The Growing Food Crisis, and What World Leaders Aren’t Doing About It

Rising food prices have plunged more than 44 million people in to poverty in the past year. That's just the beginning.

By Michelle Chen Apr 22, 2011

If all goes as planned for the G-20 this year, leaders of the world’s most powerful economies will convene to issue bold proclamations, talk past each other, and quietly agree to do virtually nothing. The stakes might be a little higher now, though, as the political poker table will be stacked with millions of the world’s hungriest people. Guess who’ll come away empty handed?

World Bank President Robert Zoellick warned at a recent World Bank-IMF meeting that the planet was hurtling toward a food crisis, akin to the chaos that erupted in 2007-2008 across the Global South. The context this time is in some ways more daunting: a perfect storm of social and economic upheaval in North Africa and the Middle East, natural and nuclear disasters in Japan, debt crises in Europe and the U.S., and epidemic unemployment worldwide.

In the past year, Zoellick said, soaring food prices have plunged some 44 million people into poverty. Another ten million would become impoverished with just a 10 percent further rise in the UN’s food price index, which jumped by 25 percent last year. Poor regions hover on the brink of malnourishment due to depleted safety nets and broken emergency back-up resources.

Following the G20 meeting in Washington this month, Oxfam issued a statement criticizing the conference’s failure to come up with meaningful ways to stave off the coming crisis:

Leaders today said the food crisis is desperately urgent, and that the G20 will act on it at its next meeting in June. That’s 66 days away; nearly half a million children will have died of hunger by then.

The World Bank says we’re one shock away from a full-blown crisis but makes no mention of the three things rich countries have done to cause it–burning food for biofuels, gambling in commodity casinos, and subsidizing farmers in rich countries."

Indeed, even the World Bank’s food fund, a stopgap measure, has been hobbled by underfunding, Oxfam noted.

This is an old story in many ways, one that may evoke more fatigue than sympathy from observers in relatively privileged regions. Hunger in sub-Saharan Africa has become chronic, punctuated regularly by an outbreak of conflict or disease. Intense poverty in India seems intractable despite ever-accelerating economic growth. Even the notoriously insular North Korean regime has admitted its people are close to starvation. Hunger is almost a banal fixture on the global economic landscape.

But it is not a natural disaster. Agricultural policies feed directly into the hunger crisis–policies such as growing crops for fuel while neglecting crops that feed people.

The Times UK reports:

Among the many causes of high food prices are rules in countries, such as the United States, that require a certain percentage of petrol to come from corn-based ethanol.

Some 31 per cent of the corn produced in the US in 2008 was turned into ethanol, and government forecasts show that this will hit 40 per cent this year.

Biofuels have been a cornerstone of American attempts to reduce its dependency on imports of oil from the Middle East and elsewhere.

The modern face of famine: A plan to cure a fuel crisis through industrial farming has potentially driven a humanitarian crisis of far greater proportions.

Princeton biofuels expert Tim Searchinger has argued that the government-subsidized expansion of biofuels, including corn-based ethanol in the U.S. and other plants like sugar cane elsewhere, cause displacement of food crops in the agricultural system. The exact impact of the food vs. fuel dilemma is unclear, but the fact that trends in energy markets are eating into the world’s need for basic sustenance says a lot about the disconnect between economic priorities and human rights.

Meanwhile, there’s a growing wariness that ethanol will do little to curb climate change and will prove to be environmentally unsustainable itself. As ethanol crops gobble up precious resources, both food prices and food supplies are taxed. Then there are the global stressors of climate change, population growth and urban migration, and a rising demand for meat. It adds up to a recipe for a collapse of the entire food system that would rival any financial bubble.

Speaking of which, speculation in commodities markets, which reduce critical stable crops to ticks on a stock exchange, are another factor that could drive poor, often aid-dependent countries into deeper hunger and instability.

Remarkably, the World Bank, a financial institution hardly known for putting a high premium on humanitarianism, seems to take a more humane position on the emerging food crisis than the G-20 leaders. Yet many of those leaders represent communities that are dealing with food insecurity and soaring prices within their own borders. Even U.S. farmers are suffering from the economic downturn despite a rise in crop prices, according to a new study by the Global Development and Environment Institute at Tufts University. In other words, even those who should be benefiting from the volatile marketplace are still cheated by its structural inequities.

At the same time, food-justice advocates inform us that the fundamental crisis, which no policymakers wish to confront, is not one of supply, but of access, distribution, and the need for equity-minded agricultural methods that can truly sustain both producers and communities.

Despite poverty, desperation, and even revolt exploding around them, officials and finance ministers are gambling on putting off decisive action, maybe hoping the market will somehow correct itself. But as Zoellick cautioned, "In revolutionary moments, status quo is not the winning hand."