Rice Bowls and Dust Bowls: Africa, Not China, Faces a Food Crisis

World grain markets tightened sharply in 1995, bringing Malthusian worries back into fashion. A weather-related drop in corn production in the United States combined with strong worldwide demand to push U.S. corn export prices up 45 percent in a single season. Corn and wheat prices on the Chicago Board of Trade jumped to a 15-year high. Both the United States and the European Union stopped subsidizing wheat exports, and the EU even imposed export taxes to guard against shortages at home. The U.N. Food and Agriculture Organization (FAO) projected that world grain stocks would fall, before a new harvest came in, to between 14 percent and 15 percent of annual consumption, the lowest level in two decades, and much less than the 17 percent to 18 percent level the organization considers safe.

Lester R. Brown, president of Worldwatch Institute, believes these short-term changes may be the leading edge of a disturbing scenario: world grain shortages caused by the growing imports of China. In Who Will Feed China? Wake-Up Call for a Small Planet, Brown calculates that by the year 2030 China’s need for grain imports will far outstrip the spare production capacity of exporting nations. International prices will then skyrocket, imperiling consumers in poor importing countries. This scenario seemed to be unfolding ahead of schedule last year, when China, already the world’s largest importer of wheat, switched from being an exporter to an importer of corn.

The result has been a flurry of speculation about the trouble facing Chinese agriculture and the long-term consequences for the world food system. In China itself, even top leaders such as Premier Li Peng have expressed concern. Yet the most severe problems facing today’s world food system -- and tomorrow’s -- will not be in China, but in South Asia and Africa. Especially in Africa, which is plagued by poor government, slow economic growth, and rural environmental degradation, malnutrition is likely to increase in the decades ahead, whether or not prices rise in the international commercial marketplace.

GRAIN PROSPECTS

Brown forecasts continuous rapid growth in Chinese grain consumption, a reasonable expectation given the dietary enrichment likely to accompany high income growth in the country’s rapidly industrializing cities. Chinese consumers will demand more meat, eggs, and other livestock products, causing demand for animal feed to surge. But Brown is wrong to assume that grain producers in exporting nations and in China will be unable to meet this demand. He is also wrong to suggest that rising grain imports would be an indication of China’s weakness or failure. And he draws too strong a connection between international grain prices and localized chronic malnutrition.

Brown underestimates by a wide margin the capacity of farmers in China and worldwide to respond to higher prices with more production. His forecast of world grain output, which assumes ruinously high prices by 2030, projects only a modest average increase of half a percent annually in production. That is less than one-third the 1.6 percent annual increase projected by FAO, far less than half the 1.3 percent annual increase projected by the World Bank, and less than one-fifth the 2.6 percent annual increase actually registered between 1961 and 1990.

Why is Brown such a pessimist? He points to the 1970s, when world grain prices suddenly doubled, mainly due to high income growth rates and inflationary monetary policies throughout the industrial world. Prices for all commodities -- including oil, copper, bauxite, and tin -- increased sharply between 1972 and 1974 because of the same macroeconomic effects. Farmers everywhere responded by planting larger areas, using more water and fertilizer, switching to new varieties of seeds, and buying better equipment, all of which greatly boosted production. In the United States, the five-year average for annual wheat production climbed 60 percent from 1970-75 to 1980-85. Brown then dismisses this response by claiming it was not environmentally sustainable; he argues that American farmers planted too much marginal land and were forced to pull back when the soil eroded and profits fell. Not true. Profits for American farmers did decline sharply in the mid-1980s, and production subsequently turned down, but the reason was a drop in prices. Between 1974 and 1987, as macroeconomic conditions changed, the export price of wheat fell in real terms by more than two-thirds. Naturally production declined.

If the high world prices Brown foresees were to materialize, much higher production would quickly follow, and not just in the United States. Already in 1996, planted corn acreage in the United States is expected to be up by 13 percent, and Canada, Australia, the EU, Ukraine, Argentina, South Africa, and many other agricultural exporters could respond as well. Dennis Avery of the Hudson Institute, a longstanding critic of Brown’s bleak projections, has estimated that Argentina could convert 75 million acres of land with deep, fertile soil in the Pampas from pasture to grain production if grain prices sustained a rise over the long term. Brazil has more than 150 million acres of arable unplanted land in the central Cerrados Plateau. Over the 40-year period in Brown’s scenario, there would be abundant opportunity to build railroads, install electrical capacity, and develop corn varieties tolerant of the plateau’s acidic soil, transforming the region into yet another grain belt, ready to meet world market demand.