Rising food prices creating unrest in 33 countries, 100 million face hunger by AP, The Observer & agencies 1:16am 13th Apr, 2008   Apr 13, 2008    Across the world, a food crisis is now unfolding with frightening speed. Hundreds of millions of men and women who, only a few months ago, were able to provide food for their families have found rocketing prices of wheat, rice and cooking oil have left them facing the imminent prospect of starvation. The spectre of catastrophe now looms over much of the planet.    In less than a year, the price of wheat has risen 130 per cent, soya by 87 per cent and rice by 74 per cent. According to the UN"s Food and Agriculture Organisation, there are only eight to 12 weeks of cereal stocks in the world, while grain supplies are at their lowest since the 1980s.    For the hundreds of millions of families, the impact has been calamitous. This is not just about meals forgone today, or about increasing social unrest, it is about lost learning potential for children and adults in the future, stunted intellectual and physical growth. Without urgent action to resolve the crisis, the fight against poverty could be set back by seven years.    Not surprisingly, these swiftly rising prices have unleashed serious political unrest in many places. In Dhaka yesterday 10,000 Bangladeshi textile workers clashed with police. The protest was triggered by food costs that was eventually quelled by baton charges and teargas. In Haiti, demonstrators recently tried to storm the presidential palace after prices of staple foods leaped 50 per cent.    In Egypt, Indonesia, Ivory Coast, Mauritania, Mozambique, Senegal and Cameroon there have been demonstrations, sometimes involving fatalities, as starving, desperate people have taken to the streets. And in Vietnam the new crime of rice rustling - in which crops are stripped at night from fields by raiders - has led to the banning of all harvesting machines from roads after sunset and to farmers, armed with shotguns, camping around their fields 24 hours a day.    But what are the factors that led to this global unrest? What has triggered the price rises that have put the world"s basic foodstuffs out of reach for a rising section of its population? And what measures must be taken by politicians, world leaders and monetary chiefs to rectify the crisis?    Economists and financiers point to a number of factors that have combined to create the current crisis, a perfect storm in which several apparently unconnected events come together with disastrous effects.    One key issue highlighted at the G7 meeting was the decision by the US government, made several years ago, to give domestic subsidies to its farmers so that they could grow corn that can then be fermented and distilled into ethanol, a biofuel which can be mixed with petrol. This policy helps limit US dependence on oil imports and also gives support to the nation"s farmers. However, by taking over land - about 20 million acres so far in the United States - that would otherwise have been used to grow wheat and other food crops, US food production has dropped dramatically. Prices of wheat, soya and other crops have been pushed up significantly as a result.    Other nations, including Argentina, Canada and some European countries, have adopted similar, but more restrained, biofuel policies.    This point has also been stressed recently by the UK government"s chief scientific adviser, Professor John Beddington. "It is very hard to imagine how we can see the world growing enough crops to produce renewable energy and at the same time meet the enormous demand for food", he said. "The supply of food really isn"t keeping up."    Urgent action is now urgently needed. "In the US and Europe over the last year we have been focusing on the prices of gasoline at the pumps. While many worry about filling their tanks, many others around the world are struggling to fill their stomachs. And it"s getting more and more difficult every day".    The call was backed by finance ministers from the G24, who represent the leading developing countries, who also demanded extra cash to help cushion the poor against the shock of rising food prices. As well as causing hunger and malnutrition, the rising cost of basic foodstuffs risks blowing a hole in the budgets of food-importing countries, many of them in Africa, they argued.    As to the other factors that have combined to trigger the current food crisis, experts also point to the connected issue of climate change. As the levels of carbon dioxide rise in the atmosphere, meteorologists have warned that weather patterns are becoming increasingly disturbed, causing devastation in many areas.    In Bangladesh, a two kilogram bag of rice now consumes about half of the daily income of a poor family.    A dramatic rise in the worldwide cost of food is provoking riots throughout the Developing World where millions more of the world’s most vulnerable people are facing starvation as food shortages grow and cereal prices soar. It threatens to become the biggest crisis of the 21st century.    This week crowds of hungry demonstrators in Haiti stormed the presidential palace in the capital, Port-au-Prince, in protests over food prices. And a crisis gripped the Philippines as massive queues formed to buy rice from government stocks. There have been riots in Niger, Senegal, Cameroon and Burkina Faso and protests in Mauritania, Ivory Coast, Egypt and Morocco. Mexico has had “tortilla riots” and, in Yemen, children have marched to draw attention to their hunger.    The global price of wheat has risen by 130 per cent in the past year. Rice has rocketed by 74 per cent in the same period. It went up by more than 10 per cent in a single day last Friday - to an all-time high as African and Asian importers competed for the diminishing supply on international markets in an attempt to head off the mounting social unrest. The International Rice Research Institute warned yesterday that prices will keep going up.The buffers stocks of staple foods that governments once held are being steadily exhausted.    Rising prices have triggered a food crisis in 36 countries, says the UN Food and Agriculture Organisation. The hike in prices means the World Food Programme is cutting food handout rations to some 73 million people in 78 countries. The threat of malnutrition on a massive scale is looming.    The impact is beginning to be felt in the rich world, too. More expensive wheat has caused large rises in the cost of pasta and bread in Italy where consumer groups staged a one-day strike that brought pasta consumption down 5 per cent. The price of miso, a fermented rice and barley mixture, is up in Japan. France and Australia have launched national inquiries into rising food prices and are pressing food producers and supermarkets to absorb price rises. In Britain, the price of bread is rising in line with the cost of wheat.    All across the world, cereals, meat, eggs and dairy products are becoming dearer. “Food prices are now rising at rates that few of us can ever have seen before in our lifetimes,” said John Powell of the World Food Programme. Prices are likely to remain high for at least 10 years, the Food and Agriculture Organisation is projecting.    The World Bank predicts global demand for food will double by 2030. Government policies do not help: the rich world subsidises agriculture not to feed the world but to enrich its farmers.    There is increasing concern about the rush to biofuels. Britain’s new chief scientist, Professor John Beddington, has said cutting down rainforest to produce biofuel crops was “profoundly stupid”. It was, he said, “very hard to imagine how we can see a world growing enough crops to produce renewable energy and, at the same time, meet the enormous increase in the demand for food”.    In Rome, Jacques Diouf, director-general of the United Nations Food and Agriculture Organization, said the cereal-import bill for the poorest countries is expected to rise 56 per cent this year, on top of the 37 per cent recorded last year. "There is certainly a risk of people dying of starvation" unless urgent action is taken, he said.    The UN"s donor countries, he said, need to come up with $1.7-billion (U.S.) to implement quick-fix food programs, such as topping up the World Food Programme, whose emergency food-buying power has been clobbered by the rising prices.    Other UN officials have been equally blunt. Sir John Holmes, the UN"s top humanitarian official and emergency relief co-ordinator, said this week that soaring food prices threaten political stability. The UN and national governments are especially worried about potentially violent situations in Africa"s increasingly crowded urban areas. Rioting triggered by absent or unaffordable food could cripple cities.    "The security implications should not be underestimated as food riots are being reported across the globe," Mr. Holmes said.    Nigeria"s Kanayo Nwanze, vice-president of the UN"s International Fund for Agricultural Development, sees no short-term fix. "I wouldn"t be surprised if there is an escalation of food riots in the next few months," he said. "It could lead to famine in certain parts of Africa if the international community and local governments do not put emergency actions into place."    The UN"s food index rose 45 per cent in the past nine months alone, but some prices have climbed even faster. Wheat went up 108 per cent in the past 12 months; corn rose 66 per cent. Rice, the food that feeds half the world, went "from a staple to a delicacy," says Standard Chartered Bank food commodities analyst Abah Ofon. The price of Thai medium-quality rice, a global benchmark, has more than doubled since the end of 2007.    Food prices in the first three months of 2008 reached their highest level in both nominal and real (inflation adjusted) terms in almost 30 years, the UN says. That"s stoking double-digit inflation and prompting countries such as Egypt, Vietnam and India to eliminate or substantially reduce rice exports to keep a lid on prices and prevent rioting.    But, by reducing global supply, this only increases prices for food-importing countries, many of them in West Africa.    There is enough food to feed everyone on the planet, said Peter Hazell, a British agriculture economist. Why millions may go hungry, he said, is because prices are so high, food is becoming unaffordable in some parts of the world.    The "rural poor" (to use the UN"s term) in Burkina Faso, Niger, Somalia, Senegal, Cameroon and some other African countries exist on the equivalent of $1 a day or less. As much as 70 per cent of that meagre income goes to food purchases, compared with about 15 per cent in the U.S. and Canada. As prices, but not incomes, rise, the point may be reached where food portions shrink or meals are skipped. Malnutrition sets in.    Economist Dr. Hazell has said that filling an SUV tank once with ethanol consumes more maize than the typical African eats in a year.    Mr. Ofon, of Standard Chartered Bank, said rising demand in the face of production shortfalls does not fully explain the dramatic price increases. Investors are the other driver. They have discovered they can make money from food commodities as easily as they can in oil, gold or nickel. "Fund money flowing into agriculture has boosted prices," he said. "This is the year of agricultural commodities."    The UN"s International Fund for Agricultural Development, for one, assumes prices will stay high for as long as 10 years.    Cutting back on ethanol production alone would go some way to restoring supply-demand balance in the food markets. But everyone - analysts, economists, agriculture experts, the UN - thinks all bets are off in the next two or three years. It"s almost impossible to boost production quickly, because of land and water shortages and competition from biofuels.    "I can say with some degree of confidence that if governments and international development agencies do not put in place a concerted effort quickly, then we are looking at a very serious problem," Mr. Nwanze said.    Many countries put the blame for the food crisis squarely on the increased production of certain bio-fuels that use food crops as an alternative energy source.    Indian Finance Minister P Chidambaram called on industrial nations to cut off all subsidies for such bio-fuel production. "In a world where there is hunger and poverty, there is no policy justification for diverting food crops towards bio-fuels," Chidambaram said. "Converting food into fuel is neither good policy for the poor nor for the environment."    Nigerian Finance Minister Shamsuddeen Usman called on the World Bank and international community to "urgently support" efforts to meet the food needs of the most vulnerable people, the majority of whom are in Africa.    On Saturday, the head of the IMF, Dominique Strauss-Kahn, warned of mass starvation and other dire consequences if food prices continue to rise sharply.
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