“The global food price crisis that led to nearly a billion malnourished people in 2008 is not over,” says David Nabarro, coordinator of the UN Secretary General’s Task Force on the Global Food Security Crisis. Although some prices have fallen due to speculation and cheaper fuel costs, food commodity prices still remain high.
As the first decade of the 21st century winds down, the world is facing a hunger challenge unlike anything it has seen in the past 50 years. A steep rise in food and fuel prices has already undone some of the progress achieved in recent decades, and now a global financial crisis threatens to do worse damage still. It has been more than a decade since prices were increasing as quickly as they are now. Unlike earlier spikes in global food prices, today’s higher prices are expected to remain for up to a decade, perhaps longer.
In little less than 2 years, the number of people who are living in poverty has increased by 100 million and the number of people who are hungry by more than 75 million. Getting by on a diet of basic staples, poor families were spending half or more of their income on food even before the jump in food prices. Higher food prices have added a crushing load to the most vulnerable and poorly nourished people, especially mothers and babies. Faced with much higher prices, poor families have had to reduce the amount of food they consume; choose less nutritious foods; forego meals, and/or reduce other expenditures such as paying for health care and sending their children to school. The very poorest cope by shifting to one meal a day and by eating famine foods: roots, grass, mud cakes.
Most of the world’s undernourished people – 907 million - live in developing countries; of these, 65% live in 7 countries: India, China, Democratic Republic of Congo, Bangladesh, Indonesia, Pakistan and Ethiopia Africa, the continent hit hardest by the crisis, is home to 16 of the 17 countries where over 35% of the population is experiencing hunger – Democratic Republic of Congo, Eritrea, Burundi, Sierra Leone, Ethiopia, Angola, Zimbabwe, Central African Republic, Rwanda, Chad, Liberia, Mozambique, Togo, Madagascar and Tanzania.
Several factors account for the rising prices. For example, in 2008, investment firms such as Goldman Sachs and AIG purchased and held up to 2.2 billion bushels of corn worth $223 billion. High oil and fertilizer prices, increased demand from India and China, inclement weather, increased production of bio-fuels (accounting for 30% of the price rises) and decreased donor funding for agriculture(from 18% of development to 3%) are some of the important factors. Ironically, progress against poverty in China, India and other countries where rapid development has occurred, the increased demand for food from people who have moved out of poverty has made prices rise. Agricultural productivity has not increased to keep pace with the rising demand, and drought in major grain producing countries like Australia has tightened supplies. A rapid increase in oil prices has been a factor because petroleum figures into agricultural production at every step, from the fertilizer used when planting crops to the fuel that transports them to market. Years of bad policy choices are at least partly to blame for the sudden spike in prices. While developed countries were protecting their farmers – paying subsidies that undercut farmers in poor countries, maintaining high tariffs to keep imports out, imposing export bans to protect their own food supply – the agricultural sector in many developing countries was devastated. Developing countries that were once self-sufficient producers of their own food became net food importers. More recently, policies in rich countries have encouraged their farmers to divert crops away from food production into bio-fuels.
Increasing agricultural production in developing countries now would improve food security in developing countries and lead to higher profits for farmers. Unfortunately, most farmers in developing countries cannot respond to higher prices for their products by planting more, because they do not have the necessary resources. For decades, too little was done to improve rural infrastructure – transportation networks, storage facilities, irrigation systems, appropriate farming tools, agricultural extension services, and improved seed varieties – as both the governments of developing countries and bilateral and multilateral donors underemphasized and underinvested in agriculture.
The world’s financial and economic crisis will certainly continue to push more people into hunger. “It means both developed and developing countries have even fewer funds to invest in social protection programs to help people become more resilient and prevent them from falling into the poverty trap,” says David Nabarro.
To respond appropriately, a High-Level UN Task Force proposed a dual approach of emergency intervention, and addressing the underlying structural problems in the food sector by improving agricultural development and seeking to change the way trading systems work.
The United States plays a crucial role in assuring food security for the world. The U.S. is the biggest donor of food aid commodities, but it is also a major source of the food speculation and bio-fuel production that contributed to steep price rises. The U.S. Government should:
1) Maintain, if not increase, Title II (Food for Peace) funding for emergency and development programs; maintain the “safe box” that protects development food assistance and the stipulation that up to 25% of funds be used for local purchase.
2) Provide emergency funding to help low-income people in the U.S. who are adversely affected by rising food prices.
3) Continue to review its farm subsidies program to eliminate practices that do not comply with international trade obligations and that disadvantage poor farmers in other countries.
4) Review the economics and ethics of subsidies for “food for fuel” in a way that places priority on the right of the poor in the U.S. and in the developing world to adequate access to nutritious food, and the promotion of sustainable agriculture practices that protect farmland, natural resources and wildlife for future generations.
5) Greatly strengthen its support to developing countries to help them increase their investments in agricultural research, extension, rural infrastructure and market access for poor small farmers.
6) Ensure that the Commodity Futures Trading Commission protects the basic needs of poor people, vulnerable populations and small farmers in the U.S. and developing world by regulating speculation of food commodities to recognize that, unlike other commodities, access to food is a basic human right.