Dollar-lust will trigger worst-ever food crisis….

Remember the export of wheat about three years ago by Pakistan triggering a very serious food shortage in the country leading to phenomenal rise in food prices? The same wheat was imported back at exorbitant prices. Since then the price of wheat and flour is constantly on the rise. This was perhaps one of the biggest corruption scandals of the Shaukat Aziz government. It seems that the present government has learnt only one lesson from this regrettable decision; do it again and make billions at the cost of millions of hapless “voters” who you will need only in the next season of “democracy”. Interestingly, this decision, which has been taken to be able to pay off central bank loans, has been taken at a moment when wheat prices are at the lowest in the international market.

It is simply beyond comprehension why export is needed to pay off SBP loans which essentially are in local currency. It seems that the driving factor behind this imprudent decision is dollar-lust. Express Tribune has reported that after a ban stretching more than three years, the government on Tuesday allowed the export of wheat in a bid to pay back central bank debt, a move that could result in a serious food crisis since a World Bank (WB) report has already warned of a five-million-ton drop in production in the next crop. The Economic Coordination Committee (ECC) of the cabinet allowed the grain export without imposing any cap on quantity. It is expected that wheat will be exported in massive quantities since Russia, the world’s largest wheat producer, has banned the grain export resulting in price surge in the international market.

The ECC assessed a $300 per ton (Rs1,040 per 40 kilogram) wheat price in the international market, anticipating a further hike in coming days. Although the government has fixed the wheat price at Rs950 per 40 kg in the domestic market, farmers usually receive an average Rs850. Pakistan is the third largest wheat producer. The ban on export of wheat was slapped in June 2007 when because of incoherent policies the country first exported the commodity and then had to spend over $1 billion to import the same for domestic consumption.

The ministry of food and agriculture’s summary to the ECC proposed lifting the ban primarily to pay back debt taken from the State Bank of Pakistan (SBP) to buy wheat, make room for next year’s crop storage and capitalize on higher prices in the international market. Total wheat stocks are estimated at 9.07 million tons, of which 6.1 million tons are in Punjab. “The Punjab government is paying Rs77.5 million per day interest on loans,” obtained for buying wheat, says the summary. The federal government is picking up Rs24.6 million from the amount.

The production target in the pre-flood scenario was also estimated at 25 million tons. According to the Damage and Need Assessment Report of the World Bank and the Asian Development Bank, “wheat production may reach only 20 million tons opposed to an average production of almost 23 million tons in the last three years.”

The report goes on to say that there is concern about the possible impact of reduced wheat output in the coming season on food security. Around 78,000 tons of wheat were either destroyed or damaged in Punjab during the recent floods.

“Almighty’s wrath” was not a sudden phenomenon; it was already in the air…

Pakistan had unprecedented hot summer this year giving a clear indication of the catastrophe that was to follow. Climate law says that rising temperatures always help hasten the melting of water sources like the Himalayas, north of Pakistan, that are the world’s third largest repository of snow and ice. South Asia is among the climate change hotspots, and floods and droughts had been predicted by international experts. Not only that, the Indus basin has always been prone to floods. The floods, therefore, were not a sudden phenomenon; it was very much in the air. It was, therefore, incorrect to say that Pakistan was caught unprepared leading to record devastations.

According to a report in the Guardian this summer has been one of weather-related extremes in Russia, Pakistan, China, Europe, the Arctic. For weeks, central Russia has been in the grips of its worst-ever heat-wave, which has caused probably thousands of fatalities. As a result of drought and heat, more than 500 wildfires have raged out of control, smothering Moscow in smoke and threatening several nuclear facilities. Russia’s government has banned wheat exports, sending world grain prices soaring.

Meanwhile, Pakistan is struggling with unprecedented flooding that has killed more than a thousand people and affected millions more. In China, flash floods have so far killed more than a thousand people and destroyed more than a million homes. On a smaller scale, European countries like Germany, Poland, and the Czech Republic have also suffered serious flooding.

Meanwhile, global temperatures in recent months have been at their highest levels in records that go back 130 years. Arctic sea-ice cover reached its lowest ever recorded average level for the month of June. In Greenland two huge chunks of ice broke off in July and August.

Are these events connected? Looking only at individual extreme events will not reveal their cause, just like watching a few scenes from a movie does not reveal the plot. But, viewed in a broader context, and using the logic of physics, important parts of the plot can be understood.

This decade has been marked by a number of extremes. In 2003, the most severe heatwave in living memory broke temperature records by a large margin and caused 70,000 deaths in Europe. In 2005, the most severe hurricane season ever witnessed in the Atlantic devastated New Orleans and broke records in terms of the number and intensity of storms.

In 2007, unprecedented wildfires raged across Greece, nearly destroying the ancient site of Olympia. And the Northwest Passage in the Arctic became ice-free for the first time in living memory. Last year, more than a hundred people were killed in bush fires in Australia, following drought and record-breaking heat.

This cluster of record-breaking events could be merely a streak of bad luck. But that is extremely unlikely. This is far more likely to be the result of a warming climate – a consequence of this decade being, worldwide, the hottest for a thousand years.

All weather is driven by energy, and the sun ultimately provides this energy. But the biggest change in Earth’s energy budget by far over the past hundred years is due to the accumulation in our atmosphere of greenhouse gases, which limit the exit of heat into space. Owing to fossil-fuel emissions, there is now one-third more carbon dioxide in the atmosphere than at any time in at least a million years, as the latest ice drilling in Antarctica has revealed.

The changes in the planet’s energy budget caused by solar variations are at least ten times smaller in comparison. And they go in the wrong direction: in recent years, the sun has been at its dimmest since satellite measurements began in the 1970’s. So, when unprecedented extreme weather events occur, the prime suspect is naturally the biggest atmospheric change that has happened over the past hundred years – one that has been caused by human emissions.

The fact that heatwaves like the one in Russia become more frequent and extreme in a warmer world is easy to understand. Extreme rainfall events will also become more frequent and intense in a warmer climate, owing to another simple fact of physics: warm air can hold more moisture. For each degree celsius of warming, 7% more water is available to rain down from saturated air masses. Drought risk also increases with warming: even where rainfall does not decline, increased evaporation dries out the soils.

The carbon-dioxide effect can also change the preferred patterns of atmospheric circulation, which can exacerbate extremes of heat, drought, or rainfall in some regions, while reducing them in others. The problem is that a reduction in those extremes to which we are already well-adapted provides only modest benefits, whereas the new extremes to which we are not adapted can be devastating, as recent events in Pakistan show.

The events of this summer show how vulnerable our societies are to weather-related extremes. But what we see now is happening after only 0.8C of global warming. With swift and decisive action, we can still limit global warming to a total of 2C or a bit less. Even that much warming would require a massive effort to adapt to weather extremes and rising sea levels, which needs to start now.

With weak action, like that promised by governments in Copenhagen last December, we will be on course for 3-4C of global warming. This is bound to outstrip the ability of many societies and ecosystems to adapt. And, with no action at all, the planet could even heat up by 5-7C by the end of this century – and more thereafter. Knowingly marching down that road would be insane.

We must face the facts: our emissions of greenhouse gases probably are at least partly to blame for this summer of extremes. Clinging to the hope that it is all chance, and all natural, seems naive. Let us hope that this summer of extremes is a last-minute wake-up call to policy makers, the corporate world, and citizens alike.

Why not think about Russian wheat…?

Pakistan’s claim to fame is its being 7^th largest wheat and rice producing country in the world. It has the capacity to become number one if it introduces some farming sector reforms including an end to large, unviable and unmanageable land holdings. It has probably, in this time and age, the biggest and oldest feudal system kept alive in the honor of colonial era when these lands were granted in return for loyalty. Yet, its masses are forced to buy wheat and flour at Rs. 28-31 per kg from the market. This wheat is homegrown and is expensive at this scale. Imagine what would happen if the wheat were to be imported?

Nothing… The wheat would have been much cheaper if it were to be imported. Bloomberg has reported that Egypt, the world’s biggest wheat importer, bought 120,000 metric tons of Russian wheat at a tender today, the country’s General Authority for Supply Commodities Vice Chairman Nomani Nomani said in Cairo. The authority, also known as GASC, bought 60,000 metric tons from Venus at $165 per ton and another 60,000 metric tons from Aston at the same price. This come to Rs. 14 per kg as against Rs. 31 being sold in the domestic market. Then why not import the wheat?

Consider another question…if our farmers were to export their wheat, what would they get? Certainly not as much as they are getting from the domestic customers. The best thing would be to export the wheat and then see the prices. They would certainly come down as the exporters would not get what they are getting in the local market.