If you lay in bed a little longer this morning wondering 'what's the point?', perhaps you had read Alan Kohler's piece yesterday on the four crises currently afflicting the globe – the credit crisis, global warming, the oil crisis and now, say the IMF and World Bank, a population-induced global food crisis (A recipe for disaster, April 15).
A food crisis is, par excellence, reason to be dreary. But as Wolfgang Münchau of the Financial Times pointed out yesterday, dealing with a crisis requires examination of the positives, as well as the gloom.
Thomas Malthus first warned of this crisis in an essay in 1798. Though he said it more eloquently, his point was that humans love eating and breeding, and "These two laws...appear to have been fixed laws of our nature, and, as we have not hitherto seen any alteration in them, we have no right to conclude that they will ever cease to be what they now."
Quite right, at the time. However, with the benefit of two-centuries' hindsight there are a couple of factors working in our favour (despite the obvious fact that Malthus had never seen a condom) that give the business community and political leaders something to aim for.
First is that the price of traded rice, which the World Bank made much of last week – World Bank president Robert Zoellick held a 2kg bag aloft at a press conference to drive home his point – is an unreliable indicator of global food prices. As Edward Hadas wrote recently (Rice hikes, March 6), only 7 per cent of the world's rice production is traded, largely due to the fact that many major rice producers create protected domestic markets for the world's most consumed staple - they eat it, rather than ship it.
World Bank's figures released last week show that food prices will spike and then return to more normal growth rates. Between 2007 and 2010, rice prices will rise 61 per cent in real terms, with soybeans will up 19 per cent, maize 25 per cent and wheat 30 per cent.
But looking over the longer period 2007 to 2015, the real increase in prices is less alarming: rice will be up 45 per cent, but soybeans will have only risen 5 per cent, maize 10 per cent and wheat 0 per cent.
That's not to say the IMF is wrong to argue that we should stop topping up our fuel tanks with grain-derived ethanol - we certainly are burning far too much food in internal combustion engines, egged on by 'sustainable' tax and regulatory incentives. To undo some of this damage will require widespread political change and is, in fact, a good reason to avoid meeting carbon emission targets 'at any cost' – which, until we have the full details of the Rudd Government's carbon trading scheme later this year, looks to be a distinct possibility for Australia.
Indiscriminate carbon pricing risks making the 'carbon cycle' of harvesting crops for ethanol (then burning them and soaking up the CO2 with next year's crop) as attractive as other renewables that don't suck food grains out the economy.
Reason to be cheerful number one, then, is that the business lobby has a lot of power to convince Penny Wong and her global climate-change counterparts that ethanol production really isn't helping the big picture.
Reason number two, was discovered in 1929 by the US demographer Warren Thompson. With a 130 years more data and ideas than Malthus, he noticed what came to be known at the 'demographic transition' - in simple terms, the observable fact that when you make people richer, they stop having so many kids. Perhaps in addition to eating and breeding, people also like lying by the pool rather than cooking dinner for child number six.
Thompson's theory was developed into a widely accepted four-stage model. The first is caveman-like (breed a lot but die young). The second is a poor agricultural life with lots of breeding but longer lifespans, resulting in rapid population growth (found in modern day Congo and Angola, for instance) - generally characterised by extremes of human misery.
The third stage is where the big transition takes place - living standards improve and parents start to trust in the state or their own private means to feed them when they're old. They also get access to enough education and contraception to contain their Malthusian urges. Birth rates and death rates decline, but on balance the population levels out before turning the corner towards decline.
The fourth stage is supposedly one of birth rates and death rates matching up to produce a stable population, though demographers now prefer to talk about a fifth stage - evident in Germany, Italy, Spain, Portugal, Greece, United Kingdom and Japan - where fertility rates are well below the replacement rate and where the population is now declining.
There are several other nations reproducing at below replacement rate - Australia, South Korea, Hong Kong, Singapore, Thailand, Cuba and, most importantly, China - but their populations won't actually begin to decline until the 'bulge' of earlier generations have worked their way through the system.
Why is the demographic transition good news? Because true trade liberalisation (with no behind the borders tariffs or currency monkey-business) promises to fill the bellies and improve the living conditions of planet's most 'Malthusian' regions. The evidence for this is the huge raft of nations that made this transition in the late 20th century - and this alone should convince business leaders and regulators to push on with this process.
The global financial system isn't broken, just going through a hugely painful deleveraging process. The oil price, if it doesn't come down as some predict (Waiting for oil to slide, March 13) will provide a massive incentive to bring renewable energy sources online sooner rather than later. The carbon emissions problem - well, that's a hard one so let's skip it for now.
But the food problem - let's at least start by measuring it using more reliable indicators than the overhyped price of rice, then work out where the right kind of regulatory incentives and investment can actually put food in those hungry mouths.
