Warming, biofuels to boost food prices for years

Reuters 3 Dec 07;

BEIJING (Reuters) - Food prices may climb for years because of expansion of farming for fuel, climate changes, and demand from richer consumers in fast-growing developing nations, a report from a top food research group said on Tuesday.

Biofuel expansions alone could push maize prices up over two-thirds by 2020 and increase oilseed costs by nearly half, with subsidies for the industry forming an implicit tax on the poor, the International Food Policy Research Institute said.

"The days of falling food prices may be over," said Joachim von Braun, lead author of the "World Food Situation" report and director general of the institute.

"Surging demand for food, feed and fuel have recently led to drastic price increases ... climate change will also have a negative impact on food production," he added.

Growing financial investor interest in commodity markets as prices climb is fuelling price volatility, and world cereal and energy prices are increasingly closely linked.

With oil prices hovering around $90 a barrel, this is bad news for the poor, who have already suffered "quite dramatic" impacts from a tripling in wheat prices and near-doubling in rice prices since 2000, the report said.

Global cereal stocks, a key buffer used to fight famines around the world, have sunk to their lowest level since the 1980s.

More investment in agricultural technology, a stronger social welfare net with particular support for children, an end to trade barriers and improved infrastructure and finance opportunities in less-developed countries, could all help improve food security.

Although increased trade, a key demand of many developing world nations in global trade talks, would bring economic gains, in many cases it would not significantly reduce poverty, the report added.

WARMING, BIOFUELS LOOM

Global warming could cut worldwide income from agriculture 16 percent by 2020, despite the potential for increased yields in some colder areas and the fertilizing impact on plants of having higher carbon dioxide concentrations in the atmosphere.

"With the increased risk of droughts and floods due to rising temperatures, crop-yield losses are imminent," the report said.

It warned that Africa would be hit particularly hard by changes in weather patterns, in which scientist say man-made gasses pumped into the atmosphere are an important factor.

"When taking into account the effects of climate change, the number of undernourished people in Sub-Saharan Africa may triple between 1990 and 2080," the report said.

Biofuels also threaten nutrition for the poor. Under current investment plans, and assuming expansion in nations with high-potential but without detailed plans, maize prices would rise a quarter by the end of the next decade.

Under a more dramatic expansion, prices could climb up to 72 percent for maize and 44 percent for oilseeds, the report said.

Even when next-generation biofuels that use feedstocks such as wood and straw become commercially viable, competition for resources from water to investment capital may continue.

Global food demand is shifting towards higher-value vegetables, diary, fruits and meat as a result of rapid economic growth in developing countries including China and India.

But it can be difficult for smaller farmers to take advantage of the trend because of large retailers' growing grip on the market and their high safety, quality and other requirements.

(Reporting by Emma Graham-Harrison, editing by Ken Wills and Jerry Norton)

World farm output to drop due to global warming: experts
Channel NewsAsia 4 Dec 07;

BEIJING - Global warming is likely to cause a significant decline in world agricultural output, with poor countries in Africa set to be hurt the most, a group of farm experts said Tuesday.

As a result, policymakers must take into account food issues when dealing with climate change, a report by the International Food Policy Research Institute said.

"World agricultural output is projected to decrease significantly due to global warming, and the impact on developing countries will be much more severe than industrialised nations," said the report, released in Beijing.

"Africa is particularly vulnerable to climate change because of its high proportion of low-input, rain-fed agriculture, compared with Asia or Latin America."

In the report, the group urged policymakers to take agriculture and food issues into account when developing national and international climate change agendas.

The report, titled "The World Food Situation," was released at an international conference aimed at addressing a global rise in food demand.

While hundreds of millions have emerged from poverty through better agricultural techniques, rising standards of living mean that more grain is being used to produce high value products like meat and diary products, the report said.

This in turn makes grain prices rise as demand grows, making it harder for poorer people in the developing world to fulfil their daily food needs.

Due to rising oil costs, the production of biofuels as an alternative energy source was also adding to dramatic changes in the world food situation, which "will adversely affect poor people in developing countries," the report said.

The group called on developed nations to lower trade barriers on farm products and reduce biofuel production, while developing nations needed to invest more in their farming infrastructure.

"Surging demand for feed, food and fuel has recently led to drastic price increases, which are not likely to fall in the foreseeable future," said Joachim von Braun, lead author of the report.

"The days of falling food prices may be over." - AFP/ir


Food prices 'will continue to go up'
Straits Times 5 Dec 07;
Global warming, use of land for bio-fuels and other trends threaten agricultural production, says new report

BEIJING - CONSUMERS worried about rising food prices have more reasons to fret - a new report shows that the worldwide trend is likely to continue for some time.

The reasons: Climate change, falling crop yields and growing demand from rapidly developing countries such as India and China.

The report by the Washington-based International Food Policy Research Institute was released yesterday at an international conference here aimed at addressing a global rise in food demand.

People should get used to paying more for their food for the foreseeable future, the report noted.

Professor Joachim von Braun, director of the research group and the report's lead author, noted that food prices had been dropping since scientists began developing high-yield plant varieties decades ago.

But he told reporters yesterday: 'The days of falling food prices may be over. The last time the world experienced such food price increases was in 1973 to 1974...but today, the situation is completely different.

'For one, the climate risk and climate change situation has increased, the climate vulnerability has increased.'

The institute also said in its report - The World Food Situation - that hunger and malnutrition could rise as poor agricultural communities most sensitive to the environment are hurt.

And it predicted that the world's agricultural production will decrease by 16 per cent by 2020 because of global warming, with land used for certain crops shrinking.

'With the increased risk of droughts and floods due to rising temperatures, crop-yield losses are imminent,' it said.

Prof von Braun said that global cereal stocks, a key buffer used to fight famines around the world, have already sunk to their lowest level since the 1980s.

'The world eats more than it produces currently, and over the past five or six years, that is reflected in the decline in stocks and storage levels,' he said.

'That cannot go on, and exhaustion of stocks will be reached soon.'

And while hundreds of millions of people have emerged from poverty through better agricultural techniques, rising standards of living mean that more grain is being used to produce high-value food such as meat and dairy products, the report said.

This, in turn, causes grain prices to rise as demand grows, making it harder for poorer people in the developing world to fulfil their daily food needs.

The rising cost of oil is also contributing to the problem, as using crops to produce bio-fuels will further reduce the amount of available food and increase prices, the report said.

Bio-fuel expansion alone could push maize prices up by more than two-thirds by 2020, and increase oilseed costs by nearly half, with subsidies for the industry effectively constituting a tax on the poor, it said.

And it warned that, overall: 'The impact on developing countries will be much more severe than on industrialised nations.

'Africa is particularly vulnerable to climate change because of its high proportion of low-input, rain-fed agriculture.'

Among the solutions proposed by the institute are more investment in agricultural technology and a stronger social welfare net, with particular support for children, and reduced production of bio-fuels.

It also proposed an end to trade barriers on food, especially in developing countries, so small-time farmers can earn more money.

'A world facing increased food scarcity needs to trade more, not less,' it said.

ASSOCIATED PRESS, AGENCE FRANCE-PRESSE, REUTERS

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