Friday, April 11, 2008

The Global Food Crisis Part III

"Global policymakers are scrambling to develop a coherent response amid food riots in developing countries and the imposition of export bans on scarce foodstuffs." -Financial Times

Price rises threaten progress on poverty

By Chris Bryant in Washington and Javier Blas in London
Financial Times - London
Published: April 10 2008 03:00 | Last updated: April 10 2008 03:00

The rising cost of basic foods risks wiping out a decade of efforts to combat global -poverty and could trigger further riots in the world's poorest countries, leading multilateral institutions warned yesterday.

The World Bank, the Food and Agriculture Organisation and the International Monetary Fund were unanimous in concluding that the rising appetite of the bio-fuels industry was part of the reason for the increase in food prices.

But they also said that -rising consumption in emerging countries and what the World Bank described as a "sense of complacency" towards agricultural investment over the past two decadeswere part of the problem.

In the past 20 years, a number of developing countries have become net importers of food because of rising internal consumption and a slowdown in agricultural productivity. That is now accentuating the impact of rising food prices.

The bank said in a note on food policy options addressed to finance ministers meeting this week in Washington that rising prices threatened to undo efforts to combat poverty.

"For many countries and regions where progress in reducing poverty has been slow, the negative poverty impact of rising food prices risks undermining the poverty gains of the last five to 10 years, at least in the short term," it said.

Gordon Brown, British prime minister, yesterday called for the IMF to help net food importing countries cope with "rising food prices which threaten to roll back progress we have made in recent years on development". Mr Brown, in a letter to Yasuo Fukuda, Japan's PM and G8 president, also called for a review of the impact on food prices of biofuel production.

The bank's warning came as the head of the United Nation's Food and Agriculture Organisation warned that food riots, already hitting countries from Haiti to Ivory Coast, could become commonplace and trigger an increase in poverty.

Jacques Diouf, FAO director-general, said: "There is a risk that this unrest will spread in countries where 50-60 per cent of income goes to food." Most sub-Saharan African and some south-east Asian countries fall into that category.

Global policymakers are scrambling to develop a coherent response amid food riots in developing countries and the imposition of export bans on scarce foodstuffs.

Talks are gathering pace as it becomes clear to policymakers that price rises of farm commodities are structural. The bank said food prices would remain elevated throughout 2008 and 2009 and would not return to the levels of the early 2000s, at least until 2015.

Average food prices have risen 45 per cent in the past nine months, creating acute problems for people who rely on a few staple foods...

for link to complete FT article click the title of this post

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