Andrea Lunt
UNITED NATIONS, Feb 23 2011 (IPS) – In an era of mass consumption in the West, the developing world is entering its second major hunger crisis in three years, with new figures from the World Bank showing food price hikes have forced 44 million people into economic hardship since last June.
More than one billion people, a sixth of the world s population, now face chronic hunger and the situation is likely to worsen this year, with experts such as David Nabarro, coordinator of the U.N. Secretary-General s High- Level Task Force on the Global Food Security Crisis, warning food prices are on an upward trend .
Somewhere in the region of two billion households are earning less than two dollars per day and spending somewhere around three quarters of their income on food, Geneva-based Nabarro told reporters in New York via video-link on Friday.
And now they are having to pay 15 percent more than they were this time last year for their basic foods, and their elasticity to cope with that increase is very limited indeed, he said.
The Food and Agriculture Organisation s (FAO) Food Price Index (FFPI) also rose for the seventh consecutive month in January, averaging 231 points, up 3.4 percent from December 2010.
Nabarro said a mix of factors were influencing the price hikes, including political instability in some nations, increased crop failures stemming from climate change and La Niña-related weather events, and serious underinvestment in agriculture.
Related IPS Articles
And although he admitted investor speculation in food commodity markets could also be an underlying factor, he said the U.N. would not give policy prescriptions on how to regulate the sector.
There s no doubt speculation is having a role; the degree to which it is actually triggering shifts in prices we don t know, Nabarro said. But we understand it s a significant role in the magnitude of price changes. To that extent it s going to be for governments to seek to find ways to address this question.
What concerns us is the volatility of prices they re moving up and down quickly sometimes without clear links to the fundamentals of market supply and demand and this makes it really hard for farmers and others in the food chain to make decisions about when and how to increase production.
International NGOs have long called for tighter regulation on speculation of food prices, arguing that financial houses in Chicago, New York and London are gambling on hunger.
French President Nicolas Sarkozy also voiced concerns about the issue, accusing food speculators of extortion and pillaging .
With mounting global concern, France s minister of agriculture, Bruno Le Maire announced last week that a meeting on the topic would be held between the agriculture ministers of the G20 countries in Paris in June.
Here in the United States, some are placing hope in the sweeping changes instigated by the Dodd-Frank Wall Street Reform and Consumer Protection Act, introduced last year in the wake of the global financial crisis, to improve transparency in the financial sector.
However, organisations such as California-based Food First Institute for Food and Development Policy say tighter regulation will not work.
Its executive director, Eric Holt-Gimenez, told IPS price speculation in agricultural markets should be banned.
The first step is to take agriculture out of the WTO (World Trade Organisation) it doesn t belong there, he said.
The second step is to prohibit financial speculation in (food) commodities prohibit it, you can t regulate it, prohibit it and then countries have to be allowed to protect their food systems. They need to be allowed their own food sovereignty.
Then we need to reinvest in agriculture, give farmers fair prices for their product, he added.
Holt-Gimenez said the recent food price hikes were not connected to normal supply and demand forces, blaming speculation and hoarding.
It s not a problem of supply and demand. If you look at FAO s figures over the past 10 years you can see there is absolutely no relationship between the supply and demand prices. And we get very high prices sometimes when we have more than enough supply.
With poverty and food prices among the key drivers of protests erupting across the Middle East and northern Africa, the issue of food security continues to pose serious challenges for both developed and developing nations.
Highlighting the recent revolutions in Egypt and Tunisia, Holt-Gimenez said we could expect to see more political unrest if the hunger crisis was not addressed properly.
This is global struggle for food sovereignty against the monopolisation of our food system and it s going to be very painful and probably going to be an extended struggle with very uneven results worldwide, he told IPS.
What we re already seeing is profound political consequences for governments around the world, including in the global north.
