Mariama Zachary and Akua Azaiz tend to cocoa beans on a drying table in Ghana. Photo: Gates Foundation (flickr)

Food prices are exceeding record highs—prompting policymakers worldwide to take action. A recent meeting of the G-20 agriculture ministers has given reason for hope, but many obstacles to less expensive food remain.

According to the BBC, 44 million people were driven into poverty last year by food price volatility — increasing the risk of conflict and adding to human suffering. Rising food prices also threaten to derail the fragile global economy, acting like an extra tax on consumers, says World Bank head, Robert Zoellick.

"We have been in a period of extraordinary volatility in food prices, which poses a real danger of irreparable harm to the most vulnerable nations and people. High, uncertain and volatile food prices are the single gravest threat facing the most vulnerable in the developing world."

The severity of the crisis has prompted the G-20 and the World Bank to push forward a number of non-contentious initiatives, three of the most important being:

• To reduce the impact of food price variability through loans . Called Agriculture Price Risk Management, the idea is to reduce farmer risk and thereby increase production of staple crops like wheat, rice, corn, and soybeans.
• To reduce food price volatility via information sharing. Known as the Agricultural Market Information System, according to The Wall Street Journal, this initiative encourages collaboration among nations to mitigate the affects of panic buying and export bans (among others), which often exacerbate a food crisis. Click here to observe food price fluctuations around the world.
• Eliminating export restrictions for food aid programs. The G-20 agricultural ministers agreed to abandon export restrictions on food aid bought by the World Food Program, states The Wall Street Journal.

Despite these promising developments, the most contentious issues will be left to future meetings. Of these, three of the most important are:

• The restriction of bio-fuel production. Food production advocates want subsidies eliminated for grains grown for fuel, says the Christian Science Monitor. However, the delegates were unable to reach consensus on reducing farm subsidies for biofuel production.
• Increased regulation of commodity speculators. Derivatives markets played a major role in causing the recent recession, and policymakers around the developed world are passing legislation to mitigate their harmful impact (including on food prices). Policymakers are stepping lightly, afraid over-regulation could stifle production.
• Creation of an African food bank. According to The Christian Science Monitor, member African nations (and international backers) would build up a continental food reserve which could be tapped into when a supply shortage occurs. The risk of underfunding and the politics behind "who pays for what" could prove fatal to this proposal.

Of course, imbalances in population growth and food supply is a major problem too, but that's another story. In general, the G-20 and World Bank's increased focus on food prices has been well-received. "People are hungry for food and for action on a global level," says Robert Zoellick, according to the BBC.

By the summer of 2008, the price of rice had increased five times from the average price in 2005. Photo: Thatcher Cook for Mercy Corps

The following post is from One Table, a Mercy Corps campaign to fight world hunger by investing in the world's women.

Today almost a billion people worldwide are unable to buy or grow enough food to avoid malnutrition. That's 120 million more than were hungry in 2006.

What happened? Basically, the world saw dramatic spikes in food prices. But there were many underlying causes of what's known as the global food crisis:

• Drought and other climate-related problems that resulted in smaller harvests
• Changing diets — rise of the middle class in India and China and an increased demand for food, especially meat, which requires large amounts of grain to raise
• Diversion of crops from food production to the production of biofuels
• High fuel prices during 2008 — if it costs more to transport food, prices go up
• Declining investments in agricultural productivity — total agriculture development aid to poor countries plunged from $8 billion in 1984 to $3.4 billion in 2004. At the same time, the developing world's cities have been ballooning with people who do not grow any of their food
• Export bans and restrictions last year in several major grain-producing countries like China as governments sought to lower food prices for their own citizens, with the result of reducing the global supply on hand.

While food prices have come down from their highs of 2008, they remain substantially above historic levels. Many economists feel this trend, which most severely affects those who can least afford it, is likely to continue for some time.

The economic, health and societal costs of the global food crisis have been severe. One of the first things Mercy Corps did to figure out how and where to direct our efforts was to survey the communities where we work. We discovered that within communities Mercy Corps serves, roughly 70 percent of income is spent on food, and 80 percent of the population had been affected by rising food prices over the past year. The survey also confirmed something we already suspected: that families were coping with higher prices by eating fewer meals, selling off household belongings, going into debt and removing children from school so that they can work.

In addition to being a record year for food prices, it's also been a record year for our food security team, allowing Mercy Corps to aggressively respond to this crisis. We now have 17 programs in 13 countries designed specifically to respond to this on-going problem. Through support from donors including USAID, the Bill & Melinda Gates Foundation, the Gap Foundation, the Hunger Site, and private individuals, our Food Crisis Response employs a strategy designed to ensure that the groundwork for increased prosperity in the future is laid — even while addressing the immediate problem of accessing sufficient food.

Food distributions, much of which are specifically targeted to improve child nutrition, are taking place in Tajikistan, Kyrgyzstan and Zimbabwe. Meanwhile, in the Central African Republic, India, Indonesia, Liberia, Nepal, Niger, Somalia, Sri Lanka, Uganda and again Zimbabwe, Mercy Corps is helping hungry households to access food by providing employment opportunities, agricultural training and inputs (such as seeds and tools), and helping people establish and grow small businesses.

Combined, these programs are reaching almost 1.5 million individuals who have been directly impacted by higher food prices. Overall, Mercy Corps’ Crisis Response will lead to a sustainable increase in income for these people, leading in turn to greater food security over the long-term.

A new UN Food and Agriculture Organization report predicts that rising food prices will soon begin to slow. However the BBC decidedly reports that cheap food is a thing of the past:

[Food] prices will level off at a far higher average level than seen before the crisis erupted. The long era of cheap food is over.

The sharp rise in food prices over the past year have been felt all over the world but are particularly painful for the poor in developing countries. The World Bank recently estimated that higher food prices and food scarcity could force 100 million people to become impoverished. In response, The World Bank is allocating $1.2 billion for increased food aid. At least $200 million is designated for grants targeting "high risk" countries including Liberia, Haiti and Djibouti.

Photo: tlindenbaum(flickr)

Ethanol is traditionally used as an additive to fuel, but these days it's adding to something else: the global food crisis.

Most U.S. ethanol is made from corn, the kind used mostly to make high fructose corn syrup and feed for cattle, chicken and pigs. But it seems a little backwards to devote farmland for fuel when 850 million people go hungry each year, according to the UN, a number expected to increase by 100 million in the next year.

Ethanol’s supporters say its environmental, economic and strategic benefits outweigh any link to higher food prices. The National Corn Growers Association claims greenhouse gases could be reduced by 20 percent if we used 15 billion gallons of ethanol in our cars.

As an example of its economic advantages, The Ethanol Factbook reported that:

A 40 million gallon per year ethanol plant will cost about $60 million to build, expand the economic base for the local economy by $110 million, generate an additional $19.6 million in household income, improve the tax revenue for the state and local governments by $1.2 million, and create nearly 700 permanent jobs.

Ethanol also has the potential to reduce our dependence on Middle East oil.

Moreover, many supporters of ethanol claim that there is a very low correlation between higher food prices and expanded ethanol production. “We think that there are enough elements in current commodity markets that resulted in very high prices for cereals and oilseeds and even they would have happened without this hike in biofuel production," says Loek Boonekamp, a top official for the Organization for Economic Cooperation and Development.

Skeptics of ethanol say there’s not enough research to prove ethanol is beneficial in the long term, that it is fueling increased food prices, and that ethanol-based corn subsidies help only a select few.

Environmental benefits? Two independent scientists looked at the footprint of biofuels, and found that the way they’re produced creates more harm than good to the environment.

The latest World Bank assessment on rising food prices found that, “Almost all of the increase in global maize production from 2004 to 2007 (the period when grain prices rose sharply) went for biofuels production in the U.S.” The New York Times reported that, “Work by the International Food Policy Research Institute in Washington suggests that biofuel production accounts for a quarter to a third of the recent increase in global commodity prices.”

What’s clear is that ethanol is coming under fire — even here in the U.S. — as food prices climb higher. According to the L.A. Times, “Some analysts believe the rapid increase in the use of corn to make ethanol has left the nation with little room to maneuver through weather-related disasters in the Midwest.”

Economist Jeffery Sachs argues we should redouble scientific efforts to grow biofuels on land that’s not suitable for growing food, but that we should end our “misguided” corn-to-ethanol subsidies. “Farmers hardly need them given world demand for food and feed grains.”

Regardless of the arguments for and against, ending ethanol subsidies may not provide the immediate assistance that UN Chief Ban Ki-Moon is looking for to solve the world’s food crisis. It would take time for farmers to convert their fields. Factor in growing time, and the impact might not be felt for several seasons.

But some experts say the conversions would take immediate pressure off food prices. At the very least, this is a great opportunity for the U.S. government to show that they are concerned about the world's growing hunger.

An Australian professor says the push to grow crops for biofuels rather than food has worsened the plight of cyclone victims in Myanmar.

Back in 2005, Myanmar's ruling junta required every farmer with an acre of land to plant Jatropha trees on their property. The oil squeezed from the non-edible crop boasts greater yields of oil per acre than other biofuels, with one-fifth the carbon emissions of petroleum-based products. The junta hoped biofuel exports would replace Myanmar's 40,000 barrels per day of petroleum imports and help an economy on the verge of collapse.

Production of biofuels in developing countries has been vigorously supported by industrialized countries. In fact, the International Herald Tribune reports that venture capital investment in biofuels has increased by 800 percent over the past four years.

But in Myanmar, otherwise known as Burma, the junta failed to build a refining plant, leaving its citizens with a useless Jatropha crop, setting off a chain reaction that increased food insecurity and fuel prices. Then the cyclone wiped out much of Myanmar's mid-year rice harvest.

Given Myanmar's political, social and economic idiosyncracies, it's certainly not the ideal case study for jatropha or biofuel. But plans to invest billions of dollars in biofuel refineries in neighboring countries have been put on hold, leading to questions about how sustainable the current equilibrium between food and fuel production really is.

This short segment from Reuters discusses the impact of rising food prices on standards of living around the world. This is a terrific snapshot overview of the dynamics at play in the current world food crisis.

Photo: C Mulvany (flickr)

In the global rush towards biofuels, some countries are being forced to choose between affordable food and renewable energy. Many poor nations cannot afford to use staple crops like corn or soybeans as fuel. But some scientists and policymakers believe that they may have found a solution: jatropha.

Jatropha is an inedible nut that can be grown on non-arable land with little water or maintenance, and it's increasingly being identified as a possible alternative source for biofuels. Because its production would not take up valuable farmland, and would have little (if any) impact on food prices, jatropha is particularly attractive to developing countries seeking a balance between increasing energy demand and poverty alleviation.

India is currently trying to launch what would be the world’s largest jatropha biofuels project to date. Its Ministry of Rural Development has proposed a five-year, $375-million project to plant over one million acres of jatropha and research its potential as a fuel source. India is far from alone in its efforts to promote jatropha. Last year, British Petroleum signed a $160-million deal with a British biofuels firm to develop a joint venture in jatropha. A number of countries are pursuing their own jatropha projects, including South Africa, Malaysia, Brazil, Mali and others.

Photo: dziner (flickr)

Like all policy choices, the decision of many developed nations to pursue greater conversion to ethanol and biodiesel has consequences. But who will pay the costs associated with the shift from oil to biofuels? According to the World Politics Review, it is the world’s poor who are going to suffer the most from the negative effects of the biofuel craze.

With current technology, almost all of the biofuel produced today has to be made from corn or soybeans. Though other sources may be able to be used in the future, the use of crops for fuel rather than food has already taken a huge toll on the world’s commodity markets. The UN Food and Agriculture Organization estimates that global food prices have increased by almost 40 percent in the last year, after a 14 percent increase in 2006. Many countries have introduced price controls on staple foods, and food shortages have caused protests in Pakistan and Indonesia.