January 19, 2008
THE FOOD CHAIN
A New, Global Oil Quandary: Costly Fuel Means Costly Calories

By KEITH BRADSHER
KUANTAN, Malaysia — Rising prices for cooking oil are forcing residents of Asia’s largest slum, in Mumbai, India, to ration every drop. Bakeries in the United States are fretting over higher shortening costs. And here in Malaysia, brand-new factories built to convert vegetable oil into diesel sit idle, their owners unable to afford the raw material.

This is the other oil shock. From India to Indiana, shortages and soaring prices for palm oil, soybean oil and many other types of vegetable oils are the latest, most striking example of a developing global problem: costly food.

The food price index of the Food and Agriculture Organization of the United Nations, based on export prices for 60 internationally traded foodstuffs, climbed 37 percent last year. That was on top of a 14 percent increase in 2006, and the trend has accelerated this winter.

In some poor countries, desperation is taking hold. Just in the last week, protests have erupted in Pakistan over wheat shortages, and in Indonesia over soybean shortages. Egypt has banned rice exports to keep food at home, and China has put price controls on cooking oil, grain, meat, milk and eggs.

According to the F.A.O., food riots have erupted in recent months in Guinea, Mauritania, Mexico, Morocco, Senegal, Uzbekistan and Yemen.

“The urban poor, the rural landless and small and marginal farmers stand to lose,” said He Changchui, the agency’s chief representative for Asia and the Pacific.

A startling change is unfolding in the world’s food markets. Soaring fuel prices have altered the equation for growing food and transporting it across the globe. Huge demand for biofuels has created tension between using land to produce fuel and using it for food.

A growing middle class in the developing world is demanding more protein, from pork and hamburgers to chicken and ice cream. And all this is happening even as global climate change may be starting to make it harder to grow food in some of the places best equipped to do so, like Australia.

In the last few years, world demand for crops and meat has been rising sharply. It remains an open question how and when the supply will catch up. For the foreseeable future, that probably means higher prices at the grocery store and fatter paychecks for farmers of major crops like corn, wheat and soybeans.

There may be worse inflation to come. Food experts say steep increases in commodity prices have not fully made their way to street stalls in the developing world or supermarkets in the West.

Governments in many poor countries have tried to respond by stepping up food subsidies, imposing or tightening price controls, restricting exports and cutting food import duties.

These temporary measures are already breaking down. Across Southeast Asia, for example, families have been hoarding palm oil. Smugglers have been bidding up prices as they move the oil from more subsidized markets, like Malaysia’s, to less subsidized markets, like Singapore’s.

No category of food prices has risen as quickly this winter as so-called edible oils — with sometimes tragic results. When a Carrefour store in Chongqing, China, announced a limited-time cooking oil promotion in November, a stampede of would-be buyers left 3 people dead and 31 injured.

Cooking oil may seem a trifling expense in the West. But in the developing world, cooking oil is an important source of calories and represents one of the biggest cash outlays for poor families, which grow much of their own food but have to buy oil in which to cook it.

Few crops illustrate the emerging problems in the global food chain as well as palm oil, a vital commodity in much of the world and particularly Asia. From jungles and street markets in Southeast Asia to food companies in the United States and biodiesel factories in Europe, soaring prices for the oil are drawing environmentalists, energy companies, consumers, indigenous peoples and governments into acrimonious disputes.

The oil palm is a stout-trunked tree with a spray of frilly fronds at the top that make it look like an enormous sea anemone. The trees, with their distinctive, star-like patterns of leaves, cover an eighth of the entire land area of Malaysia and even greater acreage in nearby Indonesia.

An Efficient Producer

The palm is a highly efficient producer of vegetable oil, squeezed from the tree’s thick bunches of plum-size bright red fruit. An acre of oil palms yields as much oil as eight acres of soybeans, the main rival for oil palms; rapeseed, used to make canola oil, is a distant third. Among major crops, only sugar cane comes close to rivaling oil palms in calories of human food per acre.

Palm oil prices have jumped nearly 70 percent in the last year because supply has grown slowly while demand has soared.

Farmers and plantation companies are responding to the higher prices, clearing hundreds of thousands of acres of tropical forest to replant with rows of oil palms. But an oil palm takes eight years to reach full production. A drought last year in Indonesia and flooding in Peninsular Malaysia helped constrain supply. Worldwide palm oil output climbed just 2.7 percent last year, to 42.1 million tons.

At the same time, palm oil demand is growing steeply for a variety of reasons around the globe. They include shifting decisions among farmers about what to plant, rising consumer demand in China and India for edible oils, and Western subsidies for biofuel production.

American farmers have been planting more corn and less soy because demand for corn-based ethanol has pushed up corn prices. American soybean acreage plunged 19 percent last year, producing a drop in soybean oil output and inventories.

Chinese farmers also cut back soybean acreage last year, as urban sprawl covered prime farmland and the Chinese government provided more incentives for grain.

Yet people in China are also consuming more oils. China not only was the world’s biggest palm oil importer last year, holding steady at 5.2 million tons in the first 11 months of the year, but it also doubled its soybean oil imports to 2.9 million tons, forcing buyers elsewhere to switch to palm oil.

Concerns about nutrition used to hurt palm oil sales, but they are now starting to help. The oil was long regarded in the West as unhealthy, but it has become an attractive option to replace the chemically altered fats known as trans fats, which have lately come to be seen as the least healthy of all fats.

New York City banned trans fats in frying at food service establishments last summer and will ban them in bakery goods this summer. Across the country, manufacturers are trying to replace trans fats. American palm oil imports nearly doubled in the first 11 months of last year, rising by 200,000 tons.

“Four years ago, when this whole no-trans issue started, we processed no palm here," said Mark Weyland, a United States product manager for Loders Croklaan, a Dutch company that supplies palm oil. “Now it’s our biggest seller.”

Last year, conversion of palm oil into fuel was a fast-growing source of demand, but in recent weeks, rising prices have thrown that business into turmoil.

Here on Malaysia’s eastern shore, a series of 45-foot-high green and gray storage tanks connect to a labyrinth of yellow and silver pipes. The gleaming new refinery has the capacity to turn 116,000 tons a year of palm oil into 110,000 tons of a fuel called biodiesel, as well as valuable byproducts like glycerin. Mission Biofuels, an Australian company, finished the refinery last month and is working on an even larger factory next door at the base of a jungle hillside.

But prices have spiked so much that the company cannot cover all its costs and has idled the finished refinery while looking for a new strategy, such as asking a biodiesel buyer to pay a price linked to palm oil costs, and someday switching from palm oil to jatropha, a roadside weed.

“We took a view that palm oil prices were already high; we didn’t think they could go even higher, and then they did,” said Nathan Mahalingam, the company’s managing director.

Growth in Biofuels

Biofuels accounted for almost half the increase in worldwide demand for vegetable oils last year, and represented 7 percent of total consumption of the oils, according to Oil World, a forecasting service in Hamburg, Germany.

The growth of biodiesel, which can be mixed with regular diesel, has been controversial, not only because it competes with food uses of oil but also because of environmental concerns. European conservation groups have been warning that tropical forests are being leveled to make way for oil palm plantations, destroying habitat for orangutans and Sumatran rhinoceroses while also releasing greenhouse gases.

The European Union has moved to restrict imports of palm oil grown in unsustainable ways. The measure has incensed the Malaysian palm oil industry, which had plunged into biofuel production in part to satisfy European demand.

Another controversy involves the treatment of indigenous peoples whose lands have been seized by oil plantations. This has been a particular issue on Borneo.

Anne B. Lasimbang, executive director of the Pacos Trust in the Malaysian state of Sabah in northern Borneo, said that while some indigenous people had benefited from selling palm oil that they grow themselves, many had lost ancestral lands with little to show for it, including lands that used to provide habitats for endangered orangutans.

“Finally, some of the pressures internationally have trickled down. Some of the companies are more open to dialogue; they want to talk to communities,” said Ms. Lasimbang, a member of the Dusun indigenous group. “On our side, we are still suspicious.”

Demand Outstrips Supply

As the multiple conflicts and economic pressures associated with palm oil play out in the global economy, the bottom line seems to be that the world wants more of the oil than it can get.

Even in Malaysia, the center of the global palm oil industry for half a century, spot shortages have cropped up. Recently, as wholesale prices soared, cooking oil refiners complained of inadequate subsidies and cut back production of household oil, sold at low, regulated prices.

Street vendors in the capital, Kuala Lumpur, complain that they cannot find enough cooking oil to prepare roti canai, the flatbread that is the national snack. “It’s very difficult; it’s hard to find,” said one vendor who gave only his first name, Palani, after admitting that he was secretly buying cooking oil intended for households instead of paying the much higher price for commercial use.

Many of the hardest-hit victims of rising food prices are in the vast slums that surround cities in poorer Asian nations. The Kawle family in Mumbai’s sprawling Dharavi slum, a household of nine with just one member working as a laborer for $60 a month, is coping with recent price increases for palm oil.

The family has responded by eating fish once a week instead of twice, seldom cooking vegetables and cutting its monthly rice consumption. Next to go will be the weekly smidgen of lamb.

“If the prices go up again,” said Janaron Kawle, the family patriarch, “we’ll cut the mutton to twice a month and use less oil.”

Contributing reporting were Andrew Martin in New York, Anand Giridharadas in Kale, India, and Michael Rubenstein in Mumbai.

December 2, 2007
Ending Famine, Simply by Ignoring the Experts

By CELIA W. DUGGER
Correction Appended

LILONGWE, Malawi — Malawi hovered for years at the brink of famine. After a disastrous corn harvest in 2005, almost five million of its 13 million people needed emergency food aid.

But this year, a nation that has perennially extended a begging bowl to the world is instead feeding its hungry neighbors. It is selling more corn to the World Food Program of the United Nations than any other country in southern Africa and is exporting hundreds of thousands of tons of corn to Zimbabwe.

In Malawi itself, the prevalence of acute child hunger has fallen sharply. In October, the United Nations Children’s Fund sent three tons of powdered milk, stockpiled here to treat severely malnourished children, to Uganda instead. “We will not be able to use it!” Juan Ortiz-Iruri, Unicef’s deputy representative in Malawi, said jubilantly.

Farmers explain Malawi’s extraordinary turnaround — one with broad implications for hunger-fighting methods across Africa — with one word: fertilizer.

Over the past 20 years, the World Bank and some rich nations Malawi depends on for aid have periodically pressed this small, landlocked country to adhere to free market policies and cut back or eliminate fertilizer subsidies, even as the United States and Europe extensively subsidized their own farmers. But after the 2005 harvest, the worst in a decade, Bingu wa Mutharika, Malawi’s newly elected president, decided to follow what the West practiced, not what it preached.

Stung by the humiliation of pleading for charity, he led the way to reinstating and deepening fertilizer subsidies despite a skeptical reception from the United States and Britain. Malawi’s soil, like that across sub-Saharan Africa, is gravely depleted, and many, if not most, of its farmers are too poor to afford fertilizer at market prices.

“As long as I’m president, I don’t want to be going to other capitals begging for food,” Mr. Mutharika declared. Patrick Kabambe, the senior civil servant in the Agriculture Ministry, said the president told his advisers, “Our people are poor because they lack the resources to use the soil and the water we have.”

The country’s successful use of subsidies is contributing to a broader reappraisal of the crucial role of agriculture in alleviating poverty in Africa and the pivotal importance of public investments in the basics of a farm economy: fertilizer, improved seed, farmer education, credit and agricultural research.

Malawi, an overwhelmingly rural nation about the size of Pennsylvania, is an extreme example of what happens when those things are missing. As its population has grown and inherited landholdings have shrunk, impoverished farmers have planted every inch of ground. Desperate to feed their families, they could not afford to let their land lie fallow or to fertilize it. Over time, their depleted plots yielded less food and the farmers fell deeper into poverty.

Malawi’s leaders have long favored fertilizer subsidies, but they reluctantly acceded to donor prescriptions, often shaped by foreign-aid fashions in Washington, that featured a faith in private markets and an antipathy to government intervention.

In the 1980s and again in the 1990s, the World Bank pushed Malawi to eliminate fertilizer subsidies entirely. Its theory both times was that Malawi’s farmers should shift to growing cash crops for export and use the foreign exchange earnings to import food, according to Jane Harrigan, an economist at the University of London.

In a withering evaluation of the World Bank’s record on African agriculture, the bank’s own internal watchdog concluded in October not only that the removal of subsidies had led to exorbitant fertilizer prices in African countries, but that the bank itself had often failed to recognize that improving Africa’s declining soil quality was essential to lifting food production.

“The donors took away the role of the government and the disasters mounted,” said Jeffrey Sachs, a Columbia University economist who lobbied Britain and the World Bank on behalf of Malawi’s fertilizer program and who has championed the idea that wealthy countries should invest in fertilizer and seed for Africa’s farmers.

Here in Malawi, deep fertilizer subsidies and lesser ones for seed, abetted by good rains, helped farmers produce record-breaking corn harvests in 2006 and 2007, according to government crop estimates. Corn production leapt to 2.7 million metric tons in 2006 and 3.4 million in 2007 from 1.2 million in 2005, the government reported.

“The rest of the world is fed because of the use of good seed and inorganic fertilizer, full stop,” said Stephen Carr, who has lived in Malawi since 1989, when he retired as the World Bank’s principal agriculturalist in sub-Saharan Africa. “This technology has not been used in most of Africa. The only way you can help farmers gain access to it is to give it away free or subsidize it heavily.”

“The government has taken the bull by the horns and done what farmers wanted,” he said. Some economists have questioned whether Malawi’s 2007 bumper harvest should be credited to good rains or subsidies, but an independent evaluation, financed by the United States and Britain, found that the subsidy program accounted for a large share of this year’s increase in corn production.

The harvest also helped the poor by lowering food prices and increasing wages for farm workers. Researchers at Imperial College London and Michigan State University concluded in their preliminary report that a well-run subsidy program in a sensibly managed economy “has the potential to drive growth forward out of the poverty trap in which many Malawians and the Malawian economy are currently caught.”

Farmers interviewed recently in Malawi’s southern and central regions said fertilizer had greatly improved their ability to fill their bellies with nsima, the thick, cornmeal porridge that is Malawi’s staff of life.

In the hamlet of Mthungu, Enelesi Chakhaza, an elderly widow whose husband died of hunger five years ago, boasted that she got two ox-cart-loads of corn this year from her small plot instead of half a cart.

Last year, roughly half the country’s farming families received coupons that entitled them to buy two 110-pound bags of fertilizer, enough to nourish an acre of land, for around $15 — about a third the market price. The government also gave them coupons for enough seed to plant less than half an acre.

Malawians are still haunted by the hungry season of 2001-02. That season, an already shrunken program to give poor farmers enough fertilizer and seed to plant a meager quarter acre of land had been reduced again. Regional flooding further lowered the harvest. Corn prices surged. And under the government then in power, the country’s entire grain reserve was sold as a result of mismanagement and corruption.

Mrs. Chakhaza watched her husband starve to death that season. His strength ebbed away as they tried to subsist on pumpkin leaves. He was one of many who succumbed that year, said K. B. Kakunga, the local Agriculture Ministry official. He recalled mothers and children begging for food at his door.

“I had a little something, but I could not afford to help each and every one,” he said. “It was very pathetic, very pathetic indeed.”

But Mr. Kakunga brightened as he talked about the impact of the subsidies, which he said had more than doubled corn production in his jurisdiction since 2005.

“It’s quite marvelous!” he exclaimed.

Malawi’s determination to heavily subsidize fertilizer and the payoff in increased production are beginning to change the attitudes of donors, say economists who have studied Malawi’s experience.

The Department for International Development in Britain contributed $8 million to the subsidy program last year. Bernabé Sánchez, an economist with the agency in Malawi, estimated the extra corn produced because of the $74 million subsidy was worth $120 million to $140 million.

“It was really a good economic investment,” he said.

The United States, which has shipped $147 million worth of American food to Malawi as emergency relief since 2002, but only $53 million to help Malawi grow its own food, has not provided any financial support for the subsidy program, except for helping pay for the evaluation of it. Over the years, the United States Agency for International Development has focused on promoting the role of the private sector in delivering fertilizer and seed, and saw subsidies as undermining that effort.

But Alan Eastham, the American ambassador to Malawi, said in a recent interview that the subsidy program had worked “pretty well,” though it displaced some commercial fertilizer sales.

“The plain fact is that Malawi got lucky last year,” he said. “They got fertilizer out while it was needed. The lucky part was that they got the rains.”

And the World Bank now sometimes supports the temporary use of subsidies aimed at the poor and carried out in a way that fosters private markets.

Here in Malawi, bank officials say they generally support Malawi’s policy, though they criticize the government for not having a strategy to eventually end the subsidies, question whether its 2007 corn production estimates are inflated and say there is still a lot of room for improvement in how the subsidy is carried out.

“The issue is, let’s do a better job of it,” said David Rohrbach, a senior agricultural economist at the bank.

Though the donors are sometimes ambivalent, Malawi’s farmers have embraced the subsidies. And the government moved this year to give its people a more direct hand in their distribution.

Villagers in Chembe gathered one recent morning under the spreading arms of a kachere tree to decide who most needed fertilizer coupons as the planting season loomed. They had only enough for 19 of the village’s 53 families.

“Ladies and gentlemen, should we start with the elderly or the orphans?” asked Samuel Dama, a representative of the Chembe clan.

Men led the assembly, but women sitting on the ground at their feet called out almost all the names of the neediest, gesturing to families rearing children orphaned by AIDS or caring for toothless elders.

There were more poor families than there were coupons, so grumbling began among those who knew they would have to watch over the coming year as their neighbors’ fertilized corn fields turned deep green.

Sensing the rising resentment, the village chief, Zaudeni Mapila, rose. Barefoot and dressed in dusty jeans and a royal blue jacket, he acted out a silly pantomime of husbands stuffing their pants with corn to sell on the sly for money to get drunk at the beer hall. The women howled with laughter. The tension fled.

He closed with a reminder he hoped would dampen any jealousy.

“I don’t want anyone to complain,” he said. “It’s not me who chose. It’s you.”

The women sang back to him in a chorus of acknowledgment, then dispersed to their homes and fields.

Correction: December 7, 2007

A chart on Sunday about improvements in Malawi’s agricultural production, using erroneous information from a study by researchers at Imperial College London and Michigan State University, misstated the size of recent corn harvests. (Because of an editing error, the article also included the wrong figures.) The increase in production was in millions of metric tons, not billions. (Estimates show that corn production rose to 2.7 million metric tons in 2006 and 3.4 million in 2007 from 1.2 million in 2005.)

"January 19, 2008
THE FOOD CHAIN
A New, Global Oil Quandary: Costly Fuel Means Costly Calories

By KEITH BRADSHER
KUANTAN, Malaysia — Rising prices for cooking oil are forcing residents of Asia’s largest slum, in Mumbai, India, to ration every drop. Bakeries in the United States are fretting over higher shortening costs. And here in Malaysia, brand-new factories built to convert vegetable oil into diesel sit idle, their owners unable to afford the raw material.

This is the other oil shock. From India to Indiana, shortages and soaring prices for palm oil, soybean oil and many other types of vegetable oils are the latest, most striking example of a developing global problem: costly food.

The food price index of the Food and Agriculture Organization of the United Nations, based on export prices for 60 internationally traded foodstuffs, climbed 37 percent last year. That was on top of a 14 percent increase in 2006, and the trend has accelerated this winter.

In some poor countries, desperation is taking hold. Just in the last week, protests have erupted in Pakistan over wheat shortages, and in Indonesia over soybean shortages. Egypt has banned rice exports to keep food at home, and China has put price controls on cooking oil, grain, meat, milk and eggs.

According to the F.A.O., food riots have erupted in recent months in Guinea, Mauritania, Mexico, Morocco, Senegal, Uzbekistan and Yemen.

“The urban poor, the rural landless and small and marginal farmers stand to lose,” said He Changchui, the agency’s chief representative for Asia and the Pacific.

A startling change is unfolding in the world’s food markets. Soaring fuel prices have altered the equation for growing food and transporting it across the globe. Huge demand for biofuels has created tension between using land to produce fuel and using it for food.

A growing middle class in the developing world is demanding more protein, from pork and hamburgers to chicken and ice cream. And all this is happening even as global climate change may be starting to make it harder to grow food in some of the places best equipped to do so, like Australia.

In the last few years, world demand for crops and meat has been rising sharply. It remains an open question how and when the supply will catch up. For the foreseeable future, that probably means higher prices at the grocery store and fatter paychecks for farmers of major crops like corn, wheat and soybeans.

There may be worse inflation to come. Food experts say steep increases in commodity prices have not fully made their way to street stalls in the developing world or supermarkets in the West.

Governments in many poor countries have tried to respond by stepping up food subsidies, imposing or tightening price controls, restricting exports and cutting food import duties.

These temporary measures are already breaking down. Across Southeast Asia, for example, families have been hoarding palm oil. Smugglers have been bidding up prices as they move the oil from more subsidized markets, like Malaysia’s, to less subsidized markets, like Singapore’s.

No category of food prices has risen as quickly this winter as so-called edible oils — with sometimes tragic results. When a Carrefour store in Chongqing, China, announced a limited-time cooking oil promotion in November, a stampede of would-be buyers left 3 people dead and 31 injured.

Cooking oil may seem a trifling expense in the West. But in the developing world, cooking oil is an important source of calories and represents one of the biggest cash outlays for poor families, which grow much of their own food but have to buy oil in which to cook it.

Few crops illustrate the emerging problems in the global food chain as well as palm oil, a vital commodity in much of the world and particularly Asia. From jungles and street markets in Southeast Asia to food companies in the United States and biodiesel factories in Europe, soaring prices for the oil are drawing environmentalists, energy companies, consumers, indigenous peoples and governments into acrimonious disputes.

The oil palm is a stout-trunked tree with a spray of frilly fronds at the top that make it look like an enormous sea anemone. The trees, with their distinctive, star-like patterns of leaves, cover an eighth of the entire land area of Malaysia and even greater acreage in nearby Indonesia.

An Efficient Producer

The palm is a highly efficient producer of vegetable oil, squeezed from the tree’s thick bunches of plum-size bright red fruit. An acre of oil palms yields as much oil as eight acres of soybeans, the main rival for oil palms; rapeseed, used to make canola oil, is a distant third. Among major crops, only sugar cane comes close to rivaling oil palms in calories of human food per acre.

Palm oil prices have jumped nearly 70 percent in the last year because supply has grown slowly while demand has soared.

Farmers and plantation companies are responding to the higher prices, clearing hundreds of thousands of acres of tropical forest to replant with rows of oil palms. But an oil palm takes eight years to reach full production. A drought last year in Indonesia and flooding in Peninsular Malaysia helped constrain supply. Worldwide palm oil output climbed just 2.7 percent last year, to 42.1 million tons.

At the same time, palm oil demand is growing steeply for a variety of reasons around the globe. They include shifting decisions among farmers about what to plant, rising consumer demand in China and India for edible oils, and Western subsidies for biofuel production.

American farmers have been planting more corn and less soy because demand for corn-based ethanol has pushed up corn prices. American soybean acreage plunged 19 percent last year, producing a drop in soybean oil output and inventories.

Chinese farmers also cut back soybean acreage last year, as urban sprawl covered prime farmland and the Chinese government provided more incentives for grain.

Yet people in China are also consuming more oils. China not only was the world’s biggest palm oil importer last year, holding steady at 5.2 million tons in the first 11 months of the year, but it also doubled its soybean oil imports to 2.9 million tons, forcing buyers elsewhere to switch to palm oil.

Concerns about nutrition used to hurt palm oil sales, but they are now starting to help. The oil was long regarded in the West as unhealthy, but it has become an attractive option to replace the chemically altered fats known as trans fats, which have lately come to be seen as the least healthy of all fats.

New York City banned trans fats in frying at food service establishments last summer and will ban them in bakery goods this summer. Across the country, manufacturers are trying to replace trans fats. American palm oil imports nearly doubled in the first 11 months of last year, rising by 200,000 tons.

“Four years ago, when this whole no-trans issue started, we processed no palm here," said Mark Weyland, a United States product manager for Loders Croklaan, a Dutch company that supplies palm oil. “Now it’s our biggest seller.”

Last year, conversion of palm oil into fuel was a fast-growing source of demand, but in recent weeks, rising prices have thrown that business into turmoil.

Here on Malaysia’s eastern shore, a series of 45-foot-high green and gray storage tanks connect to a labyrinth of yellow and silver pipes. The gleaming new refinery has the capacity to turn 116,000 tons a year of palm oil into 110,000 tons of a fuel called biodiesel, as well as valuable byproducts like glycerin. Mission Biofuels, an Australian company, finished the refinery last month and is working on an even larger factory next door at the base of a jungle hillside.

But prices have spiked so much that the company cannot cover all its costs and has idled the finished refinery while looking for a new strategy, such as asking a biodiesel buyer to pay a price linked to palm oil costs, and someday switching from palm oil to jatropha, a roadside weed.

“We took a view that palm oil prices were already high; we didn’t think they could go even higher, and then they did,” said Nathan Mahalingam, the company’s managing director.

Growth in Biofuels

Biofuels accounted for almost half the increase in worldwide demand for vegetable oils last year, and represented 7 percent of total consumption of the oils, according to Oil World, a forecasting service in Hamburg, Germany.

The growth of biodiesel, which can be mixed with regular diesel, has been controversial, not only because it competes with food uses of oil but also because of environmental concerns. European conservation groups have been warning that tropical forests are being leveled to make way for oil palm plantations, destroying habitat for orangutans and Sumatran rhinoceroses while also releasing greenhouse gases.

The European Union has moved to restrict imports of palm oil grown in unsustainable ways. The measure has incensed the Malaysian palm oil industry, which had plunged into biofuel production in part to satisfy European demand.

Another controversy involves the treatment of indigenous peoples whose lands have been seized by oil plantations. This has been a particular issue on Borneo.

Anne B. Lasimbang, executive director of the Pacos Trust in the Malaysian state of Sabah in northern Borneo, said that while some indigenous people had benefited from selling palm oil that they grow themselves, many had lost ancestral lands with little to show for it, including lands that used to provide habitats for endangered orangutans.

“Finally, some of the pressures internationally have trickled down. Some of the companies are more open to dialogue; they want to talk to communities,” said Ms. Lasimbang, a member of the Dusun indigenous group. “On our side, we are still suspicious.”

Demand Outstrips Supply

As the multiple conflicts and economic pressures associated with palm oil play out in the global economy, the bottom line seems to be that the world wants more of the oil than it can get.

Even in Malaysia, the center of the global palm oil industry for half a century, spot shortages have cropped up. Recently, as wholesale prices soared, cooking oil refiners complained of inadequate subsidies and cut back production of household oil, sold at low, regulated prices.

Street vendors in the capital, Kuala Lumpur, complain that they cannot find enough cooking oil to prepare roti canai, the flatbread that is the national snack. “It’s very difficult; it’s hard to find,” said one vendor who gave only his first name, Palani, after admitting that he was secretly buying cooking oil intended for households instead of paying the much higher price for commercial use.

Many of the hardest-hit victims of rising food prices are in the vast slums that surround cities in poorer Asian nations. The Kawle family in Mumbai’s sprawling Dharavi slum, a household of nine with just one member working as a laborer for $60 a month, is coping with recent price increases for palm oil.

The family has responded by eating fish once a week instead of twice, seldom cooking vegetables and cutting its monthly rice consumption. Next to go will be the weekly smidgen of lamb.

“If the prices go up again,” said Janaron Kawle, the family patriarch, “we’ll cut the mutton to twice a month and use less oil.”

Contributing reporting were Andrew Martin in New York, Anand Giridharadas in Kale, India, and Michael Rubenstein in Mumbai."

January 23, 2008
Congo’s Death Rate Unchanged Since War Ended

By LYDIA POLGREEN
DAKAR, Senegal — Five years after Congo’s catastrophic war officially ended, the rate at which people are dying in the country remains virtually unchanged, according to a new survey, despite the efforts of the world’s largest peacekeeping force, billions of dollars in international aid and a historic election that revived democracy after decades of violence and despotism.

The survey, released Tuesday, estimated that 45,000 people continue to die every month, about the same pace as in 2004, when the international push to rebuild the country had scarcely begun. Almost all the deaths come from hunger and disease, signs that the country is still grappling with the aftermath of a war that gutted its infrastructure, forced millions to flee and flattened its economy.

In all, more than 5.4 million people have died in Congo since the war began in 1998, according to the most recent survey’s estimate, the latest in a series completed by the International Rescue Committee, an American aid organization. Nearly half of the dead were children younger than 5 years old.

Perhaps most alarming, while the death rate has slightly decreased in eastern Congo, the last festering node of conflict, it has actually increased in some parts of central Congo, though the area has not seen combat in several years. The study’s authors and other aid organizations said the focus of aid dollars on the east and neglect of the region by government were the most likely explanations for the changes. These surprising findings demonstrate the depth and complexity of Congo’s continuing crisis, said Richard Brennan, health director for the International Rescue Committee and one of the survey’s authors.

“The Congo is still enduring a crisis of huge proportions,” Dr. Brennan said. “Protracted elevations of mortality more than four years after the end of the war demonstrates that recovery from this kind of crisis is itself a protracted process. The international engagement has to be sustained and committed for years to come.”

The survey was based on a sample of 14,000 households surveyed in 700 villages and towns across Congo from January 2006 to April 2007.

Its authors emphasized that the figures in the report are estimates, based on widely accepted statistical methods for estimating death tolls in disasters, but the cumulative figure for how many have died since the war began has a wide margin of error given the difficulty of the terrain in Congo and the lack of precision in basic demographic information, like the prewar mortality rate or even Congo’s current population.

Still, improvements in security since 2004, when the last survey was completed, meant that researchers were able to visit many areas that were off limits last time, and as a result, its authors said, the current survey provides the most complete picture yet of the toll of Congo’s slide into despair.

That picture is not encouraging. The mortality rate in Congo is 57 percent higher than the rest of sub-Saharan Africa, the survey found. Particularly hard hit were young children, who are especially susceptible to diseases like malaria, measles, dysentery and typhoid, which can kill when medicine is not available. In one village in North Kivu Province, a hot spot of continued fighting, three women of the 20 households surveyed had lost two children each in the 16 months covered by the survey period, Dr. Brennan said.

Less than half a percentage point of the deaths were caused by violence, illustrating how the aftermath of war can be more deadly than combat itself. Much of the emergency aid is focused on the eastern part of the country, where militia battles with Congolese troops have chased nearly half a million people from their homes in the last year. A peace agreement to end that conflict was reached Monday.

But the increased mortality in areas outside of the volatile east is particularly worrying because it points to longer-term problems that endure long after the bullets have stopped flying.

“Given the nature of this country, the vast differences in terrain, the broken infrastructure, I am not surprised,” said Alan Doss, the newly appointed chief of the United Nations’ vast peace operation in Congo. “This will take a long time to turn around.”

The Congolese government spends just $15 per person each year on health care, according to the World Health Organization, less than half of what is recommended to provide the most basic but lifesaving care, like immunizations, malaria-fighting mosquito nets and hydration salts.

“The past two years, we can say the health situation has not improved at all,” said Brice de le Vingne, operations coordinator for the region that includes Congo for the aid group Doctors Without Borders. “The only thing that improved a bit is mobile phone coverage. We now are in contact with more people to know that the situation is not good.”

Mortality surveys are crucial tools for aid agencies, United Nations peacekeepers and even historians, but the methods used to compile them have come under attack.

For example, a 2006 survey by the Johns Hopkins Bloomberg School of Public Health that concluded that 600,000 Iraqi civilians had died since the American invasion — far above the estimates given by the Iraqi government and other sources — was attacked as “not credible” by President Bush and the Pentagon, and criticized by other scientists as well.

For the current survey, teams of workers fanned out across Congo, a nation as big as the United States east of the Mississippi, but with rivers instead of roads, canoes and bicycles instead of airplanes and cars.

Debarati Guha-Sapir, director of the Center for Research on the Epidemiology of Disasters, a research institution in Belgium, said that the Congo survey was methodologically sound. Still, extrapolating from clusters of data over an area as vast and with as many unknowns as Congo presents particular problems, she said.

“The fact is that you have a high mortality rate in Congo altogether by any standard,” Dr. Guha-Sapir said. “Of which some is the result of conflict, some is governance, some is that no heath services are available in many areas, some is just pure poverty and the horrible legacy of what colonialism and Western greed did to Congo.”

A number of variables make the survey results inevitably imprecise, particularly when trying to turn an abstract death rate into a number of actual deaths. The population of Congo, for example, is essentially unknown: the United Nations estimated it to be 56.8 million; the Congolese Ministry of Health says it is 69.9 million. If the United Nations figure is right, for example, the actual number of deaths in the most recent survey period would be 522,000, but if the government figures are right, the figure would be 1.05 million, the study found.

The number of deaths attributed to the conflict and its aftermath is based on how many people would be expected to die under normal circumstances. Because Congo’s prewar mortality rate is disputed by different sources, it is also a source of imprecision.

According to various United Nations estimates, the prewar rate was below that of sub-Saharan Africa as a whole, but the survey’s authors said they chose to use the higher rate of the continent to be conservative.

Still, even the death rate for sub-Saharan Africa could be a problematic baseline, said Dr. Guha-Sapir, because in many countries the most basic kinds of censuses are carried out rarely, and not always with precision.

Ultimately, using the most conservative and least conservative assumptions, the data show with 95 percent certainty that 3.5 to 7.8 million people have died since 1998, according to the survey’s authors.

An earlier survey by the International Rescue Committee, completed in 2004, was published in 2006 in The Lancet, a British medical journal, but the most recent survey was declined for publication by The Lancet. Other experts said such a rejection did not necessarily undercut the scientific validity of the findings.

Dr. Brennan said that despite inevitable imprecision, the data point to a vast crisis.

“Is it possible that as few as five million people died?” he said. “It’s much more likely that 5.4 million died. But the exact number isn’t as critical. These data can help us understand the scale of the problem and target our solutions to save lives.”

The Potomac Institute for Policy Studies has just released a new monograph that presents an alternative view of the character of warfare in the 21st Century. This new model argues that future conflicts will blur the distinction between war and peace, combatants and noncombatants.

Rather than distinct modes of war, we will face “Hybrid Wars” that are a combination of traditional warfare mixed with terrorism and insurgency.

Conflict in the 21st Century: The Rise of Hybrid Wars, by Research Fellow Frank Hoffman, summarizes the background and analysis of the changing character of warfare in our time. Examining the debate over the past decade about the evolution of modern warfare in the post Cold-war world, several thinkers have claimed that we were in the midst of a “Revolution in Warfare.” Hoffman takes this discussion to a new and much more mature level by recognizing that we are entering a time when multiple types of warfare will be used simultaneously by flexible and sophisticated adversaries. These adversaries understand that successful conflict takes on a variety of forms that are designed to fit one’s goals at that particular time—identified as “Hybrid Wars” in Conflict in the 21st Century.

Hoffman notes that it is too simplistic to merely classify conflict as “Big and Conventional” versus “Small or Irregular.” Today’s enemies, and tomorrow’s, will employ combinations of warfare types.

Non-state actors may mostly employ irregular forms of warfare, but will clearly support, encourage, and participate in conventional conflict if it serves their ends. Similarly, nation-states may well engage in irregular conflict in addition to conventional types of warfare to achieve their goals. The monograph lays out some of the implications of the concept. Clearly the United States must be prepared for the full spectrum of conflict from all fronts and realize that preparing our forces for only selected types of conflict will be a recipe for defeat.

This concept builds upon and is contrasted with alternatives including “New Wars,” “Wars Amongst the People,” Fourth Generation Warfare, and Unrestricted Warfare. It absorbs useful elements from many of these concepts, and incorporates the best of foreign analysts as well.

Potomac Institute Chairman and CEO, Michael S. Swetnam remarked that “Frank Hoffman’s work on Hybrid Wars is a masterpiece of enlightened thinking on conflict in our time. It should be required reading for all students and practitioners of modern warfare.”

Hoffman is an accomplished defense analyst who is highly sought after for his insights on historical analyses of the past and on the character of future conflict. He lectures frequently here and abroad on long-range security issues. His areas of expertise include military history, national strategy, homeland security, strategic planning, defense economics and civil-military relations.

The Potomac Institute for Policy Studies is an independent, not-for-profit public policy research center that identifies key science, technology and national security issues, and aggressively follows through with focused research and policy advice. From this research and subsequent public discussions, the Institute has a track record for developing meaningful policy options and assisting their implementation at the intersection of both business and government.

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