Oxfam urges Congressional response to rising food prices

By Oxfam

WASHINGTON, DC — International agency Oxfam America called on Congress today to increase food aid funds and add flexibilities for local purchase in order to help address a mounting crisis in many poor countries due to high food prices.

Oxfam made the call on the heels of President Bush’s move last week to release $200 million in emergency aid to help nations where surging food prices have increased hunger. Congress is continuing this week to negotiate the 2008 Farm Bill, which mandates the food aid program only to buy US grown commodities for those facing starvation overseas.

“Rising food prices threaten to reverse the long-term trend of reducing the number of chronically hungry people around the world, last estimated at around 850 million,” said Raymond C. Offenheiser, president Oxfam America. “Congress should act now to make our food aid more efficient by allowing food to be purchased closer to where it is needed, reaching many more hungry people.”

Prices for staples such as rice, corn, and wheat have all reached record highs in the last few months, triggering alarms of food insecurity. Many of the poorest people in developing countries spend between 50-80% of their income on food meaning that any increase in food prices will reduce food consumption and increase hunger, especially for those already living on the edge. This could also lead to social instability, already demonstrated by food riots in Mexico, Egypt, Tanzania, Yemen, Morocco, Senegal, and Burkina Faso. The World Bank estimates that 33 countries face potential social unrest because of the acute hike in food and energy prices.

“Across Africa, hard won gains in development are being put at risks by higher food prices,” said Offenheiser. “We’re now seeing families lowering the quantity and quality of their meals, children getting pulled out from school, and increased tensions between different groups over natural resources land and water, sparking fears of instability if something is not done immediately to curb unaffordable food prices.”

Price rises have been driven by a number of factors including increased demand from India and China and other advanced developing countries, population growth, increased demand for biofuels, and high oil and input prices leading to increasing input costs for producers and traders. Increasingly erratic weather, due in part to climate change, has had a negative impact on food supplies – with crop failures in some key grain producing countries.

“The problem has several causes, and requires several responses. We need to support safety nets in poor countries to help people in desperate poverty. We need to invest in small-scale agriculture to help spur food production in poor countries. We need to revisit mandates for the production of corn-based ethanol to determine how they contribute to the problem. But the simplest and most effective thing we can do immediately is to permit US food aid programs to purchase locally-grown food to avert starvation,” said Offenheiser.

While America provides half of the world's food aid, this generosity is undermined by legal restrictions and bureaucracy, as food aid must be purchased in the US and transported on US-flagged ships. As a result, food aid takes months to deliver and costs twice as much. Higher food prices mean that food aid dollars will buy less food. With the number of hungry people set to rise and the supply of food aid is shrinking, we may not be able to afford this inefficiency in the future. Congress needs to urgently shift some food aid resources into cash for local purchase, making food aid delivery faster and more efficient and more flexible, according to Oxfam.

“On the verge of a massive worldwide crisis it is unconscionable to allow special interests and bureaucracy to deprive poor and vulnerable people food.” said Offenheiser. “If there ever was a time for reform of the US food aid system the time is now, there’s no time to spare.”

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