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Rise in food prices leads to international crisis

By Pieternel Gruppen*

12-04-2008

In countries across the world, from Haiti to Cameroon and from Egypt to Indonesia the authorities are facing riots over the increasing price of basic food staples such as wheat and rice. The disturbances are taking place mostly in large cities in the world's poorest countries.

The United Nations says there is an emergency situation in 37 countries. At their annual meeting in Washington this weekend the International Monetary Fund and the World Bank, which already have to deal with the collapse of the US housing market, will discuss the steep rise in the price of basic foodstuffs.

Robert ZoellickAt a press conference in Washington on Thursday, World Bank President Robert Zoellick pointed out that "In Bangladesh a two-kilogramme bag of rice...now consumes about half the daily income of a poor family."

Mr Zoellick held up a bag of rice to demonstrate his point. On world markets the price of rice has risen by 75 percent over the past two months and many people can no longer afford it.

Dramatic situation
This week British Prime Minister Gordon Brown also expressed concern about the high prices, The Dutch representative to the UN's Food and Agriculture Organisation, Agnes van Ardenne, described the situation as "dramatic". "We've never seen such high prices," she said.

She said that even in a wealthy Western country such as Italy - where the FAO headquarters is located - the rising price of food has led to protests. She was referring to a one-day pasta strike called by a consumer organisations in September. The demand for durum wheat, from which pasta is made, has led to steep increases on world markets. Wheat crops have suffered as a result of global warming and due to wheat's increased use as a bio-fuel.

Scene of hunger in AfricaRoelof Rabbinge, a food-safety expert at Wageningen University, points out that the effects of the price rises in developing countries are far worse than in wealthy countries.

"In the West the average family spends no more than twelve percent if its income on food, while in developing countries the figure is around 50 percent. And with the rising prices this can amount to 75 percent. Needless to say, this is an enormous problem."

Causes
The current crisis is a result of a number of factors, including poor harvests caused by droughts and global warming. The increasing prosperity in countries such as China also plays a role. Many Chinese can afford to eat meat more often and a considerable amount of grain is needed to feed animals which are butchered for meat.

Mr Rabbinge says the growing use of bio-fuels also plays a role.

"As a result of the demand for bio-fuels there are no longer large food reserves. Most of the large corn reserves in the United States have disappeared because they're used for the production of bio-fuel."

Also, in recent years African countries have invested far too little in agriculture. Donor countries have also been negligent. Mr Rabbinge says:

"In the 1990s up to fifteen percent of development assistance funds went to agriculture. Now that is three percent at the most."

* RNW translation (fs)

 

Tags: food crisis, hunger

Reaction(s):


Vituperator, 13-04-2008 - USA

This is largely the result of environmentalist derangement. "Green" at any cost! Corn is undeniably the world's core staple food item and drives prices in just about every other food category imaginable. Poverty stricken people around the world, many of them starving and near starving, depend on corn as their primary source of sustenance. So what do the enviros do? They decide to burn corn in carburetors, driving the price of corn and food in general through the roof. Next: Enviros try to find a way to turn more food into fuel for carburetors. Liberalism is mental illness.


Evert C. Weidner, 12-04-2008 - USA

Next to the silly mindless approach of growing food for cars instead of people, much of the rise in prises, all over the world, is the "gift" of greedy financial manipulators, which have presented us now with excessive fuel costs, wide spread famine, housing and mortgage scandals, bank and credit fiascos, and possible world recession, all by unprofessional people in unjustified key positions. Should we be grateful for these so called pillars of society? Business is too important to leave to business men only, as well as to do-gooders and panic mongers.


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