A billion to go hungry with food prices back on rise

Sarah Arnott
Saturday 20 June 2009 00:00 BST

The number of people going hungry is set to top one billion a day for the first time as green shoots in the world's biggest economies spell disaster for their poorer cousins.

In line with other commodities, food prices are back on the rise. Combined with the effect of the credit crunch on poorer economies, the number of people without enough to eat will go up by 11 per cent this year, according to the United Nations' Food and Agriculture Organisation (FAO). Jacques Diouf, director general of the FAO, said: "The silent hunger crisis – affecting one-sixth of all humanity – poses a serious risk for world peace and security. The present situation of world food insecurity cannot leave us indifferent."

After more than a decade of steady declines, world food prices rose sharply in early 2008 as the ballooning oil price pushed up transport and fertiliser costs, biofuels were grown on land previously used for crops, and bad weather affected harvests. The result was rioting in Haiti, Egypt and the Philippines.

After July, prices did come down. Oil collapsed from $147 per barrel to nearer $35, and global slowdown slammed the brakes on demand for everything from iron ore to television sets. But even dented, food prices remained at 2007 levels, and by March were back on the rise, as oil bounced back to the $70 mark and demand resurfaced in big economies such as China.

The problem is not only how much food costs, but also local earning capacity. The credit crunch and subsequent global recession has pummelled low-income countries even harder than their rich counterparts. Export markets dwindled. The availability of cheap capital collapsed from $890bn in 2007 to $141bn this year, according to Institute of International Finance predictions.

The world will need 50 per cent more food by 2030, putting massive pressure on land for food just as climate change priorities call for biofuels and more trees to decarbonise the warming atmosphere. Water is also in short supply.

Alex Evans, of the Centre for International Co-operation think-tank, said: "Ultimately the world needs to answer the question about fair share. We have made globalisation very efficient in economic terms but we haven't yet made it sustainable, and food is one of the front lines."

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