Food prices

Food prices to go up again, says report

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27 May 2009

Prompted by the rise in fuel prices and threats like climate change, food prices will increase again, says a new UN report. To avert another crisis in Asia and the Pacific, it recommends farmers to adopt sustainable agricultural practices and avoid over-intensive cultivation.

Johannesburg: Food prices will rise again by 2015, when economies are expected to have recovered from the global recession, pushing up demand once more, says a recent UN report

Food prices are still high in many developing countries/ Photo credit: IRIN

2008 is seen as the year of food crises, prompted in part by high fuel prices, but these started declining as the global recession got underway in late 2008 and eventually returned to 2006 levels, though food prices in many developing countries are still higher than they were then.

"This has been a temporary respite," said the report, Sustainable Agriculture and Food Security in Asia and the Pacific, by the UN Economic and Social Commission for Asia and the Pacific (ESCAP).

Citing the International Energy Agency's Energy Outlook 2008, which projected that the price of crude oil would average US$100 per barrel in the 2008-2015 period, and rise again to $120 in 2030, the report predicted that "food prices will rise again, too", partly because of resurgent demand, but also as a result of threats to sustainable agriculture, including climate change.

"Sustainable agriculture involved stewardship of both natural and human resources"

The report warned that unless farmers looked at ways to produce food more efficiently, the food security outlook would be "bleak"; sustainable agriculture involved stewardship of both natural and human resources - maintaining, regenerating or enhancing the natural environment, and ensuring the health of producers by offering them a decent income and working conditions.

Land degradation, brought on partly by over-intensive cultivation, and the use of mineral fertilisers to feed a growing population, was one of the biggest threats to agriculture.

From 1992 to 2002, countries such as India, Laos, Myanmar, the Philippines, Sri Lanka, Thailand and Vietnam increased their use of mineral fertilisers by as much as 90% , the ESCAP report noted.

In South and South-East Asia, around 74% of agricultural land has been severely affected by wind or water erosion, or chemical pollution. "If this process continues at its current rate over the next 50 years, crop output in northeastern China could fall by as much as 40%," the authors estimated

The problems are particularly severe in Central Asia, said the ESCAP report: in Kazakhstan alone, around 66 percent of the total land area has been desertified. Over-intensive livestock-keeping has also put pressure on rangeland

Forests provide critical ecosystem services to the agricultural sector, including pollination and watershed protection, and support to river fisheries. Between 1990 and 2005, deforestation accelerated in the Russian Federation, Cambodia, Vietnam and Papua New Guinea, partly prompted by the high fuel price crisis, which drove poor people to take more wood from the forests.

Water resources are also drying up, partly as a result of greater pressure being placed on agriculture by the increased demand for food. Globally, 15% to 35% of total water withdrawals for irrigated agriculture are estimated to be unsustainable – "that is, the use of water exceeds the renewable supply," the report commented.

In Asia and the Pacific region, this intensive withdrawal has depleted aquifers, particularly in South Asia and China, and has even reduced the flow of major waterways like the Ganges and Yellow rivers.


"The data showed that food prices rose 5.6 per cent in April, a higher rate than the 4.2 per cent reported a year earlier, but slower than the 7.3 per cent rise reported in March, and well below the massive 8.6 per cent jump recorded last August.

Prices of soft commodities like wheat, corn and soy almost trebled between 2006 and the market peak in early 2008, as growing consumer wealth in developing economies led to soaring demand. Between 2001 and 2007, China and other emerging economies accounted for a 26m metric tonne average annual increase in consumption of major food stocks."


"There were several explanations of why prices peaked as they did last year. One was that general economic activity forced up oil prices, which increased the costs of fertiliser and harvesting. Another was that rising living standards encouraged more people to buy meat products, and the diversion of cereal crops to animal feed imposed stresses on supply. Another argument involved biofuels, although I think that that debate got a little out of hand. Nevertheless, certainly in the United States, biofuel production took maize away from food production without delivering a great benefit in terms of fuel. Of course, there were also climate change factors—water shortages, desert conditions and crop failures for climatic reasons—and population growth pressures that contributed to what happened last year.

This year, some of those factors still exist, but additional ones have crept in. For example, the effect of the downturn has meant that many of the poorest people in the poorest countries have suffered a massive downturn in income, particularly due to the loss of remittances. That means that many of those people are poorer than they were before. Even though prices have come down from the peak, they are still historically high at a time when incomes are historically low. To a substantial degree, that is why the WFP is saying that it needs more this year than last year to address the needs and pressures that it faces."

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"It is a viewpoint shared by Oxfam's Barbara Stocking, who told the BBC News website: "It takes the same amount of grain to fill an SUV with ethanol as it does to feed a person. We don't want any more subsidies for biofuels. This rush to biofuels is absolutely dreadful."


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