London: Food prices could double in the next 20 years and demand will soar as the world struggles to raise output via a failing system, international charity Oxfam said on Tuesday, warning of worsening global hunger.
“The food system is pretty well bust in the world,” Oxfam chief executive Barbara Stocking told reporters, announcing the launch of the Grow campaign as 925 mn people go hungry every day.
“All the signs are that the number of people going hungry is going up,” Stocking said.
Hunger was increasing due to rising food price inflation and oil price hikes fuelled by speculators, scrambles for land and water, and creeping climate change, Oxfam said.
Food prices are forecast to increase by something in the range of 70 to 90% in real terms by 2030 before taking into account the effects of climate change, which would roughly double price rises again, Oxfam added.
Wheat prices have been largely flat so far in 2011 although they remain more than 70% above levels traded a year ago after rising sharply last summer as the worst drought in decades devastated crops in the Black Sea region.
Prices for corn have more than doubled in the last 12 months with global production unable to keep pace with record demand driven partly by the growth of the US ethanol industry.
Oxfam warned that by 2050 demand for food will rise by 70% yet the world’s capacity to increase production is declining.
Yield growth falling
The average growth rate in agricultural yields has almost halved since 1990 and is set to decline to a fraction of one percent in the next decade while increasing regional and local crises could see the need for food aid double in the next 10 years.
“Now we have entered an age of growing crisis, of shock piled upon shock: vertiginous food price spikes and oil price hikes, devastating weather events, financial meltdowns and global contagion,” Oxfam said in a report.
“The world’s poorest people, who spend up to 80% of their income on food, will be hit hardest.”
Entitled “Growing a Better Future: Food Justice in a Resource-Constrained World,” the report said: “The scale of the challenge is unprecedented, but so is the prize: a sustainable future in which everyone has enough to eat.”
Oxfam believes one way to tame food price inflation is to limit speculation in agricultural commodity futures markets. It also opposed support for using food as a feedstock for biofuels.
“Financial speculation must be regulated, and support dismantled for biofuels that displace food,” it said.
Stocking said she favoured the introduction by regulators of position limits in agricultural commodities futures trading, noting that financial speculation aggravated price volatility.
French President Nicolas Sarkozy has campaigned for tough measures to limit speculation and is due to use his platform as president of the world’s 20 top economies (G20) to push for more regulation this month.
France’s top market regulator told Reuters he expects top global economies to agree a framework this year to dampen speculation in commodities.
The Oxfam report said: “The vast imbalance in public investment in agriculture must be righted, redirecting the billions now being ploughed into unsustainable industrial farming in rich countries towards meeting the needs of small-scale food producers in developing countries.”
Governments to blame
The report said the failure of the food system flowed from failures of government to regulate and to invest, which meant that companies, interest groups and elites had been able to plunder resources.
“Now the major powers, the old and the new, must cooperate, not compete, to share resources, build resilience, and tackle climate change,” it said.
“The economic crisis means that we have moved decisively beyond the era of the G8, when a few rich country governments tried to craft global solutions by and for themselves.
“The governments of poorer nations must also have a seat at the table, for they are on the front lines of climate change, where many of the battles - over land, water, and food - are being fought.”