With More Food Than Ever, Why Is Hunger On The Rise?

One of the dangers of virtual demand.

By Luke Mitchell Posted 01.29.2013 at 9:00 am 9 Comments

Data Diet Ryan Snook

Virtualization is a powerful tool for improving the real world. When we translate material things, from genes to jet planes, into numbers, we can analyze and manipulate them far more easily. But two recent reports suggest that virtualization can also have disastrous real-word consequences, especially when it comes to food.

Fred Kaufman begins his new book Bet the Farm: How Food Stopped Being Food by identifying a troubling paradox of modern food production. In 2008, “farmers produced more grain than ever, enough to feed twice as many people as were on Earth. In the same year, for the first time in history, a billion people went hungry.” How could we produce more food and more hunger? The answer, Kaufman writes, is that food became virtualized, or in this case “financialized.” Instead of using data systems to find sensible ways to distribute real food, we have increasingly used them to trade virtual food as a speculative object, much like the complicated financial products that helped pump up the housing bubble. The result: Prices skyrocket, real food sits uselessly, people starve.

We have increasingly used data systems to trade virtual food as a speculative object.Creating virtual demand is especially dangerous now, because real demand is still growing, and—as the investment strategist Jeremy Grantham reported last fall in the journal Nature—farmers are struggling to keep up. “Growth in the productivity of grains has fallen to 1.2 percent a year,” Grantham reports, “which is exactly equal to the global population growth rate. There is now no safety margin.” Usually when the margins are thin, more data is the solution, and yet—paradox within paradox—it is the commodities markets themselves that historically have been our best source of information about the food supply.

I asked Kaufman, a close friend and a contributor to the magazine, how we could resolve this conundrum. It’s not hard, he said. All we have to do is apply the technology of commodity markets to coordination, not competition. The United Nations is already showing the way. Its recently introduced Agricultural Market Information System, or AMIS, provides the same useful global market data—How much do we have? How much did we use last year? How much is left over? Are we running surpluses or deficits?—without the useless speculation. “Commodity markets are extraordinary technological feats of price discovery and management,” Kaufman said. “The fight, as always, is to keep technology in line with human needs.”

Luke Mitchell covers constraint and creativity each month. Reach him here.

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9 Comments

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Need2know

01/23/13 at 3:55 pm

Profit before altruism! Check out the EIA. It's all about the money. The need to survive and pollution are for backroom conversation. They don't trade well on WallStreet. Anyone remember the recent the housing market fiasco. Investment over need! Not against good business but at the suffering of others you have to question the good.

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Robot

01/29/13 at 9:11 am

Access to food, clean water and housing is the problem; accessing these items and affording them too.

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killerT

01/29/13 at 10:15 am

Our priorities are FUBAR.

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julianpenrod

01/29/13 at 2:08 pm

Talk against genetically modified crops and you immediately get assaulted by shills for the New World Order insisting, "So you want to see billions of people starve?" The wheat in 2008 that didn't go to starving people likely was largely if not mostly if not entirely genetically modified! So why didn't it feed all those people? As the article suggests, it was grown merely to be an item in a warehouse that the government could check on if decency over obscene criminal profit ever got too nosy, so the corproate liars could claim they have "stock" that iincreaeses the value of their enterprisaes. Then govenrmen walks away and, instead of carrying out the second half of the program, namely, the evidently expensive proposition of selling the stock, the coporate liars simply take the extra value they are allowed to tack onto their stock and reap their profits, while the grain rots and the people starve!
And, all the while, North Korea is condemned for, maybe, thousands at most frankly unproved "starvation" cases, and the billion who starve because of corporate criminality are carefully unreported on by the quisling and criminally complicit "media"!
So similar, incidentally, to the fraud of "day trading". The essence of the stock market, the legitimate side of it, consists of money entering through sale of stock, that money being used to improve operations, introduce new products, develop new markets, and so up sales, resulting in a more valuable business. This was perverted by the crooks on the sotck exchange, eliminating the middleman of improvement and better service to customers, and, instead, merely automatically increasing the price of a business, due to an influx of money from stock sales, without any expansion or improvement of the business itself! "Day trading" is taking this to extremes, putting money in a stock and, before that money can even be counted, much less improve the company, taking more out! Literally making money out of nowhere! Beccause no one stopped it! Big business is never anything but a swindle!

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Oakspar77777

01/29/13 at 3:04 pm

1 billion people did not starve, they were simply surviving below a basic level of nutrion that leads to good health. Of course, millions likely starved to death, but the 1 billion number is for those who went hungry.

This was due to (1) droughts in Africa (as always) and (2) increases in fuel cost.

Yes, the food is here, the problem is, even if the farmer gave it away, most of the world's poor cannot even afford the shipping to get it to them.

That is not the farmer's fault, and it isn't like we throw it all away. Most of it, after sitting for 1 or 2 years of the 30 year shelf life of dried grain is processed into fuel (ethenol) or animal feed.

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spark55155

01/30/13 at 3:17 pm

...how we could resolve this conundrum. It’s not hard, he said. ... The United Nations is already showing the way....

Why does the author act as if this is a just discovered problem? ...it's not hard...? Don't you hate it whenever anyone says something "isn't hard" - especially concerning GLOBAL ISSUES? It's just a strange way to answer a question regarding a problem of this scale, which, of course, trivializes the problem. If it was easy to solve then THE PROBLEM WOULDN'T STILL EXIST AND WE WOULDN'T BE "ANALYZING" IT! And ABC news reported that American's discard enough food every year to fill 730 football stadiums. This is because people buy too much food. The problem isn't farmers struggling. Stock groceries with just enough food to feed America, then ship the rest to Africa - and that's not a "conundrum".

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spark55155

01/30/13 at 3:30 pm

continuing from my other comment, this will result in less waste and fewer starving - AND IT WILL NOT BE EASY! Do we only tackle easy problems? Food needs to be RATIONED - even in America. We have too much food, as evidenced by obesity. Farms grow TOO MUCH food. Our relationship to food is unnatural, and more foods are "ready to eat" than ever before, even at the grocery store, which didn't have ready to eat food 30 years ago and longer. On the other hand, hunger may be the solution to obesity,and maybe starvation is just natural selection at work. But don't say farmers can hardly "keep up" because that isn't true. The problem is one of distribution...and compassion...and priorities..not the lands ability to grow.

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