FAO Head Says World Food Supply Shrinking

Jacques Diouf is the head on the United Nations Food and Agriculture Organization (FAO). Earlier this week, according to a report in the International Herald Tribune, Diouf issued a warning that there has been an "unforeseen and unprecedented" shift and the world food supply is shrinking rapidly as food prices soar to historic levels. The result of these two shifts is that the number of people who will be able to access food will decrease and as a result food insecurity will grow. The people who live in the developing countries will be the hardest hit but people everywhere who live on low and fixed incomes will feel the pinch. The FAO’s food price index rose by more than 40 per cent this year as compared with 9 per cent the year before. The figures show that the total cost of foodstuffs imported by the neediest countries rose 25 per cent, to $107 million, in 2006. The reserves of cereals are also seriously depleted according to FAO records. For example, world wheat stores declined 11 per cent this year and this is the lowest level since 1980. There were only 12 weeks of the world's total consumption rather than the average of 18 weeks consumption in storage during the period 2000-2005. Corn is also at an all time low with 8 weeks left as compared to 11 weeks in the earlier period. Oilseed and wheat prices are at record highs A series of supply and demand factors have precipitated the crisis; on the supply side, the earlier than anticipated effects of global warning has decreased crop yields combines with a shift from growing food for human production to growing for fuel and cattle feed to accelerate the problem. The demand for grain is growing as the world population of upwardly mobile meat-eaters grows and more grain is diverted to feed cattle. "We're concerned that we are facing the perfect storm for the world's hungry," said Josette Sheeran, executive director of the World Food Program, in a telephone interview. She said that her agency's food procurement costs had gone up 50 per cent in the past 5 years and that some poor people are being "priced out of the food market." Rising oil prices have added more fuel to the fire as shipping costs have doubled in the past year. This places enormous stress on poor nations that need to import food as well as the humanitarian agencies that provide it. "You can debate why this is all happening, but what's most important to us is that it's a long-term trend, reversing decades of decreasing food prices," Sheeran said. "If there's a significant change in climate in one of our high production areas, if there is a disease that affects a major crop, we are in a very risky situation," said Mark Howden of the Commonwealth Scientific and Industrial Research Organization in Canberra. "In the U.S., Australia, and Europe, there's a very substantial capacity to adapt to the effects on food - with money, technology, research and development," Howden said. "In the developing world, there isn't." Diouf has suggested it is time for all countries and international agencies to "revisit" agricultural and aid policies they had adopted "in a different economic environment." One possibility is that due to food and oil prices increasing, it may not make sense to send food aid to poorer countries, but instead to focus on helping farmers grow food locally. FAO is planning to initiate a new program which will offer farmers in poor countries vouchers that they can exchange for seeds and fertilizer, and will try to help them adapt to climate change. Francesco Tubiello, of Columbia University Earth Institute said. "Many people assume that we will never have a problem with food production on a global scale, but there is a strong potential for negative surprises." One response from the European Union (EU) is an effort to promote free markets, The EU is in the process of reducing farm subsidies and this has accelerated the process. "It's much easier to do with the new economics," said Michael Mann a spokesman for the EU agriculture commission. "We saw this coming to a certain extent, but we are surprised at how quickly it is happening." Diouf said that there has been a "tension and political unrest related to food markets" in a number of poor countries this year, including Morocco, Senegal and Mauritania. "We need to play a catalytic role to quickly boost crop production in the most affected countries," he said. The spread of prosperity takes some of the blame for the current conditions; meat consumption has increased which, diverts grain from humans to livestock. The use of food crops to make biofuel is contributing to a rise corn prices. The EU has set low targets for biofuel use - 10 per cent by 2020 - to limit food price rises and that it plans to import some biofuel. "We don't want all our farmers switching from food to biofuel," Mann said.