As food prices soar, hunger and unrest prompt global concern

By Oxfam

If you're already spending between 50 and 80 percent of your income on food—and many people around the world are—any spike in food prices is going to mean serious trouble for your family.

That's what's has been happening this spring, 2008, in some of the world's poorest countries. A convergence of factors, including high energy and fertilizer costs, has sent food prices spiraling upward, forcing families to make excruciating choices. Do they send their kids to school or put them to work earning money to help feed the family? Do they cut down on the number of meals they eat? Do they plant fewer acres?

Those are the kind of questions that have been at the heart of food riots erupting in recent weeks in Haiti and Mexico, in Senegal and Burkina Faso. The World Bank estimated that the social unrest could spread to 33 countries. Already 840 million people around the world are chronically hungry, and the shock of high prices—in March, rice hit a 19-year high while wheat climbed to its highest level in 28 years—is deepening their suffering.

The Asian Development Bank predicts that the rising cost of cereals could put 300 million people in India, Pakistan and Bangladesh at risk of starvation. And Oxfam is concerned that families with no other options will be forced to sell productive assets, like their animals or land, so they can buy food today—even as that choice undermines their future ability to make a living.

The source of the trouble

Where does the blame lie? Broadly.

Analysts point to erratic weather, caused in part by climate change, as one of the factors affecting food supplies. Bad weather has lead to crop failures in some key grain-producing countries and exposed small-scale subsistence farmers to unpredictable harvests. Experts predict that climate change eventually could cause as much as a 30 percent reduction in Africa's agricultural productivity. And as food production shrinks, demand for it is growing, particularly in the booming economies of India and China, where in the past 23 years the annual per capita consumption of meat among the Chinese has more than doubled.

The switch to biofuels is correlated with food price rises over the past year, and, with consumption likely to grow, is expected to drive further food price inflation. Structural problems are also a culprit: the tendency of countries not to invest enough in agriculture, the dominance big companies hold over food supply chains, and the general mismanagement of food and agricultural policies.

With the cost of food rising, aid groups are also concerned about how they are going to meet global demands. The UN World Food Program estimates it needs a $500 million injection just to maintain its operations at last year's levels. And the US Agency for International Development predicts it will have shortfall of $260 million by the end of this year.

What does all of this mean for families struggling to survive?

It means that in Kabul, Afghanistan, the price of bread has risen by 90 percent since November. In Senegal, Oxfam staff are reporting that families are eating fewer meals and of a lower quality. In Indonesia, the price of soybeans has almost doubled, sparking a January protest in Jakarta by 7,000 tofu and tempe producers. In Thailand, small chicken farmers are going out of business as the cost of animal feed rises and they can no longer compete against large-scale producers.

What can be done?

The most urgent thing Congress can do is reform food aid programs.

President Bush's move to release an additional $200 million in emergency aid is a good first step. What Congress needs to now is reform food aid policies to allow for food to be purchased where it is needed rather than shipping it halfway around the world.

Americans now provide half of the world's food aid, but the current law requires that it be purchased from American farmers, processed and bagged in the US, and shipped on US vessels. All of that adds a huge amount of time and expense. It can take up to four months before those critical supplies of food reach the people who need it and it costs twice as much. For every dollar Americans spend on food aid, only 50 cents worth actually reaches hungry people. Congress is still debating the Farm Bill, the legislative package that governs our food and farm policy, including international food aid programs. A simple change the law to allow some cash for local purchase of commodities would immediately increase the efficiency of food aid programs and feed more hungry people.

Congress should also take a hard look at policies that continue to subsidize biofuels production. Recently-passed energy legislation and provisions in the Farm Bill continue to encourage greater production of fuels from corn and soybeans. Sufficient concern has been raised about this food to fuels policy as well as questions about corn-based ethanol's real contribution to reducing carbon emissions, to warrant evaluation of the current biofuels incentives and to spur further research into the possibilities of non-food-based biofuels, such as switchgrass.

Over the longer term, governments around the world need to work together and develop a system of global safety nets so that poor families faced with fluctuating prices can survive price shocks and meet basic needs. Our humanitarian response strategies need to be revamped to include a broader range of interventions and better preventative actions.

A greater investment needs to be made in small-scale sustainable agriculture in developing countries, especially in sub-Saharan Africa. Malawi and Zambia are good examples of what's possible. They have moved from dependence on food aid to become food exporters.

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