G8 sees rising hunger as a threat to global stability

April 8, 2009

     By Duncan Green     

A significant new addition to the growing chorus of voices expressing concern on hunger and food prices. The food crisis has not gone away since last year, even if the general economic meltdown has driven it from the headlines. World Bank officials have been warning that plantings may be down this year; the FAO has found that consumer prices in poor countries have got stuck, and are diverging from falling world prices (see here) and now Javier Blas at the Financial Times has got hold of a grim report to the upcoming G8 ministerial meeting on agriculture┬áin Italy from 18-20 April. Here are some excerpts from Javier’s piece:

‘The report, entitled “The global challenge: to reduce food emergency”, warns that global food production needs to double by 2050 to feed a surging population while at the same time dealing with “pronounced climate changes” and higher input costs.

“Without immediate interventions in agriculture and agri-marketing systems, the 2007 crisis will become structural in only a few decades,” the document, drafted by the G8’s Italian presidency and seen by the Financial Times, warns. It adds that a further food crisis will have “serious consequences not merely on business relations but equally on social and international relations, which in turn will impact directly on the security and stability of world politics”.

A combination of lower growth, rising unemployment and falling remittances together with persistently high food prices has pushed the number of chronically hungry above 1bn for the first time. Although agriculture commodity prices have fallen since then by up to 50 per cent, they continue well above their pre-crisis level. “The issue of price volatility remains a crucial element for world food security,” the report says. “There is a need for a fast increase of agricultural production in developing countries.”

In the US, the world’s largest exporter of agricultural commodities, farmers are set to break with five years of cropland expansion, cutting their acreage by 7m, the largest fall in 20 years. Elsewhere, the concern is that cash-strapped farmers, particularly in breadbasket countries such as Ukraine, Argentina and Brazil, will reduce their use of high-yield hybrid seeds and fertilisers, hurting output.
The main nightmare scenario among food aid and agriculture officials – and the food industry – is that an unexpected spate of bad weather harms the next crop. With agriculture commodities stocks at multiyear lows, that could push prices up, triggering another crisis on top of the economic one.’