WFP Chief Warns Of Growing Crisis For World's Hungry

WFP Chief Warns Of Growing Crisis For World's Hungry

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WFP Executive Director Josette Sheeran released this statement in London.

LONDON - In the week that marks the first anniversary of the global financial crisis, there are more hungry people in the world and less food aid than ever before. For the world’s most vulnerable, the perfect storm is hitting with a vengeance.

The double whammy of the financial crisis and the still record high food prices around the world is delivering a devastating blow. Throw in a storm, a drought and a conflict and you have a recipe for disaster.

WFP’s budget to feed 108 million people in 74 countries this year is US$6.7 billion. But today, we have just US$2.6 billion. Donors have been extremely generous, but the fact is that the cost of food is still high, needs have gone up and this requires the world to step up to the plate in a bigger way.

We are making an urgent plea to the world that as the green shoots of economic recovery are appearing, we do not forget those who are most in need, and who have been hit hardest by this crisis.

Today in the United States and much of Europe, more people are relying on government safety nets for food and support than perhaps ever before, but for 80 per cent of the world, there is perhaps no safety net.

We urgently need an additional US$3 billion to meet those needs, which is less than 0.01 per cent of what was put on the table to stabilise the world financially. We think this is critical for the world’s peace and stability.

At our current funding levels, we will – in October – have to cut our services throughout the world, including to half of those we are trying to reach in Kenya. We will be reaching one-fifth of those we have been targeting due to the impact of high food prices in Bangladesh. In Somalia we will have to cut rations by half. Around the world, there are many more examples like this.

Food and Water Crisis

This is official. UN Secretary-General Ban Ki-moon and World Bank President Robert Zoellick have already sounded the alarm. Delegates in the Davos meeting this year were requested to respond. The food and water crisis is set to hit the world hard and if corrective actions are not taken on time, it can take the form of a catastrophe.

Food prices continue to go up and in a world where 1.02 billion people are hungry (WFP), this is definitely not a good news. At a time when thousands of people are made homeless every day due to conflicts in different parts of the world, this crisis is taking a toll of many lives. Food riots have become common phenomena in Sub Saharan Africa, Haiti, Bangladesh and in many other developing countries. The situation is already so severe that even big organizations like World Food Programme (WFP), UNICEF and UNHCR are struggling to curb this crisis.

How did we reach this point? The world is running out of water and this has severely impacted food production. The demand for food is ever increasing, particularly from emerging populous economies like India and China. Countries with food surpluses few years ago are now struggling to feed themselves. India, for instance, used to export rice to Bangladesh till few years ago. Owing to decreasing food production and increasing prediction of food shortages, India now imports rice from Australia, triggering rice crisis in Bangladesh. On top of that, increasing food production for bio fuels has further complicated the matter and raises more questions than solutions. It has given rise not just to ethical dilemmas and controversies but also to steep price hikes making food out of reach from the hands of world’s poorest population.

Having realized the gravity of this issue, Asia America Initiative launched several agricultural projects in Mindanao, Philippines. We empower agricultural communities not just to be self-sufficient but also to provide surplus to other communities in desperate need. Join AAI as we create models of communities that can be followed all over the world to best tackle food and water crisis.

What's driving up food prices?

Jehea thinks the casuses are:

1. Global shifting of diet: Shifting to meat consumption, which requires more grains, causes shortage in food for people.
2. Increased interest to biofuel issues
3. Demand for grains is increasing.
4. Climatic conditions: Recent droughts in Australia, Central Europe, and many other places in the world.
5. Low stocks: Growing grains tend to be seasonal and time consuming. Therefore the stocks tend to be quite low.
6. Crisis in Financial Markets: Illiquidity created by the crisis in financial market makes investment difficult. As a result, investment is not reached to the community which concentrates in agriculture. Therefore, harvest is not expected.

Sources:

Robert Zoellick, President of World Bank, Opening Press briefing at the WB-IMF meetings 2008.
Davao Norte farmers rue high costs, low gains from farming, By Frinston Lim Mindanao Bureau, Inquirer.net, April 06, 2008

Crunching rice supply in East Asia

The FT has a nice story about rice supply, rising prices brought about by declining production, and its implications on security and social stability in Asia, particularly East Asia. Rising prices have already forced major rice exporters like Vietnam, Australia, and Egypt to curtail exports. Meanwhile, India has banned temporarily banned exports as well to satisfy domestic demand. This is going to put further upward pressure on rice price in the internatinal market. This is going to hit the South Asians (and to some extent East Asia and the Pacific) the most because rice is a major component of daily lunch and dinner (rice is consumed almost 365 days a year in South Asia). More on food prices here, and here (UN Secretary General writes about food crisis), here (People eating mud coookies in Haiti). For those interested in more economic interpretation of the rising food prices check this one out by Nobel laureate Gary Becker and Richard Ponser.

Some experts aruge that the Filipino rice shortage problem is exacerbated by the government and some special interest groups. It is said that the government is trying to siphon off a huge amount of money while importing rice from foreign countries. It is alleged that the Filipino government and special interest groups are trying to dissuade farmers not to grow rice, which would give them an exclusive control over rice sourcing and distribution in the whole country.

...Rice prices jumped 30 per cent to an all-time high on Thursday, raising fears of fresh outbreaks of social unrest across Asia where the grain is a staple food for more than 2.5bn people.

...The increase came after Egypt, a leading exporter, imposed a formal ban on selling rice abroad to keep local prices down, and the Philippines announced plans for a major purchase of the grain in the international market to boost supplies. Global rice stocks are at their lowest since 1976.

...The Philippines, the world’s largest buyer of the grain, said on Thursday it wanted to purchase 500,000 tonnes after it failed to buy a similar amount earlier this month. It is struggling to import 1.8m-2.1m tonnes to cover a production shortfall and on Thursday confirmed it would tap emergency stocks maintained by Vietnam and Thailand.