Why has the Global Food Crisis reached Emergency Proportions?

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The mounting global food crisis pushed aside fears of a protracted recession and systemic risk in the financial sector to become the top priority for the world's economic leaders gathered in Washington, DC. Ministers representing 185 countries agreed over the weekend that soaring food prices threaten global calamity and pledged to co-operate on a solution to save the world's poorest people from starvation. However, that solution remains elusive. The finance ministers and central bank governors who oversee the International Monetary Fund and the World Bank left Washington yesterday without a definitive response to agricultural prices that have surged 48 per cent since early 2007, sparking a wave of hoarding, speculation and riots throughout the developing world.

Food security has become a major concern in recent weeks as supplies of basic commodities have dwindled in the face of soaring demand, triggering riots and outbreaks of violence from Haiti to Indonesia. "The rapidly escalating crisis of food availability around the world has reached emergency proportions," United Nations Secretary-General Ban Ki-moon told a joint meeting in New York of the UN Economic and Social Council (ECOSOC), the Bretton Woods institutions, the WTO and the UN Conference on Trade and Development (UNCTAD). "We need not only short-term emergency measures to meet urgent critical needs and avert starvation in many regions across the world, but also a significant increase in long-term productivity in food grain production. He called for short-term emergency measures in many regions to meet urgent food needs and avoid starvation and longer-term efforts to increase significantly the production of food grains. The "international community will also need to take urgent and concerted action in order to avoid the larger political and security implications of this growing crisis," Ban said.

Rising Unrest and Inflation

The United Nations Food and Agriculture Organization (UNFAO) has said 37 countries may be facing a food crisis. Grain prices including rice, staple food for half the world, have surged this year on shortage concerns, prompting some growers to impose export restrictions. The gains in prices are stoking unrest and fanning inflation, world finance ministers said over the weekend. China, Egypt, Vietnam and India, representing more than a third of global rice exports, have curbed sales this year, and Indonesia says it may do the same. The Philippines, the world's largest rice importer, is urging China, Japan and other Asian nations to convene an emergency meeting on the region's food crisis to try and reverse export curbs that have driven prices to a record. Rising food costs have sparked violent protests in Cameroon, Egypt, Ethiopia, Haiti, Indonesia, Ivory Coast, Madagascar, Mauritania and the Philippines. In Pakistan and Thailand, troops have been deployed to avoid the seizure of food from fields and warehouses, while price increases fuelled a general strike in Burkina Faso. In Bangladesh, 50 people were hurt when workers rioted over food costs.

Increased Demand and Bio-Fuels

ATCA has already warned that using arable land to produce crops for biofuels has reduced surfaces across earth which are available to grow food, putting further pressure on supplies already strained by the soaring demand. The United Nations Educational, Scientific and Cultural Organization (UNESCO) said that since March 2007 prices for soya beans have risen 87 percent and those for wheat 130 percent at a time when global grain stores are at their lowest levels on record. It attributed the trend to increased demand in emerging market powerhouses China and India as well as the alternative use of maize and soya beans for biofuels. Jean Ziegler, UN special rapporteur for the "Right to Food," went so far as to describe the recent rush to boost production of biofuels as "a crime against humanity" because of its impact on global prices.

EU Subsidies

Jean Ziegler has accused the European Union of undermining the agriculture sector in Africa by exporting in the past the surpluses of its heavily subsidised farmers to the continent. "The EU finances the exports of European agricultural surpluses to Africa ... where they are offered at one half or one third of their (production) price," Ziegler charged. "That completely ruins African agriculture." While defending EU hand-outs to its farmers, France's Barnier said Europe should not bow under pressure at the World Trade Organisation to ease its farm support but should instead help developing countries build up their agriculture sector. "Europe must remain a major producing continent but other continents have to get organised as well," Barnier said.

Markets Speculation

French Agriculture Minister Michel Barnier said governments must take action to regulate surging food prices and stop them being driven by speculative forces. "We cannot, and we must not leave food for people to the mercy of the rule of the market alone and to international speculation," he said.

Ramping Up Production

Michel Barnier has warned that farmers worldwide would have to raise their output sharply in the coming decades as demand booms in fast growing Asian countries like China and India. "Global agriculture production will have to double by 2050 ... in order to feed nine billion people on the planet," Barnier told journalists on the sidelines of a meeting in Luxembourg with his EU counterparts. A new UN-sponsored study, due to be presented Tuesday in Paris, warns that farming practices must change to confront soaring food prices that threaten the poor in particular. "Business as usual is no longer an option," the International Assessment of Agricultural Science and Technology for Development will say in the report, according to a statement from UNESCO.

Organic Farming, GMO and Sustainability

UNESCO has said its new report will urge that agricultural science pay greater attention to safeguarding natural resources and to promoting "agro-ecological" practices, such as the use of natural fertilisers and traditional seeds and reducing the distance between the farm and the consumer. Nihon Shokuhin Kako, Japan's largest buyer of corn for use in food, is importing genetically modified supplies as high prices deter gene-pure purchases.

Free Meals

More people in Singapore, Southeast Asia's wealthiest economy, are joining the queue for free meals. Thirty percent more are turning up daily at a free vegetarian meal temple and 10 percent more elderly citizens go to a senior care centre. An official said those who show up come from all walks of life.

USD 500 Million in Emergency Aid

Ban echoed World Bank President Robert Zoellick's appeal to governments on Sunday to quickly provide the UN World Food Program with USD 500 million in emergency aid that it needs by May 1st. "We have to put our money where our mouth is now so that we can put food into hungry mouths," Zoellick said. "It's as stark as that" to deal with rapidly rising food prices that have caused hunger and deadly violence in several countries. Ban said the recent steep rise in food prices "has already raised the cost of WFP's needs to maintain its current operations from USD 500 million to USD 755 million." WFP, the world's largest humanitarian agency, issued an "extraordinary emergency appeal" to donor countries for USD 500 million last month, saying the money was needed by May 1st to avoid cutting rations to some of the world's most impoverished regions. The Rome-based agency said its funding gap was growing weekly.

100+ Million Pushed into Abject Poverty, Seven Lost Years

"The World Bank has estimated that the doubling of food prices over the last three years could push 100 million people in low income countries deeper into poverty," Ban has said. Ban echoed Zoellick in warning that the food crisis "could mean seven lost years in the fight against worldwide poverty." The United Nations is at a midpoint in its campaign to reduce global poverty and improve living standards of the world's bottom billion. The Millennium Development Goals, adopted at a UN summit in 2000, include cutting extreme poverty by half by 2015.


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