November 25, 2009—Three leaders in the global fight against hunger warned the world needs to be prepared for another food crisis and take steps now to build food security in developing countries.
Low food stocks, rising cereal prices, and the possibility some rice-producing countries will have to import rice next year suggest food prices may rise in 2010.
“I worry we could be through another round of this… we could see ourselves in 2010 repeating some of this problem,” World Bank President Robert B. Zoellick said at a panel discussion on the global food crisis at the Brookings Institution in Washington.
The Brookings panel included Zoellick, Josette Sheeran, executive director of the United Nations World Food Programme, and Samuel Worthington, president of Interaction, the largest alliance of relief and development nongovernmental organizations in the United States.
“On the food crisis, I don’t think it was a one-off phenomenon. I think it was a wake-up call,” added Sheeran, whose organization provides food assistance to more than 102 million people in 78 countries.
She said the cost of cereal has risen 17 percent, and international food prices are 50 percent higher than just five years ago.
The food crisis “exposed fault lines in access to food from the village level up to the national, regional, and global level. And I think what we’re seeing today with the financial crisis is a compounding issue that’s driving up the numbers of hungry in the world.”
Almost 230 million children and adults wake up each morning unsure whether they will be able to get even a cup of food, Sheeran said.
“This is inherently destabilizing. It’s unacceptable, and in fact the numbers keep increasing. In just the past two years the numbers went from 846 million to over a billion,” said Sheeran.
Some of the elements that drove up food prices two years ago are still in play, said Zoellick. For instance, food stocks were low before the crisis and remain low today. Commodities have become an “asset class” for investment, making them potentially more volatile.
In addition, there is a “much closer linkage” between fuel and food prices than before the food crisis. When oil prices rise, so do food prices, said Zoellick.
He said the World Food Programme, as the main organization providing emergency food aid, should receive more predictable, longer-term funding. Currently, WFP must raise money “from scratch” each year – “a very difficult task,” said Zoellick.
Rules should also be in place to prevent hoarding of food, Zoellick said. During the food crisis, export restrictions and bans affected even purchases by the World Food Programme and for humanitarian purposes.
The G-20 has called upon the World Bank to work with interested donors and organizations to deliver a multilateral trust fund to scale up agricultural assistance to low income countries. The move follows a G8 “plus” meeting last July in which leaders pledged to contribute to an Agricultural and Food Security initiative to improve agricultural production and productivity, food security, and nutrition. Based on country-led initiatives, multiagency participation is expected. Canada, Spain and the United States are the initial donors. The initiative is scheduled to go before the World Bank Board of Directors in January.
The World Bank itself is taking action on food security. It increased agricultural investment to $6 billion this fiscal year in response to a report (World Development Report 2008) finding a strong link between agricultural investment and overcoming poverty, said Zoellick.
The Bank also increased support for social safety nets, such as school feeding programs, during the food and financial crises. The Bank’s fund for the poorest countries, the International Development Association, accelerated assistance, disbursing close to $14 billion from July 2008 to October 2009.
A new report from the World Bank and the World Food Programme released at the Brookings event shows that school feeding and other food-based safety net programs are vital to keeping children in school, improving their learning and health, and promoting food security.
The Bank is also working with the Gates Foundation on promoting agricultural research and development, such as enhanced seeds, to increase agricultural productivity, particularly in Africa.