UN debates global food cost rise

David Loyn, BBC News 26 Jan 09;

Just because the issue of food prices has not been in the headlines recently it has not gone away.

Although prices have fallen from the highs recorded during the unprecedented spike at the beginning of 2008, they have not fallen back to where they had been before the crisis began.

And many of the factors that contributed to the rise then are still driving prices up.

These include competition with biofuels for scarce land, worsening agricultural productivity, the increasing proportion of people living in cities, and the effects of climate change threatening harvests.

Since an emergency summit meeting in Rome last June, the UN has set up a task force to coordinate action on food, now headed by Dr David Nabarro, who established a troubleshooting reputation when he led the UN response to the threat of bird flu.

Ahead of a two-day meeting in Madrid designed to put fresh momentum into the food price issue, Dr Nabarro said: "The worldwide economic crash did not put an end to the food crisis; instead, it complicates and exacerbates the situation."

Careful policies

As the ripples spread out from the banking sector in the richest countries in the world, the waves are hitting those least able to cope - in the poorest countries.

There is less money to invest in new businesses, and as well as a cut in foreign direct investment, the global economic slowdown means that money sent home by those working abroad has gone down.

In a country like Kenya, where locally prices have continued to rise, the effect is being felt hard.

According to the World Bank, the volume of world trade is likely to contract for the first time since 1982, further reducing the potential for growth in developing countries.

The collapse in commodity prices has taken the pressure off food price rises, but has also given new problems to some developing countries that depend on commodities, like Zambia, with its reliance on copper.

A World Bank report on economic prospects for 2009 concluded that it is not inevitable that there will be shortages of food and oil, but that careful policies need to be followed.

The author of the report, Andrew Burns, said aid needs to be better targeted.

"Action is needed at the global level to discourage export bans of food grains, strengthen agencies like the World Food Programme, and improve information about and coordination of existing domestic grain reserves," he said.

The World Bank has earmarked $1.2bn to help those countries worst hit by the price spike last year, part of more than $18bn committed worldwide, but anti-poverty campaigners say that not all the money promised has been delivered.

The head of the Global Call to Action against Poverty (GCAP) in Kenya, Mwangi Waituru, said that food prices continue to rise, making it harder for people to feed their families.

"The current consumer society is rapidly eroding the traditional security nets system, leaving the poor more and more vulnerable," he said

All of this means that efforts made to reach Millennium Development Goals on poverty and hunger are now being undermined, as the number of people in the world who go to bed hungry comes close to a billion, while the colossal sums needed to bail out banks make further demands on funds in the richest countries, cutting their ability to feed the hungry, or fund agricultural innovation.