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food and agriculture > newsfile > crop switch worsens global food price crisis

Crop switch worsens global food price crisis

Posted: 07 Apr 2008

The UN Secretary General, Ban Ki-Moon, has joined in the chorus of concern now being voiced over the use of biofuels, especialy those which lead to direct competiton for food supplies. This report is by John Vidal Environment Editor of The Guardian, and a Planet 21 Trustee.

Two years ago the UN's Food and Agriculture Organisation expected biofuels to help eradicate hunger and poverty for up to two billion people. Yesterday [April 4, 2008] UN secretary general, Ban Ki-moon raised real doubt over that policy amid signs that the world was facing its worst food crisis in a generation.

Since the FAO's report in April 2006 tens of thousands of farmers have switched from food to fuel production to reduce US dependence on foreign oil. Spurred by generous subsidies and an EU commitment to increase the use of biofuels to counter climate change, at least 8m hectares (20m acres) of maize, wheat, soya and other crops which once provided animal feed and food have been taken out of production in the US.

In addition, large areas of Brazil, Argentina, Canada and eastern Europe are diverting sugar cane, palm oil and soybean crops to biofuels. The result, exacerbated by energy price rises, speculation and shortages because of severe weather, has been big increases of all global food commodity prices.

Lester Brown, director of the Earth Policy Institute in Washington, said yesterday that land turned to biofuels in the US alone in the last two years would have fed nearly 250 million people with average grain needs. "This year 18% of all US grain production will go to biofuels. In the last two years the US has diverted 60m tonnes of food to fuel. On the heels of seven years of consumption of world grains exceeding supply, this has put a great strain on the world's grain supplies," he said.

Soaring prices

Robert Zoellick, president of the World Bank, said this week that prices of all staple food had risen 80 per cent in three years, and that 33 countries faced unrest because of the price rises. Zoellick urged rich countries to give the UN's World Food programme $500m for emergency aid. The bank plans to increase lending for agricultural production in Africa from $420m to $850m a year in 2009.

As the bank predicted rice price rises of 55% in 2008, violent protests against the cost of living hit Ivory Coast this week. On Thursday President Laurent Gbagbo cancelled custom duties on imported staple foods and cut taxes on rice, sugar, milk, fish, flour and oils.

In Bangladesh, where families spend up to 70% of income on food, more than 50,000 households are getting emergency food after rice price rises. A government source said: "One reason is that the overall drop in food production because of biofuels has prevented food being exported."

Many countries that switched from traditional crops to rice diets as urbanisation increased face serious shortages and have defied the IMF by increasing wages, lowering prices and banning exports. China has put price controls on cooking oil, grain, meat, milk and eggs.

Exports stopped

There have been protests in Guinea, Egypt, Morocco, Uzbekistan, Yemen, Burkina Faso, Mauritania, Niger, Uzbekistan, Senegal, Haiti, Bolivia and Indonesia. In the last two months Vietnam, Cambodia, Egypt, India, the Philippines and Thailand have stopped crop exports or raised prices to more than $1,200 a tonne to discourage exports.

Yesterday Philippine leaders warned that people hoarding rice could face economic sabotage charges. A moratorium is being considered on converting agricultural land for building housing or golf courses. Fast-food outlets are being pressed to offer half-portions of rice.

Robert Zeigler, director-general of the International Rice Research Institute, said it could be months before the market got a clear sense of how high prices could go. "The whole market could become paralysed. Who's going to sell rice at $750 a tonne when they think it's going to hit $1,000?"

Josette Sheeran, director of the World Food Programme, said in Ethiopia this week: "The cost of our food has doubled in just the last nine months. We are seeing more urban hunger than ever before. Often we are seeing food on the shelves but people being unable to afford it."

Urbanisation and world trade rules have encouraged the dumping of rice and other food on African countries, which now import up to 40% of food.

Last month the UK's chief scientist and food expert, Professor John Beddington, said the prospect of food shortages over the next 20 years was so acute that politicians, scientists and farmers must tackle it immediately. "Climate change is a real issue and is rightly being dealt with by major global investment. However, I am concerned there is another major issue along a similar time-scale, an elephant in the room - that of food and energy security."

At a glance:

Cameroon: At least 24 people killed and 1,600 people arrested in February. Taxes slashed on food imports and public sector wages increased by 15 per cent

Indonesia: 10,000 demonstrated outside the presidential palace in Jakarta after soya bean prices rose more than 50% in a month and more than 125 per cent over the past year.

Egypt: Seven people have died in fights or of exhaustion queuing for subsidised bread. Dairy products are up 20 per cent oil 40 per cent.

Burkina Faso: Riots in three towns after the government promised to control the price of food but failed.

Guinea: Five anti-government riots over cost of living in past 18 months.

Pakistan: Thousands of troops have been deployed to guard trucks carrying wheat and flour.

Copyright The Guardian. Reproduced with kind permission. The original srticle and links may be seen at The Guardian website

Related links:

Royal Society warns of biofuel dangers

UN report warns on impact of biofuels

Ethanol will drive up world food prices in 2008

Bright future for biofuels, says report

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