Drought worries spread beyond Britain’s borders

Apologies for returning to the subject I wrote about a couple of weeks ago, but drought is the story of the year. And it’s not just here in eastern England, although we’ve probably got worse problems than most.

It spreads across the country, only easing close to the Scottish borders. But it doesn’t stop at England. Most of Europe is suffering, the only notable exceptions being Spain and Italy, which is a bit of a paradox, and there seems little prospect in the forecast of the substantial UK precipitation we so desperately need. The few drops late last week, some of which dampened the Royal Wedding, were not enough.

More serious from a world perspective is a widespread drought across most of the wheat growing areas of North America. Kansas, Colorado, Oklahoma, and Texas have all had hot dry conditions and the USDA recently estimated between 42% and 69% of winter wheat crops in those states were poor or very poor. Assessing the entire US acreage of wheat, the agriculture department rated 36% as being in poor condition. And there, as here, it’s too late for those crops to recover when rain comes.

Add to that the problems Canada and north central America still have with lying snow preventing spring sowing; inadequate rainfall in the northern half of China (a perennial problem there); and the on-going effects of last year’s drought across Russia and several FSU states and there are the makings of a major supply crisis of staple foods.

We can’t assume it’s definitely going to happen when American maize and soya beans have not been planted (it isn’t time yet) and after some parts of Eastern Australia had their best harvest for years (other parts, further north were flooded). South America, however, seems unlikely to fill the gap as Argentina threatens more export taxes and Brazil grows little wheat.

In any event, futures markets around the world went crazy with prices hitting records of over £220/t (briefly) before falling back £10 in one trading session. And if speculators smell more volatility they can be expected to continue distorting prices. The difficulty for those of us who grow the stuff is to judge when to enter the forward market and how much to sell. Overdo it, only to find crops fail, and we could find ourselves having to pay margin calls and/or buy someone else’s production at goodness knows what price to complete a contract.

The other major dilemma is whether to invest in irrigation. On relatively heavy land farms, like we have, where we don’t grow potatoes or vegetables, we’ve previously regarded it as a luxury we could do without. But if this year (and last) are examples of the weather we can expect in future it may be we should reconsider – always assuming we’d get the necessary permission when domestic and industrial water supplies are becoming a big issue.

In terms of national policy I am reminded of the days, after the Second World War when memories of food rationing were still fresh, of the “strategic reserves” governments tried to build up against a period the like of which we may be about to experience. Later, when we joined the Common Market they were called “intervention stocks” and got a bad name for being too big and expensive to maintain. But might it be time to re-visit those policies and make plans, next time we have a bumper harvest, to put some of it by for a rainy or droughty day?