A potent mix of growing populations and economies; a switch from food to biofuel crops; droughts and diseases; and a lack of new technology in crop yields, have hit the poor hardest
Joanne Lee, Straits Times 5 Apr 08;
FEEDING the poor has been dubbed the 'forgotten Millennium Development Goal' by World Bank president Robert Zoellick.
And the hungry are raising a din, as rising food prices and the impact of knock-on inflationary effects on low-income families across the globe breed social unrest throughout the developing world.
With world inventories of staples like rice, wheat and corn at all-time lows, rising agricultural commodity prices are being passed on to consumers.
As surging oil prices overshadow efforts to tackle world hunger, Dr Zoellick outlined a 'New Deal for a Global Food Policy' with a suite of multi-
lateral trade initiatives last Wednesday, in the face of skyrocketing food prices.
Governments around the world have taken radical unilateral measures in recent weeks to control their countries' supplies of rice.
Egypt said last week it will ban all rice exports for six months. Cambodia has stopped all private-sector exports of rice. India and Vietnam also have imposed restrictions to protect domestic consumption.
Prices of staple grains - corn, wheat and rice - have also risen since 2005, under pressure from farmers who would rather plant crops for biofuels than for food; the lack of technological breakthroughs in crop yields; and drought and disease.
Corn gained 73 per cent in the past year, touching a record US$6.03 (S$8.34) a bushel in Chicago on Thursday. Soya beans are up 65 per cent in the past 12 months, reaching US$15.86 on March 3, the highest ever.
Wheat, meanwhile, rose to a record US$13.50 a bushel on Feb 27 - more than doubling in the past year.
The price of rice, however, has taken centre stage in the past fortnight.
This week, store shelves were wiped cleaned in Hong Kong and Singapore. Poorer Asian nations like the Philippines and Indonesia have seen demonstrations calling for a curb on rising prices.
The Philippines, the world's biggest buyer of rice, has been hardest hit in Asia. President Gloria Arroyo has been criticised by protesters for her handling of the food situation.
In the past week, investigators there have raided rice warehouses and arrested traders buying subsidised rice from the government to sell at a higher price.
The government has even threatened to charge rice hoarders with economic sabotage - a crime that carries a life sentence.
This latest wave of food insecurity was sparked last week when the Philippines appealed to Vietnam to help avoid a shortage by supplying it with 1.5 million tonnes of rice this year.
The news contributed to an overnight 30 per cent spike in Thai rice prices to US$760 a tonne - more than double the US$360 fetched less than three months ago.
Adding to the supply shortage, Indonesia said on Thursday it may join China, India, Vietnam and Egypt in curbing exports.
The United Nations Food and Agriculture Organisation (FAO) said such moves will worsen matters, cutting global exports of the grain by 3.5 per cent this year.
Over the past few months, food riots have broken out in Guinea, Mauritania, Mexico, Morocco, Senegal, Uzbekistan and Yemen.
In Egypt, where the price of bread is up 35 per cent and cooking oil up 26 per cent, at least seven people have died in fights in queues for subsidised bread.
The developed world has not been spared either. Bread prices have risen in the United States and Europe - with reports last week predicting baguette prices in France will rise between 5 and 7 per cent over the next few weeks.
Economists say the food shortage should not have come as a surprise.
The UN warned in February that 36 countries, including China, face food emergencies this year, as stockpiles of staples fell to 30-year lows.
The FAO previously released data showing a 23 per cent spike in food costs worldwide from 2006 to last year. Within a year, the prices of grains shot up 42 per cent, oils by 50 per cent and dairy products by 80 per cent.
Meanwhile, investment funds and other speculators have bet on commodity prices, accelerating the self-fulfilling cycle.
Ironically, it is the food producers - typically poorer countries dependent on cheap staples - that will suffer the most as domestic consumption is exported to richer countries that can afford the surging commodity prices. The food scarcity and resulting retail price climbs affect lower-income households more as they tend to spend a relatively larger proportion of their earnings on food.
The ingredients causing the sharp rises are many.
On the demand side of the equation, the World Bank predicts global requirements will double by 2030 on the back of a three billion spike in the world's population by 2050.
Data from the US Department of Agriculture shows that global rice inventories are currently enough to cover only 17 per cent of consumption - compared to 35 per cent eight years ago.
Nearly half of the world's 6.6 billion people depend on rice to survive, and it is a staple for more than 2.5 billion people in Asia. With growing populations and rising economic growth, the world is already eating more grain than is harvested.
With the standard of living soaring in high-growth countries like China and India, demand for non-staples like meat and dairy products is also rising. Apart from boosting their prices, costs of grain to feed cattle and livestock are also shooting up.
Supply of food, on the other hand, has fallen due to consecutive years of bad harvests and climbing agricultural production costs.
The additive that is overwhelming the calamitous mix, however, is biofuels.
As crude oil prices continue to hit record highs, developed economies like the US and European Union champion the switch to fossil fuel substitutes.
Dr M. Nasir Shamsudin, agricultural and resource economist at Universiti Putra Malaysia's Faculty of Environmental Studies, says this is what makes the current situation different from the past.
'In previous oil price shocks, the impact on agriculture was only to push up costs of production. Now, with more sustained interest generated in the biofuel issue, food is not just more expensive to produce. People are also facing decreasing food supplies.'
Vast tracts of farmland are reallocated to the cultivation of biofuels like sugar cane and corn - both used in ethanol production. Other staples diverted away from feeding man to machine include soya beans, palm oil and cassava.
The UN Economic and Social Commission for Asia and the Pacific (Escap) projects that the food-to-fuel phenomenon will be 'one of the main drivers' of food price hikes estimated at 20 to 50 per cent over the next eight years.
Highlighting the specific impact of biofuel demand on Asia's poor, it noted that for many countries in the region, food prices are a bigger inflationary concern than oil prices.
Summing up the report's call for more political will to address the food crisis, Dr Noeleen Heyzer, UN under-secretary-seneral and Escap executive secretary, says: 'It is simply unacceptable that at a time when the economic growth of Asia and the Pacific has surpassed all expectations, we are not doing all we can to improve the lives of more than 200 million people living in such poverty.'
'Let them eat cake': The worst food riots in history
Straits Times 5 Apr 08;
1789 FRANCE
One of the most dramatic episodes of the French Revolution. Rumours that the royals were hoarding grain led to a hungry Parisian mob of 7,000 knife-wielding fishmongers' wives surrounding the Palace of Versailles to protest against high bread prices. When told of the ruckus, Queen Marie Antoinette (right) is reputed to have said: 'Let them eat cake.'
1840s EUROPE
The Potato Riots were initially a mass Russian movement against serfdom in 1834. Peasants rebelled at the government's enforcement of potato cultivation. Unrest spread across the continent over the next 10 years and was made worse by crop failure, leading to the European revolutions of 1848.
1863 UNITED STATES
The Southern Bread Riots during the American Civil War were triggered by invading armies ravaging crops and slaughtering herds. Between 1861 and 1863, the price of wheat tripled while butter and milk costs quadrupled. Blaming the government and merchants, citizens in Atlanta and North Carolina attacked and destroyed stores and warehouses.
1905 CHILE
Called the Meat Riots or Red Week, this five-day looting spree saw about 250 killed in violence in the capital, Santiago. Meat prices soared after the government imposed special tariffs on cattle imports. What started as a peaceful demonstration by 40,000 outside the presidential palace rapidly escalated into an uncontrollable rampage.
1917 RUSSIA
The February Revolution, which led to the overthrow of the Russian monarchy, began with food strikes in St Petersburg. It saw 90,000 on strike against bread shortages. Food prices were so high, 95 per cent of workers could not afford to eat.
1918 JAPAN
The Rice Riots began in the small fishing village of Ouzu in Toyoma prefecture and widened into nationwide riots, armed clashes and police station bombings. In three months, an estimated two million people participated in more than 620 reported incidents, eventually leading to the resignation of the administration.
