World Food Crisis
04.30.08
Rising world food prices are hurting the world's poor
DATA is deeply concerned about the impact that rising food prices are having on the world's poorest people. Sharp increases in the prices of wheat, rice and corn threaten to undermine recent gains in poverty reduction and frustrate already slow progress toward the Millennium Development Goals (MDGs). The World Bank has estimated that the current food crisis could push 100 million people deeper into poverty and ultimately translate into seven lost years in the fight against global poverty.
The Food and Agriculture Organization (FAO) estimates that food prices have risen 45% in the last nine months and has warned that the world is facing serious shortages of rice, wheat and corn. Since 2005, the prices of staple foods have risen by 80%- wheat and rice prices have hit 28 and 19-year peaks, respectively. Some of the factors behind the current price boom include population growth, changing diets, increased demand for biofuels, more frequent flooding and drought, trade distortions and rising energy and transport costs.
Impact harshest in the world's poorest countries
Rising food prices are dealing a crushing blow to the world's poorest people, who spend around half of their income on food. The current situation threatens to exacerbate the twin crises of hunger and malnutrition; already, under-nutrition contributes to almost half of all child deaths and more than 20% of maternal deaths. Sub-Saharan Africa and the Middle East and North Africa are both seriously off track from meeting the MDG targets on hunger and malnutrition by 2015; rising food prices will likely delay their progress even further. And because hunger and malnutrition have strong linkages to economic productivity, educational outcomes and the ability to fight disease, rising food prices also threaten to undermine poverty reduction efforts across the board.
With the impact of rising food prices concentrated largely in urban areas, the situation is already fueling social unrest in some of the world's poorest and most fragile countries. Riots and discontent have already erupted across the globe in countries like Haiti, Egypt, Niger, Burkina Faso, Cameroon, Indonesia, Ivory Coast, Senegal, Mozambique and Bolivia. World Bank President Robert Zoellick has warned that 33 nations are at risk of social unrest due to the rising cost of food. "For countries where food comprises from half to three-quarters of consumption, there is no margin for survival," he said.
The road ahead: investment in agriculture key to ending hunger
In the past few weeks, several world leaders have responded to the food crisis with announcements of increased development assistance and calls for global action. The food emergency has been put on the agenda of July's G8 summit in Japan and U.N. Secretary General Ban-Ki Moon has announced the establishment of a task force to address the situation. The international community should use these developments as an opportunity to take concrete steps towards mitigating the current crisis and waging a long-term fight against hunger.
In the short-term, quick action should be taken to provide the $755 million needed by the World Food Program (WFP) to maintain its existing programs. In addition, donor governments should increase all types of food aid to countries impacted by the crisis. Food aid can be provided in two ways: through cash assistance (which allows providers to buy food in local or regional markets) and in-kind donations (where local food is not available). To be equipped to respond to both humanitarian emergencies and long-term food insecurity, global food agencies and providers must have the resources and flexibility to utilize both types of food aid.
However, an increase in food aid alone will not win the fight against global hunger and malnutrition. Projections indicate that rising food prices are not a temporary phenomenon- crop prices are expected to remain well above 2004 levels until at least 2015. To meet this emerging challenge, global efforts must focus on increasing agricultural productivity, especially in Africa. Despite the strong correlation between agricultural growth and poverty reduction, Africa's agricultural sector has been historically under-funded and agricultural income growth in the region has averaged less than 1% over the last 25 years. With greater investment in agriculture and market infrastructure and the introduction of improved technology, seeds, tools and fertilizer, African farmers could benefit from increased crop yields and stronger connections to domestic, regional, and international markets.
