[R-G] [BillTottenWeblog] Will the food run out?

[Bill Totten]

Observations on aid

by Tom Marchbanks

New Statesman (January 17 2008)


The weekly shop and the morning loaf of bread are becoming more
expensive, but while most of us may barely have noticed, rising food
prices are hitting the world's developing nations hard.

Global reserves of cereals are at an all-time low, mounting food costs
have sparked riots in Mexico and there are hunger warnings across
sub-Saharan Africa. A seldom-mentioned casualty of the price surge,
though, has been the aid agencies, which are struggling to buy in food
aid. With prices predicted to remain high, they are increasingly seeking
new ways to feed the world's hungry.

The boom in global food prices, in part driven by demand for biofuels,
is stretching resources at the UN's World Food Programme (WFP). Over the
past five years, the agency's food procurement bill has rocketed by
fifty per cent, according to Robin Lodge, spokesman for the organisation.

"There has been a cost increase across the board in major grains and
pulses, such as maize, wheat and rice", he says. The escalating price of
grains, described as agri-inflation among economists, has been rapid.
The price of wheat, for example, doubled in 2007.

Paul Horsnell, head of commodities research at Barclays Capital, blames
increased use of land for biofuels, reduced supply and an insatiable
demand for food and animal feed from the world's emerging markets.
"Biofuels, China and some poor harvests have been a recipe for a very
sharp rise in grain prices", he says.

The WFP's finances are further hit by record oil prices. This impacts on
grain prices by pushing up the cost of fertiliser and also adding to the
agency's food-aid distribution expenses.

"Transport costs have soared over the past few years, adding enormously
to our costs; also the rates shipping companies charge have increased.
We are being hit all round", says Lodge.

The WFP's problems are unlikely to diminish since, in the long term,
global warming will push up food prices, predicts John Ingram of Global
Environmental Change and Food Systems, an organisation which monitors
environmental change and food security. "Climate change is going to make
things more difficult", he says.

The influences of climate change are already evident; as the US and
Europe search for alternative carbon-neutral energy sources, land is
diverted from food to fuel crops. "It's not rocket science to say that
if you take land out of food production, the price of food will go up",
says Ingram.

Another impact of global warming on the cost of food is the projected
increase in extreme weather events, such as Australia's continuing
drought and the serious floods of 2007 across Africa. The
Intergovernmental Panel on Climate Change (IPCC) predicts that by 2100
we will experience heavier rainstorms, causing soil erosion and crop
damage; droughts producing lower crop yields; and widespread soil
salination from rising sea levels.

Responding to the growing crisis, Jacques Diouf, director general of the
UN's Food and Agriculture Organisation, is demanding urgent steps to
boost crop production. The UN agency is also seeking to address the
problem from the other direction - by seeking means to prevent
shortages, rather than simply managing them. "We look at ways of
mitigation", says Lodge. "We are trying to increase farmers' yields by
providing a ready market".

Handing out vouchers or small amounts of cash to stimulate local trade,
rather than shipping in and distributing food aid, is one method
increasingly used by the WFP. It has also started to buy directly from
farmers, creating a stable market price that encourages production.

"World commodity prices are high, but this is not reflected at the farm
gates. By being on the spot, we can guarantee a price", explains Lodge.

Nonetheless, the WFP is warning governments that if official development
assistance doesn't keep up with rising food prices, the agency will be
unable to maintain current levels.

"The bottom line is that if the donations remain static, we cannot feed
all the people we are feeding at the moment. And unless donations go up,
we may have to cut programmes", says Lodge.

http://www.newstatesman.com/200801170016


TO POST A COMMENT, OR TO READ COMMENTS POSTED BY OTHERS, please click
on the word "comment" highlighted at the end of the version of this
essay posted at http://billtotten.blogspot.com/