Food Crisis – An Oil Manipulation Turmoil or Scarcity of Supply: Based on Studies of Food Consumption and Local Landscape.
Mohd Fairuz Sariz Bin Zainun
1051100373
Bac. IT (Hons) Artificial Intelligence
Faculty of Science and Information Technology (FIST)
Multimedia University
mfsariz@yahoo.com
Abstract1051100373
Bac. IT (Hons) Artificial Intelligence
Faculty of Science and Information Technology (FIST)
Multimedia University
mfsariz@yahoo.com
This paper will discuss about the food crisis that landmark the world issue. These also include diagnosis of the world consumption of food, balance of supply traders including exporters and consumption of Genetic Manipulation Food (GM). At end we will try to relate the theories of management to summaries these issues.
Keywords: Hidden Hand Theory, Ethical Dilemmas, Substitutes Product, Demands and Supply, Bargaining Power of Supplier.
Keywords: Hidden Hand Theory, Ethical Dilemmas, Substitutes Product, Demands and Supply, Bargaining Power of Supplier.
Introduction
Our Earth is flourishing and rich with all nature resources that we need to survive. Air, waters, lands, animals, and foods all of it is bestow to humankind to flourish and make use of it for good. At a several place, food are limitless. People eats and eats since there will always have the food stock. But, in other part of the world, hunger and poverty are still unsettled issue. Based on the World Food Program (WFP), an international body for food aid branch of United Nation estimates that one billion of the world populations subsist on less then a dollar per day to life. Within that estimation, 162 million live on less then 50 cents per day. They manage to survive and spend almost 50%-60% of these household only for food.
In a place like Kenya, Lebanon, Sudan, Ethiopia and most African country, the scale are worst. Reaching up the mid 2007 world was alarm with the news of the food crisis. But for the most people is a question of human survival. Can we live without our daily digest or in some place there is no more what we call a malnutrition food to hunger nation. In the first part we will discuss about factor that lead to this massacre. Second part about several issues that landmark the global debate.
Food for Oil: Industrial Biggest Folly
World oil price crisis that incur before the food crisis is like a spark that ignite the torch. It’s a Hidden Hand theory that everybody in this world can predict. Oil price hiking means the other will also get affected. Food, transportation, raw material, industrial business, and also world politics and nation government fall into a stage of disturbance for a while or long last. Oil from petroleum is not the renewable energy source. Researchers know that one day all the oil well will drain. Till the day come, world already introduce a Biofuel that raise the dilemma of farmers to diverting their farmland to produce a crop for food or Biofuels production. Of course some benefits are likely eager from one of the choice. As well we study in Management, not all ethical dilemmas have a clean and obvious solution. In this case, the farmers will surely feel the opportunistic exploitation for them to produces more Biofuels will grant them more profits then sales their crop for food. A better profit means a better life, but the effect will definitely hits all of us because we all are the stakeholder in the circle.
Biofuel are made from daily commodities like sugar, cane, vegetable oil and maize. The world biggest producer for Biofuels, United States is now used maize, corn, and vegetable oil to produces biofuels to maximize its ethanol production. With the global demand for Biofuels increase due to the world oil price crisis, and several other factor, a lot of Research and Development (R&D) effort are put together to produce more reliable source for Biofuels [6].
In 2007 US alone, rising demand for grains to produce biofuels, food, and livestock feed have push the prices of corn up to 40% and soy beans up to 75%. An estimated 100 million over 2000 million tons of worldwide of grain production per year are have been directed from food to fuel. The second world largest Biofuels based Ethanol producer, Brazil and have been consider to have their own ‘World First Sustainable’ Biofuels economy by using sugar cane, claim that their ethanol based industry has not contributed to the 2008 food crisis. This was supported by a report from the World Bank policy research working paper concluded that “largest increase in biofuels production in the United States and Europe are the main reason behind the steep rise in global food process [7].
As mention earlier, oil prices hiking did give impact to other. These not include the oil prices only. The other energy sources also contribute which affected the value chain of food production. Fertilizer, harvesting machine, storage cost, food transportation, and industrial agricultural. As the price of liquid petroleum hiking, substitute’s product is needed. Here came the biofuels to keep the harvesting machine and transportation still operating. These increase demand of Biofuels diverting crops from making food to energy source.
Is World Not Big Enough?
Current world population show us a climatically a roof chart. A bigger population means a lot of mouth to be feed. The debates issue is not about the world population. Growth in food production has been greater than population growth. Food per person increased during the 1961 – 2005 period [7]. So where is the missing line?
In the developing country like US, population grew by 2.8 million between July 1 2007 and July 1 2008. The actual annual growth of human statistical show a decent increase and stabilized for past of the decade. But, it is not the story in the new developed country. International Food Policy Research Institute stated that there is a gradual change in the diet among newly prosperous populations that underpinning the rise of the global food market.
Even though most of the rural and undeveloped place in Asia and Africa, vast majority still trap in poverty and hunger, the growth of middle class citizen in the region have been dramatic, and is projected to continue to be so. This increase of population also brought the changing of lifestyle and eating habit. For records, in India the growth of the middle class grew from 9.7 percent in 1990 into 30 percent at 2007. in China the same class and year, grew from 8.6 percent into 70 percent. These changing deem a greater variety leading to a greater demand for agricultural resources [7]. These also explain in the economics boom in India and China has created and increase demands for higher values of food like cereals and meats.
Another issue is the world food productions have literally reduced and ignite the world food shortage. According to the United Nation Food and Agricultural Organization reported that half of the world food produced goes to waste. The report states that the amount of food we produce is more than enough to feed the world’s population, but between the inefficient distribution systems and our ridiculous practice of tossing out perfectly good food, a big chunk of humanity goes hungry while another eats itself into an epidemic [17].
The U.S. throws away as much as 30 percent of its food, worth some $48.3 billion. Meanwhile, in poorer countries, most uneaten food bites the big one before it has a chance to be consumed. An estimated 15 to 35 percent of food may be lost in the fields, while another 10 to 15 percent is spoiled during processing, transport, and storage.
Another problem is water. Same as food, an estimated that about half of the H2O used to produce all this food also goes to waste, since agriculture is the largest human use of water. At most ten trillion gallons of water wasted to produce the 48 billion of uneaten food in the U.S. alone and enough to meet the needs of 500 million families.
The Financial Speculation
Economics recession is another world issue that have haunted the world recently. Lead by the collapse of the financial derivatives markets follow before the speculation in the commodities futures trading have contributed to the crisis due to a commodities super-cycle [7]. Financial speculator that seeking the quick return have removed a trillions of dollars from equities and mortgage bonds, some have been invested into food and raw materials. These American commodities speculation have a world wide direct impact on food prices reflected to the globalization of food production.
World prices for cereals commodities have grew steadily since 2000, but entering 2006, the developing financial crisis in the United States have triggers the arousing speculation among the speculators and investor. Under condition of growing debt arising from US subprime crisis, speculator and hedge fund groups have increasingly switched their investment. The reason was simple, more prices inflation feeds in itself, the more prices rise, and big profits are made, the more invest, and more bigger return [2]. As a bigger picture, the whole problem is not about supply, but it’s a bout the food prices that most people cannot afford.
Misguided Food System: A Solution or a Problem
As explained above the farmers that plant the crops have intended to sell more of their production for Biofuels programs. But thus this means these farmers that work on their croplands should be blame. A global chain of the world food system is design to maximize the corporate profits and their shareholders. With a slogan to help the farmers or feeding people using the idea of globalization and genetically modified seeds, these food system is leaves more people to hunger then feeding people.
The current global food system, which designed by US-based agribusiness conglomerates like Cargill, Monsanto, and ADM and forced into placed by the US government and its allies at The World Bank, the international Monetary Fund and the World Trade Organization, has planted the seeds for disaster by pressuring farmers to produces cash crops for export and alternative fuels rather then grow healthy food for local consumption and regional stability [1].
So who’s the victim here? Farmers that are push to sell their crops to big firm or consumers that need to pay extra cash so the food chain keeps going. As I stated earlier, we all are the stakeholder. US government policy of encouraging ethanol from corn is the main cause. Us federal government ethanol subsidizes total $7 billion per year. Following to these, American farmers have diverted almost 30 percent of their corn production into ethanol schema, driving up to cost the other [7]. As we know, in the bargaining power for supplier, when the firm can but the resources for the large quantity, and there is a lot of multiple resources supplier, the power to control the price are not in the consumer anymore.
Conclusion
Aftermath the economics slowdown on the end of 2008, the oil price decreasing, ending up a speculations and decrease a demand for world commodities bring down the price. Further planning step should be taken now, allocate more responsibility to understand the task and make an adjustment for the current global food system.
A strategic planning is needed to prevent this to happen again. Increase the production of world food and start build intelligence information stockpiling for future crisis. Help the hungry country to produce more sustainable food production and stop all the nonsense energy and food policy that gives benefits for those who greed while the other part of the world suffer.
Reference
[1] John Nichols, (2008), “The World Food Crisis”, The Nations, http://www.thenations.com/doc/20080512/nichols
[2] Stefan Steinberg, (2008), “Financial Speculators Reap Profits from Global Hunger”, Global Research.ca, www.globalresearch.ca
[3] The Cost of Food: Facts and Figures, (2008), http://news.bbc.co.uk/2/hi/in_depth/7284196.stm
[4] Jeffrey Sachs, (2008), “How to solve the growing global food crisis, in three steps”, http://www.nydailynews.com/opinions/2008/07/23/2008-07-23_how_to_solve_the_growing_global_food_cri.html
[5] Kausik Basu, (2008), “How to solve the global food crisis”, Cornell University, http://news.bbc.co.uk/go/pr/fr/-/2/hi/south_asia/7365798.stm
[6] “Food vs Fuel”, Wikipedia, http://en.wikipedia.org/wiki/Food_vs._fuel
[7] “2007 – 2008 World Food Price Crisis”, Wikipedia, http://en.wikipedia.org/wiki/2007%E2%80%932008_world_food_price_crisis
[8] Magnus Linklater, (2008), “Who knew there’s a food crisis?” Forward May Ed., MMP Communications Sdn. Bhd.
[9] “Food Crisis: How to make it worse”, (2008), Forward June Ed., MMP Communications Sdn. Bhd.
[10] “Demans for rice affecting everyone”, (2008), Forward June Ed., MMP Communications Sdn. Bhd.
[11] Shahrizal Musa, (2008), “The Rice Price Crisis – Who is to blame”, Forward June Ed., MMP Communications Sdn. Bhd.
[12] Fariza Uzmat, (2008), ‘is it food crisis, Or is it a food price crisis”, Forward June Ed., MMP Communications Sdn. Bhd.
[13] Wan Ahmad Fayhsal, (2008), “Biofuel Dan GM, Kerakusan bawa padah”, Millenia Muslim May Ed. MMP Communications Sdn. Bhd.
[14] Wan Azilina Wan Ahmad, (2008), “Krisis Makanan dan Revolusi Genetic”, Millenia Muslim June Ed. MMP Communications Sdn. Bhd.
[15] Md. Shukri Shuib, (2008), “ Dunia Diancam Kurang Makanan”, Millenia Muslim June Ed. MMP Communications Sdn. Bhd.
[16] Isma Ae Che Uma, (2008), “Bersyukur Masih Boleh Memilih Beras”, Millenia Muslim June Ed. MMP Communications Sdn. Bhd.
[17] ”How much food do human waste”, 2008, http://www.iwmi.cgiar.org/news_room/pdf/How_Much_Food_Do_Humans_Waste.pdf, 2008,
In a place like Kenya, Lebanon, Sudan, Ethiopia and most African country, the scale are worst. Reaching up the mid 2007 world was alarm with the news of the food crisis. But for the most people is a question of human survival. Can we live without our daily digest or in some place there is no more what we call a malnutrition food to hunger nation. In the first part we will discuss about factor that lead to this massacre. Second part about several issues that landmark the global debate.
Food for Oil: Industrial Biggest Folly
World oil price crisis that incur before the food crisis is like a spark that ignite the torch. It’s a Hidden Hand theory that everybody in this world can predict. Oil price hiking means the other will also get affected. Food, transportation, raw material, industrial business, and also world politics and nation government fall into a stage of disturbance for a while or long last. Oil from petroleum is not the renewable energy source. Researchers know that one day all the oil well will drain. Till the day come, world already introduce a Biofuel that raise the dilemma of farmers to diverting their farmland to produce a crop for food or Biofuels production. Of course some benefits are likely eager from one of the choice. As well we study in Management, not all ethical dilemmas have a clean and obvious solution. In this case, the farmers will surely feel the opportunistic exploitation for them to produces more Biofuels will grant them more profits then sales their crop for food. A better profit means a better life, but the effect will definitely hits all of us because we all are the stakeholder in the circle.
Biofuel are made from daily commodities like sugar, cane, vegetable oil and maize. The world biggest producer for Biofuels, United States is now used maize, corn, and vegetable oil to produces biofuels to maximize its ethanol production. With the global demand for Biofuels increase due to the world oil price crisis, and several other factor, a lot of Research and Development (R&D) effort are put together to produce more reliable source for Biofuels [6].
In 2007 US alone, rising demand for grains to produce biofuels, food, and livestock feed have push the prices of corn up to 40% and soy beans up to 75%. An estimated 100 million over 2000 million tons of worldwide of grain production per year are have been directed from food to fuel. The second world largest Biofuels based Ethanol producer, Brazil and have been consider to have their own ‘World First Sustainable’ Biofuels economy by using sugar cane, claim that their ethanol based industry has not contributed to the 2008 food crisis. This was supported by a report from the World Bank policy research working paper concluded that “largest increase in biofuels production in the United States and Europe are the main reason behind the steep rise in global food process [7].
As mention earlier, oil prices hiking did give impact to other. These not include the oil prices only. The other energy sources also contribute which affected the value chain of food production. Fertilizer, harvesting machine, storage cost, food transportation, and industrial agricultural. As the price of liquid petroleum hiking, substitute’s product is needed. Here came the biofuels to keep the harvesting machine and transportation still operating. These increase demand of Biofuels diverting crops from making food to energy source.
Is World Not Big Enough?
Current world population show us a climatically a roof chart. A bigger population means a lot of mouth to be feed. The debates issue is not about the world population. Growth in food production has been greater than population growth. Food per person increased during the 1961 – 2005 period [7]. So where is the missing line?
In the developing country like US, population grew by 2.8 million between July 1 2007 and July 1 2008. The actual annual growth of human statistical show a decent increase and stabilized for past of the decade. But, it is not the story in the new developed country. International Food Policy Research Institute stated that there is a gradual change in the diet among newly prosperous populations that underpinning the rise of the global food market.
Even though most of the rural and undeveloped place in Asia and Africa, vast majority still trap in poverty and hunger, the growth of middle class citizen in the region have been dramatic, and is projected to continue to be so. This increase of population also brought the changing of lifestyle and eating habit. For records, in India the growth of the middle class grew from 9.7 percent in 1990 into 30 percent at 2007. in China the same class and year, grew from 8.6 percent into 70 percent. These changing deem a greater variety leading to a greater demand for agricultural resources [7]. These also explain in the economics boom in India and China has created and increase demands for higher values of food like cereals and meats.
Another issue is the world food productions have literally reduced and ignite the world food shortage. According to the United Nation Food and Agricultural Organization reported that half of the world food produced goes to waste. The report states that the amount of food we produce is more than enough to feed the world’s population, but between the inefficient distribution systems and our ridiculous practice of tossing out perfectly good food, a big chunk of humanity goes hungry while another eats itself into an epidemic [17].
The U.S. throws away as much as 30 percent of its food, worth some $48.3 billion. Meanwhile, in poorer countries, most uneaten food bites the big one before it has a chance to be consumed. An estimated 15 to 35 percent of food may be lost in the fields, while another 10 to 15 percent is spoiled during processing, transport, and storage.
Another problem is water. Same as food, an estimated that about half of the H2O used to produce all this food also goes to waste, since agriculture is the largest human use of water. At most ten trillion gallons of water wasted to produce the 48 billion of uneaten food in the U.S. alone and enough to meet the needs of 500 million families.
The Financial Speculation
Economics recession is another world issue that have haunted the world recently. Lead by the collapse of the financial derivatives markets follow before the speculation in the commodities futures trading have contributed to the crisis due to a commodities super-cycle [7]. Financial speculator that seeking the quick return have removed a trillions of dollars from equities and mortgage bonds, some have been invested into food and raw materials. These American commodities speculation have a world wide direct impact on food prices reflected to the globalization of food production.
World prices for cereals commodities have grew steadily since 2000, but entering 2006, the developing financial crisis in the United States have triggers the arousing speculation among the speculators and investor. Under condition of growing debt arising from US subprime crisis, speculator and hedge fund groups have increasingly switched their investment. The reason was simple, more prices inflation feeds in itself, the more prices rise, and big profits are made, the more invest, and more bigger return [2]. As a bigger picture, the whole problem is not about supply, but it’s a bout the food prices that most people cannot afford.
Misguided Food System: A Solution or a Problem
As explained above the farmers that plant the crops have intended to sell more of their production for Biofuels programs. But thus this means these farmers that work on their croplands should be blame. A global chain of the world food system is design to maximize the corporate profits and their shareholders. With a slogan to help the farmers or feeding people using the idea of globalization and genetically modified seeds, these food system is leaves more people to hunger then feeding people.
The current global food system, which designed by US-based agribusiness conglomerates like Cargill, Monsanto, and ADM and forced into placed by the US government and its allies at The World Bank, the international Monetary Fund and the World Trade Organization, has planted the seeds for disaster by pressuring farmers to produces cash crops for export and alternative fuels rather then grow healthy food for local consumption and regional stability [1].
So who’s the victim here? Farmers that are push to sell their crops to big firm or consumers that need to pay extra cash so the food chain keeps going. As I stated earlier, we all are the stakeholder. US government policy of encouraging ethanol from corn is the main cause. Us federal government ethanol subsidizes total $7 billion per year. Following to these, American farmers have diverted almost 30 percent of their corn production into ethanol schema, driving up to cost the other [7]. As we know, in the bargaining power for supplier, when the firm can but the resources for the large quantity, and there is a lot of multiple resources supplier, the power to control the price are not in the consumer anymore.
Conclusion
Aftermath the economics slowdown on the end of 2008, the oil price decreasing, ending up a speculations and decrease a demand for world commodities bring down the price. Further planning step should be taken now, allocate more responsibility to understand the task and make an adjustment for the current global food system.
A strategic planning is needed to prevent this to happen again. Increase the production of world food and start build intelligence information stockpiling for future crisis. Help the hungry country to produce more sustainable food production and stop all the nonsense energy and food policy that gives benefits for those who greed while the other part of the world suffer.
Reference
[1] John Nichols, (2008), “The World Food Crisis”, The Nations, http://www.thenations.com/doc/20080512/nichols
[2] Stefan Steinberg, (2008), “Financial Speculators Reap Profits from Global Hunger”, Global Research.ca, www.globalresearch.ca
[3] The Cost of Food: Facts and Figures, (2008), http://news.bbc.co.uk/2/hi/in_depth/7284196.stm
[4] Jeffrey Sachs, (2008), “How to solve the growing global food crisis, in three steps”, http://www.nydailynews.com/opinions/2008/07/23/2008-07-23_how_to_solve_the_growing_global_food_cri.html
[5] Kausik Basu, (2008), “How to solve the global food crisis”, Cornell University, http://news.bbc.co.uk/go/pr/fr/-/2/hi/south_asia/7365798.stm
[6] “Food vs Fuel”, Wikipedia, http://en.wikipedia.org/wiki/Food_vs._fuel
[7] “2007 – 2008 World Food Price Crisis”, Wikipedia, http://en.wikipedia.org/wiki/2007%E2%80%932008_world_food_price_crisis
[8] Magnus Linklater, (2008), “Who knew there’s a food crisis?” Forward May Ed., MMP Communications Sdn. Bhd.
[9] “Food Crisis: How to make it worse”, (2008), Forward June Ed., MMP Communications Sdn. Bhd.
[10] “Demans for rice affecting everyone”, (2008), Forward June Ed., MMP Communications Sdn. Bhd.
[11] Shahrizal Musa, (2008), “The Rice Price Crisis – Who is to blame”, Forward June Ed., MMP Communications Sdn. Bhd.
[12] Fariza Uzmat, (2008), ‘is it food crisis, Or is it a food price crisis”, Forward June Ed., MMP Communications Sdn. Bhd.
[13] Wan Ahmad Fayhsal, (2008), “Biofuel Dan GM, Kerakusan bawa padah”, Millenia Muslim May Ed. MMP Communications Sdn. Bhd.
[14] Wan Azilina Wan Ahmad, (2008), “Krisis Makanan dan Revolusi Genetic”, Millenia Muslim June Ed. MMP Communications Sdn. Bhd.
[15] Md. Shukri Shuib, (2008), “ Dunia Diancam Kurang Makanan”, Millenia Muslim June Ed. MMP Communications Sdn. Bhd.
[16] Isma Ae Che Uma, (2008), “Bersyukur Masih Boleh Memilih Beras”, Millenia Muslim June Ed. MMP Communications Sdn. Bhd.
[17] ”How much food do human waste”, 2008, http://www.iwmi.cgiar.org/news_room/pdf/How_Much_Food_Do_Humans_Waste.pdf, 2008,
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