1. http://www.independent.co.uk/environment/green-living/rising-prices-threaten-millions-with-starvation-despite-bumper-crops-790319.html Rising pricesMessage 1 of 1 , Mar 1, 2008View Source1. http://www.independent.co.uk/environment/green-living/rising-prices-threaten-millions-with-starvation-despite-bumper-crops-790319.html
Rising prices threaten millions with starvation, despite bumper cropsBy Geoffrey Lean, Environment Editor
Sunday, 2 March 2008
There has never been anything remotely like the food crisis that is now increasingly gripping the world, threatening millions with starvation. For it is happening at a time of bumper crops.
All the familiar signs of impending disaster are here, and in spades. Across the developing world already hungry people are now having to eat even less. Food stocks have plunged to record lows. Food prices have scaled new heights. Food riots are spreading around the globe. Yet the world is still harvesting record amounts of grain.
Three times over the past 60 years prices have soared in the same way. But each was the result of poor harvests, and each was reversed when good crops returned. This crisis is being caused not by shrinking supplies but by skyrocketing demand.
"This is the new face of hunger," said Josette Sheeran, the executive director of the UN's World Food Programme. "There is food on the shelves, but people are priced out of the market." Indeed, so great are the price rises that both her organisation and the US government's Agency for International Development, which buy their supplies on the open market, are having to draw up plans to cut back their aid.
Wheat prices have doubled in a year – and in just one day last week they shot up by 25 per cent. Stocks are lower than at any time since records began.
The chief reason for the escalating demand is the mushrooming middle class in developing countries, especially China and India, now growing by 50 million people a year. As people get better off they demand more meat, which mops up grain supplies, since it takes some 8lbs (3.5kg) of cereals to produce 1lb (450g) of beef.
Now cars, as well as cows, are out-competing hungry people, through the increasing use of corn for biofuels. By next year, predicts Lester Brown, president of the Washington-based Earth Policy Institute, almost a third of the US corn crop – which has traditionally helped to feed 100 nations – will go for fuel. Mr Brown points out that, in an increasingly fuel-scarce world, the price of corn will henceforth be tied to the mounting price of oil.
Already, 25 million people in India are believed to have cut their meals from two to one a day. The calorie intake from an average meal in El Salvador has fallen by half in less than two years. Riots have broken out from Mexico to Mauritania.
And if this is happening when harvests are good, what can we expect when they next fail? Global warming is making this ever more likely, and climatologists predict big crop reductions in poor countries. A supply crisis on top of a demand one – that is a recipe for catastrophe.
Soaring Food Prices Putting U.S. Emergency Aid in Peril
Supplies and Recipients Likely to Be Reduced
Saturday, March 1, 2008; Page A01
The U.S. government's humanitarian relief agency will significantly scale back emergency food aid to some of the world's poorest countries this year because of soaring global food prices, and the U.S. Agency for International Development is drafting plans to reduce the number of recipient nations, the amount of food provided to them, or both, officials at the agency said.
USAID officials said that a 41 percent surge in prices for wheat, corn, rice and other cereals over the past six months has generated a $120 million budget shortfall that will force the agency to reduce emergency operations. That deficit is projected to rise to $200 million by year's end. Prices have skyrocketed as more grains go to biofuel production or are consumed by such fast-emerging markets as China and India.
Officials said they were reviewing all of the agency's emergency programs -- which target almost 40 countries and zones including Ethiopia, Iraq, Somalia, Honduras and Sudan's Darfur region -- to decide how and where the cuts will be made.
"We're in the process now of going country by country and analyzing the commodity price increase on each country," said Jeff Borns, director of USAID's Food for Peace, the organization's food aid arm. "Then we're going to have to prioritize."
The reductions, international relief agencies say, will seriously complicate already strained efforts to combat global hunger, particularly in Africa, Central Asia and Latin America. Poor countries in those regions are struggling to cope with record food price surges, which have made it difficult for aid groups to sustain their operations in some countries.
The cuts will likely have a direct impact on major USAID partners, including aid groups and the United Nations World Food Program, the largest international provider, which counts on U.S food aid for 40 percent of its distribution.
The U.N. program is confronting similar price pressures. It announced this month that it was facing a $505 million shortfall due to soaring food and fuel costs, and would cut distribution if it did not receive new funds. Meanwhile, need is increasing. Afghanistan, for instance, recently put in an emergency request for $77 million to cope with skyrocketing prices that have put key staples out of reach for more and more Afghans.
"Look at what's happened to wheat prices alone -- they shot up 25 percent in one day last week," said Josette Sheeran, executive director of the World Food Program. "This is really the first emergency we've faced without a drought, war, natural disaster. We will have to cut the amount of people being served or the amount of food being served if we do not get more funds."
Groups that work with USAID, several of which have been informed of the shortfall over the past two weeks, are alarmed. Emergency aid is earmarked only for countries in desperate need as a result of natural disasters, civil strife or other humanitarian crises. Although the United States has proportionally provided less of the world's food aid in recent years, it still provides about half the global total in efforts to relieve hunger among more than 800 million people. In 2007, USAID gave about 2.5 million tons of food, accounting for more than 50 percent of the emergency aid in a number of nations, including Ethiopia.
USAID officials would not speculate on which countries might be picked for cuts, though aid workers said it was unlikely that those with the greatest need -- such as Sudan -- would be hit hard. Most at risk appeared to be long-term emergency programs in such countries as Nepal, where unrest has quieted, as well as a number of African countries, such as Tanzania, that had relatively good harvests last year.
The Bush administration's 2008 USAID budget request calls for $1.2 billion in food aid with a supplemental $350 million to cover assistance in Darfur and critical situations in southern Africa, Kenya and other hot spots.
USAID officials said the administration, facing a tight budget year, was not planning to request funds to cover the projected $200 million shortfall from the price increases. USAID purchases grains in the same domestic commodities market as the U.S. companies that serve up Wonder bread or Big Macs, meaning they pay the same high market rates. As a result, officials said, the program cuts are necessary. "At this point, this is the administration's request," Borns said yesterday.
Aid groups said they would press USAID and the Bush administration to pursue more funds from Congress to cover the shortfall. Several are concerned that the cuts come at a time when the Senate is considering a farm bill that would make it much harder for USAID to tap into non-emergency food in the event of a catastrophic event such as the 2004 Asian tsunami.
Frank Orzechowski, an adviser for Catholic Relief Services, said his organization has calculated that U.S. food aid would drop from 2.6 million tons last year to about 2.2 million this year. "That is going to be a pretty big hit for the people who can afford it the least," he said.
"The biggest concern is that there are going to be more people being pushed into food insecurity in poor countries because they don't have the purchasing power to cover higher costs, and we will be less rather than more prepared to cope with that. Higher commodity prices is not a situation that the U.S. is to blame for, but we are going to need to see it step up now and decide to make a greater contribution anyway."
Although it may take several months before the cuts are felt, higher food prices already have begun to erode the non-emergency aid and development programs sponsored by USAID in partnership with CARE, Catholic Relief Services, World Vision and others. In the case of one Asian nation, CARE said USAID had provided 10 percent less non-emergency food aid than expected, citing higher prices.
In Liberia, Catholic Relief Services funds its developmental programs -- including health worker training and technical assistance to farmers -- by selling wheat or rice provided by USAID at market prices. But, Catholic Relief was unable to find buyers for those grains in January because market prices have jumped so high that local buyers have switched to cheaper foods. The aid group is scrambling to find alternate sources before its funding runs out in April.
Crop prices go up, so does hungerWashington, D.C. - The rising price of crops like corn and soybeans is a boon to Iowa's economy, but some of the world's poorest people are paying a steep cost.[Ends]
The soaring commodity prices are making it more expensive to feed the poor and increasing the number of people who can't afford to eat, said Josette Sheeran, executive director of the United Nations World Food Program, the primary distributor of international food aid.
"For the world's most vulnerable, it's hitting them hard," she said in an interview Friday.
In El Salvador, people can purchase 50 percent less food now than they could 18 months ago with the same amount of money.
Sheeran was in Washington this week warning members of Congress that food aid spending needs to be increased to cope with the high commodity prices. The U.S. government is the U.N. agency's largest supplier. In Darfur, for example, America provides 70 percent of the food the United Nations is distributing.
Lawmakers currently are negotiating a new farm bill that will include spending authority for food-aid programs.
The agency's 2008 food budget, initially projected at $1.3 billion, will be short $500 million because of higher commodity prices and higher transportation costs, Sheeran said. Since last June, the United Nation's food costs have gone up 40 percent.
To illustrate the impact, Sheeran brought with her a weathered, red plastic cup from Rwanda to represent the amount of meal or other food a child would normally get each day.
"For many of the children we serve, this is literally the only cup of food they get a day. And for some of the kids in Kenya we are seeing them save half the cup to take home because their brothers and sisters have no food," she said.
If there is less food to put "in that cup, we're talking about a real impact on human beings who have no other place else to retreat to make up that loss."
Prices for a variety of commodities, including corn, soybeans and wheat, have exploded over the past year or two because of increased biofuel production, droughts in parts of the world and rising energy prices. Wheat supplies have been particularly hard-hit because of drought and smaller plantings last year.
While the price of wheat is likely to come down as supplies increase, prices for corn and soybeans are likely to remain strong for some time because of rising production of ethanol and biodiesel, said Chad Hart, an economist at Iowa State University.
Poor people who eat minimally processed foods, such as tortillas, would feel the price increases most acutely, he said. That would include people in Central America and parts of Africa where corn is a staple.
The chairman of the Senate Agriculture Committee, Iowa Democrat Tom Harkin, said lawmakers are using the farm bill to streamline food aid programs, including cutting administrative costs, but will be hard-pressed to increase overall spending levels. He said the "budget situation will determine how far we can go."
Small-scale farmers around the world aren't necessarily benefiting from the higher prices either because of poor harvests or their distance from markets, Sheeran said.
She said Africa in particular badly needs a "green revolution," a reference to the increases in crop yields that transformed India decades ago.
But in the short term, there is the prospect that increased crop production will go into making fuels, not food.
"Maybe for the first time in history, we're just not sure (that) if there is increased production that it will actually increase food supply," she said.
Sheeran, a former Bush administration official, downplayed the impact of a much-criticized provision of U.S. food-aid policy that requires commodities to be purchased in America and shipped overseas on U.S.-flagged vessels rather than bought in countries closer to where the food is needed. That requirement drives up food costs and delays delivery.
The administration has been pushing Congress without success to change the policy. But for now, with world commodity supplies as tight as they are, the World Food Program is struggling to find food wherever it can get it, Sheeran said.
"Right now, if I did not have the 70 percent of the Darfur contribution that the U.S. makes we would have a real tragedy on our hands. ... There might be more efficient ways of doing business, but it's life saving and it's critical," she said.
Messenger on the move… Text MSN to 63463 now!