POSTED ON APRIL 30, 2008:
Loaf of Bread for a Bag of Gold?
Local restaurants fearful of cost of doing business, the apocalyptic pangs of rising worldwide food prices are felt in Tulsa and abroad
According to the Book of Revelation, the Third Horseman of the Apocalypse will come in the form of a worldwide famine of such magnitude that an entire day's labor will bring only enough money for a small measure of grain.
If the first-century Jewish fisherman who penned that prophecy had somehow been familiar with such recently-coined terms as "agflation" and "biofuel," he might not have envisioned the harbinger of such a doom astride a black horse, but in the driver's seat of a "green" car instead.
As reported by the United Nation's World Food Programme (along with just about every other organization on the planet that deals in the donation, sale or production of food), overall worldwide food prices have increased by 65 percent since January of this year, which is part of a long-term trend of rising food costs.
Overall global food prices have increased 83 percent over the 36 months leading up to February of this year, according to a recently released report by the World Bank, "Rising Food Prices: Policy Options and World Bank Response."
Among that and other bad news, the document also reports that staple crops are up even higher, such as wheat, which has increased a staggering 181 percent over the same period.
Of course, hundreds of millions around the world don't need the World Bank to tell them what their stomachs are already screaming at them. Recent weeks have seen thousands take to the streets in riots over the scarcity of food in their respective countries--from Haiti, where many have literally resorted to eating dirt to fill their bellies, to Pakistan, where the government has begun rationing food.
Other nations that have experienced an eruption of food riots have begun restricting food exports, if they haven't halted them altogether, in an effort to drive down domestic prices.
According to the aforementioned World Bank report, as well as innumerable other observers, the rising prices are driven primarily by the growing demand for environmentally-friendly energy.
"Concerns over oil prices, energy security and climate change have prompted governments to take a more proactive stance towards encouraging production and use of biofuels," the report reads.
That "proactive stance" has created what economists are now referring to as "agflation": an increased demand for the raw materials from which biofuels are made, such as corn, wheat, soy and palm oil--but mostly corn.
The study reports that global corn production increased by 51 million tons between 2004 and 2007, but the United States' consumption of biofuels also increased for that time by 50 million tons.
While the vast majority of that increase in corn production went to make biofuels in the U.S., the global consumption of corn for other uses also increased on the order of 33 million tons during the same period.
The most common of those "other uses" was either eating the corn directly, or using it for other foods, since corn is used at some point in the production of virtually every kind of food commodity, from turning it into vegetable oil, high-fructose corn syrup for ketchup and everything else, or use as feed for livestock.
That consumption depleted global stockpiles by 30 million tons and created increased competition for cropland, thereby driving up prices for other crops and food products as well.
The skyrocketing prices have led many world leaders to declare a state of crisis, and some to go so far as to demonize biofuel producers.
"Producing biofuels today is a crime against humanity," one UN official declared last month.
Jean Ziegler, UN Special Rapporteur for the Right to Food, made his comment last month on a German radio station as he condemned current worldwide energy and food export policies, predicting more riots and starvation to come.
(Not so incidentally, his condemnation doesn't, or at least shouldn't apply to all biofuel producers, like the guys at Tulsa Biofuels who, rather than diverting corn from filling empty bellies to filling empty gas tanks, only use recycled cooking waste to make biodiesel. For more details, see "Taking on the Times" in the February 21-27 issue of UTW at www.urbantulsa.com.)
At about the same time Ziegler made his comments, UN Secretary-General Ban Ki-Moon called for better long-term agricultural practices as well as short-term emergency measures, such as the United States' release of $200 million in emergency aid to famished countries.
His comments came shortly after World Bank Group President Robert B. Zoellick called on world leaders to pitch-in to make up the $500 million "food gap" needed by the World Food Programme to meet the needs of the moment.
"Poor people are suffering daily from the impact of high food prices, especially in urban areas and in low income countries," he said in a prepared statement last month.
In many of those low-income parts of the world, the parallels between the coming of the dreaded "Third Horseman" and their present circumstances go beyond mere literary comparisons, but are painfully literal: "A quart of wheat for a day's wages, and three quarts of barley for a day's wages, and do not damage the oil and the wine!" the passage reads.
In places like Bangladesh, which is like several other developing countries throughout the world, where the yearly per capita income is only about $300 US (that's only 82 cents per day), people are literally only making enough money from a day's labor to buy their daily food, which doesn't go very far these days with cost increases outrunning their ability to earn, forcing many to slowly starve as they struggle to stay alive until they receive outside aid.
The situation isn't quite so dire in places like Tulsa, U.S.A., though, but that doesn't mean there aren't plenty of people here who are also suffering.
According to Ephraim Leibtag, an economist with the U.S. Department of Agriculture's Economic Research Service, retail food prices increased domestically by an average of 4 percent last year.
In light of the ongoing global food crisis, that doesn't seem like much, but Leibtag said that's the largest increase in 17 years, as food prices had increased just 2.5 percent on average over the past 15 years.
Hey, What's in the Fridge?
KimAnn Vargas, who owns and operates El Rey restaurant near 21st St. and Garnett Ave., said the rising prices have exacted a heavy toll on her business.
"With gas prices getting higher, and food prices going up, it affects us and our customers," she said.
Since November, patronage of her restaurant has declined 65 percent, due to customers no longer being able to afford to eat out, Vargas said.
Also, she added, "Since January, a lot of our supplies have doubled in cost."
For instance, El Rey restaurant needs about 80 pounds of tomatoes a month to operate, which cost 53 cents a pound before the beginning of the year. Now, Vargas said, she's paying $1.37 per pound.
"We can't just raise the prices on our menu," she said, explaining that she hasn't changed anything about how she and her husband operate their restaurant, such as reducing portions or laying-off employees, choosing instead to ride out the price increase and accept what she hopes is a temporary assault on their bottom line.
"There is no profit right now--we're just trying to pay our bills with what we make," Vargas said.
Other Tulsa restaurants in more well to do parts of town are also feeling the effects, but not quite so sharply.
"We don't see as much profit as we feel we should be," said Jamie Earl, general manager of The Brook, which has a location on Brookside and another in south Tulsa.
He said two factors have helped to cushion the blow of rising food prices for the restaurant.
Last year, they increased menu prices by an average of about 25 cents per item, which has helped absorb some of the rising costs.
Also, Earl said, since they purchase supplies in such high-volumes, they're cheaper than they might be for smaller, "Mom and Pop" restaurants like Vargas'.
Further, since they purchase in such high volumes, they have longer-termed contracts with suppliers, with prices that were agreed upon before the food crisis began, thereby shielding them somewhat from the effects of drastic worldwide price increases--for the time being, at least.
There are other items, however, that are cutting into the restaurants' bottom line, Earl said.
For instance, he said a gallon of mayonnaise, which cost $3.33 at this time last year, now costs about $7, hence the need to raise prices.
"The biggest thing we don't want to do is shrink our portions," Earl said.
"I never thought we'd see prices on our menus this high, but we're just in there with everyone else on that," he said.
"To me, our supply prices are too high," he added.
Many other Tulsans and Oklahomans, though, are experiencing the rising food prices as a threat even graver than the erosion of a hard-earned business.
"It's pretty scary right now from where we sit," the Rev. Steve Whitaker told UTW.
He said he's paying twice what he was last year at this time to feed the multitudes who come to him for help at downtown's John 3:16 Mission.
He said two main factors are contributing to the heavier burden. First, they're paying 5-8 percent more for food than at this time last year. Secondly, food donations, which historically have made up the bulk of what the Mission distributes, are only 48 percent of what they were a year ago, presumably because of the tighter budgets of the donors.
"People are afraid of recession, and they have to pay more for their own groceries," Whitaker said.
Further, he said the higher prices are forcing more people to have to rely on the Mission to put food on their tables and in their families' mouths.
Whitaker said he doesn't know exactly how many people more are coming to him for food compared to last year, since they don't keep track of the numbers they can't help.
He said he serves about 180,000 meals per year at the Mission, and many more through the food distributed for people to take home, but that there are always more people in need than they are able to serve. In recent months, though, Whitaker said more people than usual have had to be turned away.
"We know that people are skipping meals," he lamented, noting that it's not uncommon for children in low-income parts of the city to go to school hungry, or go an entire weekend without eating, surviving entirely on meals provided in their school's cafeteria.
Whitaker also said the Mission's ability to reach those people is declining as food prices increase.
"This month is a little lean, and I don't know what that means--if the chickens are coming home to roost," he said.
While Oklahoma is fifth worst state in the nation for what's called "food insecurity," Whitaker said other parts of the country are also being hit hard by rising food prices.
Having recently returned from a meeting of the Christian Management Association, which he said "is the largest organization of people in the world who do what I do," Whitaker said the directors of other ministries across the nation are also experiencing what he's experiencing.
While the hunger-watchers at the UN and USDA are predicting even leaner times ahead for the foreseeable future, Whitaker isn't losing heart, though.
"That being said, Tulsans have always been very generous and I know they'll rally to meet this need," he said.
"I've worked at John 3:16 for 20 years, and I've seen God answer prayers and generous people come forward. With all the assets we have in Tulsa, if any city can rally in this situation, it is this city. It is unconscionable for anyone to go hungry in Tulsa," Whitaker added.
He said he's particularly encouraged by last week's unanimous passage in the state Senate of HB 2833, the Food Security Act, which, if it's signed into law, will create the Oklahoma Food Security Committee to implement recommendations made by last year's Oklahoma Task Force on Hunger, of which Whitaker was a member.
The bill would also provide tax relief to Oklahomans who are at the greatest risk for hunger, enact tax rebates for charities working to address the hunger crisis, and grant sales-tax exemptions to small farmers selling their goods in farmers' markets.
The bill and the task force were the work of Sen. Andrew Rice, D-Oklahoma City; Sen. James Williamson, R-Tulsa; and Rep. Kris Steele, R-Shawnee.
"I was never more encouraged than I was at those committee meetings," said Whitaker.
"Not many people are as driven to end hunger as I am, but the other members of that task force have the same drive that I do. I'm ecstatic that there's this level of cooperation. This is one of the most exciting things I've seen in years," he added.
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