Thursday, January 13, 2011

Food prices to be the big conversation in 2011

Major changes need to be made to keep the price of food from soaring to new heights. Food prices are at their highest levels since 1990, and at the same levels as 2008 when riots erupted across the globe.

The G-20 is expected to make the food price discussion a priority this year, but it remains to be seen what they will put the blame it on. Bio-fuels, market speculators and climate change all have a factor in changing the supply and demand for food.

From the Guardian, writer Madeleine Bunting previews what she and other journalists will be looking for in the food price debate.

The year started grimly with news of the food prices rising to the highest point since 1990, according to the Food and Agriculture Organisation. They have surpassed the 2008 prices that led to widespread rioting and unrest across the developing world; immediately, bloggers such as Duncan Green and Alex Evans were asking why there had been no riots. And just as they were posting, riots flared up in Algeria, with two killed and hundreds injured in the protests against soaring food prices. Across the border in Tunisia 14 were killed in clashes with the police. As the unrest spreads across northern Africa, Egypt is nervously trying to put measures in place to prevent any comparable violence, with extra supplies of meat being flown in from Kenya. An occupational hazard of blogging; no sooner have you posted, than somewhere in the world you have been outstripped by events.

Food prices is an issue likely to dominate the global news agenda this year. President Nicolas Sarkozy – in Washington this week in his new role as chairman of the G20 – has put volatile food prices high on his agenda of reform of global economic governance. The French prime minister, François Fillon, said a priority was to find a collective response to "excessive volatility". France has asked the World Bank to undertake urgent research into the impact of rising food prices. This is continuing work initiated by its predecessors, South Korea, on improving global co-operation to resolve food security issues. Last year, cereal prices jumped by 47% and sugar and meat prices are at their highest for more than 20 years. There is plenty of argument about what is going on here. Extreme weather is playing its part; last summer's heatwave in Russia impacted on wheat prices.

Another argument is that the real villains here are speculators. As Deborah Doane, from the World Development Movement, puts it in her blog: "The reality is that the same speculators that caused the global economic meltdown through their illustrious trade in sub-prime mortgages, are betting on our food system now too." She argues that investment funds are pouring into speculating on food prices.

Robert Zoellick, head of the World Bank, weighed into the argument in the Financial Times this week, and, in an excellent blog, Duncan Green analyses how wedded the World Bank remains to the untrammelled market as the most effective way to handle the situation and feed the world.

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