Rome: In an “unforeseen and unprecedented” shift, the world food supply is dwindling rapidly and food prices are soaring to historic levels, the top food and agriculture official of the United Nations warned on Monday.
The changes created “a very serious risk that fewer people will be able to get food,” particularly in the developing world, said Jacques Diouf, head of the UN Food and Agriculture Organization (FAO).
The agency’s food price index rose by more than 40% this year, compared with 9% the year before—a rate that was already unacceptable, he said. New figures show that the total cost of foodstuffs imported by the neediest countries rose 25%, to $107 million (Rs424 crore), in the last year.
At the same time, reserves of cereals are severely depleted, FAO records show. World wheat stores declined 11% this year, to the lowest level since 1980. That corresponds to 12 weeks of the world’s total consumption—much less than the average of 18 weeks consumption in storage during the period 2000-2005. There are only eight weeks of corn left, down from 11 weeks in the earlier period.
Prices of wheat and oilseeds are at record highs, Diouf said. Wheat prices have risen by $130 per tonne, or 52%, since a year ago. US wheat futures broke $10 a bushel for the first time on Monday, the agricultural equivalent of $100 a barrel oil.
Diouf blamed a confluence of recent supply and demand factors for the crisis, and he predicted that those factors were here to stay. On the supply side, these include the early effects of global warming, which has decreased crop yields in some crucial places, and a shift away from farming for human consumption toward crops for biofuels and cattle feed. Demand for grain is increasing with the world population, and more is diverted to feed cattle as the population of upwardly mobile meat-eaters grows.
“We’re concerned that we are facing the perfect storm for the world’s hungry,” said Josette Sheeran, executive director of the World Food Programme. She said that her agency’s food procurement costs had gone up 50% in the past five years and that some poor people are being “priced out of the food market.”
To make matters worse, high oil prices have doubled shipping costs in the past year, putting enormous stress on poor nations that need to import food as well as the humanitarian agencies that provide it.
“You can debate why this is all happening, but what’s most important to us is that it’s a long-term trend, reversing decades of decreasing food prices,” Sheeran said.
Climate specialists say that the vulnerability will only increase as further effects of climate change are felt. “If there’s a significant change in climate in one of our high production areas, if there is a disease that affects a major crop, we are in a very risky situation,” said Mark Howden of the Commonwealth Scientific and Industrial Research Organization in Canberra.
Already “unusual weather events,” linked to climate change—such as droughts, floods and storms—have decreased production in important exporting countries such as Australia and Ukraine, Diouf said.
In southern Australia, a significant reduction in rainfall in the past few years led some farmers to sell their land and move to Tasmania, where water is more reliable, said Howden, one of the authors of a recent series of papers in the Proceedings of the National Academy of Sciences on climate change and the world food supply. “In the US, Australia, and Europe, there’s a very substantial capacity to adapt to the effects on food—with money, technology, research and development,” Howden said. “In the developing world, there isn’t.”
Sheeran said, that on a recent trip to Mali, she was told that food stocks were at an all time low. The World Food Programme feeds millions of children in schools and people with HIV/AIDS. Poor nutrition in these groups increased the risk of serious disease and death.
Diouf suggested that all countries and international agencies would have to “revisit” agricultural and aid policies they had adopted “in a different economic environment.” For example, with food and oil prices approaching record, it may not make sense to send food aid to poorer countries, but instead to focus on helping farmers grow food locally.
FAO plans to start a new initiative that will offer farmers in poor countries vouchers that can be redeemed for seeds and fertilizer, and will try to help them adapt to climate change.
In Europe, officials said they were already adjusting policies to the reality of higher prices. The European Union (EU) recently suspended a “set-aside” of land for next year—a longstanding programme that essentially paid farmers to leave 10% of their land untilled as a way to increase farm prices and reduce surpluses.
In an effort to promote free markets, EU has been in the process of reducing farm subsidies and this has accelerated the process.
“It’s much easier to do with the new economics,” said Michael Mann a spokesman for the EU agriculture commission. “We saw this coming to a certain extent, but we are surprised at how quickly it is happening.” But he noted that farm prices the last few decades have been lower than at any time in history, so the change seems dramatic.
Diouf noted that there had been “tension and political unrest related to food markets” in a number of poor countries this year, including Morocco, Senegal and Mauritania. “We need to play a catalytic role to quickly boost crop production in the most affected countries,” he said.
Part of the current problem is an outgrowth of prosperity. More people in the world now eat meat, diverting grain from humans to livestock. A more complicated issue is the use of crops to make biofuels, which are often heavily subsidized. A big factor in rising corn prices globally is that many US farmers are now selling their corn to make subsidized ethanol.
©2007/INTERNATIONAL HERALD TRIBUNE