The World Reacts to Rising Food Prices
If you live in the United States, it’s hard to ignore how hard farmers have it this year. Due to recent droughts, a road trip through the Midwestern U.S. reveals miles and miles of damaged corn and soybean crops. Drought has also damaged crops in Brazil and Russia’s bread basket. With damaged crops come inevitable loss of food supply and worldwide increases in food prices. Currently, organizations from around the world are working to stave off another global food crisis and the resulting “panic buying” we saw in 2008.
In a joint statement released last week the World Food Programme (WFP), the Food and Agriculture Organization of the UN (FAO) and the International Fund for Agricultural Development (IFAD) emphasized the need for the international community to come together to ensure food prices do not cripple the world’s most vulnerable people who spend upwards of 70 percent of their incomes on food according to the WFP. The World Food Programme noted that for every 10 percent increase in food it must find an extra $200 million a year for food assistance.
In response to this statement Oxfam's GROW Campaign Spokesperson, Colin Roche, echoed the sentiment of rapid action,
"Political leaders must heed the warning of food agencies, stop dragging their feet and convene an emergency meeting of the Rapid Response Forum to prevent the threatened food price crisis becoming a reality. Only the powerful G20 leaders have the political muscle to tackle the multiple problems - from speculation and bad biofuels policies to greenhouse gas emissions and lack of investment in agriculture - which are driving this crisis and making future crisis all the more likely."
Last week the Russian Deputy Agriculture Minister Ilya Shestakov said G20 countries would hold a meeting on the grain market next month according to Reuters. Despite the urgent need to monitor and react to rising food prices, the FAO Food Price Index, a measure of the monthly change in international prices of a basket of food commodities, remained unchanged from July 2012 and below August of 2011.
Still, food prices rose 10 percent from June to July according to the World Bank. In fact, maize and soybean costs were at an all-time high. If food prices continue to increase, sub-Saharan Africa and the Middle East will bear the brunt of the effects as they import most of their foods and many of its citizens spend a majority of their incomes on food purchases.
Right now the world is waiting to see what will happen next. How will the markets fare? Will another food crisis ensue? Will the price of fertilizer and crude oil skyrocket? The answers to those questions will determine whether millions living in poverty will suffer through even more hardships simply trying to put food on the table.
This blog has been cross posted from The Bill & Melinda Gates Foundation Impatient Optimists Blog.
Photo: Nafise Motlaq / World Bank