Global Hunger Crisis Looms As Food Prices Soar

By Laurie Goering

NEW DELHI, India – To support his family of six, Raju sells plastic packets of chilled water to commuters on a busy New Delhi roadside. Like many Indians, he normally spends more than half of his monthly income to buy food.

Over the past year, though, as world food prices have soared and inflation began creeping up, the rice, lentils and wheat his family needs have begun to take as much as 70 percent of his meager monthly salary of $77. With the other 30 percent of the family’s income committed to rent, they have had to give up buying vegetables – meat and milk have never been affordable – and will simply have to go hungry if prices rise any further.

“We’re barely managing,” said the 36-year-old, who goes by only one name.

With India’s inflation hitting 7 percent, “I don’t see any improvement coming,” he said. “There will be riots if this gets worse.”

As global food prices race upward, no place demonstrates the risks as much as India – home to more than half of the world’s hungry.

Worldwide, food prices have soared 45 percent over the past year as surging oil prices make growing and transporting food more expensive and as economic growth in emerging giants such as China and India leads to rising demand for food, according to the United Nations’ Food and Agriculture Organization.

Ramped-up production of biofuels, particularly in the United States, also is taking an increasing share of the world’s food production, and droughts and floods have slashed harvests in leading grain producers such as Australia.

In richer developed nations, where people spend an average of 10 percent to 15 percent of their disposable income on food, price hikes have been a growing irritation. In the developing world, where most poor people spend at least half of their income to eat, rising costs threaten to create major social unrest.

In Haiti, at least five protesters were killed last week after hungry mobs tried to storm the presidential palace, and on Saturday lawmakers voted to dismiss the country’s prime minister. Food riots also have flared across Africa’s Sahel and in Mexico, Uzbekistan and Morocco. Egypt’s government has put the army to work baking subsidized bread.

All told, 33 countries around the world are at risk of social upheaval as a result of acute increases in food and energy prices, said Robert Zoellick, president of the World Bank, in a speech this month. In countries where buying food requires half to three- quarters of a poor person’s income, “there is no margin for survival,” he warned.

U.N. officials said Friday the problems are likely to persist despite an expected increase in global cereal production over the next year.

“All indications we have is that this is not a short-term effect,” Jacques Diouf, director general of the Food and Agriculture Organization, said at a news conference in Rome.

India, which has more malnourished people than anywhere else in the world – even more than sub-Saharan Africa in both absolute and percentage terms – is not counted among the countries most in danger.

Largely that’s because its government runs the world’s biggest food aid program, an $8.4 billion effort that pushes 15 million tons of subsidized wheat and rice a year to hundreds of millions of people. The United Nations’ World Food Program, the world’s biggest food relief aid agency, by comparison, ships just 5 million tons of food a year to 73 million hungry people at a cost of $3.4 billion, WFP officials said.

India also enjoys an impressive economic growth rate of better than 8 percent a year, deep cash reserves of $300 billion and near- self-sufficiency in basic grains, all of which have helped insulate it from the world food price shock.

However, India has the potential to play a big role in accelerating the world’s food crisis. With its population and its per capita demand for food growing faster than its agricultural productivity, the nation of 1.1 billion is edging toward becoming a net importer of food, a reality that could turn the current spikes in international food prices into consistent highs for a decade or more as demand grows, analysts say.

India, the world’s biggest rice producer after China, also is a major exporter of rice to Bangladesh, one of the poorest and most vulnerable nations in the world. Its decision late last month to ban exports of all but high-priced basmati rice could hit hard at Bangladesh and other hungry neighbors, which might be forced to import food at prices higher than those they pay to India. So far, Bangladesh has received a limited exemption from the export curb.

Inside India itself, inflation is eroding the buying power of millions of people like Raju with little ability to pay more for food. That is a huge political worry for India’s ruling party, which faces elections this year and already has begun pulling a variety of economic levers, including cutting duties on imported food, in an effort to hold down prices.

India today sets its poverty line at an income of about 33 cents a day, a third of the international extreme poverty standard of $1 a day. As food prices rise, it might be forced to recalibrate its calculation of the number of Indian families who need help, requiring the government to add billions of dollars a year to a food aid budget that already has surged 27 percent since the 2006-07 financial year.

“India’s capacity to cope is immense,” said Gianpietro Bordignon, the World Food Program’s India director. “They have the biggest food safety net in the world. The question is how long that will be affordable as the costs increase more and more.”

The World Food Program faces deep cuts in its efforts because of a $500 million budget shortfall caused largely by rising food prices.

India hopes to address its own potential problem by increasing its agricultural productivity, now just half that of China, which has much more irrigated farmland, said Ramesh Chand, an agricultural economist at the National Center for Agricultural Economics and Policy Research.

However, in a country where 60 percent to 70 percent of people make their living farming small plots and there are few jobs for unskilled labor in the cities, moving small farmers off their land to expand larger-scale agriculture would be difficult.

A better option for cutting hunger, Indian agricultural economists say, would be new government-funded work programs to build irrigation canals and improve infrastructure, particularly rural roads that are now so overburdened and potholed that more than 30 percent of the country’s agricultural produce spoils on the way to market.

Increasing agricultural output fast enough will be tough, particularly with the government announcing last week that it intends to put 30 million acres into biofuel crops by 2017.

In India, as in much of the world, nobody is quite sure whether world food production will increase to meet demand – as has happened repeatedly over the centuries – or whether a new era of permanently higher prices and hungrier times is on the horizon.

“It’s a very difficult question,” said Arif Husain, a food policy analyst with the World Food Program in Rome. “Nobody knows what the long run means right now. We are in uncharted waters.”

Originally published by Chicago Tribune.

(c) 2008 Sunday Gazette – Mail; Charleston, W.V.. Provided by ProQuest Information and Learning. All rights Reserved.