An article published in The Economist on Dec. 6 titled “The end of cheap food” argues that the global food market is gradually entering an era of high prices. The article also analyzes how rising food prices influence living standards in countries at different stages of economic development.
As food consumption makes up a relatively high portion of expenditures in developing countries with average or low incomes, they are the most vulnerable to the possible impact of rising food prices. As could be expected, food shortages in Haiti have recently led to violent food riots.
With many big rice-producing countries restricting rice exports, the Council of Agriculture recently declared that Taiwan’s grain self-sufficiency rate had reached 90 percent and that it had a 90-day stock of domestic grain. Agriculture, however, is an industry where the climate plays a significant factor. As the harvest season only begins in June, worries about food shortages remain.
Therefore, a deliberate look at relevant issues is necessary.
A number of reasons explain soaring international food prices: First, overall raw material supplies have decreased.
The rising price of oil has created substantial demand for alternative energy sources. The US, for example, produced 85 million tonnes of bioethanol last year, compared with 15 million tonnes in 2000.
With the total output of corn remaining stable, corn fodder supplies decreased, leading to a hike in the price of corn. Many farmers then shifted their soybean plantings to corn, which resulted in a rise in the price of soybeans.
The wheat price hike was mainly the result of the sharp decline in grain yield caused by a drought in Australia. So long as transportation continues to vie with humans and animals for limited crop supplies, supplies will remain under constant pressure.
Second, demand has increased mainly because of rapid economic growth in China and India, where the rising national income has led to increased demand for meat. It is estimated that the production of 1kg of pork requires 3kg of grain feed, while the production of 1kg of beef requires 8kg of grain. If every Chinese increases pork consumption by 1kg, grain production would have to increase by 3.9 million tonnes.
At present, meat consumption per capita per year is 50kg in China and 79kg in Taiwan. It is easy to see that global food markets could be in for a strong increase in demand for food products.
As far as food policy is concerned, some academics advocate relying on international trade for the provision of sufficient necessary foods at the lowest prices and with the smallest production fluctuations. In other words, a high degree of self-sufficiency is not necessarily the policy goal.
In order to join the WTO, Taiwan deregulated rice imports in 2002 and prior to that it made a vigorous push for rice field conversion and fallow policies in preparation for the impact of market deregulation. These policies were all predicated on continued sufficient food supplies.
However, significant changes in global demand and supply meant that aside from continuing to maintain a high degree of rice self-sufficiency, there was also the question of whether Taiwan should use fallow land to produce highly demanded crops such as wheat, corn and soybeans to increase self-sufficiency.
The nation’s scattered and narrow fields as well as its climate are unfavorable to growing soybeans and wheat. More pragmatic food policies should focus on the development of alternative foods. For instance, Japan has long promoted sweet potato production as a food reserve in wartime. Other than that, the government should develop alternatives for crop feeds, such as exploring the use of agricultural waste as feed.
Of course, given the cross-strait market premise, one feasible strategy would be to focus on crop improvement and take advantage of China’s vast agricultural land to increase production to raise self-sufficiency while cutting demand on foreign products and meeting domestic demand. Food supply is vital for living standards and social and political stability, and we cannot rely entirely on imports. However, how to stabilize society and offer reasonable prices is certain to become an important part of government policy.
Lei Li-fen is a professor in the Department of Agricultural Economics at National Taiwan University.
Translated by Ted Yang
Concerns that the US might abandon Taiwan are often overstated. While US President Donald Trump’s handling of Ukraine raised unease in Taiwan, it is crucial to recognize that Taiwan is not Ukraine. Under Trump, the US views Ukraine largely as a European problem, whereas the Indo-Pacific region remains its primary geopolitical focus. Taipei holds immense strategic value for Washington and is unlikely to be treated as a bargaining chip in US-China relations. Trump’s vision of “making America great again” would be directly undermined by any move to abandon Taiwan. Despite the rhetoric of “America First,” the Trump administration understands the necessity of
US President Donald Trump’s challenge to domestic American economic-political priorities, and abroad to the global balance of power, are not a threat to the security of Taiwan. Trump’s success can go far to contain the real threat — the Chinese Communist Party’s (CCP) surge to hegemony — while offering expanded defensive opportunities for Taiwan. In a stunning affirmation of the CCP policy of “forceful reunification,” an obscene euphemism for the invasion of Taiwan and the destruction of its democracy, on March 13, 2024, the People’s Liberation Army’s (PLA) used Chinese social media platforms to show the first-time linkage of three new
If you had a vision of the future where China did not dominate the global car industry, you can kiss those dreams goodbye. That is because US President Donald Trump’s promised 25 percent tariff on auto imports takes an ax to the only bits of the emerging electric vehicle (EV) supply chain that are not already dominated by Beijing. The biggest losers when the levies take effect this week would be Japan and South Korea. They account for one-third of the cars imported into the US, and as much as two-thirds of those imported from outside North America. (Mexico and Canada, while
The military is conducting its annual Han Kuang exercises in phases. The minister of national defense recently said that this year’s scenarios would simulate defending the nation against possible actions the Chinese People’s Liberation Army (PLA) might take in an invasion of Taiwan, making the threat of a speculated Chinese invasion in 2027 a heated agenda item again. That year, also referred to as the “Davidson window,” is named after then-US Indo-Pacific Command Admiral Philip Davidson, who in 2021 warned that Chinese President Xi Jinping (習近平) had instructed the PLA to be ready to invade Taiwan by 2027. Xi in 2017
RSS