Food price rise will affect 'millions,' FAO economist says

Jan 10 2011

Abdolreza Abbassian, an economist with the U.N. Food and Agriculture Organization (FAO), on Friday "warned of a 'worrying rise' in food prices which will affect millions of people following unexpected shortfalls in major cereals owing to bad weather in 2010," Agence France-Presse reports.

Abbassian's comments come after the FAO's December global food price index reached its highest level ever. The price spikes "will affect millions of people, particularly where basic foodstuffs such as cereals are concerned," he said. "Abbassian said the situation was not as critical as in 2008, when the price of cereals reached historic levels, provoking a food crisis and riots," the news service notes (1/7). Weather predictions for early this year suggest prices will stay high for the next few months, Abbassian said, Australia's ABC reports. "The likelihood of these prices to go down significantly I'm afraid may not be in the cards for the next few months," he said (Duxfield, 1/7).

"Working-group talks in the G20 are underway, aimed at improving global cooperation to resolve food security problems ahead of a summit in Paris later this year, said Rhee Chang-yong, who represents South Korea at the G20," Reuters reports.  

"France is emphasizing food security. As a former host country of G20, we would like to deal with the price volatility problem thoroughly," Rhee said. In addition, "French President Nicolas Sarkozy has asked the World Bank to conduct urgent research on the impact of food prices ahead of G20 meetings later this year, a source familiar with the matter said" (Yeonhee, 1/7). According to a second Reuters article, "G20 deputy finance chiefs will meet in Paris next weekend for [a] framework working-group discussion" (Yeonhee, 1/7).

IRIN Looks At Plan Aimed At Strengthening African Food Security

IRIN examines AU Chair Bingu wa Mutharika's plan to ensure food security in Africa. "In a document called The African Food Basket, Mutharika spelt out the details of his plan, which requires countries to allocate a substantial portion of their budget to agriculture, provide farming input subsidies, and make available affordable information and communications technology," IRIN writes, noting that the Comprehensive Africa Agriculture Development Programme (CAADP), which was started in 2003, "covers all the main aspects of Mutharika's plan, including the commitment to devote at least 10 percent of their budgets to agriculture."

The article looks at whether the plan is realistic, highlighting perspectives from Ousmane Badiane, Africa director of the International Food Policy Research Institute (IFPRI), and Calestous Juma, an international development professor at Harvard University. Badiane said countries that have the capacity to expand food production should focus on producing enough to feed their less productive neighbours. This can be achieved by expanding regional trade and investment in regional infrastructure, he said. In his book, The New Harvest, Juma wrote that regions could produce the food they require "by capitalizing on the different growing seasons in different countries and making products available in all areas for longer periods of time." He also discusses the need for additional investment in technology. The role of fertilizers, African leadership and subsidies in promoting food security is also discussed.

"There is a high level of engagement between countries on agriculture," IRIN writes. "They meet regularly and we support them in building evidence-based information," Martin Bwalya, head of CAADP, said. "If they stayed the course in implementing CAADP, Badiane said in five years a large number of African countries, if not food secure, would be in a much better position to feed themselves" (1/6).

Government Report Reveals Food Inflation Spike In India

"Government data revealed on Thursday that India's food inflation topped 18 percent for the week ending Dec. 25, with vegetables prices up more than 50 percent from the same period last year. The steep increase came as a surprise to economists, who had predicted a moderation in prices due to last year's good monsoon," GlobalPost reports. The country's "skyrocketing food prices threaten to send the entire economy into a tailspin, as the government struggles to balance growth and inflation - and create a safety net for the millions still mired in poverty," the publication writes. The article looks at how the problem arose and the outlook for improving it (Overdorf, 1/7).  

In accounting for factors influencing the significant spike, the Wall Street Journal's "Real Time India" blog writes: "The poor monsoon of a year ago that keeps grain prices at elevated levels. A poor onion crop that has driven up the price of that staple. And a greater demand for protein from rising incomes that has increase demand for milk, where the inflation rate is 24.6%, and egg, meat and fish, up 31%." The article looks at different possibilities for improving agricultural productivity in India (Beckett, 1/6).