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The UN’s Food and Agricultural Organization (FAO) recently reported that the December 2010 Food Price Index surpassed the peak reached in June 2008. A closer examination of the data, however, provides some modest hope that the worst effects of the 2007-08 price spikes can be avoided, with luck and better policies.
First, it is important to note that only two of the five components of the Food Price Index were above 2008 levels—meat (slightly above) and sugar (more than twice as high). Second, as shown in the chart below, staple grain prices, which are key to preventing hunger among the poor, are increasing sharply, while rice and, to a lesser degree, wheat remain well below their 2008 peaks. Maize is the exception, thanks in part to U.S. policies supporting corn-based ethanol that bring to mind the zombies populating popular culture—they just won’t die!
Today’s Washington Post reports Senate passage of the food safety bill. It passed 73 to 25, despite the putative rise of anti-regulatory sentiment, because a raft of stories about food poisoning made American families anxious about food safety. On climate safety, however, Congress remains paralyzed despite clear evidence that extreme weather is hitting American families harder every year .
At the next meeting of its Executive Board in Rome on November 8, the management of the World Food Programme (WFP) will propose an expanded financing facility to the tune of $557 million to fund advance purchases of food. This is a welcome news that has the potential to cut hunger, by stretching WFP dollars and speeding deliveries.
Last week’s deadly unrest in Mozambique became a global news story, as clashes between security forces and people protesting rising food prices in the capital, Maputo, left at least ten people dead and more than 400 people injured. CGD Non-Resident Fellow Chris Blattman explained his skepticism about such riots, questioning why many were blaming climate change and higher international grain prices for domestic unrest. Rather, he pointed to poor domestic policies and alarmist journalism and “yearned for real information” about the root causes of the riots this weeks. Having recently returned from Mozambique, here are some additional insights on the food riots.
The decision by Russia to respond to scorching heat and wildfires by restricting wheat exports is threatening to trigger a panic similar to what sent food prices soaring in the first half of 2008. Commodity experts argue that supplies are sufficient to meet needs, thanks to bumper crops and increased stocks in the U.S.
An illustrious lineup was on hand today at the U.S. Treasury for the launch of the somewhat awkwardly named Global Agriculture and Food Security Program (GAFSP), a multidonor trust fund that the global leaders promised to create at the G-20 Summit in Pittsburgh last September. The new fund’s goal: to help countries reduce poverty and hunger by increasing investments in agriculture, particularly amongst smallholder farmers. Speakers included U.S.
The World Food Programme feeds almost 100 million people around the world. It has a world class logistical capability but its financial risk management capacity is extremely limited. In a new paper coauthored with Benjamin Leo and Owen McCarthy, I argue that the World Food Programme must be empowered to actively manage price risk, using financial markets to feed more people in a timely manner.
Feeding three billion additional people over the next four decades and improving food security for one billion people who are currently hungry or malnourished—all in an era of worsening land and water scarcity, climate change, and declining crop yields—is a dire challenge. Meeting it will require a giant leap in agricultural innovation in developing countries, similar to the 1960s Green Revolution. You can help to design the solution.
I wrote in a CGD Note last week with Tom Slayton about how the Philippines are engaging in aggressive buying techniques that seem designed to drive up prices, raising the specter of another rice price crisis such as what befell us in early 2008.