EGYPT:The demand for biofuels has combined with other issues to whip up a "perfect storm" on food prices and supply, writes Mary Fitzgeraldfrom Alexandria in the second part of her series World food security
WITH FOOD riots helping to topple a government in Haiti, deadly protests in Egypt and Cameroon, and increasing desperation in dozens of developing countries, it is clear that the soaring cost of basic foodstuffs is provoking much soul-searching and no little fury across the world.
In less than 12 months, wheat prices have risen 130 per cent, soya by 87 per cent and rice by 74 per cent. In general, food prices have climbed about 83 per cent worldwide over the past three years, according to World Bank figures.
The spiralling cost of rice, a staple food for nearly half the world's population, has led several major rice-producing countries, including India and Vietnam, to impose severe limits on exports to ensure domestic stocks.
According to the World Bank, 33 countries are now in danger of political instability and domestic unrest following food price inflation.
In the words of Jacques Diouf, executive director of the UN's Food and Agriculture Organisation (FAO), the current crisis presents "a risk for peace and stability around the world".
Last weekend World Bank president Robert Zoellick warned that 100 million people faced being pushed deeper into poverty as a result of rising food prices. The repercussions, he said, could be felt well into the future.
"This is not just about meals forgone today, or about increasing social unrest, it is about lost learning potential for children and adults in the future, stunted intellectual and physical growth," Zoellick explained.
The reasons why the world has arrived at this point are many and complex but economists and development experts highlight several factors that have combined to create what they say is something of a "perfect storm" with the potential to wreak catastrophe on a global scale.
Zoellick and many others in the development sector believe a key factor is the growing biofuel industry and, in particular, the US government's policy of giving subsidies to farmers so they can grow corn for the making of ethanol, a biofuel which can be blended with petrol.
Ethanol production is set to account for some 30 per cent of America's corn sector by 2010 as part of US attempts to reduce its dependence on oil imports.
Critics charge that by taking over land that would otherwise be used to grow food crops, the ethanol industry has caused food production in the US to plummet.
Last year the FAO predicted the making of biofuels would increase world food costs by 10 to 15 per cent, if current levels continue. The US-based International Food Policy Research Institute suggests biofuel production accounts for a quarter to a third of the recent hike in global commodity prices.
But biofuels is not just a US issue. Last week, an environment advisory panel urged the EU to suspend its aim of having 10 per cent of transportation fuel made from biofuels by 2020.
Everyone should examine the effects of "the dash for biofuels," Zoellick said last weekend. "I would hope countries that . . . have emphasised biofuel development will be particularly sensitive to the call to meet the emergency needs for people who may not have enough food to eat."
Ismail Serageldin, director of the Bibliotheca Alexandrina and a former vice-president of the World Bank, is more blunt. "We have to recognise that we have a disastrous situation before us. The corn ethanol policy of the United States is terribly wrong . . . it has an enormous impact."
This week Serageldin hosted a conference in the Egyptian coastal city of Alexandria bringing together Nobel Laureates, scientists, academics and researchers to examine how to tackle the problems of the developing world. Not surprisingly rising food prices dominated many of the sessions.
Richard R Ernst, a Swiss chemist and Nobel prize winner did not mince his words when it came to ethanol and the food versus fuel debate. "This is taking the food of the poor to burn it as fuel for the cars of the rich," he told delegates during the opening session. "By any standard that is not acceptable."
Last year the UN's special rapporteur for the right to food, Jean Ziegler, attempted to draw attention to the issue, going as far as describing biofuels as a "crime against humanity" because of effect on global food prices.
The impact of climate change is another factor. Drought, desertification, more frequent flooding and changing weather patterns in general have affected agricultural production worldwide. In Australia, once a leading producer of wheat, consecutive droughts have devastated crop yields, pushing prices up even further.
But the main reason why prices are rising - and will continue to rise, say experts - is simply that the population of the world is growing to the point where it is expected to top nine billion by the middle of this century, a rate which puts pressure on energy, other resources and food supply.
Not only that, but increasing wealth in emerging economies such as China and India has led to dietary changes that effect the global food balance.
"It's not just a case of more people, it's a case of more people moving up the income scale and people eating greater quantities of better food as a result of higher incomes," says Eduardo Trigo, an Argentinian economist attending the Alexandria conference.
The expansion of China's middle class has led to a doubling in meat consumption in the country. Chu Chengcai, a Chinese delegate, points out that his nation imported more than 50,000 tonnes of beef from the US last year. "People in China did not have the money to eat meat before but now they can," he says. "Eating a diet rich in meat protein is seen as healthier there."
Increased consumption of meat in countries such as China and India means there is greater demand for grain to be used as a feedstuff for livestock, sending prices soaring.
As queues for state-subsidised bread swell in his native Egypt due to the price squeeze on other staple foods, Ismail Serageldin admits the immediate future looks bleak. "This problem is not going to go away anytime soon."
Haiti
Port-au-Prince- Sellers and customers have been clashing over the price of rice in Haiti, three days after the government announced a deal to reduce the price by 15 per cent after food riots that killed at least five people.
Vendors said customers had expected rice prices to drop immediately after the government announced an agreement with importers to cut the cost of a 110-pound (50kg) sack of rice from $51 (¬32) to $43. But vendors were still selling older, higher-priced stocks, angering Haitians and keeping alive tensions over skyrocketing living costs in a nation where most people get by on less than $2 a day.
The senate fired prime minister Jacques-Édouard Alexis on Saturday after days of unrest over the high cost of living in the impoverished Caribbean nation of almost nine million people, where malnutrition is rampant. Five people were killed in the early days of the unrest when crowds attacked UN peacekeepers and Haitian police. - (Reuters)
North Korea
North Korea, which suffered from a famine in the 1990s that may have killed three million, faces a "potential humanitarian crisis" after harvests fell on poor weather and food prices surged, the World Food Programme (WFP) says. The country has a grain shortfall of 1.66 million metric tonnes this year, the highest since 2001, the agency said in a statement yesterday.
"It takes a third of a month's salary just to buy a few days' worth of rice," Jean-Pierre de Margerie, the WFP's country representative in North Korea, said in the statement. The situation is "not yet" on the scale of the 1990s famine, but "yellow lights have to be flashed", he added in an interview.
Prices of staple foods in the North Korean capital have doubled over the past year following floods last August that reduced agricultural output, the WFP statement said. Last year's harvest was a quarter less than that gathered in 2006, it said. - (Bloomberg)