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March 28, 2011

Warning of Recurring Food Crises

by Joe DeCapua

Soaring and volatile food prices have experts warning of recurring food crises, putting poor people – especially women and children – at risk.

Similar conditions existed during the 2007/2008 food crisis, when high prices and shortages ignited unrest in many countries around the world.

IFPRI, the International Food Policy Research Institute, is calling for urgent action to prevent a repeat of the crisis. Director-General Shenggen Fen says, “Many food items have become more expensive…since last May or June. Wheat prices have almost doubled. The maize price has also increased substantially. Many meat products, dairy products have also increased substantially.”

While the situation is not as serious as the food crisis three years ago, Fen says, “If we don’t take urgent actions, food prices will continue to rise and the poor people will suffer.”

What’s triggering the price hikes?

After the last crisis, IFPRI analyzed a number of factors that contributed to the problem.

“For example,” says Fen, “the expansion of bio-fuel production, the rising oil prices, the bad weather and also reduced agricultural investment. So we analyzed all these factors and today, surprisingly – maybe not surprisingly – many factors are similar…. So my question is, have we learned a lesson?”

Recommendations

IFPRI has issued a number of recommendations it says could help prevent recurring food crises. One calls for “effective policies and technology investments to minimize food-fuel competition.”

Fen says, “The higher energy prices will increase food prices through two channels. First is the production costs will increase – 20 percent, 30 percent of the food production cost is coming from energy. The second [is] the continued rise of oil prices will expand the bio-fuel production. So the bio-fuel production will definitely compete with poor peoples’ food.”

New bio-fuel production technology is available that is not in direct competition with food production. It uses waste instead of food to generate energy.

IFPRI also calls for “social safety nets” for vulnerable groups. When food prices soar, most of what little income poor people earn goes towards food.

“They need special protection, particularly women and children. In some of the countries some of the protection system is already there. So what we need to do is to scale up the social protection to make sure the…poor…will be covered…. For the countries that do not have this system, they need to think how to institutionalize or how to build a system that can help the poor in the short run.”

In the long run, IFPRI recommends countries invest more in agriculture, especially smallholder farms.

Grain reserves

Another recommendation would establish a “global emergency physical grain reserve.” Grain would be stored in strategic regions, such as the Horn of Africa.

“In the meantime, some of the large producing countries, like China, Brazil, the U.S. [and] Canada, can also…donate some of their grains from their own stock,” he says. The grains would be stored by such organizations as the U.N. World Food Program for emergency use.

Other recommendations include more investment in climate change adaptation and a working group to “regularly monitor the world food situation and trigger action to prevent excessive price volatility.”

Risks

If the recommendations are not followed, Fen says, “Food prices will continue to rise. I’m afraid that more poor people will suffer from hunger, from malnutrition. And this is the situation we do not want to see.”