Wednesday, March 9, 2011

Is World Hunger Necessary?

An op/ed in the January 18, 2011 edition of Investors Business Daily stated that governments around the world and in particular in Africa promote famine. While it referenced corruptions amongst governments which sold their nation's grains and kept the profits for themselves, it raised the more controversial issue of African nations which have declined American food aid due to their policy of accepting food from the United States because our nation's food is genetically modified. In 2002, Zambia declined food aid from the U.S., mostly in the form of corn, deeming it "frankenfood", notwithstanding a famine that would affect nearly one-third of its population. In light of recent rebellions in Tunisia, Egypt, Bahrain, and Libya which have been sparked by food shortages and vastly escalating food prices, I was motivated to learn more about genetically modified food (GMF), and its potential impact on solving world hunger and perhaps more geopolitical revolutions.

The World's population is projected by the United States Census Bureau to grow from approximately 7 billion in 2012 to 8 billion by the year 2025. To put this into perspective, there were only 6 billion mouths to feed in the year 2000. Today, tragically, eighteen percent of the population of the developing world lacks sufficient food. In a nation like China where the need for food production is expected to increase sixty percent by the year 2030 to keep pace with population growth, boosting food production has always been a national priority. Africa has the highest population growth rate in the world, making it difficult to maintain adequate food supplies.

Compounding these problems are recent draughts, floods and fires and the diversion of food crops to produce bio-fuels as well as export bans imposed by nations in light of shortages. Some examples are the cost of wheat which has almost doubled in the last six months and oil prices which have surpassed $100 per barrel, putting more pressure on farmers to use corn for fuel production, rather than for food. On February 16, 2011, Josette Sheeran, the Executive Director of the United Nations World Food Programme, asserted that we are on "red alert". World Bank Managing Director, Ngozi Okonjo-Iweala, said, "I feel we have now entered a danger zone. National food security issues are becoming a global food security issue. This is a challenge for the world. Almost one billion people are going to bed hungry."

Biotechnology used for purposes of human food supply no doubt is unsettling for many. Terms like "genetically modified", particularly when this term relates to food is foreign and scary. I don't know what the alternative is, especially for hungry people. Farmers have been battling pests for centuries. Chemicals such as pesticides and herbicides are very common and widely-used. Because of environmental and health concerns, many of which have been raised by European scholars who are not surrounded by famine, development of new chemical treatments has been curtailed in recent years. Today, scientists are using the tools of advanced molecular technology to fortify plants with genes to help them resist pests. Although breeding practices have been used for years to grow crops with desirable traits, scientists can now identify genes from similar species or even from completely unrelated organisms, and transfer those genes into crops.

Sharon Bomer Lauritsen, Executive Vice President, Food and Agriculture for the Biotechnology Industry Organization, states, "biotech crops help to provide for more sustainable agricultural production. The benefits include a reduction in the environmental impacts of agriculture, increased production on the same amount of acreage, improved food quality, and increased farmer incomes."

The reality is that much of the controversial science involved in agriculture is used and is more widely accepted globally when it comes to pharmaceuticals or many other industrial products. With staggering world population growth, radical weather events, famine, and political upheavals, food and the efficacies of food production will surely continue to be a major economic theme and investment opportunity over the course of the decade and beyond. I will do my best to keep you informed.

The opinions voiced in this material are for general information and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, you should consult a financial advisor prior to investing.
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