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Rising Food Prices Affect World's Poor


At the annual National Food Policy Conference in Washington, some of the country's leading food and development experts gathered to discuss new strategies for reducing global hunger in a time of high food prices. VĂ©ronique LaCapra has this report.

Worldwide, the demand for food is increasing. According to Janet Larsen, director of research at the Earth Policy Institute, the world population is growing by more than 70 million people each year. The institute is an environmental research organization that focuses on sustainable development.

"Around the world there are four billion people trying to move up the food chain, consuming more grain-intensive livestock products," says Larsen. She also blames the increasing diversion of food to fuel to run our growing automobile fleets.

Expert Says Not Enough Money Invested in Agriculture

Global food production has not been keeping pace with increased demand. Larsen says that in seven of the last eight years, the world has consumed more grain than it has produced.

Ann Tutwiler, the managing director for trade and development at the William and Flora Hewlett Foundation, says inadequate investment in agriculture by developing country governments and international aid agencies is a major reason why today food demand is outstripping supply.

"Spending on farming as a share of public spending fell by half between 1980 and 2004," says Tutweiler. "While official development assistance has almost doubled in the last five years, the agricultural share of that official development assistance has fallen from about 20 to 15 percent."

Rising Food Prices Hurt World's Poor

With demand already exceeding production, the recent spike in food prices has been a disaster for the world's poor. David Beckmann, president of the hunger relief organization Bread for the World, says that the impact has been most severe in 35 low-income countries that depend heavily on imports for food, many of them in sub-Saharan Africa.

"Those 35 countries are spending $60 billion more on food imports this year than they did in 2006," he said.

The World Bank estimates that the surge in food prices could push 100 million more people deeper into poverty.

And according to Janet Larsen, environmental problems will exacerbate the crisis. "We're looking at a future of water shortages," she says.

Larsen says that irrigation is the primary culprit, accounting for about 70 percent of all water use worldwide. "Irrigation has tripled since 1950," says Larsen, "but we have tripled our irrigation by over-pumping underground water resources, diverting rivers so that they no longer make it to the sea."

Developing Countries Urged To Increase Food Aid, Make Better Use Of Funds

To address the food crisis in the short term, says David Beckmann, wealthy nations like the United States need to increase food aid funding. But they also need to make better use of that funding, by purchasing the food in the recipient country, rather than shipping it from donor nations. "When we appropriate money for food aid that can be purchased locally, we get about twice as much help for hungry people with every dollar."

Daniel Gustafson of the United Nation's Food and Agriculture Organization agrees. "We know from long experience that cash or additional income that is spent within ... the village economy, has a much larger impact and a much larger multiplier effect," Gustafson says. This ensures the food aid funding goes directly to local producers and merchants.

Gustafson says that rural economies also benefit if agricultural inputs, like fertilizer and seeds, can be purchased on the local market.

In addition, says Gustafson, programs that provide cash to smallholder farmers can help them break out of the cycle of poverty and hunger. He says that a big problem for most small farmers is not having access to cash or credit when they need it the most. As a result, they end up selling off livestock or other assets, driving themselves further into poverty with each periodic crisis. Gustafson says that having "a little bit of extra cash" can allow farmers to survive difficult periods, and even invest in their farms to improve their means of production.

The experts stressed that to address the global food crisis in the long term, low-income countries will need more funding for agricultural development.