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Food Prices Spike Worldwide


In recent months, prices for basic foods have risen dramatically in many parts of the world, adding to the misery of impoverished regions and straining the budgets of families across the globe. VOA's Michael Bowman reports from Washington, a complex set of factors is causing global demand for food to outstrip supply, and experts warn that, absent swift action, the situation may get even worse.

Recent weeks have seen Philippine authorities scramble to augment rice stocks in the country, Indonesian officials warn of possible social unrest due to skyrocketing prices for basic foodstuffs, irate Egyptians protesting bread shortages, and international food aid programs unable to buy enough goods to meet their food distribution targets for vulnerable populations.

These cases should not be viewed as isolated anomalies, but rather as indicators of a global phenomenon, according to Lester Brown of the Washington-based Earth Policy Institute.

"In seven of the last eight years, world grain production has fallen short of consumption," he said. "We have been pulling down world grain stocks until now they are at the lowest level in 34 years."

Experts say several factors are to blame: a growing world population, under-investment in agriculture technology, high petroleum prices, housing and business development crowding out farmlands, droughts and floods made more severe by climate change, and demand for a limited supply of fresh water.

In addition, grains like corn once grown exclusively to feed humans and livestock are now being diverted into programs to generate ethanol and other so-called "biofuels" as an alternative to oil and gasoline. With oil prices rising steeply in recent years, the economic incentive to produce grain-based fuels has risen as well.

Taken together, these factors have led to growing food shortages and rising prices that could spell disaster for the world's poor people, according to Lester Brown.

"People on the lower rungs of the global economic ladder are barely hanging on [surviving], and as food prices rise, many are simply losing their grip and beginning to fall off," he added. "And what we are looking at, in the absence of a major intervention, is a very substantial increase in hunger in the world, in mortality rates."

For the past two years, Australia's wheat harvest has been lowered by drought. Experts note that Australia is one of many wheat suppliers to the global marketplace. But they add that, given the tightness in world grain stocks, any production shortfall in virtually any country spells trouble far beyond its borders.

Siwa Msangi, a research fellow at the Washington-based International Food Policy Research Institute, says the margin for error in global food production has been virtually eliminated.

"The margins have shrunk and they are shrinking fast," he explained. "So if one country stumbles, you are going to feel the prices on the markets immediately."

Msangi, originally from Tanzania, has a set of policy recommendations for governments around the world: invest more in agriculture technology to boost crop yields, address climate change and environmental issues, improve water management, carefully consider the impact of biofuels on world food stocks, and resist the temptation to enact counter-productive measures to artificially lower food prices.

Msangi notes that leaders in Zimbabwe and Venezuela have recently ordered price controls in response to soaring food costs, and says the efforts are making a bad situation worse.

"That is a knee-jerk reaction that a lot of countries take," he explained. "Instead of producers getting the signal that prices are going up and that they should produce more [food], it actually works against some of the responses that you want the food system to undertake when it is faced with high prices."

How high will global food prices get? Msangi says no one knows for sure, but he fears they may rise even higher in coming years.

He says, not only does the world's population continue to grow, but consumers in countries like China and India that are experiencing rapid economic growth are changing their diets as incomes rise: demanding more high-protein food that require large amounts of grain to produce. In other words, not only are there more mouths to feed, but satisfying each mouth is placing ever-higher demands on world food stocks.

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