Food prices up, World Bank worried
Rising food prices have driven an estimated 44 million people into poverty in developing countries since June 2010 as food costs continue to rise to near 2008 levels, according to new World Bank Group numbers released ahead of the G20 Meeting of Finance Ministers and Central Bank Governors in Paris.
"Global food prices are rising to dangerous levels and threaten tens of millions of poor people around the world," said World Bank Group President Robert B. Zoellick, according to a media statement. "The price hike is already pushing millions of people into poverty, and putting stress on the most vulnerable, who spend more than half of their income on food."
According to the latest edition of Food Price Watch, the World Bank's food price index rose by 15 per cent between October 2010 and January this year, is 29 per cent above its level a year earlier, and is only three per cent below its 2008 peak.
Increase in extreme poverty
Among grains, global wheat prices have risen the most, doubling between June 2010 and January 2011. Maize prices are about 73 per cent higher, but crucially for many of the world's poor, rice prices have increased at a slower rate than other grains. Sugar and edible oils have also gone up sharply. Other food items essential for dietary diversity in many countries have increased, such as vegetables in India and China, and beans in some African countries.
According to Food Price Watch, the increase in extreme poverty (under US$1.25 a day) due to the price hike is associated with higher malnutrition, as poorer people eat less and are forced to buy food that is both less expensive and less nutritious.
In contrast to the 2008 food price spike, two factors have prevented even more people falling into poverty this time. One is that good harvests in many African countries have kept prices stable, especially for maize, a key staple. Another is the fact that the increases in global rice prices have been moderate and the outlook for the rice market appears stable.
Measures to address the recent round of food price spikes include expanding nutritional and safety net programmes in countries where food prices are rising fastest, avoiding food export restrictions, and finding better information on food stocks. More investments in agriculture, the development of less food-intensive biofuels, and climate change adaptation, are also needed, the World Bank said.
The World Bank said that it was helping by:
The World Bank's Global Food Crisis Response Programme is helping about 40 million people in need through $1.5 billion in support. To date, over 40 low-income countries are receiving or will receive assistance through new and improved seeds, irrigation, and other farm support and food assistance for the most vulnerable people. For example, in Benin, fertiliser provided through these resources led to the production of an extra 100,000 tons of cereal.
For the longer term, the World Bank Group is boosting its spending on agriculture to some $6-8 billion a year, from $4.1 billion in 2008.