Rising food prices cause for alarm for poor by Reuters / ActionAid International 5:46pm 25th Nov, 2010   Jan 2011    Rising food prices bring host of risks. (AlertNet)    Record food prices will hit the world''s poorest hardest, raising the risk of riots, export bans, foreign-owned farmland expropriation and further price spikes fuelled by short-term investors. The UN Food and Agriculture Organisation said on Wednesday food prices hit a record high in December and could rise further on erratic global weather patterns.    For the first time they outstripped levels reached in early 2008, when spiralling prices prompted riots in countries in some 35 countries including Haiti, Egypt and Cameroon and brought demands for tighter commodity market regulation.    The potential humanitarian impact -- particularly in impoverished states where food makes up the largest component of the inflation basket -- is already alarming policymakers and senior officials.    "Food price increases impact the poor hardest as food is a higher proportion of their incomes," said James Bond, chief operating officer of the World Bank''s political risk insurance arm the Multilateral Investment Guarantee Agency (MIGA).    "It creates significant tension in poorer countries, exacerbates standard of living disparities and is a major source of unrest."    So far, experts say weather-related supply shocks -- floods in Australia, drought in Argentina, dry weather and fires in Russia and potentially crop damaging frosts in Europe and North America -- were largely to blame. But they worry politics and markets could soon take over to produce a vicious circle.    "The danger is that what happens now is that you get a second shock as countries can respond by imposing export bans and financial markets investors pile in for short-term investment, pushing prices much higher, as they did in 2008," said Maximo Torero, divisional director for markets, trade and institutions at Washington DC''s International Food Policy Research Institute (IFPRI).    Torero said reports of unrest could further fuel price rises, driving speculative investment and promoting panic buying -- even if the causes might often in reality be more complex. He pointed to reported food riots last year in Mozambique as an example.    "Clearly what is needed is to increase production through appropriate investment in agriculture, to strengthen the regulation of the futures markets and to have safety net mechanisms to protect the poorest consumers," he said.    Nov 2010    ActionAid reaction to UN report on world food price rises.    Jo Walker, ActionAid’s International Advocacy Manager said: “Today’s announcement of a surge in global food prices has huge implications for the world’s poorest who are already struggling to get enough to eat”.    “Poor countries could be crippled by a jump of 20% in the cost of food imports, which the UN puts at a trillion dollars”.    “ActionAid is calling on governments to take urgent measures to boost harvests and protect the most vulnerable against the looming possibility of another global food crisis”.    “Governments must urgently distribute seeds and give cheap loans to support poor farmers in the developing world to plant more for the next harvest”.    "Locally grown food is the only protection against spiralling world prices that are being pushed upward by irresponsible financial trading, climate change and a biofuels industry that is converting fertile land from food to fuel production”.    * ActionAid is a leading agency in the fight against hunger. It works with farmers in 30 countries and is spearheading a global campaign to ensure governments delivery on their Millennium Development Goal to halve extreme poverty and hunger by 2015. Visit the related web page
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