I had a long chat with Pascal Fletcher at Reuters on Friday while he was writing this article on the effect of price rises for food and fuel in west Africa, where he’s based. He clearly knows the region back to front, and as his piece makes clear, the outlook isn’t good:
Africa’s cocoa makes the world’s chocolate, its fish, fruit and vegetables reach tables around the globe and its oil powers vehicles and factories from China to the United States. Yet far from benefiting from soaring commodity prices, African states are being squeezed as hard as any by the costs of fuel and food imports. Their desperate moves to cushion the impact for potentially restive populations threaten to wreck already stretched budgets, slashing receipts and swelling state spending.
As far as I can tell from the rough tally I’ve been keeping over the last few months, west Africa’s been one of the regions hardest hit by civil unrest related to food and fuel inflation, and Pascal’s article seems to confirm this. As a result, many governments have been under pressure to subsidise prices for both. Problem is, that doesn’t do their exchequers any good at all - quite apart from the inflationary impact of such measures.
The unplanned contingency measures, on top of global food and oil prices far above what most imagined a year ago, are wreaking havoc with governments’ finances. “This trend is throwing the budget out of gear,” Ghana’s President John Kufuor lamented last month when he unveiled a package of actions to mitigate the price rises…
As I argue in Pascal’s piece, the expense of subsiding goods across the whole economy, coupled with the inflationary impact, are two of the reasons for the current enthusiasm for social protection systems - be they food aid, vouchers or straightforward cash transfers - that are targeted at the poorest people. Expect to hear a lot about such ’social protection systems’ at this week’s UN food summit.
But there’s a catch, too: in many places, the infrastructure for administering these systems just isn’t in place. Helping countries to get it set up has to be a top priority for donors - starting right now.
May 30th, 2008 at 10:52 am | posted by Alex.Evans-Global.Dashboard
A post by Alex Evans, cross-posted from his blog Global Dashboard.
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Next week, the UN is holding a major summit on food security in Rome - I’ll be there throughout (and blogging regularly on what goes on). Ahead of the kick-off, I’ve updated the Global Dashboard page on where to get briefed on food prices, and put out a scene-setter press release through Chatham House that sets out a few thoughts on what the summit needs to achieve.
This week’s already seen a couple of new items on food prices that are worth a look, starting with a new annual FAO / OECD outlook report - which this year looks all the way out to 2017. It finds that although prices will come down in the short term (which you already knew, since you read it here on Global Dashboard on March 18th), nominal prices over the medium term will remain “substantially above” levels over the last ten years. In other words, it’s not just a blip.
Also worth a look is World Bank President Bob Zoellick’s ten point plan for food prices, published in the FT this morning. His article confirms that he’s well ahead of the curve on understanding the need for an integrated approach to scarcity issues:he says collective action is needed on “the interconnected challenges of energy, food and water [which will be] drivers of the world economy and security”. (I’ll be publishing a paper on how the multilateral system needs to be reformed to cope better with scarcity issues just before the G8 in early July.)
What will actually happen at the summit is currently anyone’s guess. It’s fair to say that FAO haven’t been very proactive in briefing the media on likely outcomes or what they’re hoping for, which puts them in the rather hazardous position of allowing high expectations to emerge without really managing them. Another risk is that a major spat over biofuels could erupt: Ahmadinejad and Chavez will both be at the food summit, and would like nothing better to embarrass the US over its support for ethanol - and while US subsidies for corn-based ethanol are certainly problematic, it’s hard to see these particular interlocutors opening up much political space on Capitol Hill as legislators contemplate the Farm Bill.
But on the upside, great progress has been made on financing the immediate humanitarian needs (after Saudi Arabia stunned everyone by coming up with half a billion dollars last week - a coup for WFP head Josette Sheeran and for UN Emergency Relief Coordinator Sir John Holmes, who’s invested much time encouraging Gulf countries to contribute). This, together with the prospect of some short term relief on prices, gives policymakers a chance to look ahead towards the longer term challenges as well as short term crisis management.
It’s also hard to remember a time when the UN system and the international financial institutions have worked together as closely or as effectively as they seem to have been doing on the UN’s food task force - a great story, given how fragmented the international system usually is, but one that’s gone largely unreported. Even so, the real work in pulling together the longer term agenda is still in front of us…
“It is crucial that we focus on specific action,” said World Bank president Robert Zoellick.
“These initiatives will help address the immediate danger of hunger and malnutrition for the two billion people struggling to survive in the face of rising food prices.”>
Countries will be able to access money to provide food for schools and other core services as well as to buy essential items such as seeds and fertilizer.
May 29th, 2008 at 10:49 am | posted by Virginia Simmons
The U.S. Government Accountability Office will release a report today saying that the United States’ and multilateral agencies efforts to reduce hunger in sub-Saharan Africa have been “insufficient.” The report comes one week before a special United Nation’s summit in Rome on the global food crisis.
“To see that chronic hunger in Africa is getting worse despite our actions shows that the international community must retool its strategy to combat it,” said Sen. Russell Feingold (D-Wis.), chairman of the subcommittee on African affairs, who led the request for the report. “Rather than simply sending more food aid to Africa, the U.S. and the international community need to address the factors that contribute to food insecurity.”
A spokeswoman for USAID said the agency was aware of the report but said it would decline comment until its official release this morning. The report comes on the heels of another released by the GAO last year sharply criticizing U.S. food aid programs. That report called them “inherently inefficient” because they rely on the sale of American-grown food that is costly to transport overseas, as opposed to food purchased closer to the troubled regions themselves.
May 12th, 2008 at 4:21 pm | posted by ONE.Partners
You signed ONE’s petition to President Bush about the global hunger crisis—137,000 of you did, in fact. Our nation’s leaders are hearing our voices. But this crisis is still in the news. People are still going hungry.
You can keep the pressure on by taking another next step.
Join ONE partner Bread for the World’s emergency online campaign, Recipe for Hope. For six weeks, from Mother’s Day through Father’s Day, you’ll receive an email with an Ingredient for Despair—more information on the causes of this crisis—and an Ingredient for Hope—specific actions you can take to help end it. Bread will tell you something you can do and something you can say to our nation’s leaders. Then we’re all doing our part to help hungry people around the world at this perilous time.
May 7th, 2008 at 11:18 am | posted by Virginia Simmons
Last week, we reported on the continuing calls to alter food aid policy so that 1/4 of the food could be purchased local to its distribution location (rather than shipping it all from the U.S.) Today, Reuters reports on a tide-changing shift toward that change.
Some excerpts:
President George W. Bush, taking a harder line in recent weeks, appears closer to victory in persuading Congress to accept a proposal to use some U.S. food-aid funds to buy crops overseas in the end game of a long-delayed agriculture law.
Giving poor countries the authority to buy food aid locally “seems like it’s becoming a requirement to get this farm bill passed,” said Rebecca Bratter, who follows trade at U.S. Wheat Associates, an industry group….
Although no final decisions have been made, according to one congressional aide, lawmakers are more likely than ever to set aside sharp agribusiness opposition and vote to allow up to a quarter of the largest food-aid program, run by the U.S. Agency for International Development, to buy crops overseas.
May 2nd, 2008 at 10:56 am | posted by Virginia Simmons
1970 Nobel Peace Prize winner Norman Borlaug and Georgetown professor and former USAID administrator Andrew Natsios join the chorus advocating for U.S. food aid reform in this joint Wall Street Journal op-ed.
Specifically they state: “Congress should amend the Farm Bill to allow up to 25% of the appropriation for USAID’s food-aid program to be used to purchase food locally” instead of insisting, as the bill currently does, that the U.S. only purchase and ship U.S.-grown food.
A couple more excerpts:
The U.S. government currently buys grain and other foodstuffs from American farmers for free distribution in poor countries…
Ocean shipping costs are 20%-30% of the food-aid budget; and it takes on average over four months to order, buy, ship, offload and transport food by ground. In a famine, people can die waiting for the food to arrive.
Other problems arise. One food shipment sunk in a storm off the coast of Asia in 1996. In 2006, two food shipments were hijacked by pirates off the coast of Somalia. Hurricane Katrina nearly shut down much of the foreign food-aid delivery system in the Mississippi Delta…
Seventy-five percent of USAID food aid goes to Africa, the most food-deprived region of the world. More robust agricultural growth there will help in a period of rising food prices. More prosperous African nations will become better trading partners, expanding imports of U.S. agricultural commodities, machinery and technology. Any near-term losses will lead to longer-term gains for the American economy.
May 1st, 2008 at 4:06 pm | posted by Virginia Simmons
This afternoon, just hours after ONE staff dropped off a petition at the White House with nearly 120,000 signers, President Bush stood before press and TV cameras to call for $770 million in emergency food aid.
You can now see a transcript of his 3:30 PM public speech here.
Some excerpts:
In recent weeks, many have expressed concern about the significant increase in global food prices. And I share this concern. In some of the world’s poorest nations, rising prices can mean the difference between getting a daily meal and going without food…
I think more needs to be done, and so today I am calling on Congress to provide an additional $770 million to support food aid and development programs. Together, this amounts to nearly $1 billion in new funds to bolster global food security…
As America increases its food assistance, it’s really important that we transform the way that food aid is delivered. In my State of the Union address this year, I called on Congress to support a proposal to purchase up to nearly 25 percent of food assistance directly from farmers in the developing world. And the reason you do that is, in order to break the cycle of famine that we’re having to deal with too often in a modern era, it’s important to help build up local agriculture…
We believe in a timeless truth: To whom much is given, much is expected. And so therefore at home we are working to ensure that the neediest among us can cope with the rising food prices. And with the new international funding I’m announcing today, we’re sending a clear message to the world: that America will lead the fight against hunger for years to come.
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I had a long chat with Pascal Fletcher at Reuters on Friday while he was writing this article on the effect of price rises for food and fuel in west Africa, where he’s based. He clearly knows the region back to front, and as his piece makes clear, the outlook isn’t good:
You signed ONE’s petition to President Bush about the global hunger crisis—137,000 of you did, in fact. Our nation’s leaders are hearing our voices. But this crisis is still in the news. People are still going hungry. 
