Rising costs may force UN to ration food aid

Straits Times 25 Feb 08;

Crisis talks held as more nations are hit by hunger due to spiralling prices
LONDON - SPIRALLING costs of agricultural commodities and shortages of new donations have forced the United Nations food programme to draw up plans to ration food aid.

The UN's World Food Programme (WFP), responsible for relieving hunger, is holding crisis talks to decide what aid to halt if new donations do not arrive in the short term, according to the Financial Times.

'Our ability to reach people is going down just as the needs go up,' said WFP executive director Josette Sheeran.

She said the agency would look at 'cutting the food rations or even the number of people reached' if donors did not provide more money.

The WFP crisis talks come as the agency sees the emergence of a 'new area of hunger' in developing countries, where even middle-class, urban people are being 'priced out of the food market' because of rising food prices.

While hoping that the cuts can be avoided, WFP officials warned that the agency's budget requirements were rising by several million dollars a week because of rising food prices.

The warning suggests that the price jump in wheat, corn, rice and soya beans is having a wider impact than thought, hitting countries that have previously largely escaped hunger.

Hunger is now 'affecting a wide range of countries', Ms Sheeran said, pointing to Indonesia, Yemen and Mexico. 'Situations that were previously not urgent - they are now.'

The main focus of the WFP to date has been to provide aid in areas where food was unavailable. But it now faces having to help countries where the price of food, rather than shortages, is the problem.

Ms Sheeran said that families in developing countries, hit by rising costs, were moving from three meals a day to just one, or dropping a diverse diet to rely on one staple food.

Food prices are rising on a mix of strong demand from developing countries, a growing global population, more frequent floods and droughts caused by climate change and the biofuel industry's appetite for grains.

In response to increasing prices, Pakistan has reintroduced a ration card system that was abandoned in the mid-1980s.

Countries such as China and Russia are imposing price controls, while Argentina and Vietnam are enforcing foreign sales taxes or export bans on food items. Importing countries are lowering their tariffs.

Rice and wheat prices have doubled in the past year, while freight costs have increased sharply on the back of fuel price hikes.

The world's poor countries will have to pay 35 per cent more for their cereals imports, taking the total cost for the year to July to a record US$33.1 billion (S$46.5 billion), even as their food purchases fall 2 per cent, according to the UN's Food and Agriculture Organisation.

The United States Department of Agriculture has also warned that high food prices would continue for the next two to three years.