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Financial crash deepens food crisis
(China Daily)
Updated: 2008-10-17 06:59
http://www.chinadaily.com.cn/world/2008-10/17/content_7113789.htm

Nearly 1 billion people went hungry Thursday as the world marked World Food 
Day.

The global financial crisis has sent food prices soaring and pushed an extra 
119 million people into hunger, meaning 967 million people are now living 
below the hunger line, according to Oxfam, the British-based aid and 
development charity said.

Meanwhile, United Nations' Food and Agriculture Organization (FAO) fears 
Western governments embroiled in the financial crisis could cut aid to 
agriculture in developing countries and introduce protectionist trade 
measures.

On Wednesday, the FAO's Director-General Jacques Diouf warned that such steps 
could increase the risk of another food crisis occurring next year.

In a speech at the 34th Session of the FAO's Committee on World Food Security 
on the eve of the World Food Day, Diouf said that it could happen despite 
this year's record cereal harvest.

According to the latest issue of the FAO's Crop Prospects and Food Situation 
report, cereal production this year is forecast to increase 4.9 percent to a 
record 2.23 billion tons.

However, some 36 countries around the world are still in need of external 
assistance as a result of crop failures, conflict or insecurity, or 
continuing local high prices, the report said.

The great uncertainty now enveloping international markets and the threat of 
global recession may tempt countries toward protectionism and toward 
reassessing their commitments to international development aid, Diouf said.

"It would be unfortunate if this were to be the case and the recently 
mobilized political will toward enhanced international support for developing 
country agriculture were to evaporate," he added.

The financial crisis, following hard on the heels of the soaring food price 
crisis, which threw an additional 75 million people into hunger and poverty 
last year alone, may well deepen the plight of the poor in developing 
countries, he said.

Commodity prices are currently dropping, mainly on expectations of favorable 
crop prospects but also because of a slowing world economy, among other 
factors.

This could mean a cutback in planting followed by reduced harvests in major 
exporting countries. Given continuing low grains stocks, this scenario could 
lead to another turn of record food prices next year - a catastrophe for 
millions who by then would be left with little money and no credit.

The impact of the financial crisis may also be felt in developing countries 
at the macro level, with further potentially negative effects on agriculture 
and food security, Diouf said.

"Borrowing, bank lending, official development aid, foreign direct investment 
and workers' remittances all may be compromised by a deepening financial 
crisis," he said.

Coordinated action needed

Diouf said that governments and world leaders agreed at the FAO High-Level 
Conference on World Food Security held last June that "the international 
community needs to take urgent and coordinated action to combat the negative 
impacts of soaring food prices on the world's most vulnerable countries and 
populations".

A G8 summit in Japan a month later confirmed the resolve of world leaders to 
address global food security as a top priority and demonstrated a growing 
political will to reverse disturbing trends in global hunger, he said.

"It is vital that this momentum be maintained," Diouf said.

"Unless political will and donor pledges are turned into real and immediate 
action, millions more may fall into deeper poverty and chronic hunger.

"The global financial crisis should not make us forget the food crisis. 
Agriculture needs urgent and sustained attention too to make hunger and rural 
poverty part of history," he said.

Also yesterday, Oxfam launched an urgent appeal to mark UN World Food Day, 
saying that the global total of people in hunger had risen to almost 1 
billion.

In Double Edged Prices report, launched in London, Oxfam argued that the 
increase in food costs had seen some international companies quadruple their 
profits while the world's poor were pushed further into destitution.

Oxfam said it needed an extra $26.2 million to fund its development and 
humanitarian work on food and agriculture, and to campaign for changes to 
"flawed trade and agricultural policies" afflicting poor farmers.

"These are tough times for many of us, but huge increases in food prices mean 
that the world's poorest are being hit hardest," Oxfam chief executive 
Barbara Stocking, said, adding that anything people could give would make a 
difference.

Oxfam slammed the international community's response to the food problem, 
comparing the $12.3 billion pledged in Rome earlier this year - and the $1 
billion it said has been disbursed so far - to the vast sums made available 
in days to bail out Western banks.

The charity said higher food prices meant people were eating less and lower 
quality food, while children were being pulled out of school and farmers were 
migrating to city slums.

The Oxfam report said all governments, donors and agencies had to learn 
lessons from the financial crisis and invest in agriculture, adopt trade 
policies that ensure food security, and design social security systems that 
protect the poorest.

"The trend in agriculture, as in international finance, has been toward 
deregulation and a reduced role for the state," Stocking said.

"This has had devastating effects and innocent lives have been blighted by 
exposure to market volatility.

"It is time the world woke up to the need for developing country governments 
to support their poor farmers, and the obligation of developed countries to 
help them to do so.

"Where there has been unmanaged trade liberalization, underinvestment in 
agriculture, and little support from government, the effects have been 
devastating."

Agencies-Xinhua