Global price crisis update from Mary Atkinson, BRC Food Security Advisor

Agency activities
Of the US$20 billion pledged to help tackle the "world food crisis" triggered by rising food price in Rome in June, only US$1 billion has been paid out from the fund (compared to US$700 billion bail out in US in one day). Concern that global financial crisis may be used as an excuse for inaction. UN estimate that US$25- 40 billion is needed to lessen impact of price rises in developing countries.

FAO World Food Security Committee meeting in Rome in October

Global food crisis - highlighted by many agencies on World Food Day (Oct 16):

• Oxfam GB launched a £15 million appeal to help tackle the "world food crisis" and released a report, "Double-Edged Prices, Lessons from the food price crisis: 10 actions developing countries should take". They report a lack of a co-ordinated international response to the crisis
• ODI event - Soaring Prices, rising hunger: what next in the global food crisis - notes and recording available online.
• WFP expect to feed 1/3 more people in 2009 (90 million people in 2008) including urban area, as global financial crisis adds to pressure in food prices
• Wahenga debate about how price crisis impacted on perspective on use of cash as alternative to food in emergency & social protection. Underlying issue that cash not being sufficiently indexed to rising prices, particularly in Ethiopia, where large beneficiaries switch to food aid in national safety net programme.

Price/situation updates

• Price crisis has pushed 75 million more people into hunger and poverty (FAO) with 967 million malnourished people in the world (World Bank)
• FAO warn that the new global financial crisis could deepen the situation of the poor even more
• With industrialised countries in crisis, less vital remittances sent to developing countries , e.g. Bangladesh usually receives $4billion US annually
• African banks thought not directly impacted by credit crunch as virtually no exposure to sub-prime market, aside from South Africa where Rand severely hit. However, with global economic crisis, demand for African commodities and hence export earnings will fall. Recent growth rates of 5% per annum over last 10 years in Africa likely to fall to 3% (IMF)
• WFP report on Summary of Price Impact Assessment findings to date available includes Uganda, Nepal, Tajikistan, Pakistan, Liberia.
• World cereal forecast for 2008 better than expected (i.e. 4.9% increase to record 1,232 million tonnes, possibly giving 8% increase in world stocks). International prices of most cereals continued to fall in last 2 months due to such improved supply and falling price of oil, food prices still 51% higher than 2 years ago and FAO state 36 countries still in need external assistance, particularly Somalia.

Update on food security situation in most chronically food insecure regions (from FAO report):

• East Africa: Unfavourable outlook for cereal harvest in parts of Ethiopia, Somalia, parts of Kenya and Uganda.
• West Africa: Overall early crops prospects favourable with improved FS situation from October
• Southern Africa: Recent main season cereal harvest OK but far below last year
• Asia: Regional cereal harvest to increase slightly from last year with bumper crops in China and India offsetting reductions in Pakistan and Iran, but serious food insecurity still affects 12 countries in region