A soaring food price has swept the world and presented a gloomy picture for people, especially those from poor countries.
PRICE UP
The food price hike virtually started from 2002, but accelerated during the past few years, especially since August, 2007. In year 2007 alone, international grain price soared by 42 percent.
A latest report by the World Bank showed that wheat price on the international market has jumped 181 percent during the past three years, and food price surged 82 percent in general.
The surge in prices has been led primarily by dairy and grains, but prices of other commodities, with the exception of sugar, have also raised significantly.
Along with the price hike comes shrinking grain stocks worldwide. According to UN's Food and Agriculture Organization (FAO), the current world food reserve has dropped to the lowest level since 1980.
REASONS
It's widely believed that natural disasters, a growing demand for food worldwide, coupled with market speculation, surging oil prices, and the expansion of bio-fuels, are pushing the food price up.
The UN Environment Program said the planet's water, land, air, plants, animals and fish stocks were all in "inexorable decline." According to the UN's World Food Program (WFP), 57 countries, including 29 in Africa, 19 in Asia and nine in Latin America, havebeen hit by catastrophic floods. Harvests have been affected by drought and heat waves in south Asia, Europe, China, Sudan, Mozambique and Uruguay, according to a Guardian report.
A growing population also contributed to greater demand for food. According to Josette Sheeran, director of the WFP, "There are 854 million hungry people in the world and 4 million more join their ranks every year."
"We are facing the tightest food supplies in recent history. For the world's most vulnerable, food is simply being priced out of their reach," he said.
According to Japan's Economist magazine, after the U.S. subprime mortgage crisis triggered a turmoil on the international financial market, a huge amount of speculative funds has flowed into the less risky agricultural commodities futures market, pushing food price up along with oil, gold and other commodities.
High oil prices and the promotion of biofuels in many developed countries have further stimulated the surge of food price. The expensive oil has raised the cost of farm production in its various phases, such as crop growth and product transportation.
Biofuels directly consume crops such as maize. Some developed countries have encouraged the use and production of biofuels in recent years in a bid to reduce greenhouse gas emission and dependence on oil imports. The direct negative side effect is the reduction of staple food for human consumption, subsequently pushing the price up.
CONSEQUENCES
Skyrocketing prices on rice, wheat, corn and other staple foods like milk have direct impact on ordinary people's lives, particularly those in Africa, where the bulk of income is spent on the bare necessities for survival. Soaring food prices have incited unrest in some hard-stricken countries, such as Haiti, Egypt and the Philippines. According to the FAO, 37 countries currently face food crises.
The continuing rice riots in Haiti recently have forced Prime Minister Jacques Edouard Alexis to step down. In Asia, the soaring prices of rice, a staple food in the region, is putting leaders under intense pressure as mounting strikes and protests are demanding pay hikes to keep up with the rising costs of living.
On Saturday, about 20,000 workers rioted over high food prices and low wages on Saturday close to the Bangladeshi capital Dhaka amid spreading global unrest over soaring food costs.
In Sierra Leone, one of Africa's poorest nations, rice price has soared 300 percent. Rice prices in Cote D'ivoire, Senagal and Cameroon also jumped 50 percent. Western African countries such as Cote D'ivoire, Mauritania, Senegal and Burkina Faso have all witnessed protests against soaring food prices over the past few days.
"Food prices, if they go on like they are doing today ... the consequences will be terrible," International Monetary Fund (IMF) managing director Dominque Strauss-Kahn said.
"Hundreds of thousands of people will be starving...leading to disruption of the economic environment," Strauss-Kahn told a news conference at the close of the IMF spring meeting in Washington Saturday.
Development gains made in the past five or 10 years could be "totally destroyed," he said, warning that social unrest could even lead to war.
"As we know, learning from the past, those kind of questions sometimes end in war," he said. If the world wanted to avoid "these terrible consequences," then rising prices had to be tackled.
World Bank President Robert Zoellick also warned climbing food prices would set back efforts to reduce poverty by about seven years.
"While many are worried about filling their gas tanks, many others around the world are struggling to fill their stomachs," Zoellick said. "With little margin for survival, rising prices too often means fewer meals."
SOLUTIONS
Boiled in hot water, governments of major rice-producing Asian countries, like Thailand, Vietnam and India, are reducing or restricting rice exports, in a bid to meet their domestic needs. Philippine President Gloria Arroyo on Friday announced major investments to overhaul the country's agriculture sector, which is long been inefficient and riddled with graft.
FAO Director General Jacques Diouf has called all leaders of the 191 members to attend a summit in Rome, Italy slated from June 3 to 5, to discuss the current "emergencies", hoping to find feasible solutions.
"In the face of food riots around the world like in Africa and Haiti, we really have an emergency," he said.
FAO and other international organizations have called on rich countries to intensify aid to poorer nations. World Bank President Zoellick urged industrial nations to make up a 500-billion-U.S. dollar food gap required by the UN's World Food Program to meet emergency needs.
European Union Development Commissioner Louis Michel promised after meeting with African Union Commission chief Jean Ping that the European Development Funds will boost funding from the current 650 million euros (about one billion U.S. dollars) to 1.2 billion euros (about 1.9 billion dollars) for agriculture and rural development in the poorest nations in Africa.
FAO also urged all governments, especially of the developing countries with food problems, to increase investment on agriculture, improve farming productivity, and make favorable policies to promote agricultural development.
A few days ago, British Prime Minister Gordon Brown wrote a letter to his Japanese counterpart Yasuo Fukuda, whose country is currently chairing the G8, demanding that the impact of bio-fuels on food prices be part of discussions during the summit of the eight most industrialized nations to be held in Japan in July.
On Saturday, Germany's development minister, who is attending the World Bank's meeting held Sunday, called for greater regulation of the global biofuels market to prevent its expansion from driving up food prices.
"It is unacceptable for the export of agrofuels to pose a threat to the supply situation of the very people already living in poverty," Heidemarie Wieczorek-Zeul said.
She said the world needs new rules that balance goals including climate change mitigation, food security and social development.
A development NGO, Oxfam, urged the IMF to work closely with its sister institution, the World Bank, and other organizations to provide developing countries with financial support and policy advice to deal with the food problems.
For future trends of the international food price, the World Bank predicted that the high price will last for a long time due to a strong global demand. After about two years, the food price may drop after a readjusted supply and demand situation, the Bank predicted, but by the year 2015, the general food price will remain above the price level of year 2004.
Source:Xinhua
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