Rust to fertilize food price surge

By F William Engdahl – Asia Times April 4, 2008

A deadly fungus, known as Ug99, which kills wheat, has likely spread to Pakistan from Africa, according to reports in the British New Scientist. If true, that threatens the vital Asian bread basket, including the Punjab region.

The spread of the deadly virus, stem rust, against which an effective fungicide does not exist, comes as world grain stocks reach the lowest in four decades and government subsidized bio-ethanol production, especially in the United States, Brazil and the European Union, are taking land out of food production at alarming rates.

Stem rust is the worst of three rusts that afflict wheat plants. The fungus grows primarily in the stems, plugging the vascular system so carbohydrates can't get from the leaves to the grain, which shrivels. Ug99 is a race of stem rust that blocks the vascular tissues in cereal grains including wheat, oats and barley. Unlike other rusts that may reduce crop yields, Ug99-infected plants may suffer up to 100% loss. During the Cold War, both the US and the Soviet Union stockpiled stem rust spores as a biological weapon.

In the 1950s, the last major outbreak of stem rust destroyed 40% of the spring wheat crop in North America. At that time governments started a major effort to breed resistant wheat plants, led by Norman Borlaug of the Rockefeller Foundation.

After the 1954 epidemic, Borlaug began work in Mexico developing wheat that resisted stem rust. The project became the International Maize and Wheat Improvement Center (in Spanish, CIMMYT). The rust-resistant, high-yield wheat it developed ended stem rust outbreaks, led to the Green Revolution, and won Borlaug the Nobel Peace Prize in 1970. It also resulted today in there being far fewer varieties of wheat that might resist a new fungus outbreak.

When Ug99 turned up in Kenya in 2002, Borlaug, now 93, sounded the alarm. "Too many years had gone by and no one was taking Ug99 seriously," he says. He blames complacency and the dismantling of training and wheat testing programs after 40 years without outbreaks, according to the New Scientist report.

The first strains of Ug99 were detected in 1999 in Uganda. It spread to Kenya by 2001, to Ethiopia by 2003 and to Yemen when the cyclone Gonu spread its spores in 2007. Now the deadly fungus has been found in Iran and according to British scientists may already be as far east as Pakistan.

Pakistan and India account for 20% of the annual world wheat production. It is possible as the fungus spreads that large movements could take place almost overnight if certain wind conditions prevail at the right time.

In 2007, a three-day "wind event" recorded by Mexico's CIMMYT had strong currents moving from Yemen, where Ug99 is present, across Pakistan and India, going all the way to China. CIMMYT estimates that from two-thirds to three-quarters of the wheat now planted in India and Pakistan are highly susceptible to this new strain of stem rust. One billion people who live in this region and they are highly dependent on wheat for their food supply.

These are all areas where the agricultural infrastructure to contain such problems is either extremely weak or non-existent. It threatens to spread into other wheat producing regions of Asia and eventually the entire world if not checked.

Alarming world grain forecast

The 2007 World Agriculture Forecast of the United Nations Food and Agriculture Organization (FAO) in Rome, just released, projects an alarming trend in world food supply even in the absence of any devastation from Ug99. The report states:

“Countries in the non-OECD [Organization for Economic Cooperation and Development] region are expected to continue to experience a much stronger increase in consumption of agricultural products than countries in the OECD area. This trend is driven by population and, above all, income growth - underpinned by rural migration to higher income urban areas ... OECD countries as a group are projected to lose production and export shares in many commodities. Growth in the use of agricultural commodities as feedstock to a rapidly increasing biofuel industry is one of the main drivers in the outlook and one of the reasons for international commodity prices to attain a significantly higher plateau over the outlook period than has been reported in the previous reports.”

The FAO warns that the explosive growth in acreage used to grow fuels and not food in the past three years is dramatically changing the outlook for food supply globally, and forcing food prices sharply higher for all foods from cereals to sugar to meat and dairy products. The use of cereals, sugar, oilseeds and vegetable oils to satisfy the needs of a rapidly increasing bio-fuel industry, is one of the main drivers, most especially the large volumes of maize in the US, wheat and rapeseed in the EU and sugar in Brazil for ethanol and bio-diesel production.

This is already causing dramatically higher crop prices, higher feed costs and sharply higher prices for livestock products. In the US this year according to the United States Department of Agriculture, some 25% of the corn crop will go to bio-ethanol.

Ironically, the current bio-ethanol industry is being driven by US government subsidies and a scientifically false belief in the European Union and US that bio-ethanol is less harmful to the environment than petroleum fuels and can reduce CO-2 emissions. In a Swiss NZZ newspaper interview on March 23, Nestle's chief executive Peter Brabeck warned that the dramatic conversion of agriculture acreage to bio-fuels in the recent period was "political madness". He pointed out that its impact would be seen not only in exploding world wheat prices.

"Just as serious," he added, bio-fuel production "threatens our water supply. In order to produce one liter bio-ethanol we need 4,000 liters water. And water is a more serious problem than CO-2 emissions."

The huge expansion of global acreage now planted to produce bio-fuels is creating other ecological problems and demanding far more use of pesticide spraying, while use of bio-fuels in autos releases even deadlier emissions than imagined. Bio-ethanol has little if any effect on exhaust-pipe emissions in current car models. But it gives significant emission of some toxins including formaldehyde and acetaldehyde, a suspected neurotoxin that has been banned as carcinogenic in California.

The most alarming effect of the recent bio-fuels boom, however, has been a catastrophic shift down in world grain stocks at the same time that the EU and US have enacted policies that drastically cut traditional emergency grain reserves.

For the past several years, both the EU and US have passed legislation dramatically reducing reserve stocks of cereals. In the EU this has been through reform of the grain price supports of the Common Agriculture Program and in the US through a similar policy via the FAIR act (Federal Agriculture Improvement Program) to remove or greatly reduce price supports for cereals.

Combined with severe drought in the past two to three years in major growing areas from the US to Australia and parts of Asia, as well as the expanding acreage competition from bio-fuel plantings in especially the US, Brazil and the EU in the past three years, world cereal stocks, including wheat, have hit lows not seen in decades.

In the enlarged EU of 27 members, a lower than expected harvest in 2006, 265.5 million tonnes, led to tightening supplies at the end of marketing year 2006/2007 and to historically high prices. Intervention stocks have shrunk to around 1 million tonnes now from 14 million tonnes at the beginning of 2006/2007.

In short, with severely low grain stocks worldwide, expanding acreage set aside to grow grains for burning as fuel not food, spread of a deadly wheat fungus is a scenario pre-programmed for catastrophe. Given the fact that the scale of the growing US biofuel industry is well known, some suggest that the Washington Administration has other priorities than abating world hunger. It is certainly clear that we face a crisis of serious proportions even absent a new deadly wheat fungus threat.

One of the consequences of the spread of Ug99 is a new effort by Monsanto Corporation, the Swiss agrichemical concern Syngenta and other major producers of genetically manipulated plant seeds to promote introduction of genetically modified organism (GMO) wheat varieties said to be resistant to the Ug99 fungus. Biologists at Monsanto and at the various GMO laboratories around the world are working hard to patent such Ug99 resistant varieties.

In 2004, Roundup-ready wheat, poised to be the first biotech trait in wheat released to growers, was mothballed by Monsanto. The company cited strong resistance from US and Canadian wheat growers who feared losing export markets if US wheat was known to be GMO.

That GMO technology would have allowed farmers to apply Monsanto's Roundup herbicide, glyphosate, over a growing crop to kill weeds. Were Monsanto now to unveil a patented Ug99 resistant wheat variety, large new seed markets formerly hostile to genetically engineered wheat would open. Syngenta, which has developed a biotech trait that provides resistance to fusarium head blight or scab, is also seeking regulatory approval. Now their attention is turned to Ug99.

Borlaug, the former Rockefeller Foundation head of the Green Revolution, is active in funding research to develop a fungus resistant variety against Ug99, working with his former center in Mexico, the CIMMYT and ICARDA in Kenya, where the pathogen is now endemic. So far, about 90% of the 12,000 lines tested are susceptible to Ug99. That includes all the major wheat cultivars of the Middle East and west Asia. At least 80% of the 200 varieties sent to CIMMYT from the United States can't cope with infection. The situation is even more dire for Egypt, Iran, and other countries in immediate peril.

Even if a new resistant variety were ready to be released today it would take two or three years' seed increase in order to have just enough wheat seed for 20% of the acres planted to wheat in the world, CIMMYT agronomists estimate.

Work is also being done by the USDA's Agricultural Research Service (ARS), the same agency that co-developed Monsanto's Terminator seed technology. The spreading alarm over the Ug99 fungus is encouraging Monsanto and other GMO agribusiness companies to demand that the current voluntary ban on GMO wheat be lifted to allow spread of GMO patented wheat seeds with the argument they are Ug99 stem rust resistant.

The influential USA National Association of Wheat Growers reportedly is softening its opposition as fears of the deadly Ug99 spreading to North American wheat increase.

F William Engdahl is a geopolitical risk consultant and the author of Seeds of Destruction: The Hidden Agenda of Genetic Manipulation (www.globalresearch.ca) and A Century of War: Anglo-American Oil Politics and the New World Order (Pluto Press). He may be contacted at www.engdahl.oilgeopolitics.net.
http://www.atimes.com/atimes/Asian_Economy/JD04Dk01.html

Last updated 05/04/2008