Monday, April 14, 2008

The Great Famine of 2008-2009?

Over the last year rising food prices have affected poor people in countries around the world and in recent days many thousands of them have taken to the streets to protest. There have been food riots in Bangladesh, Burkina Faso, Egypt, Haiti, Mauritania, Mozambique and Senegal.

The World Food Program has reported food crises in 37 countries, and told governments that it faces a $500 million shortfall to meet the needs of 89 million hungry people. That number could rise dramatically if the inflation in food prices -- which analysts ascribe to a perfect storm of soaring petroleum prices, natural disasters linked to climate change, growing demand in China and India, and the ever-rising demand for raw materials to make biofuels -- is not brought under control. The rampant speculation that has contributed to skyrocketing food and fuel prices is hardly ever mentioned as a cause of the crisis; however the Food and Agriculture Organization (FAO) has noted that speculation and market failures have reduced the impact of increased production.

Recommendations to deal with the situation have not been too specific. World Bank President Robert Zoellick, who has warned that the inflation in food prices "is not a this-year phenomenon," has proposed a "New Deal for a Global Food Policy"combining emergency aid and long-term initiatives to boost agricultural productivity. The "Group of 24" Developing Countries in the World Bank-IMF has urged affluent countries to increase financial aid.

There does not seem to be an air of urgency about the situation yet, much less one of panic; but that could develop within a matter of weeks if it becomes apparent that governments do not have a handle on the situation.

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