Food insecurity
From HFA-PEDIA
Food security and market shocks
According to FAO, by September 2008 rising prices had plunged an additional 75 million people below the hunger threshold, bringing the estimated number of undernourished people worldwide to 923 million.
Global food insecurity - some of the causes of the 2008 speculative rise in food prices:
Whereas in the recent past food insecurity generally concerned the least developed countries, particularly those in conflict and facing uncertain weather patterns, concerns about sustainable food supplies are now global. In 2007 and 2008, the price of many basic grains such as corn, wheat and rice reached record levels. According to the World Economic Forum, food insecurity is now at the centre of a global nexus of risks, including disaster risk, energy prices, declining water quality and quantity, interstate and civil wars and global financial instability and is shaped by drivers that include population increases and lifestyle changes, biofuel production and climate change. In this web of global risks, shocks and crisis become inter-linked. The more vulnerable the whole, the more a crisis in any one risk sector will have ripple effects in other sectors. Food insecurity is critical for the poor who spend a greater percentage of their income on food and therefore suffer more when prices increase.
The run on rice prices in 2008 exemplifies the complexity of the food insecurity issue. World rice production in 2007 was at an all-time high, with 2008 forecast to set another record, while world rice stocks have remained fairly steady at 17-18% of world consumption in recent years. Between November 2007 and April 2008, however, the price of rice almost tripled to US$ 907 per ton with a dramatic impact on the rural poor. A recent paper by World Bank economists indicated that contrary to popular opinion, the cause of the price increase was not rising food demand in China or India, but a combination of other factors: rising energy and fertilizer prices in the context of a falling dollar, government policies encouraging the production of biofuels and restrictions in exports by major producing countries, driven by a concern to secure adequate domestic supplies and forestall price increases. The price increase particularly affects the rural poor. In Indonesia, for example, 72% of the rural poor are net rice buyers and it is estimated that a 10% rise in rice prices reduces the real value of expenditure of the poorest decile of the population by 2%.
Food price rises have a significant impact on poor rural households that no longer produce enough food to cover their subsistence needs and must buy a proportion from local markets. Having to spend more on food increases poverty and also increases the probability of disaster impacts translating into poverty outcomes.
The risk of sudden increases in food prices would appear to be linked to irregularities in global supply, including due to major disasters and the use of agricultural land for the production of biofuels or a range of speculative and protective measures, which cause food to be withdrawn from the market. For example, in Bangladesh in 1974-1975 major flooding led to exaggerated predictions of a poor rice harvest, in turn causing excessive quantities of rice to be withdrawn from the market and stored, for either precautionary or speculative purposes. A minor shortfall became a massive shortfall in market supplies. Prices rose rapidly to levels that were unaffordable by the poor leading to the deaths of up to 1.5 million people. Landless labourers, especially agricultural workers, were worst affected because they were entirely dependent on the market for their staple food.
(Source: 2009 Global Assessment Report on Disaster Risk Reduction - Appendix 4; UNISDR, 2009)
Food crisis
The world food situation is rapidly being redefined. Most obviously, the recent trend of unprecedented increases in the price of food and overall import bills for the poorest countries, coupled with diminishing food stocks and difficulties accessing food by some communities, has created a host of humanitarian, socio-economic, developmental, political and security-related challenges and most notably immediate hunger needs.
Given the complexity of the issue, policymakers face a tricky balancing act between the urgency of responding to the immediate problems, and taking enough time to adequately understand and analyze the challenges involved and the potential consequences of their actions. In some instances, further clarity and system-wide agreement are necessary on the most appropriate way forward. We need to review the demand and supply drivers of higher food prices, the impacts and challenges that are already evident, and the predicted (likely) threats and opportunities that high food prices present.
According to an April 25, 2008 UN/ISDR Press Release:
Drought and unsustainable water management have been key contributing factors to the global food crisis. In turn, managing drought risk to prepare for the increasing drought impact of climate change, is a crucial part of addressing the food crisis long term.
The effects of drought that we are now seeing on major food exporters like Australia and Ukraine is just a taste of how climate-change could contribute to a future of ongoing global food crises. Water scarcity will contribute to food scarcity. Drought has already disrupted food production and exports, most markedly Australian rice, contributing to higher global prices of staples for those who can least afford it, and reducing the supply of food relief to the world’s poorest people. The Intergovernmental Panel on Climate Change (IPCC) has already observed that the currently raised levels of drought will increase, placing billions of people at risk of water stress by the end of the century, unless there are deep cuts in carbon emissions and urgent action is taken on adaptation.
More attention must be focused on disaster risk management, which has already developed practical ways for adapting to increased drought predicted to come with climate change. Because drought is a slow-building phenomenon, communities and nations can build their defences against rising temperatures and dryer seasons with good planning – such as better water management and scaled-up use of available risk-reduction tools and programmes to combat drought and desertification.
“Drought creeps,” says UN/ISDR secretariat Director Salvano Briceño, “so we can outrun it. But this will take a genuine mindset and policy shift towards the ethos that prevention is better than cure, and serious political and economic commitment to saving harvests and lives on a global economic level.”
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