Has the rise in international food prices since the mid 2000s hurt the poor, or helped them? Until recently, everything we knew about this topic came from simulation analyses rather than survey data. Simulation approaches invariably predict that poverty and food insecurity increases as the result of higher food prices, but there are many reasons why these predictions might not eventuate. On the other hand, standard household surveys yield information only after long lag periods. In light of these constraints, in some of my work I use an indicator of self-assessed food security from the Gallup World Poll (GWP). Since 2005, Gallup has survey men and women in a large number of developing countries and asked them (among other things) whether they have had “any trouble affording sufficient food in the last 12 months?” I take the percentage of respondents who answer yes to this question as a measure of national food insecurity.
Guest post from Oxfam Research Policy Adviser Richard King (right)
Today the UN’s Food and Agriculture Organisation (FAO) is celebrating World Food Day, and is playing host to the latest Committee on World Food Security meeting. Last week, to warm things up, the FAO, World Food Programme, and International Fund for Agricultural Development launched their joint 2012 ‘State of Food Insecurity in the World’ (SOFI) report, with the FAO’s latest estimates of global hunger. If you’re familiar with oft-cited facts such as ‘nearly one in seven people go to bed hungry’, or ‘nearly a billion people don’t have enough to eat’ reverberating around the echo chamber, they’re based on the calculations in previous editions of this publication.
The annual report has commanded a lot of interest over the past few years, partly because we’re living through a time of extraordinary food price volatility, but also because some of the FAO’s estimates of hunger (or more properly ‘undernourishment’) during the global food and economic crises have raised eyebrows. I won’t rehash here previous critiques of the recent estimates; suffice to say the shortcomings have been increasingly recognised by the FAO itself, and they’ve been beavering away behind the scenes to improve both their calculations and the data that they rely on. So it was with much anticipation that we waited to see what changes last week’s report would bring. And [fanfare!] here they are…
There is no arguing that high food prices are taking a heavy toll on Latin America’s families, business and governments, fueling ripple effects on people’s budgets and the economy as a whole.
But behind the cold hard numbers of price increases, shrinking budgets and inflationary fears, the simple truth is high food prices can kill –or severely impair- people, especially kids from underprivileged environments.
Today the world seems to hold its breath again amidst the sudden hike in food prices caused by a historical drought in the US and lack of rain in Eastern Europe. It is a thorny task to predict whether the very recent increases in food prices will unfold into magnitude of the crises seen in 2007-08 and again in 2010-2011: differences between now and then in the price of energy, a critical driver of food prices, give a reason for optimism; as does the hope that governments now better understand the painful consequences of some panic policies that have been put in place during previous episodes. On the other hand, months of volatility in global food prices, low food stocks and food security crisis alerts in parts of East and West Africa all paint a gloomy picture.
As food prices creep up again for the third time in five years, concerns about global food security are also on the rise. Right off the bat, three questions come to mind: Why this is happening? How does this affect Latin America and the Caribbean? What should we do about it?
The latest Global Monitoring Report analyzes the impact of recent food price spikes on the Millennium Development Goals (MDGs), paying particular attention to the negative consequences that temporary food price shocks may have on nutrition.
Nutritional outcomes are directly linked to the MDG on hunger (MDG 1.c) and indirectly to most of the remaining development targets, through its effects on cognitive skills of young children and consequently on human capital accumulation. Unfortunately, progress in fighting undernourishment is considerably lagging across nearly all developing regions (figure 1).
While the world’s population doubled in the last fifty years, global food production trebled – especially in the staple grains that form the mainstay of the poor man’s diet. Yet, over a billion people in the world still go hungry - why?
As the World Bank’s Global Monitoring Report of 2012 shows, it is not that the world as a whole lacks rice, wheat or maize, but produce from food abundant areas does not always make it to food deficit ones – i.e. it is not so much the availability of food that matters as access to it.
Movement of food within a country or across its borders remains hampered by dismal infrastructure and inefficient regulations, and shackled to the dictates of political economy. Yet, trading food can feed the poor at lower costs and help countries weather shocks to local production.
High food prices, especially when they have increased suddenly and unexpectedly, have been found to hurt many poor people around the world. The Global Monitoring Report 2012: Food Prices, Nutrition, and the Millennium Development Goals (GMR) finds that the food price shock that peaked in early 2011 pushed nearly 50 million people into poverty. On one level, this is not surprising—the poorest people, after all, spend nearly all of their income on food. But on further reflection, this result is not so obvious— three quarters of the world’s poor are rural and the majority of them depend on farming for their livelihoods. The problem is that—unlike farmers in rich countries—many poor farmers in developing countries don’t produce enough food to meet their families’ needs. These net buyers of food are hurt by higher food prices even though they are farmers.
Three years from the deadline for reaching the Millennium Development Goals, two-thirds of countries will not reach MDGs 4 and 5 (child and maternal mortality, respectively). And now the second food price rise in three years is a wake-up call for the development community.
In this context, the Global Monitoring Report 2012: Food Prices, Nutrition, and the Millennium Development Goals examines some of the possible consequences of food price increases, such as a rise in poverty and undernourishment1. Households cope through a variety of mechanisms, including: eating less nutritious diets and then less food; making more household members work (women and children); and not seeking health care when ill. The most vulnerable (the poor, children, and pregnant women) bear the brunt of these adverse impacts. Moreover, as countries seek to maintain food prices, some increase food price subsidies and cut into other services.
Food prices are finally coming down after a year of spikes and high volatility. But we must remain vigilant. Prices of certain foods remain very high, and millions of people around the world are still at risk of suffering from malnutrition and hunger.
Let’s get to the numbers first.
As we gather in kitchens and dining rooms during this season of eating and charity, let us pause for a moment to review the state of food trade in Africa: how does cross-border commerce in key crops fare on a continent with pockets of harsh weather and unpredictable politics? How is the traffic in grains and tubers?
It’s clear that prices are high, following the February 2011 peak worldwide. The price of maize in Nairobi has tripled this year alone, while the price of a 50 kg bag of rice in Dakar has risen from $36 to $43.50. These spikes can be blamed partly on increased demand for food crops – including for biofuel production in Europe and the United States. They are also due to supply-side factors, such as higher energy prices which impact transportation and fertilizer costs, and weak harvests in large exporting countries.
But on a global scale there is no food shortage. In 2010, the world produced 2.2 billion tons of cereals, up from 820 million tons 50 years ago (a 268 percent increase). Over the same period, the world’s population has grown from three billion to seven billion people: an increase of 233 percent. In Africa, food staple production is abundant in some areas even though the continent is a net importer of food. Mali grows enough excess sorghum to supply its neighbors, and Uganda, the bread basket of East Africa, makes regular shipments of maize to Kenya, Southern Sudan and Rwanda. The problem is that the surplus food does not always get to those in need. Often shipments of perishable goods are stopped at the border and excessive inspections frequently cause delays.
Global food prices remain high and volatile, affecting the poorest countries the most. Global prices might not be at their 2008 record high, but they are still well above their levels a year ago. For millions who are already vulnerable, events like the droughts in the Horn of Africa add to their hardships while continued market turmoil increases uncertainty in the global economy.
How are communities around the world coping with the higher and more volatile food prices? What is the impact on poverty, or on nutritional outcomes? And, how should policymakers respond to such price spikes that can eat away at already-tight budgetary resources?
These are only some of the questions that a key World Bank-IMF report is delving into as it provides an annual assessment on progress towards the Millennium Development Goals (MDGs) as well as the challenges which developing countries face in achieving them.
Turmoil is not solely circumscribed to Wall Street and stock markets around the world. Volatility is also affecting global food prices, and with them, millions of people in developing countries. So, just as the world marks the birth of the 7 billionth baby this week, his or her family might be struggling to put food on the table.
Rising food prices, famine in the horn of Africa, climate change, seasonal hunger, uncertainty about the future of the global food system.
World Food Day and Blog action Day are on October 16, and one hopes this day will inspire many ideas and innovations to tackle the World’s food security challenges. One such idea is - ‘small is beautiful’. Duncan Green explains why small farmers are actually beneficial when it comes to agriculture. One obvious reason is “it puts food into circulation and at the same time boosts the income of some of the poorest people on the planet”. Read his post to know more. Also, revisit the post "Seasonal Hunger" on this blog to know about the specific policy actions that can end the occurrence of this cycle.