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Coming Food Crisis

August 27, 2010

UPDATE MARCH 7, 2011 from World Food Situation

he FAO Food Price Index (FFPI) rose for the eighth consecutive month, averaging 236 points in February 2011, up 2.2 percent from January and the highest (in both real and nominal terms) since January 1990, the inception date of the index. Except for sugar, prices of all other commodity groups monitored registered gains in February with dairy products and cereals climbing the most.

» The FAO Cereal Price Index averaged 254 points in February, up 3.7 percent from January and the highest since July 2008. The increase in February mostly reflected further gains in international maize prices, driven by strong demand amid tightening supplies, while prices rose marginally in the case of wheat and fell slightly in the case of rice.

» The FAO Dairy Price Index averaged 230 points in February, up 4 percent from January, but well below its peak in November 2007. Firm world demand continues to underpin prices. The earthquake recently registered in New Zealand, a major supplier, did not seem to have affected world availability of dairy products.

» The FAO Oils/Fats Price Index rose marginally to 279 points in February, standing just below the peak recorded in June 2008. The slight increase is in contrast to a series of sharp increases since last year, reflecting a recovery in global supply prospects.

» The FAO Meat Price Index averaged 169 points in February, up 2 percent from January, owing to higher quotations for prices of pig meat (Europe) and sheep meat (Oceania). The trend in rising beef prices appears to have stalled due to import disruptions in several key markets.

» By contrast, the FAO Sugar Price Index averaged 418 points in February, slightly below the previous month but still 16 percent higher than this time last year. International sugar prices remain high and volatile, mostly driven by tight supplies in major sugar exporting countries.

Go to Global Food Price Monitor, for details on domestic food price developments — click here

ORIGINAL POST: Climate Progress — August 27, 2010

Prices of basic foodstuffs like buckwheat and flour have soared in Russia over the past month as the effects of its worst ever drought hit supplies, statistics showed Wednesday….

Most alarmingly, the price of Russian staple buckwheat — enjoyed by generations for breakfast or as an accompaniment to meat — rose a very sharp 8.6 percent in the space of the week.

So Seed Daily reported Wednesday. Last year, Lester Brown and Scientific American asked “Could Food Shortages Bring Down Civilization?”

CAP’s John D. Podesta and Jake Caldwell have a new piece in Foreign Policy,”The Coming Food Crisis,” which I excerpt below:

There was already little margin for error in a world where, for the first time in history, 1 billion people are suffering from chronic hunger. But the fragility of world food markets has been underscored by the tragic events of this summer.

The brutal wildfires and crippling drought in Russia are decimating wheat crops and prompting shortsighted export bans. The ongoing floods and widespread crop destruction in Pakistan are creating a massive humanitarian crisis that has left more than 1,600 dead and some 16 million homeless and hungry in a region vital to U.S. national security. These and other climate crises trigger widespread food-price volatility, disproportionately and relentlessly devastating the world’s poor.

Less noticed has been the spiking price of wheat — up 50 percent since early June. The U.N. Food and Agriculture Organization recently cut its 2010 global wheat forecast by 4 percent amid fears of a scramble among national governments to secure supplies. As wheat prices climb, demand for other essential food crops such as rice will increase as part of a knock-on effect on world food markets, driving up costs for consumers. In particular, Egypt and other countries that depend heavily on Russian wheat might see dramatic price increases and unrest in the streets.

Fortunately, there are signs we will likely avoid a repeat of the 2007-2008 food crisis, when prices jumped as much as 100 percent and led to deadly riots in Port-au-Prince and Mogadishu. This year, bumper crops in the United States, alongside replenished wheat stocks globally, may be adequate to offset shortages due to the fires in Russia. But these short-term measures should not lull us into complacency or a false sense of confidence. We still have neither a strategy nor a solution to ending global hunger.

In the short term, the United States must implement U.S. President Barack Obama’s promise to commit $3.5 billion to food security assistance….

Looking beyond the immediate crisis, the United States and other developed countries must renew long-neglected investments in agriculture assistance across the developing world, targeting small farmers as the fundamental drivers of economic growth. In Africa, for example, agriculture employs more than 60 percent of the labor force and accounts for 25 percent of the continent’s economic output. And yet, Africa continues to struggle: Nearly 10 million people in the northern Sahel region are suffering from extreme hunger, and most countries still lack adequate investment in agricultural and road infrastructure to facilitate the development of value-added products and new markets.

While the United States provides more than half of the world’s food aid, agriculture assistance today stands at only 3.5 percent of overall U.S. development aid, down from 18 percent in 1979. Not surprisingly, agricultural productivity growth in developing countries is now less than 1 percent annually.

We must also improve how this assistance is targeted. We can reap lasting results by focusing on soil and water conservation and improved crop varieties rather than carbon-intensive fertilizers. Scientific research and appropriate biotechnology can deliver significant crop yield gains and water savings if conducted in a safe and transparent manner. We also must invest in women, who represent up to 80 percent of the food producers in many developing countries, but frequently lack the support and services that will allow them to reinvest hard-earned agricultural gains into health and education for their families….

The Group of Twenty leading developed and developing nations must uphold their pledges of $22 billion to enhance global food security by sending real money out the door. The multilateral Global Agriculture and Food Security Program, a new global partnership funded by commitments from the United States, Canada, South Korea, Spain, and the Bill and Melinda Gates Foundation, is to be commended for issuing $224 million in initial grants to help increase food security and reduce poverty in five developing countries.

But lasting gains in agricultural productivity will require something more — action to confront climate change. Food shortages resulting from severe crop losses will occur more frequently and take longer to recover from as more people become vulnerable to extreme weather events like the droughts and flooding we see today in Russia and Pakistan. The World Bank predicts that developing countries will require $75 billion to $100 billion a year for the next 40 years to adapt to the effects of climate change on agricultural productivity, infrastructure, and disease.

This year, we may be able to limit the damage to a single supply shock in Russia and Eastern Europe. But even in the best of times, our global food system is stretched to the breaking point by the ever-present challenges of population growth, increased demand from changing diets, higher energy costs, and more extreme weather. Experts at the U.N. Food and Agriculture Organization estimate global agricultural productivity must double by 2050 to keep pace with increased demand. Unless we take immediate action, we are destined to race from food crisis to food crisis for generations to come, with grim consequences for the world’s poor and our own national security.

John D. Podesta is the president and CEO of the Center for American Progress (CAP) and was White House chief of staff under President Bill Clinton. Jake Caldwell is the director of policy for agriculture, trade, and energy at CAP.

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