Food Scarcity 'Creating New World Order'*

Antoaneta Bezlova,
Inter Press Service (IPS)
Jun 6, 7:26 PM ET

BEIJING, Jun 4 (IPS) - Unprecedented food scarcity is beginning to
dictate the rules of a new political order where individual countries
are scrambling to secure their own food supplies with little concern for
the rest of the world, says the founder of the Earth Policy Institute.

Recent manifestations of national food insecurity like export
restrictions imposed by some grain-producing countries are the
troublesome portents of an "entirely new chapter in the book of food
security," Lester Brown told foreign correspondents in Beijing on Tuesday.

"We are in the midst of the most severe food crisis in the world's
history," Brown said. "This is not your mother's food shortage...but a
chronically tight food situation, a serious and long-term problem.''

Politicians have been meeting in Rome to find global solutions to
soaring food prices and civil unrest caused by food shortages, but in
reality many countries are already acting unilaterally to secure
supplies for the future.

 From Africa to Asia, countries are scrambling to buy or lease land
overseas to grow crops and feed their people. China, which has to feed
the world's largest population, has taken the lead by contracting land
in Tanzania, Laos, Kazakhstan, Brazil, and others.

India has set its eyes on Uruguay and Paraguay, while South Korea is
looking for farming deals in Sudan and Siberia. Libya and Egypt for
their part have been negotiating deals to lease land in Ukraine.

The worry here, according to Brown, is that "the more influential
countries would be able to secure food supplies, leaving a number of
low-income, less influential countries with no food to import."

"This could create a lot of desperate countries," he says. The United
Nations says soaring prices of basic foods such as rice and other
cereals could affect around 100 million of the world's poorest people.
In Asia, rice prices have almost tripled this year alone, leading many
governments to fear the consequences if the poor cannot afford to buy
their staple food.

To protect their domestic consumers, India, Vietnam, Indonesia, and
China have all taken steps to restrict exports. This year has seen
China's first grain trade deficit in decades. It has scrapped export
rebates for wheat, rice, paddy, maize and soybeans, and it will start
imposing export duties of 5 to 25 percent.

World Worries as China Begins to Import Grain

As the current food crisis unfolded, China's role as the world's largest
grain producer and consumer has come in for increasing scrutiny.
Politicians around the globe are looking at China, which has to feed 1.3
billion people, with apprehension, worrying that any change in the
country's long-held policy of self-sufficiency could have a tremendous
effect on the global grain markets.

Chinese Premier Wen Jiabao has said China's main priority is to feed its
own population and that this would be the country's "biggest
contribution to the world." Beijing contends it has large grain reserves
to weather the current food crisis. However, the size of the country's
state and private reserves is uncertain.

"It is mostly rice," says Zhao Jinhou, a grain analyst with Shenyin
Securities. Chinese planners subsidize grain production and this has led
to discrepancies between international and domestic prices of rice.
While global prices of rice have soared, China's domestic prices have
remained stable. "There has been no incentive to sell the rice stocks,"
Zhao says.

In 2007, China produced more than 501.5 million tons of grain, almost
level with the nation's annual consumption of 510 million tons,
according to official statistics. Chinese officials have vowed to keep
the nation's grain output stable and above 500 million tons to cope with
rising global grain prices. But analysts say even a stable grain output
in China could do little to slow down global price surges as the country
is already a net grain importer.

Last year, China imported 31 million tons of grain, or 22 million tons
more than what it exported. The bulk of the total imports were soybeans.

"[The Chinese] have sacrificed their self-sufficiency in soybeans in
order to preserve land and water for other crops," says Brown,
predicting it is only a matter of time before Beijing moves to the world
markets for grain as it has done with soybeans.

"China only needs to import 10 percent of its grain consumption to
influence markets greatly," he reckons.

The devastation caused by the grade-8 Sichuan earthquake on May 12 has
also heightened speculations that Beijing may take further steps to
restrict its exports to rein in inflation and ensure domestic supplies.

"More restrictions on grain exports would hurt China's ability to assume
its leading role of a big country in the current crisis," cautions Mei
Xinyu, researcher with the Chinese Academy of International Trade and
Economic Cooperation, under the ministry of commerce. "The side effects
of further tightening of exports would be significant and there will be
more harm than benefit."

The impact of Asia's export curbs has already provoked riots in Africa
and Haiti, places that depend on cheap food imports. The U.S. Department
of Agriculture predicts that high prices and export restrictions will
cut the volume of rice traded internationally by 9 percent in 2008,
which will drive prices even higher.

At the ongoing food summit in Rome, UN Secretary-General Ban Ki-moon
pressed nations around the world to ease a wide range of export bans and
import tariffs to help millions of poor cope with the highest food
prices in 30 years.