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Why Food Prices will go through the Roof in coming Months

Commodities / Agricultural Commodities Mar 30, 2008 - 11:25 PM GMT

By: F_William_Engdahl

Commodities Best Financial Markets Analysis ArticleA deadly fungus, known as Ug99, which kills wheat, has likely spread to Pakistan from Africa according to reports. If true, that threatens the vital Asian Bread Basket including the Pu nj ab region. The spread of the deadly virus, stem rust, against which an effective fungicide does not exist, comes as world grain stocks reach the lowest in four decades and government subsidized bio-ethanol production, especially in the USA, Brazil and EU are taking land out of food production at alarming rates. The deadly fungus is being used by Monsanto and the US Government to spread patented GMO seeds.


Stem rust is the worst of three rusts that afflict wheat plants. The fungus grows primarily in the stems, plugging the vascular system so carbohydrates can't get from the leaves to the grain, which shrivels. Ug99 is a race of stem rust that blocks the vascular tissues in cereal grains including wheat, oats and barley. Unlike other rusts that may reduce crop yields, Ug99-infected plants may suffer up to 100 percent loss.

In the 1950s, the last major outbreak destroyed 40% of the spring wheat crop in North America . At that time governments started a major effort to breed resistant wheat plants, led by Norman Borlaug of the Rockefeller Foundation. That was the misnamed Green Revolution. The result today is far fewer varieties of wheat that might resist such a new fungus outbreak.

The first strains of Ug99 were detected in 1999 in Uganda . It spread to Kenya by 2001, to Ethiopia by 2003 and to Yemen when the cyclone Gonu spread its spores in 2007. Now the deadly fungus has been found in Iran and according to British scientists may already be as far as Pakistan .

Pakistan and India account for 20 percent of the annual world wheat production. It is possible as the fungus spreads that large movements could take place almost overnight if certain wind conditions prevail at the right time. In 2007 a three-day wind event recorded by Mexico's CIMMYT (International Maize and Wheat Improvement Center), had strong wind currents moving from Yemen, where Ug99 is present, across Pakistan and India, going all the way to China. CIMMYT estimates that from two-thirds to three-quarters of the wheat now planted in India and Pakistan are highly susceptible to this new strain of stem rust. One billion people who live in this region and they are highly dependent on wheat for their food supply.

These are all areas where the agricultural infrastructure to contain such problems is either extremely weak or non-existent. It threatens to spread into other wheat producing regions of Asia and eventually the entire world if not checked. 

FAO World Grain Forecast

The 2007 World Agriculture Forecast of the United Nations' Food and Agriculture Organization (FAO) in Rome , projects an alarming trend in world food supply even in the absence of any devastation from Ug99. The report states, “countries in the non-OECD region are expected to continue to experience a much stronger increase in consumption of agricultural products than countries in the OECD area. This trend is driven by population and, above all, income growth – underpinned by rural migration to higher income urban areas...OECD countries as a group are projected to lose production and export shares in many commodities… Growth in the use of agricultural commodities as feedstock to a rapidly increasing biofuel industry is one of the main drivers in the outlook and one of the reasons for international commodity prices to attain a significantly higher plateau over the outlook period than has been reported in the previous reports.” (my emphasis—w.e.).

The FAO warns that the explosive growth in acreage used to grow fuels and not food in the past three years is dramatically changing the outlook for food supply globally and forcing food prices sharply higher for all foods from cereals to sugar to meat and dairy products. The use of cereals, sugar, oilseeds and vegetable oils to satisfy the needs of a rapidly

increasing bio-fuel industry, is one of the main drivers, most especially the large volumes of maize in the US , wheat and rapeseed in the EU and sugar in Brazil for ethanol and bio-diesel production. This is already causing dramatically higher crop prices, higher feed costs and sharply higher prices for livestock products.

Ironically, the current bio-ethanol industry is being driven by US government subsidies and a scientifically false argument in the EU and USA that bio-ethanol is less harmful to the environment than petroleum fuels and can reduce CO2 emissions. The arguments have been demonstrated in every respect to be false. The huge expansion of global acreage now planted to produce bio-fuels is creating ecological problems and demanding use of far heavier pesticide spraying while use of bio-fuels in autos releases even deadlier emissions than imagined. The political effect, however, has been a catastrophic shift down in world grain stocks at the same time the EU and USA have enacted policies which drastically cut traditional emergency grain reserves. In short, it is a scenario pre-programmed for catastrophe, one which has been clear to policymakers in the EU and USA for several years. That can only suggest that such a dramatic crisis in global food supply is intentional.

A plan to spread GMO?

One of the consequences of the spread of Ug99 is a campaign by Monsanto Corporation and other major producers of genetically manipulated plant seeds to promote wholesale introduction of GMO wheat varieties said to be resistant to the Ug99 fungus. Biologists at Monsanto and at the various GMO laboratories around the world are working to patent such strains.

Norman Borlaug, the former Rockefeller Foundation head of the Green Revolution is active in funding the research to develop a fungus resistant variety against Ug99 working with his former center in Mexico, the CIMMYT and ICARDA in Kenya, where the pathogen is now endemic. So far, about 90% of the 12,000 lines tested are susceptible to Ug99. That includes all the major wheat cultivars of the Middle East and west Asia . At least 80% of the 200 varieties sent from the United States can't cope with infection. The situation is even more dire for Egypt , Iran , and other countries in immediate peril.

Even if a new resistant variety was ready to be released today it would take two or three years' seed increase in order to have just enough wheat seed for 20 percent of the acres planted to wheat in the world.

Work is also being done by the USDA's Agricultural Research Service (ARS), the same agency which co-developed Monsanto's Terminator seed technology. In my book, Seeds of Destruction I document the insidious role of Borlaug and the Rockefeller Foundation in promoting the misnamed Green Revolution as well as patents on food seeds to ultimately control food supplies as a potential political lever. The spreading alarm over the Ug99 fungus is being used by Monsanto and other GMO agribusiness companies to demand that the current ban on GMO wheat be lifted to allow spread of GMO patented wheat seeds on the argument they are Ug99 stem rust resistant.

By F. William Engdahl
www.engdahl.oilgeopolitics.net

COPYRIGHT © 2008 F. William Engdahl. ALL RIGHTS RESERVED

* F. William Engdahl is the author of A Century of War: Anglo-American Oil Politics and the New World Order (Pluto Press) and Seeds of Destruction: The Hidden Agenda of Genetic Manipulation , www.globalresearch.ca . The present series is adapted from his new book, now in writing, The Rise and Fall of the American Century: Money and Empire in Our Era. He may be contacted through his website, www.engdahl.oilgeopolitics.net

F. William Engdahl Archive

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