Groundbreaking events are adding to the list of things pushing up food prices. Erratic weather in key grain exporting countries, the increasing crop use for biofuel production, export restrictions, and low global stocks, have been key contributors to the spike. Now, it is also linked to surging fuel prices connected to events in the Middle East and North Africa. Crude oil, for instance, increased 21 percent in the first three months of 2011, pushing food prices up because it raises the cost of inputs needed in agriculture, among other things.
According to the World Bank's Food Price Watch, a brief we just released tracking food prices and poverty trends, global food prices are 36 percent above their levels a year ago and remain volatile, close to their 2008 peak. Key staples going through the roof include maize (74 percent), wheat (69 percent), soybeans (36 percent) and sugar (21 percent).
For some of us, expensive food might mean we spend more money in the supermarket, but for millions of people around the world, it is a real threat. The poor spend most of their money on food. So think about Mexicans, whose daily diet includes a good amount of tortillas. Or a family in Mauritania trying to get enough bread amid the 40 percent wheat price increase of the last year.
In addition to poor people being less able to afford a good meal, more people are now poor because of higher food prices. Since last June, an additional 44 million people became extremely poor, living under U.S. $1.25 a day. And we now calculate that a further 10 percent increase in global prices could drive an additional 10 million people to poverty, while a 30 percent food price hike could lead to 34 million more poor. We still don't know with certainty what's going to happen because of price volatility, but what we can do and must do is help and protect the vulnerable.
We need to focus social assistance and nutritional programs on the poorest people, invest more and better in agriculture, address climate change and remove grain export restrictions, which can increase prices in the importing countries. Relaxing biofuel mandates when food prices exceed certain limits should also be on the agenda because this could reduce the demand for food crops.
It is all about putting food first!
For more about the food crisis, click here
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Noam Chomsky
Recently, in many regions of Mexico, tortilla prices jumped by more than 50 per cent. In January, in Mexico City, tens of thousands of workers and farmers rallied in the Zocalo, the city’s central square, to protest the skyrocketing cost of tortillas.
In response, the government of President Felipe Calderon cut a deal with Mexican producers and retailers to limit the price of tortillas and corn flour, very likely a temporary expedient.
In part the price-hike threat to the food staple for Mexican workers and the poor is what we might call the ethanol effect — a consequence of the US stampede to corn-based ethanol as an energy substitute for oil, whose major wellsprings, of course, are in regions that even more grievously defy international order.
In the United States, too, the ethanol effect has raised food prices over a broad range, including other crops, livestock and poultry.
The ethanol boom fits the pattern. As discussed by agricultural economists C Ford Runge and Benjamin Senauer in the current issue of Foreign Affairs, "the biofuel industry has long been dominated not by market forces but by politics and the interests of a few large companies," in large part Archer Daniels Midland, the major ethanol producer. Ethanol production is feasible thanks to substantial state subsidies and very high tariffs to exclude much cheaper and more efficient sugar-based Brazilian ethanol.
balance of all telling article
http://www.chomsky.info/articles/20070515.htm
> my weekly food bill has doubled. I understand that higher fuel prices mean higher transp. costs. but many would be surprised to find so much corn products are in our other foodstuffs. and last we must mention goldman hedge funds they are complicit for speculating and running ALL of our commodity prices up to make a quick buck. IT does not matter to them if they cause panic in households who must now choose between HEALTHY foods and just belly fillers. also today Cotton has tripled, coffee, sugar,chocolate up 40%. Futures on Corn for next month have doubled from this time last year. www.barchart.com