Rising Food Prices: Time to Fix a Broken Global Food System
The United Nations World Food Program calls rising food prices a “silent tsunami” that threatens to plunge 100 million more people into hunger. Every day new reports emerge about the disastrous consequences of rising food prices around the world. Food riots have erupted in Haiti, Senegal, Yemen and Bangladesh. Across the world, poor people are desperately seeking ways to cope with growing hunger. The tragic irony, however, is that in 2007 global grain harvests actually increased to a record 2.1 billion tons.
The real question is not whether there is enough food for everyone, but why record harvests are not accessible to the hungry.
Roots of the Current Problem
There is no single cause or simple fix for recent and dramatic food price increases. Rising incomes and consumer demand from China and India are a factor. Oil prices, which doubled from $60 a barrel in April 2007 to over $120 a barrel this month, drive up costs for petroleum-based inputs such as fertilizers and inflate the cost of shipping food around the world. Droughts and floods caused by climate change have reduced harvests in some countries, and threaten even more severe consequences in the near future, according to the Intergovernmental Panel on Climate Change.
In the United States, rising demand for ethanol has driven up prices for corn and for other commodities such as wheat and rice when farmers shift their production to corn for ethanol. While most US corn production is still used for livestock and processed foods, demand for ethanol has raised corn prices by 215% since 2007.
Economic theory suggests that in most sectors of the economy, rising prices should lead to increased production. But in the case of food, those market mechanisms often don’t function well. The time lag between planting and harvest is one factor; unpredictable weather is another. Poor people lack the land, credit and marketing support they need to respond to demand. But beyond all these factors, food must be treated as an essential human right and not just a commodity to be bought and sold on markets.
Thanks to “free market” policies over the last few decades, government support for agriculture has been dismantled by conditions imposed by donors and international financial institutions. Public research and agricultural extension services have been cut. Marketing boards, which once served to stabilize prices, have been eliminated. Poor countries have been compelled to remove trade protections for their fragile agricultural systems. As a result huge inflows of subsidized food from abroad have destroyed incentives and capacity for local production. Once poor farmers have been forced out of work by these problems, it is extremely difficult for them to restart production, even when rising prices create an incentive for them to do so.
For example, ActionAid Ghana reports that up until the late 1970s, the country was self-sufficient in rice, even exporting to nearby countries in years of bountiful harvests. But under economic reform programs imposed by the World Bank and International Monetary Fund, input subsidies were cut, the Ghanaian marketing board was eliminated, and food trade was liberalized. Rice imports increased and consumer tastes shifted from healthier brown Ghanaian rice to imported polished rice, much of it subsidized by US taxpayers. And now, even though imported rice has become more expensive than local varieties, there are simply not enough rice farmers left in Ghana to increase production.
Solving the Problem -- Today and Tomorrow
Though the reality of skyrocketing food prices is bleak indeed, there is hope. The situation is focusing much-needed public attention on flaws in the global food system, and thereby creating opportunities for reform.
ActionAid has pushed for years for fundamental changes to a food system whose contradictions are exposed by the current crisis. The key to reducing food prices and volatility in global food markets is to invest in small-scale sustainable agriculture in developing countries. Poor people can and should grow their own food and build their livelihoods instead of depending on imports. International trade rules and government support should help them do so.
ActionAid is already working with communities and farm organizations across the global south to stimulate local food production and build sustainable food systems that can feed people and help lift them out of poverty. Your support can strengthen efforts like ActionAid’s Territorial Development Initiative, which brings developing country farmers together to share knowledge, identify needs and advocate for policy changes. You can also lend your voice to ActionAid’s demand for an end to the failed agricultural policies that created the current food crisis.
Over the last year, ActionAid has held a series of public education events, formed alliances with US family-farm, religious and development organizations, and issued urgent action alerts to reform US food aid policy to support local and regional purchases of food aid and to increase funding for effective agricultural development. Working with partners in Kenya and Malawi, we published Women and Food Crises: How Changes in US Food Aid Policies Can Support their Struggles. We also produced an important critique of the World Bank’s agricultural policies. ActionAid is currently carrying out research in Ghana, Senegal and Mozambique to determine how increased biofuels production is affecting local farmers and to develop appropriate proposals for national and international policies.
- Increase emergency funding for local and regional purchase of food aid to help those pushed into hunger by recent price increases.
- Insist that the World Bank increase investment in smallholder agriculture for food production.
- Support developing country efforts to implement food security programs and manage trade policy to reduce price volatility for food crops that are critical for rural livelihoods.
- Examine the impacts of biofuel demand and recent increases in renewable fuels standards on commodity prices and food production around the world.
Join us now to call on decision-makers in Congress to take action on rising food prices:
