World Food Day - Food Prices Crisis!

Food prices – from crisis to stability

World Food Day ,Observed Oct 18 each year in over 150 countries,has a different focus each year. This year’s theme is “Food prices – from crisis to stability” . Jacques Diouf, Director-General,Food and Agriculture Organization of the United Nations issued the following statement explaining this year’s focus on food price instability,and points to a variety of causes,and suggested solutions,which might help end food price instability,and hunger.The Canada Agricultural Museum has a great wealth of information and resources available on their site to help understand the problem,and help with the solution. According to their information,the problem is not in a lack or food,but the distribution of food. Unstable food prices cause many problems ‘When food prices go up, more people go hungry, whether due to importing less, growing less, or earning less for what is grown.’

There are over 1 billion people living in chronic hunger, and by the time you finish reading this 2 children will have died of hunger. I urge you to take action,by signing the petition to end hunger,and finding out more about what you can do. If they could put a man on the moon,so many years ago,can we not bring an end to world hunger NOW? Where are our priorities?

Join the 3 million, and sign this petition to end hunger.  Let's start looking at what is really important.

From  Jacques Diouf, Director-General,Food and Agriculture Organization of the United Nations

“Food prices – from crisis to stability” has been chosen as this year’s World Food Day theme to shed some light on a trend that is hurting the poor consumer, the small producer and agriculture in general. Food prices, which were stable for decades, have become increasingly volatile.

If we are to seriously address the issue of world hunger, more effort has to be made to address the problem of food price fluctuations, particularly for those who spend most of their incomes on food, to ensure that they can return from the market with enough for their families to eat nutritiously.

Food Price Instability Causes

The causes of food price instability are well known. However, counteracting this instability requires political will.

Food Price Instability - Climate Change Depletes Stock

The global food market is tight, with supply struggling to keep pace with demand and stocks are at or near historical lows. Droughts or floods hitting key producing regions squeeze prices further. Agriculture cannot respond fast enough with increased food production because of long-term under-investment in research, technology, equipment and infrastructure.

Food Price Instability-Increased Animal Feed Costs

Increased wealth means many people worldwide are eating more meat and dairy products, driving up the price of animal feed. Eighty million people are born every year, creating more demand for food.

Food Price Instability - Food Commodity Investments Distorting Trade Policies

A further contributing factor may be the recent entry of institutional investors with large sums of money into food commodity futures markets. In addition, distorting agricultural and protectionist trade policies bear a significant part of the blame.

Food Price Instability- Market Price Prediction Guessing Game for Farmers

At the level of net food-importing countries, price rises can hurt poor countries by making it much more expensive for them to import food for their people. Farmers are also affected because they badly need to know, months away, the price their crops will fetch at harvest time. If high prices are likely, they plant more. If low prices are forecast, they plant less and cut costs. Rapid price swings make that calculation much more difficult.

Food Price Instability - Solutions

Food Price Instability - Solution - Eliminate Agricultural Subsidies

Greater policy coordination in international food trade can reduce volatility by helping maintain an assured flow of goods. FAO supports the elimination of trade-distorting agricultural subsidies in rich countries.

Food Price Instability - Solution - Increase Futures Markets Transparency

On speculation, FAO’s research suggests that while this might not trigger price movements, it could exaggerate their size and duration. More and better information is needed to allow greater transparency in trade on futures markets. This would help ensure that governments and traders make informed decisions and avoid panic or irrational reactions.

Food Price Instability - Solution - Emergency Food Reserves

As to mitigating the effects of volatility on the poor, national or regional safety nets, possibly featuring emergency food reserves, can help assure food supplies to the needy during crises. Poor consumers can also be assisted with cash or food vouchers and farmers helped with inputs such as fertilizer and seeds.

Food Price Instability - Solution -Government Call Options

Various financial mechanisms can help governments protect consumers from food price increases. One example is call options, which would give governments the right to buy food at a set price even months ahead, regardless of how the market has moved in the meantime.

Food Price Instability - Solution -  Increased Agricultural Investment

Ultimately though, stability in the food market depends on increased investment in agriculture, particularly in developing countries, where 98 percent of the hungry live and where food production needs to double by 2050 to feed growing populations.

On World Food Day 2011, let us reflect seriously at what causes swings in food prices, and articulate alternatives on what needs to be done at national, regional and global levels to reduce the impact on almost a billion people who do not have enough to eat.
Jacques Diouf
Director-General
Food and Agriculture Organization of the United Nations

Food prices - from crisis to stability – 2011 Focus!

Resources:

1 Billion Hungry

Canadia Agriculture Museum