It's food not oil we should be watching.

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Once again, oil prices are "surging," and once again the primary discussion focuses on the cost of gasoline. While the price of gasoline is the most direct visible aspect for individuals, it is certainly not the only one. Increasing fuel costs are a concern, but there are other costs and related crises that erode people's ability to survive. These are largely "indirect" costs only because they are media-framed as such.

As oil jumps around the $100 a barrel price and is expected to go higher, gas prices are expected to go up to at least $3.50. While that may or may not affect individual driving habits, it also effects the cost of everything moved by, and produced with oil. At the immediate top of the crisis list are heating oil and diesel. In the United States, awareness of the heating oil issue is in part regional. For example, the Northeast is more impacted that the Southwest. However, many older homes across the country rely on heating oil. The price of heating oil is directly impacted by rising oil costs.

Likewise, in the U.S., most private autos run on gasoline so the assumption is that skyrocketing fuel costs don't impact us. However, diesel makes up 28% of daily consumption. Much of that is in the form of transporting goods (big trucks and rail), public transportation (mass transit systems), construction (earth movers, graders, etc.), and agriculture (tractors, cultivators, etc). Increasing oil costs directly impact those sectors, and those costs pass through to end point consumers.

These end point costs are concentrated most heavily in the cost of food because food needs to be grown (cultivation equipment and fertilizer), harvested (harvesting equipment and transportation to processors or storage), processed and transported to market. At each point along the way, increasing costs of petroleum prices impact final cost. Therefore it is not surprising that we are hearing more and more about rising food costs and an advancing global food crisis.

The USDA predicts at least a 4% increase in food costs in 2008. However, this estimate came before the current spike.

The oil "crisis," which the corporate media refuse to call "peak oil," is having multiple effects. First, there is the direct effects of cost increases of oil as noted above. However, the growing gap between supply and demand, and the high cost of what is available, is driving the bio-fuels "revolution." This has placed the global food supply in direct competition with the global food supply, and the consequences are dire. Aside from the environmental destruction caused by tactics (such trying to increase agriculturally productive land, or the destruction of palm forests for bio-fuel production), cooking oils are equally sources for bio-fuel as noted in this from Reuters:

From Russia to China to the United States, consumers will be feeling the pinch of higher food prices in 2008, with cooking oil now joining corn, wheat, and milk on the growing list of food inflation culprits.

Rising food prices will hurt more in developing nations, where a larger share of incomes are spent on food, and analysts have warned of likely food shortages and political upheaval in impoverished areas.

Consumers were already paying more for cooking oils. But prices of processed and fried foods and those made from edible oils such as salad dressings and condiments will also be rising in the months ahead, economists said.

The rising cost of oil combined with the increasing demand on grain crops and food oil sources for bio-fuels, are further aggravated by global warming impacts. For example, the US gets much of its wheat from Australia which has been hit by an ongoing devastating drought. These increasing costs are only accelerating as noted in the above article:

Sara Lee Corp. has raised prices three times, for a total of 15 percent, since December 2006. The most recent increase, 5 percent, was announced last week but may not show up on grocery goods until next year, said Mark Goldman, spokesman for the company based in Downers Grove, Ill.

"We're talking about prices (for wheat products) that are double, in some cases triple a year and a half ago," Goldman said. Inflation is hitting the whole-grain breads that health-conscious consumers have been favoring.

Meanwhile, the price of oils, especially soybean oil, is expected to climb 5 percent to 6 percent as soybean farmers, seeking ample waves of gain, switch to corn.

So we have rising fuel prices, crops going to bio-fuel rather than food, and global warming, all pressing food prices higher. Two other issues are also driving up the cost of food. One is a U.S. energy policy that is subsidizing farmers for ethanol production, and the other is a dietary switch to meat.

Some analysts estimate that as much as 30 percent of the US grain crop will go toward producing ethanol this year, a doubling from 2006. IFPRI forecasts that if the world sticks to current biofuel expansion plans, the price of corn will go up 26 percent by 2020, and the price of oilseeds (such as soybean, sunflower, rapeseed) by 18 percent. If governments double efforts to produce this alternative fuel source, corn prices are expected to go up 72 percent and oilseeds by 44 percent in 12 years' time. (Why the era of cheap food is over)

As many of the world's poor are already spending a significant amount of their income on food, even a marginal increase in food costs can be devastating. For example:

A family in Bangladesh, for example, living on $5 a day, typically spends $3 of that on food. The 50 percent rise in food prices the world has seen in recent years takes a $1.50 chunk - nearly 30 percent - out of the family budget. (CSM)

Meanwhile, rising incomes among portions of some populations - such as in India and China - are shifting to a diet that includes more meat. This is redirecting grains from direct consumption to meat production (Economist). Since it takes much more grain to produce meat than to get that protein directly from the grain, it increases demand on those crops - crops already being diverted for bio-fuel production. U.S. farmers grew 15 million tons of corn for ethanol in 2000. That tally is expected to total 85 million tons for 2007 (Economist).

Ethanol is the dominant reason for this year's increase in grain prices. It accounts for the rise in the price of maize because the federal government has in practice waded into the market to mop up about one-third of America's corn harvest. A big expansion of the ethanol programme in 2005 explains why maize prices started rising in the first place.

Ethanol accounts for some of the rise in the prices of other crops and foods too. Partly this is because maize is fed to animals, which are now more expensive to rear. Partly it is because America's farmers, eager to take advantage of the biofuels bonanza, went all out to produce maize this year, planting it on land previously devoted to wheat and soyabeans. This year America's maize harvest will be a jaw-dropping 335m tonnes, beating last year's by more than a quarter. The increase has been achieved partly at the expense of other food crops.

This year the overall decline in stockpiles of all cereals will be about 53m tonnes--a very rough indication of by how much demand is outstripping supply. The increase in the amount of American maize going just to ethanol is about 30m tonnes. In other words, the demands of America's ethanol programme alone account for over half the world's unmet need for cereals. Without that programme, food prices would not be rising anything like as quickly as they have been. According to the World Bank, the grain needed to fill up an SUV would feed a person for a year.

America's ethanol programme is a product of government subsidies. There are more than 200 different kinds, as well as a 54 cents-a-gallon tariff on imported ethanol. That keeps out greener Brazilian ethanol, which is made from sugar rather than maize. Federal subsidies alone cost $7 billion a year (equal to around $1.90 a gallon). (Economist)

Since the United States is one of the major global exporters of corn, the shift to ethanol and the subsidies driving it, are driving of food cost in the Untied States, and across the world. Hence we have report after report pointing to a global food crisis, and that food crisis will lead to growing political instability (Vidal). Other countries are taking the same approach as the U.S. from Brazil, to Russia, to China. All of this takes food out of the mouths of billions of people around the globe - perhaps more than half of the population:

Lester Brown, founder of the Washington-based Worldwatch Institute thinktank, said: "The competition for grain between the world's 800 million motorists, who want to maintain their mobility, and its 2 billion poorest people, who are simply trying to survive, is emerging as an epic issue."

Last year, he said, US farmers distorted the world market for cereals by growing 14m tonnes, or 20% of the whole maize crop, for ethanol for vehicles. This took millions of hectares of land out of food production and nearly doubled the price of maize. Mr Bush this year called for steep rises in ethanol production as part of plans to reduce petrol demand by 20% by 2017. (Vidal)

I have been regularly shouting the meme for years of "Don't put the food supply in competition with the fuel supply." Clearly that message is finally being recognized, but it is ignored by both government policy makers and the corporations who influence them. The consequence is increasingly billions of people living at or below starvation level, and growing bloody conflict as desperate circumstance drive desperate action.

In the United States, we are experiencing the confluence of issues which will serve to magnify the impact. The increasing cost of fuel combines with the increasing cost of food, combines with a falling dollar. The falling dollar is critical. While it is directly impacted by the national debt which is directly impacted by U.S. military "adventures" for oil, it is also impacted by oil being bought and sold in U.S. dollars (the petrodollar). The falling value of the dollar decreases its buying power which increases real costs across the board. The creation of a national and global grain shortage drives up those costs and therefore the costs of food.

As the corporate media shows us rising gas prices and issues the mantra that "it is not impacting car driving," think about those grocery prices. First, it has impacted people's private transportation (and car purchasing) choices. People (who can afford to) are reacting to increasing gasoline prices. People (who cannot afford to) are shifting to other forms of transportation or cutting their food budgets or consumption. Since those struggling to put food on the table are a largely "invisible" population, the media can get away with the lies. However, food banks across the country are facing empty shelves and the hungry leave with empty hands.

It is a "quiet" problem; a hidden problem; but it is real. Everyone is impacted by it, though the severity of that impact is moderated by income. We will face the question of who eats and who does not? Who lives and who dies? We will also face the conflict that arises from this. The domino effect is huge and is implicated in everything from internal warfare to recruitment into "extremist" groups to the parents selling their children and themselves into slavery.

The answer is not more oil drilling or more bio-fuels or hydrogen fuel cells. We have to address consumption and life style. In this year of political campaigning will any candidate be brave enough to confront this issue directly? Probably not voluntarily. However, we are important to them at this point and we can (and must) push the questions and the dialogs.

Authors Bio:

Rowan Wolf is an activist and sociologist living in Oregon. She is the founder and principle author of Uncommon Thought Journal, and Editor in Chief of Cyrano's Journal Today.