As prices soar, riots rise. But it's not for lack of crops. The cause? A rush to biofuel and grain-fed meat.
Record prices for grain from corn to rice have ignited food riots from Jakarta to Rome. In Pakistan, troops now guard wheat stocks. China and Russia have imposed price controls. Connect the dots and there's a need for a fix to a crisis that, strangely, isn't caused by smaller harvests.
No, the main reasons for a long-term bubble in grain prices lie largely in a number of dubious human actions, related to heightened competition for grain as either fuel or feed.
One reason is an ill-conceived dash by both the United States and Europe to use grain and valuable farmland for biofuels, motivated more by powerful farm lobbies than concerns about global warming. (Telling factoid: To fill up the tank of one SUV with ethanol would require enough grain to feed one person for a year.)
Then there is the rising demand for grain-fed meat by an expanding middle class in China, India, and other fast-growing economies. (Factoid: To produce one pound of meat can take up to eight pounds of grain and a loss of land to other agricultural uses.)
And with world oil prices at nearly $100 a barrel – up 57 percent last year alone – the costs of food transport and petroleum-based fertilizers are also driving "ag-flation." (Factoid: In the past year, the world has seen more protests over higher food prices than over fuel hikes.)