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Spike in Food Prices Causes Global Concern


15 October 2007
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During the past year, basic foods have become significantly more expensive in many parts of the world, adding to the misery of impoverished regions and straining the budgets of families across the globe. VOA's Michael Bowman reports from Washington, a complex set of factors is causing global demand for food to rise faster than the supply, and experts warn that, absent swift action, the situation is likely to worsen.

Amelia Garcia makes corn tortillas in Mexico City (Jan 2007)
Amelia Garcia makes corn tortillas in Mexico City (Jan 2007)
Recent months have seen Mexicans protesting a doubling of the price of tortillas, Italians dismayed by soaring prices for pasta and other wheat-based products, and Egyptians, like Ahmed Abass, angry over prices rising as much as 50 percent for basic groceries.

He says, oil and butter prices have increased by almost 30 cents. Prices have increased across the board so Egyptians can only buy one kilogram of a product instead of two.

These cases are not simply isolated anomalies, but rather a global trend, according to Lester Brown of the Washington-based Earth Policy Institute.

"In seven of the last eight years, world grain production has fallen short of consumption," said Brown. "We have been pulling down world grain stocks until now they are at the lowest level in 34 years."

Experts say several factors are to blame: a growing world population, underinvestment in agriculture technology, housing and business development crowding out farmlands, droughts and floods made more severe by climate change, and ever-growing human demand for a limited supply of fresh water.

In addition, grains like corn once grown exclusively to feed humans and livestock are now being diverted into programs to generate ethanol and other so-called biofuels as an alternative to oil and gasoline. With oil prices rising steeply in recent years, the economic incentive to produce grain-based fuels has risen as well.

Taken together, these factors have led to growing food shortages and rising prices that could spell disaster for the world's poor people, according to Lester Brown.

"People on the lower rungs of the global economic ladder are barely hanging on [surviving], and as food prices rise, many are simply losing their grip and beginning to fall off," said Brown. "And what we are looking at, in the absence of a major intervention, is a very substantial increase in hunger in the world, in mortality rates."

Brown and others say a doomsday scenario need not come to pass if decisive steps are taken. For instance, U.N. officials are urging farmers to strike a balance between crops grown for food and those destined for energy purposes.

"The crops for energy production should be done in rotation with crops for food production, so you rotate crops between energy and food in different parts of the year or different years," said U.N.-Energy Vice Chairman, Gustavo Best.

A fuel nozzle for ethyl alcohole made from renewable resources at a fuel station in Fulda, Germany, 20 Feb 2007
A fuel nozzle for ethyl alcohole made from renewable resources at a fuel station in Fulda, Germany, 20 Feb 2007
Others recommend an end to government subsidies for ethanol and other biofuels, more funding for crop research, combating climate change, and improving roads in developing countries to help farmers get their crops to market.

Perhaps most important is water management, according to Mark Rosegrant of the International Food Policy Research Institute in Washington.

"Agriculture is going to have to get by with less water and still produce a lot more food," said Rosegrant. "So there is a big push needed to make water management more efficient, but also to breed [develop] crops that are much more drought tolerant."

Rosegrant notes that rising food prices will encourage greater food production, but says the free market alone cannot solve the problem.

"You are seeing already responses with farmers putting more land under production, increasing productivity in the last year or so," said Rosegrant. "So I do expect some falloff in these commodity prices over the next year or so. But to engender a long term solution, you do need bigger and longer-term investments, some of which have to come from the public sector."

Absent such investments, Rosegrant and others predict the outlook for food supplies in sub-Sahran Africa, much of South Asia and other parts of the world will become more bleak.

 

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