Developing strategies to end hunger
 

4 posts from February 2011

Looking Beyond the Current Food Price Crisis

Global food prices are up almost 30 percent over this time last year. The World Bank says that sugar and wheat prices have risen 20 percent, while fats and oils used in cooking jumped 22 percent.  An increasing number of severe droughts, floods, fires, and storms are causing serious damage to farming and agricultural production in a widespread area that includes major food producers and exporters: Russia, Ukraine, Canada, the United States, Germany, Australia, Pakistan, Argentina, and the countries of Southeast Asia. Elsewhere, floods in Sri Lanka destroyed more than 30 percent of the country's rice harvest, according to a recent United Nations report. Above-average amounts of rain in Southern Africa pose food insecurity risks as well. Recently, the FAO issued an alert that a severe winter drought in the North China plain—China’s wheat belt--may put wheat production at risk. In a statement last week, World Bank President Robert Zoellick reported more price increases: "In just six months, prices for wheat rose by more than 50 percent in Kyrgyzstan, 45 percent in Bangladesh, and 33 percent in Mongolia." These realities illustrate our complex global agricultural matrix. The good news: there are  opportunities to improve the situation.

What we already know

The Population Reference Bureau projects that the world population will surpass 9 billion by the year 2050. In order to meet the food and nutritional needs of this larger population, agricultural productivity will need to increase by 50 percent to 70 percent. Yet at the same time, other estimates indicate that global agricultural production could drop by 50 percent by 2020 because of climate change--the greatest threat to the very basic foundation of human existence. Regions classified as low-income and likely vulnerable to food insecurity are among the areas expected to have the greatest increases in population-- so the world’s most vulnerable people are at risk of bearing the brunt of extreme and erratic climatic conditions. This is even more true because their livelihoods depend largely on subsistence farming.

With global food prices skyrocketing, the production of biofuels increasing, and the amount of arable land static, we must shift our attention to more integrated investment platforms that deliver increased productivity, nutritional value, market access, and environmental management. The momentum for economic growth and re-investing in agriculture has already been set. As a result of commitments made at the L’Aquila G8 Summit in 2009, the Global Food Security Program (GAFSP) was set up at the World Bank to help developing countries expand their agricultural production, build access to markets, and make their food supplies more resistant to shocks such as those currently sweeping the world markets. To date, however, only a fraction of the pledges of resources for GAFSP have been fulfilled. 

GAFSP: Amount Pledged Per Contributor Vs. Amount Received

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Please Note: Ireland also pledged in the amount of US$ .5M, all of which has been received.

The lack of fulfillment of pledges and commitments leads to unpredictable financial resource-flows. It disrupts every aspect of the food chain, from production to income availability to nutrition. Yet it is abundantly clear that it is much more cost-effective to invest in building agricultural and economic systems that are sustainable in the long run and prevent calamities than it is to respond to emergency food shortage crises.

To respond effectively to today’s price spikes and tomorrow’s growing demand for food, national governments must put in place the necessary infrastructure. A top priority is building institutions to boost agricultural research. New technologies to develop improved and fast-maturing seed varieties and livestock breeds that are resistant to drought, pests, and diseases will help increase productivity. Food diversification should be encouraged, emphasizing indigenous foods that are often well adapted to the climate. We must also remember that the agriculture sector is one of the most water-intensive sectors, and water delivery in agriculture is increasingly important. This means that farming practices must provide for soil replenishment and water management to prevent further loss of already limited arable land.  

Knowledge-sharing platforms and strategic partnerships mong smallholder farmers must also be strengthened. Extension services play a powerful role by passing on new ideas to farmers on the ground. These, coupled with supportive national policy environments to catalyze private sector investment and fair commodity prices in the global markets, should work to reduce levels of hunger and malnutrition while also increasing the incomes and well-being of populations, in order to achieve the Millennium Development Goal 1.

Rising food prices push 44 million more people into poverty

“Global food prices are rising to dangerous levels and threaten tens of millions of poor people around the world,” said World Bank Group President Robert B. Zoellick yesterday. Since June of 2010, according to the Bank, 44 million people have been pushed into poverty.

Poverty and hunger are inextricably linked, especially in the developing world where most of a household’s budget is consumed by food costs. As people become poorer, they buy less food or purchase less expensive food that lacks nutrients. 

Grain prices are now dangerously close  to the levels reached during the 2008 hunger crisis, the Bank also reports. Are we watching another hunger crisis unfold like we saw three years ago? And how should the world respond?

G20 Finance ministers meet in Paris starting February 18th. The surge in global food prices should be at the top of the agenda. “Finance ministers will define the G20’s development credentials this week,” said Oxfam spokesperson Luc Lampriere. “The G20’s money ministers must now plan how exactly they will deliver ... or otherwise G20 leaders will be left looking like emperors with no clothes.”

The number of people in poverty will surely rise still higher lest the global community make a concerted effort to arrest the continued surge in food prices. 

Life Before and After “Davos 2011”- Shared Norms for the New Reality

Last week (January 26-30, 2011), government and business leaders from around the world met in Davos-Klosters, Switzerland, for the 41st World Economic Forum to discuss global issues, including poverty, growth, and food security. Given the recent financial crisis and the prevailing global economic situation, it wasn’t surprising that the general tone of the meeting could be described as one of “cautious optimism.” The meeting highlighted two main points: that although the global economy will continue to grow, the fiscal environment is still very volatile; and that much-needed sustainable growth will only be achieved if it is inclusive. 

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Anti-Wef demonstrators make the link to the elite in Davos and the masses who have taken to the streets in Tunisia and Egypt (Keystone) 

The civil unrest now sweeping a number of countries around the world, particularly in the Middle East, appositely echoes the tone of the just concluded WEF, which was organized around the theme “Shared Norms for the New Reality.” As the five-day Annual Meeting convened in Davos, Egypt and Tunisia were stirred up in violent protests associated with hopelessness - lack of jobs, lack of political inclusion, and problems related to poverty. Unfortunately, the global economy is still navigating troubled waters, so conditions could get worse, further lengthening the road to economic recovery.  The economic forces that fueled mass protests during the global meltdown of 2008-2009 are still prevalent: inflation remains a risk, and--of even greater concern--commodity and food prices are spiking. Anxiety over the violent protests in the Middle East is currently driving up the price of oil and could potentially drive up the prices of agricultural commodities, especially food.

Image1  FAO Food Prices Index: FAO January, 2011

High commodity prices make it even harder for poor people around the world to afford food. When prices are high, it follows that the world’s poorest people have to spend a larger proportion of their income on food. It also means that they will be able to buy less food and that this food is likely to be less nutritious, thereby perpetuating the whole cycle of malnutrition, poverty, and dependence on aid.

Take Egypt, for example: the World Food Program considers the Arab world’s most populous country a “low-income, food-deficit country,” with 19.6 percent of the population – almost 14.2 million people – living below the lower global poverty line, on less than U.S. $1/day.  The country’s current turmoil is interpreted by onlookers as being mainly dissatisfaction with political leadership, but there are layers to the turmoil and the reasons behind it. The cost of living has been repeatedly highlighted as one of the major frustrations of the citizens, and while the Egyptian government says 10 percent of the nation’s 26 million workers are unemployed, independent observers put the proportion of jobless youth much higher. Civil unrest is being provoked largely by both economic and political factors, and these are strongly interlinked.

New Reality -- What New Reality?

Hunger and poverty are not new concepts! What might be new, though, is how clear the consequences of inaction – by both local and international players -- have become. In the increasingly interdependent, increasingly interconnected world of 2008, there was a wave of food riots and disruption to world trade unrivaled in the new millennium.  The reverberations were felt far beyond the boundaries of hunger-stricken countries. In 2009, in response to the crisis, a number of global food security strategies were drawn up, accompanied by renewed commitment to investing in agriculture.

In a Joint Statement on Global Food Security, released by the summit convened in L’Aquila in 2009, leaders from 40 countries noted that food security is closely connected with economic growth and social progress as well as with political stability and peace. This realization--hopefully accompanied by sustained commitment and political will from both the international community and national governments -- should underscore the need to build local capacity to move from projects to systems and from emergency aid to long-term investments in development.

Increasingly, then, the effectiveness of foreign assistance should be measured by how well it stimulates local investment in both the private and public sectors of an economy. Only then can we strengthen the vital safety nets that protect the most vulnerable people from food price volatility and the other environmental shocks and risks that plague ordinary citizens in unstable fiscal conditions.

 

 

Food prices and the unrest in Egypt

An interesting article in the online publication Slate yesterday argues food inflation is probably partly responsible for the unrest in Egypt. National Public Radio also had a story a couple of days ago that suggests much the same.

It’s easy to see what’s happening in Egypt as simply part of a wave of opposition to autocratic rule that started in Tunisia last month. In the case of Tunisia, it was also speculated that rising food prices played a role in events that led to the toppling of the government.

Under normal circumstances, the average Egyptian household spends up to 40 percent of monthly income on food, far more than what people in other emerging economies spend. For example, Chinese consumers spend only 20 percent of income and Brazilians 17 percent. In the U.S., we spend about 10 percent.

These are not normal circumstances. Egypt is highly dependent on imports of food, especially its staple grain wheat, which makes it vulnerable to surges when world food markets are volatile as we’ve seen in the past year.

According to the Food and Agriculture Organization of the United Nations, the worldwide food price index is at an all-time high—surpassing its 2008 peak, when skyrocketing costs caused global rioting and pushed as many as 64 million people into poverty. The price of oils, sugar, and cereals have all recently hit new peaks—and those latter prices are especially troubling for Egypt, as the world's biggest importer of wheat.

In 2008, during the last wave of riots over rising food prices, protests occurred on the streets of Cairo—nothing like what is happening now, but then we should reiterate this is NOT all about food prices. However the events in Egypt do underscore how food prices could create the spark to unleash a tinderbox of grievances that causes major upheavals within countries.

 

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