Escalating prices move food beyond the reach of the poor

[August]

THE CLUB OF ROME

"The poorest of the poor spend two thirds of their income on food. They are the hardest hit by the escalating prices for food. The price of rice in Asia has risen from $460 per ton in March to more than $1,000 two months later. Before this emergency, more than 850 million people in the world were short of food. The World Bank estimates that this figure could rise by a further 100 million who can no longer purchase the food they need. And the simple rise in food process does not convey the reality of the human tragedies of deprivation and of children marked for life by the absence of the minimum nutrition which is vital to meet their basic needs.

Such enormous rises in the price of food are the causes of unrest and violence in a growing number of countries. They are also the symptoms of deeper factors which have profound longer-term indications. The increases in price are driven by many factors: the demands of a growing population in many developing countries; changes in the pattern of demand as rising living standards increase the demand for meat products; spreading degradation of the environment and weakening of the productive ecosystems on which food production depends; increasing stress on water resources as consumption exceeds sustainable levels; and, most recently, the rush into first-generation biofuels to improve perceived energy security.

Thus, food price increases are a symptom of fundamental trends and processes: consequently, coherent longer term strategies - integrating ecological, environmental, technological, cultural, social and economic aspects - will be essential to deal with the profound causes of the current crisis and to establish the foundations of sustainable food security which a growing global population will demand."

[August]

Food Prices - Council on Foreign Relations

"By just about any measure, global food prices rose significantly over the past two years. The consumer price index (CPI) measuring inflation for retail foodstuffs in the United States is expected to rise from 4.5 percent in 2007 to 5.5 percent in 2008. Those figures pale in comparison to the price increases faced by consumers in the developing world, who more often purchase non-packaged food directly (i.e. corn, not cornflakes) and thus are more exposed to the prices of individual food commodities. The prices of rice and wheat, for instance, have more than doubled in twelve months; for someone subsisting mainly on rice and purchasing it directly, that means food inflation of roughly 100 percent in a year. This jump in prices has led to riots in dozens of poorer countries."

[DebbieJ]

One other reason for the rise of prices might be that traders are using the goods to speculate.

[imp]

Originally Posted by DebbieJ

One other reason for the rise of prices might be that traders are using the goods to speculate.

Ah yes, the evil speculator. The left blames him when prices climb, ignore him when prices fall. And never any credit goes to the speculator for the liquidity they provide hedgers.

[August]

FT.com / World - UN warns of food ‘neo-colonialism’

The race by food-importing countries to secure farmland overseas to improve their food security risks creating a “neo-colonial” system, the United Nations’ top agriculture official has cautioned.

The warning by Jacques Diouf, director-general of the Food and Agriculture Organisation, comes as countries from Saudi Arabia to China plan to lease vast tracts of land in Africa and Asia to grow crops and ship them back to their markets.

“The risk is of creating a neo-colonial pact for the provision of non-value-added raw materials in the producing countries and unacceptable work conditions for agricultural workers,” Mr Diouf said.

- - Sudan provides us with an excellent example of what is happening here.

http://www.nytimes.com/2008/08/10/wo...=1&oref=slogin

Even as it receives a billion pounds of free food from international donors, Sudan is growing and selling vast quantities of its own crops to other countries, capitalizing on high global food prices at a time when millions of people in its war-riddled region of Darfur barely have enough to eat. ...

The country is already growing wheat for Saudi Arabia, sorghum for camels in the United Arab Emirates and vine-ripened tomatoes for the Jordanian Army. Now the government is plowing $5 billion into new agribusiness projects, many of them to produce food for export.

[Richard]

The Club of Rome? Hardly going to be an unbiased article considering the source...

[August]

http://www.zawya.com/Story.cfm/sidFT...000D0B74A0D7C/

While Saudi Arabia's plans are among the grandest, they reflect growing interest in such projects among capital-rich countries that import most of their food. The United Arab Emirates is looking into Kazakhstan and Sudan, Libya is hoping to lease farms in Ukraine and South Korea has hinted at plans in Mongolia. Even China - with plenty of cultivable land but not a lot of water - is exploring investments in south-east Asia.

"This is a new trend within the global food crisis," says Joachim von Braun, director of the Washington-based International Food Policy Research Institute. "The dominant force today is security of food supplies." ...

Mr von Braun, echoing the opinion of dozens of other officials interviewed by the Financial Times, says that faith in the international food market is waning. ... "The importers are nervous and they have realised that they [had] better have a stake in countries with potential for agriculture exports," he says. ...

Some countries have grasped the potential of this resource. Sudan, for example, is seeking to attract at least $1bn (€680m, £540m) of capital for its agricultural sector from Arab and Asian investment groups. The investment ministry is marketing 17 large-scale projects that would cover an area of 880,000 hectares.

Meles Zenawi, the prime minister of Ethiopia, is also enthusiastic. After welcoming a Saudi agriculture delegation a fortnight ago, he said: "We told them [the Saudis] that we would be very eager to provide hundreds of thousands of hectares of agricultural land for investment."

- Slogan: "Feed the rich!"

[August]

Global Food Crisis (washingtonpost.com)

Lots of stuff to read and learn: news stories and background material on the Global Food Crisis: "The new world of soaring food prices" -

[krystof]

I visit relatives in Indonesia every year. Historically, Indonesia is as poor as India but has seldom had famines because of abundant rainfall and volcanic soil. The poorest people could still buy cheap fruit for their children, if indeed they could not find it wild. Recently however the cheapest fruits are no longer cheap and children are visibly coming down with more serious colds. Adults eat lots of chili peppers which are high in vitamin C but children can not do so. The fruit is still very cheap and abundant so far as tourists are concerned but for Indonesians, even average people who have good jobs can no longer afford their own fruit, not to mention the very poor.

Much of this is because of foreign interest. Even the major drinking water company, Aqua, using water from the mountains of Java, has been bought by Dannon. I do not believe that Dannon is doing so out of the goodness of their heart. They are selling Indonesian rain water to Indonesians so that they can remove profits from Indonesia to Europe. I can understand the Japanese helping Indonesians to make cars or the Americans helping Indonesians to make computers in exchange for profit sharing. However I can not understand Europeans selling Indonesian water to Indonesians. (If I ever become successful I would like to start a cooperative that produces bottled water and shares all the profits to benefit the Indonesian people.)

[August]

Spy Agencies to Warn New President of Warming’s Dangers - Dot Earth Blog - NYTimes.com

A source of instability: Population growth is highest in places where growing food is toughest. (The New York Times)