 1960, and the U.S. stockpile had not been this low since 1948.
This problem has been coming for some time, driven by three separate factors. The first is overall population increase. The second is that emergent economies like China and India are climbing up the prosperity chain and demanding more meat protein, which takes eight times as much land to produce as vegetable protein. The third is that short-sighted government subsidies for biofuels is eroding the amount of crops available for eating.