Posted on 7-9-2003

Europe's Harvest Crisis
by John Vidal and Heather Stewart,
September 6, 2003, The Guardian

The prolonged heatwave has devastated crops across Europe, leaving some countries facing their worst harvests since the end of the second world war.

The searing weather, especially in central and eastern Europe, has forced countries that usually export food to import it for the first time in decades. Several, including Hungary, Bulgaria and Romania, are experiencing rising food prices and the UN is warning this will have a severe impact on economies.

According to the UN's Food and Agriculture Organisation (FAO), wheat output in the EU is expected to be millions of tonnes down on last year, with much greater losses in southern Europe than in the north.

France has also been severely hit, and is expected to lose more than 20% of its grain harvests. Italy is expected to lose 13% of its wheat, Britain 12% and other countries 5%-10%. In Britain, one immediate effect is likely to be a 7p rise in the price of a loaf, retailers said.

In Ukraine, once known as the breadbasket of Russia, the wheat crop fell to 5m tonnes this year, a 75% decrease on normal years.

In Moldova, 40% of the wheat area has reportedly been decimated and harvests are down 80%. According to the FAO, which has sent a mission to assess the emergency, losses are being been compared to those of 1945, the worst harvest in memory.

Across the EU, wheat production is down 10m tonnes, about 10%.

"In some parts it's pretty bad," said Henri Josserand, head of the FAO's early warning system, which forecasts harvests and predicts where food may be scarce. "Some countries will have to import a lot more than usual. Their import bills will go up significantly."

He warned that floods similar to those that caused devastation in Germany two years ago are likely to hit parts of Europe shortly. "These are now ideal conditions for serious flash flooding because the capacity for the ground to absorb water is very low."

The UN figures, released yesterday, mirror those of the world's two leading crop monitors. The US department of agriculture last week cut its forecast for this year's global grain harvest by 32m tonnes, mainly because of Europe's extreme weather. The International Grains Council, an intergovernmental organisation, believes the world harvest will be even lower.

A report from the Worldwatch Institute in Washington, in cooperation with the UN Environment Programme, paints a bleak picture of the intense weather continuing to devastate farming. Last year was the third time in four years that global wheat, rice and maize production failed to meet demand, forcing governments and food companies to release stocks from storage. This week India released 50% of its food stocks, partly as a result of intense heat and then floods in some states.

Lester Brown, the head of Worldwatch, an independent research organisation, predicted that prices would rocket in the next few months: "The heatwave came at a time when world food supplies were already at their most precarious ever. The amount of grain produced for each person on earth is now less than at any time in more than three decades."

But although 38 countries are experiencing food emergencies, the UN does not believe there will be overall food shortages this year.

"The world food supply is on an upward trend," said Mr Josserand. "But just because the world is doing OK, it doesn't mean that in some areas the situation is not severe. Southern Africa, especially Zimbabwe, is still in real difficulty."

Surprisingly, one country that has done better than ever this year is Afghanistan, where the cereal crop will be the largest on record, due in large part to good rainfall and better access to seeds and fertilisers.

In Britain, British Bakeries, which produces Hovis and Mother's Pride, has warned retailers that it will put its wholesale prices up by 15% because of the rising cost of flour. The British Retail Consortium said margins on bread were already so slim that much of the cost - 6p to 7p a loaf - was likely to be added to the price.

Consumers in eastern Europe could be harder hit. For the poorest countries, many of which spend up to half of their foreign exchange earnings on importing grain from the west, the result could be burgeoning balance of payments deficits, according to Kevin Watkins, of Oxfam. He said the reduced harvest was also likely to cut donations of food aid to developing countries.