In past economic crises, food was plentiful and prices were low. Today, the story is different
Philippine Inquirer, Nov. 3, 2008
MANILA, Philippines – The world financial crisis has the “potential to be far worse” than previous meltdowns because of “high food prices and food shortages, and the steady erosion of agriculture and rural economies,” the United Nations’ Food and Agriculture Organization warned on Monday.
The food crisis, “coupled with an economic crisis of the enormity taking place today, the impact could be catastrophic,” said Bangkok-based FAO assistant director general and regional representative for Asia and the Pacific, Dr. He Changchui.
In a statement e-mailed by the UN Manila office to media outfits, He called on all countries to ensure a steady supply of food as he urged developed countries to follow through on commitments they made during the Food Security Summit in Rome last June, when they pledged $11 billion for immediate food aid, and for investing in and revitalizing the agricultural sector to boost crop production.
“Donors must neither slow [down] nor renege on the official development assistance and other political commitments made in Rome and elsewhere,” the FAO official said. “This is a problem that can only be addressed at a global level, and so the pledges made in Rome must be fulfilled – and fulfilled on time.”
On the other hand, developing countries must invest in agriculture, including improved infrastructure, to make it “sustainable, rewarding, and sufficiently productive to support us all,” He said.
He said this is particularly true for Asia and the Pacific, where there are 583 million hungry people on farms and in villages. He noted that 75 percent of the region’s poor live in rural areas.
To grow more diverse crops and to harvest more frequently in a year, He said, farmers in developing countries must be provided with technical knowledge, tools, and infrastructure.
“With investment and support they can remedy these problems and begin producing enough food for us all at prices we can stomach,” He said.
Unlike the Great Depression of the 1930s, 1987’s Black October, and the Asian Economic Crisis of 1997, the FAO official said today’s financial crisis is coupled with a food crisis.
During those economic meltdowns, He said, “food prices were at historic lows. No matter how dire the situation, food was still plentiful and cheap.”
“Today, the story is different. Food is in shorter supply; prices have been steadily climbing since 2001, and have escalated dramatically since 2006,” He added.
Citing FAO tracking, He said food prices rose by nine percent in 2006, 24 percent in 2007, and surged 51 percent in the past 12 months.
“Although we saw some price drops for certain food commodities in the past months, average prices are still much higher than normal, and the international markets remain volatile,” He said.
The FAO official warned of more social unrest and political upheaval due to food shortages and runaway food price inflation. He pointed out that the current food crisis has already sparked riots.
If the food crisis worsens, He also warned of more people joining the ranks of the hungry, the malnourished, and the poor, endangering and possibly reversing the positive trends toward meeting the Millennium Development Goals by 2015.
“In 2007 alone, the food crisis threw an additional 75 million people into the ranks of the malnourished. Hard-won gains by many nations in their battles against hunger and poverty may be reversed. The ability of countries to meet the Millennium Development Goals will be ever more doubtful,” He said.
The FAO official also noted the ill effects of climate change on agriculture: increasing droughts and flooding in fertile, food-producing regions.
He said global policy makers must also consider the other factors that contribute to low agriculture productivity: the lure of quick cash from bio-fuels crops (which reduces the area of land devoted to food), and subsidies and trade barriers (which distort markets and reduce production and distribution efficiencies).
“For our own sake, we must provide [farmers in developing countries] with the tools for achievement and the seeds for success. Their success puts food on our tables. And the fruits of their labors are the very staples of our lives,” He said.