THE END OF CHEAP FOOD? WORLD’S POOREST IN DANGER AS FOOD PRICES SPIKE

arsamma Masanagari stands amid pigeon peas and sorghum on her family’s farm in Pastapur village in the Indian state of Andhra Pradesh.

 new round of food inflation and severe hikes in the price of basic foodstuffs such as rice, maize, wheat, oil, sugar and salt is plunging many of the world’s poorest people, including millions across the Horn of Africa, into deeper poverty and into situations of severe hunger and malnourishment. This is one of the findings of the IFRC’s annual World Disasters Report  2011 launched today in New Delhi, India.  The worst hit are poor people who typically spend between 50 and 80 per cent of their incomes on food.

“Food prices are hitting the alarming highs of the 2008 crisis, with the poorest of the poor being hit the hardest,” said IFRC Secretary-General Bekele Geleta. “It’s profoundly concerning that we seem to be going backwards in terms of ensuring basic food is available and affordable” he added.

Speculative commodity trading, rapidly growing populations, climate change and a sharp decrease in domestic agricultural production due to lack of appropriate investment and ineffective governance, are just some of the leading causes fuelling a new round of food inflation concludes the report.

The recent bursting of the US property bubble has led to a surge in global investors seeking new opportunities in the food-commodity futures.  “Global financial and trade speculations can have a dangerous impact on food prices,” said Geleta adding that food stocks were often being bought up by traders and stored away in depots and warehouses waiting for high profits. “It’s unacceptable that a trader in London or New York can determine whether or not a father in a country such as India can afford to feed his family,” he said. 

According to The Kenya National Bureau of Statistics, the price of a 90 kilogram bag of maize, the main food source for most Kenyans, jumped from about $16 in June 2010 to about $44 in July 2011 -- an increase of 160%. Sugar prices increased by 19.43% between June 2011 and last month.

More investment in agriculture is essential, but the reports questions whether this investment should target smallholders and pastoralists or encourage capital-intensive, large-scale farming. There is increasingly widespread agreement that smallholder farming could be the best way forward in Africa.

“Governments and donors should invest more in agriculture and give a helping hand to farmers,” said Geleta, himself Ethiopian-born. “It’s not just food that is becoming expensive, the price of new technologies, seeds, fertilizers and fuel needed to transport food is also going up. We need to boost the agricultural sector as a way of protecting people who find themselves at the mercy of inflation and the global stock markets.”

The WDR also highlights growing fears that the rise in food prices could reach a violent tipping point and become a dangerous source of instability in many countries.  The recent uprisings in the Middle East and North Africa were fuelled, amongst other factors, by an increase in the price of food and general cost of living.   In September 2010, 13 people were killed in “food riots” in Mozambique.

“It seems the global volatility of food prices is here to stay, and the era of cheap food is over, “ said Geleta urging governments and donors to ensure that the most vulnerable people are better prepared to cope with  unstable agricultural markets and volatile food prices.