The government sends calming signals and says no dramatic shortages are expected. The Economist says do nothing, market forces will sort it all out. But as the global food-price crisis hit Israel this week, something told us we are not being told the whole story.
Around the world food prices are soaring. Since January 2006, the price of rice has risen by 217 percent. Wheat, corn and soybean prices have more than doubled, and in several countries, milk and meat prices have also doubled.
Food prices and falling wages have sparked riots in more than 30 countries from Bangladesh to Egypt to Haiti - where the prices of rice, beans, fruit and condensed milk have gone up 50 percent over a few months, while the price of fuel has tripled.
The poor are being hit the hardest. The steep price rises make a huge difference in countries like Indonesia, where food purchases alone eat up over half of a family's disposable income (compared to 7.3 percent in the United States, and close to 20 percent in Israel).
With Israel's high dependence on food imports, it is no surprise that prices are rising. The country imports over 90 percent of its cereals, 70-80 percent of its fish and beef, and half of its pulses, oilseeds and nuts. We may soon be relying far more on Israeli potatoes, fruit and vegetables, since the present crisis appears to be part of a worrying long-term trend.
The striking fact is that from 1974 to 2005, real food prices dropped by 75 percent globally. So what can explain this sudden and aggressive upturn? Though it has been played down in official reactions, the obvious explanation is staring us in the face: the dramatic rise in oil prices.
In January 1999, crude oil cost $8 a barrel. Today it costs $119. Oil is vital for every stage of industrialized agriculture: from synthetic-pesticide and fertilizer production, to fuel for farm machinery and international freight. All of these have seen steep price hikes, and not surprisingly, food prices have risen with them.
The reality is that we are effectively "eating oil." The shift to industrial agriculture over the last 60 years has left our food systems dependent on a nonrenewable resource. Now we are paying the price.
The rise in oil prices betrays a genuine market concern about "peak oil." Most geologists today agree that world oil production is reaching, or has already reached, its point of historical maximum. Like with any other nonrenewable resource, once the peak is passed, oil availability begins to decline and prices rise to reflect the growing scarcity.
Western governments don't publicly talk about peak oil, but they have been quietly and efficiently subsidizing the massive expansion of biofuels: converting the use of millions of acres of land from food to fuel crops, such as maize and canola, again contributing to rising food prices. Meanwhile, land previously used to grow food is increasingly converted to grow animal feed, as the globalization of the American diet results in an increasing demand for meat worldwide.
The United Nations Food and Agriculture Organization hopes that a projected 2.6-percent increase in world cereal production next year will ease the crisis. But this depends on favorable weather. This year, droughts in Australia and unseasonable rains in India caused crop failures that contributed to the crisis. If these events represent a new era of erratic and unpredictable weather patterns driven by global warming, the projections may fail to materialize.
Between peak oil and climate change, this may be the "perfect storm" that marks the beginning of the end of our civilization in hyperdrive. At the very least, the situation forces us to recognize that our modern industrial food system is extremely vulnerable and cannot be sustained on the current model.
The good news is that around the world, and in Israel, too, people are creating solutions that can make our future less precarious. Intelligent, small-scale and organic-farming methods, together with a resilient local economy, can help us weather the storm. This will require some serious transitions, but it is entirely possible.
Cuba survived its own version of peak oil with the collapse of the Soviet Union - its major source of food and oil imports. In response, the Cubans swiftly turned their gardens over for food production, and switched from industrialized agriculture to cooperatively owned organic farms.
Israel will also need to confront the challenge of self-sufficiency. Connecting the dots, the food and fuel crisis this year will only be exacerbated by the serious water crisis caused by the cold dry winter. Israel's clever "techno-fix" for the water crisis, desalinization, is not the solution, since it is hugely energy intensive. Breaking the addiction to oil is clearly a necessary step in a transition to a healthier and more sustainable society.
Dr. Uri Gordon teaches at the Arava Institute for Environmental Studies, and is the author of "Anarchy Alive!" (Pluto Press). Lucy Michaels is a doctoral environmental policy researcher at Ben- Gurion University.
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