Christian relief and development agency World Vision has warned that there will be no long-term fix to the impending food crisis in southern Africa unless the international community unites to combat its root causes.
“As we mark World Aids Day, the international community must focus its attention on the looming food crisis in southern Africa, whilst also addressing its long-term causes – including the Aids pandemic currently devastating countries such as Malawi and Zambia,” said World Vision policy adviser Stephen Doughty.
The appeal from World Vision comes as world leaders meet in New York this week to discuss the impact of soaring food and fuel prices on developing countries.
World Vision Emergency Officer, Nick Wasunna, was recently in Zimbabwe where he encountered the effect of high Aids infection rates on the food crisis.
"I saw queues of people at food distribution centres," he said, in a report on the agency’s website. "After talking to them you discover they are all affected in some way by HIV.
"The impact of HIV/Aids across the region cannot be underestimated," he continued.
"When a family cannot work or grow food because carers are sick or dying from Aids, the problems facing them and their community are severely compounded. Children, especially girls, drop out of school as they are required to look after dying family members.”
The long-term consequences, he said, would be a persistently “uneducated, unskilled and poverty-stricken generation” and less development.
World Vision launched an emergency appeal on Wednesday to assist the 12 to 14 million people it says are facing hunger across southern Africa, most seriously in Malawi and Zimbabwe.
On the web: www.worldvision.org.uk
Showing posts with label global food crisis. Show all posts
Showing posts with label global food crisis. Show all posts
Wednesday, October 29, 2008
Tuesday, October 14, 2008
Secret report: biofuel caused food crisis
Aditya Chakrabortty ,The Guardian
Biofuels have forced global food prices up by 75% - far more than previously estimated - according to a confidential World Bank report obtained by the Guardian.
The damning unpublished assessment is based on the most detailed analysis of the crisis so far, carried out by an internationally-respected economist at global financial body.
The figure emphatically contradicts the US government's claims that plant-derived fuels contribute less than 3% to food-price rises. It will add to pressure on governments in Washington and across Europe, which have turned to plant-derived fuels to reduce emissions of greenhouse gases and reduce their dependence on imported oil.
Senior development sources believe the report, completed in April, has not been published to avoid embarrassing President George Bush.
"It would put the World Bank in a political hot-spot with the White House," said one yesterday.
The news comes at a critical point in the world's negotiations on biofuels policy. Leaders of the G8 industrialised countries meet next week in Hokkaido, Japan, where they will discuss the food crisis and come under intense lobbying from campaigners calling for a moratorium on the use of plant-derived fuels.
It will also put pressure on the British government, which is due to release its own report on the impact of biofuels, the Gallagher Report. The Guardian has previously reported that the British study will state that plant fuels have played a "significant" part in pushing up food prices to record levels. Although it was expected last week, the report has still not been released.
"Political leaders seem intent on suppressing and ignoring the strong evidence that biofuels are a major factor in recent food price rises," said Robert Bailey, policy adviser at Oxfam. "It is imperative that we have the full picture. While politicians concentrate on keeping industry lobbies happy, people in poor countries cannot afford enough to eat."
Rising food prices have pushed 100m people worldwide below the poverty line, estimates the World Bank, and have sparked riots from Bangladesh to Egypt. Government ministers here have described higher food and fuel prices as "the first real economic crisis of globalisation".
President Bush has linked higher food prices to higher demand from India and China, but the leaked World Bank study disputes that: "Rapid income growth in developing countries has not led to large increases in global grain consumption and was not a major factor responsible for the large price increases."
Even successive droughts in Australia, calculates the report, have had a marginal impact. Instead, it argues that the EU and US drive for biofuels has had by far the biggest impact on food supply and prices.
Since April, all petrol and diesel in Britain has had to include 2.5% from biofuels. The EU has been considering raising that target to 10% by 2020, but is faced with mounting evidence that that will only push food prices higher.
"Without the increase in biofuels, global wheat and maize stocks would not have declined appreciably and price increases due to other factors would have been moderate," says the report. The basket of food prices examined in the study rose by 140% between 2002 and this February. The report estimates that higher energy and fertiliser prices accounted for an increase of only 15%, while biofuels have been responsible for a 75% jump over that period.
It argues that production of biofuels has distorted food markets in three main ways. First, it has diverted grain away from food for fuel, with over a third of US corn now used to produce ethanol and about half of vegetable oils in the EU going towards the production of biodiesel. Second, farmers have been encouraged to set land aside for biofuel production. Third, it has sparked financial speculation in grains, driving prices up higher.
Other reviews of the food crisis looked at it over a much longer period, or have not linked these three factors, and so arrived at smaller estimates of the impact from biofuels. But the report author, Don Mitchell, is a senior economist at the Bank and has done a detailed, month-by-month analysis of the surge in food prices, which allows much closer examination of the link between biofuels and food supply.
The report points out biofuels derived from sugarcane, which Brazil specializes in, have not had such a dramatic impact.
Supporters of biofuels argue that they are a greener alternative to relying on oil and other fossil fuels, but even that claim has been disputed by some experts, who argue that it does not apply to US production of ethanol from plants.
"It is clear that some biofuels have huge impacts on food prices," said Dr David King, the government's former chief scientific adviser, last night. "All we are doing by supporting these is subsidising higher food prices, while doing nothing to tackle climate change."
Biofuels have forced global food prices up by 75% - far more than previously estimated - according to a confidential World Bank report obtained by the Guardian.
The damning unpublished assessment is based on the most detailed analysis of the crisis so far, carried out by an internationally-respected economist at global financial body.
The figure emphatically contradicts the US government's claims that plant-derived fuels contribute less than 3% to food-price rises. It will add to pressure on governments in Washington and across Europe, which have turned to plant-derived fuels to reduce emissions of greenhouse gases and reduce their dependence on imported oil.
Senior development sources believe the report, completed in April, has not been published to avoid embarrassing President George Bush.
"It would put the World Bank in a political hot-spot with the White House," said one yesterday.
The news comes at a critical point in the world's negotiations on biofuels policy. Leaders of the G8 industrialised countries meet next week in Hokkaido, Japan, where they will discuss the food crisis and come under intense lobbying from campaigners calling for a moratorium on the use of plant-derived fuels.
It will also put pressure on the British government, which is due to release its own report on the impact of biofuels, the Gallagher Report. The Guardian has previously reported that the British study will state that plant fuels have played a "significant" part in pushing up food prices to record levels. Although it was expected last week, the report has still not been released.
"Political leaders seem intent on suppressing and ignoring the strong evidence that biofuels are a major factor in recent food price rises," said Robert Bailey, policy adviser at Oxfam. "It is imperative that we have the full picture. While politicians concentrate on keeping industry lobbies happy, people in poor countries cannot afford enough to eat."
Rising food prices have pushed 100m people worldwide below the poverty line, estimates the World Bank, and have sparked riots from Bangladesh to Egypt. Government ministers here have described higher food and fuel prices as "the first real economic crisis of globalisation".
President Bush has linked higher food prices to higher demand from India and China, but the leaked World Bank study disputes that: "Rapid income growth in developing countries has not led to large increases in global grain consumption and was not a major factor responsible for the large price increases."
Even successive droughts in Australia, calculates the report, have had a marginal impact. Instead, it argues that the EU and US drive for biofuels has had by far the biggest impact on food supply and prices.
Since April, all petrol and diesel in Britain has had to include 2.5% from biofuels. The EU has been considering raising that target to 10% by 2020, but is faced with mounting evidence that that will only push food prices higher.
"Without the increase in biofuels, global wheat and maize stocks would not have declined appreciably and price increases due to other factors would have been moderate," says the report. The basket of food prices examined in the study rose by 140% between 2002 and this February. The report estimates that higher energy and fertiliser prices accounted for an increase of only 15%, while biofuels have been responsible for a 75% jump over that period.
It argues that production of biofuels has distorted food markets in three main ways. First, it has diverted grain away from food for fuel, with over a third of US corn now used to produce ethanol and about half of vegetable oils in the EU going towards the production of biodiesel. Second, farmers have been encouraged to set land aside for biofuel production. Third, it has sparked financial speculation in grains, driving prices up higher.
Other reviews of the food crisis looked at it over a much longer period, or have not linked these three factors, and so arrived at smaller estimates of the impact from biofuels. But the report author, Don Mitchell, is a senior economist at the Bank and has done a detailed, month-by-month analysis of the surge in food prices, which allows much closer examination of the link between biofuels and food supply.
The report points out biofuels derived from sugarcane, which Brazil specializes in, have not had such a dramatic impact.
Supporters of biofuels argue that they are a greener alternative to relying on oil and other fossil fuels, but even that claim has been disputed by some experts, who argue that it does not apply to US production of ethanol from plants.
"It is clear that some biofuels have huge impacts on food prices," said Dr David King, the government's former chief scientific adviser, last night. "All we are doing by supporting these is subsidising higher food prices, while doing nothing to tackle climate change."
Thursday, September 11, 2008
Solution to food crisis must address inequalities – UN human rights chief
A wide-ranging approach addressing inequalities and the rights of marginalized groups is essential in tackling the current global food crisis, the top United Nations human rights official said in Geneva today.
While it is crucial to respond with humanitarian support in the short term, a medium- and longer-term plan must centre on human rights, High Commissioner for Human Rights Louise Arbour told a special session on the food crisis at the Human Rights Council.
“Such focus helps to analyze and confront the differing impact of the crisis on people,” she noted. “It contributes to clarify the imbalances in a society that trigger or exacerbate the food crisis.”
Mr. Arbour added that a rights-based approach will also take into account the voices of marginalized groups, along with human rights institutions, civil society organizations and others.
Such a solution could also help to defuse tensions and prevent civil unrest, as well as avert violations of civil and political rights in response to protests.
The current food emergency, she observed, was triggered by the confluence of several factors, including imbalances in supply and demand, unfair trade practices and distorted incentives and subsidies.
“Yet at its core and in its punitive effects, this crisis boils down to a lack of access to adequate food,” the High Commissioner told the Council at the start of the day-long event, adding that this access is a right protected by international law.
Not only must the impact of the crisis on marginalized people must be studied, but the root causes of such discrimination – such as exclusion from access to land, productive resources and decent work – must be eliminated, she said.
If such comprehensive action is not taken, a “domino effect” which affects other rights, including the right to health or to education, could result, Ms. Arbour cautioned.
She emphasized the key role of States, which by human rights law must resolve such situations. “States’ obligations regarding the right to food and freedom from hunger also entail the adoption of national strategies to ensure food and nutrition security for all.”
The current crisis “transcends national boundaries,” the High Commissioner said, calling for cooperation among States in addressing the problem.
In his address to the Council, Olivier De Schutter, the Special Rapporteur on the right to food, underscored how the crisis should not be viewed as one that is solely humanitarian or macro-economic in nature, but as one that is focused on the right to food.
“What distinguishes a natural disaster from a violation from human rights is that, in the latter situation, we are capable of moving along the chain of causation, from the situation of the malnourished of the hungry to specific acts or abstentions by duty-holders,” he said.
It is up to individual countries to outline their plans regarding the right to food, the independent expert said. “At the same time, the international community must ensure that an enabling environment is created, allowing such national strategies to flourish, and providing financial and technical assistance where needed.”
The independent expert also called for stepped-up efforts to assist the agriculture sector in developing nations, in the face of soaring input prices.
“We must feed the hungry now, but we must also prevent famines from occurring tomorrow,” he pointed out.
The Council later adopted a resolution by consensus expressing its grave concern at the worsening global crisis.
It called on States – both individually and though cooperation and assistance – and others to make every effort to ensure the realization of the right to food as an essential human rights objective.
In a related development, poor countries relying on food imports are expected to spend 40 per cent more on food this year than they did last year, according to a new report by the UN Food and Agriculture Organization (FAO).
According to the latest Food Outlook, this year’s food import bill for the Low Income Food Deficit Countries (LIFDSs) is forecast to reach $169 billion this year.
FAO characterized this as a “worrying development,” noting that by the end of this year imports could cost four times as much as they did in 2000.
“Food is no longer the cheap commodity that it once was,” said the agency’s Assistant Director-General Hafez Ghanem, stressing that soaring food prices will likely exacerbate the food deprivation suffered by 854 million people. “We are facing the risk that the number of hungry will increase by many more millions of people.”
Although the global production outlook is favourable, this is unlikely to translate into the decline of many agriculture commodities because of the need to replenish stocks and rising utilization.
FAO predicts record cereal production this year, but tight markets will result in continued price volatility. (UN News Centre)
While it is crucial to respond with humanitarian support in the short term, a medium- and longer-term plan must centre on human rights, High Commissioner for Human Rights Louise Arbour told a special session on the food crisis at the Human Rights Council.
“Such focus helps to analyze and confront the differing impact of the crisis on people,” she noted. “It contributes to clarify the imbalances in a society that trigger or exacerbate the food crisis.”
Mr. Arbour added that a rights-based approach will also take into account the voices of marginalized groups, along with human rights institutions, civil society organizations and others.
Such a solution could also help to defuse tensions and prevent civil unrest, as well as avert violations of civil and political rights in response to protests.
The current food emergency, she observed, was triggered by the confluence of several factors, including imbalances in supply and demand, unfair trade practices and distorted incentives and subsidies.
“Yet at its core and in its punitive effects, this crisis boils down to a lack of access to adequate food,” the High Commissioner told the Council at the start of the day-long event, adding that this access is a right protected by international law.
Not only must the impact of the crisis on marginalized people must be studied, but the root causes of such discrimination – such as exclusion from access to land, productive resources and decent work – must be eliminated, she said.
If such comprehensive action is not taken, a “domino effect” which affects other rights, including the right to health or to education, could result, Ms. Arbour cautioned.
She emphasized the key role of States, which by human rights law must resolve such situations. “States’ obligations regarding the right to food and freedom from hunger also entail the adoption of national strategies to ensure food and nutrition security for all.”
The current crisis “transcends national boundaries,” the High Commissioner said, calling for cooperation among States in addressing the problem.
In his address to the Council, Olivier De Schutter, the Special Rapporteur on the right to food, underscored how the crisis should not be viewed as one that is solely humanitarian or macro-economic in nature, but as one that is focused on the right to food.
“What distinguishes a natural disaster from a violation from human rights is that, in the latter situation, we are capable of moving along the chain of causation, from the situation of the malnourished of the hungry to specific acts or abstentions by duty-holders,” he said.
It is up to individual countries to outline their plans regarding the right to food, the independent expert said. “At the same time, the international community must ensure that an enabling environment is created, allowing such national strategies to flourish, and providing financial and technical assistance where needed.”
The independent expert also called for stepped-up efforts to assist the agriculture sector in developing nations, in the face of soaring input prices.
“We must feed the hungry now, but we must also prevent famines from occurring tomorrow,” he pointed out.
The Council later adopted a resolution by consensus expressing its grave concern at the worsening global crisis.
It called on States – both individually and though cooperation and assistance – and others to make every effort to ensure the realization of the right to food as an essential human rights objective.
In a related development, poor countries relying on food imports are expected to spend 40 per cent more on food this year than they did last year, according to a new report by the UN Food and Agriculture Organization (FAO).
According to the latest Food Outlook, this year’s food import bill for the Low Income Food Deficit Countries (LIFDSs) is forecast to reach $169 billion this year.
FAO characterized this as a “worrying development,” noting that by the end of this year imports could cost four times as much as they did in 2000.
“Food is no longer the cheap commodity that it once was,” said the agency’s Assistant Director-General Hafez Ghanem, stressing that soaring food prices will likely exacerbate the food deprivation suffered by 854 million people. “We are facing the risk that the number of hungry will increase by many more millions of people.”
Although the global production outlook is favourable, this is unlikely to translate into the decline of many agriculture commodities because of the need to replenish stocks and rising utilization.
FAO predicts record cereal production this year, but tight markets will result in continued price volatility. (UN News Centre)
What's the solution to global food crisis?
By Subir Gokarn
Monetary policy actions are relatively easy to specify when the growth rate and the inflation rate are both moving in the same direction. If, with reference to a "neutral" or "comfort" zone for the two indicators, implying a sustainable balance between the two, both are to move up, this constitutes overheating and the unexceptionable response by the central bank is to increase interest rates, reduce liquidity or do both. If, relative to the same reference zone, both are to move down, the appropriate response would be just the opposite -- enhance liquidity, decrease interest rates or do both.
It is when both these indicators move in opposite directions from the reference zone that complications arise. Obviously, a situation in which the inflation rate declines while growth accelerates will not be perceived as a problem warranting any kind of monetary policy response. But let's turn to the contrary situation, in which inflation is accelerating while the growth rate declines. This is what India -- for that matter, the rest of the world -- appears to be in at the moment. What should a central bank do? Address inflation and risk growth slowing down even more? Or, try and sustain growth but risk unleashing inflationary forces that might prove to be extremely difficult to rein in later on?
The choice depends entirely on the context. However, some general principles that should guide the choice can be laid down. Two principles provide a foundation for deciding on an appropriate response. First, the response should be based on the significance of the risks to the two indicators. If the risk that inflation will accelerate in the absence of appropriate monetary actions outweighs the risk that growth will decelerate if those actions are taken, they should be taken.
Second, the response should be sensitive to the probability of success. If potentially anti-inflationary measures are highly likely to reduce the growth rate while not very likely to have an impact on the inflation rate, they should not be implemented. Conversely, if potentially pro-growth measures are highly likely to exacerbate inflation while not having a very significant impact on growth, they should be resisted.
Let's now consider the three choices that confront the Reserve Bank of India -- tighten liquidity, ease liquidity or hold steady -- with reference to these principles. Tightening liquidity is being both recommended and widely anticipated as the likely outcome in the next policy announcement. In terms of the first principle, relative risks, while the risk that growth will decelerate even more is very much there, inaction by the central bank now could cause inflation to accelerate, requiring a much more heavy-handed response in the not too distant future. Gradual, calibrated steps are far more palatable.
However, on the second principle, the probability of success, the evidence appears to go against tightening for the moment. The dominant contributors to the recent inflationary surge are food items and minerals, especially iron ore. Both these categories are being significantly driven by global demand-supply mismatches, something which domestic monetary policy actions will not have much of an influence over. As far as minerals and metals are concerned, the global slowdown may have a favourable impact on prices in the coming weeks; more importantly, slower growth in China will almost certainly contribute to softening prices over the next year or so. In other words, if a tight monetary policy cannot have much impact on circumstances that are, in any case, likely to be transitory in nature, why do it when it will almost certainly exacerbate the growth slowdown?
Turning to the second option, easing liquidity, at this point, it is widely believed to be impossible. However, it is worth examining the case for and against, particularly because it would have been seen as a legitimate course of action had the inflation numbers been less intimidating. With reference to the principle of relative risks, the growth slowdown is real and, more importantly, the sectoral pattern is closely related to the interest rate cycle.
On the other hand, it could stimulate domestic demand pressure prices, reinforcing the global forces that are already so malignant. In terms of the principle of probability of success, the issue is essentially one of timing. Going by our understanding of response lags, an easy liquidity stance will probably have a quicker impact on inflation, through its influence on expectations, than it will have on growth.
So, if tightening liquidity does not convincingly satisfy the tests of appropriateness while easing liquidity somewhat more convincingly fails them, at least for the moment, the status quo emerges as a default option. However, this is not entirely satisfactory. If there is a concrete case for the holding course, even as the clamour to tighten liquidity, it must be brought into the discussion.
In terms of the principle of relative risks, non-intervention will very likely allow the growth deceleration to consolidate and widen across sectors through linkages and multipliers.
This will, in turn, ease pressure on prices of various products and services, offsetting the global inflationary forces to some extent. On top of this, if at least some of the commodity price patterns are transitory, as suggested above, the inflationary pattern should become more tolerable in a few months. With reference to the principle of probability of success, the eventual objective is to stabilise the economy in the zone around 8.5 per cent growth and 4.5 per cent inflation. Given this, if the current inflation surge is transitory, a status quo policy today provides a little more room to manoeuvre in the next couple of quarters as far as the growth slowdown is concerned.
The critical question, therefore, is whether the recent inflationary pattern is more likely to be transitory or persistent. With respect to minerals and their downstream products, global business conditions will eventually dictate prices. However, energy and food prices are being driven by factors other than purely cyclical. There are some important linkages between them, notably through the diversion of food crops to bio-fuels and the rising prices of fertilisers, which are contributing to lower yields globally. The point, however, is that if these are structural problems with long-term implications, how much impact can a short-term policy instrument, which is essentially what monetary policy is, have?
This leads us to a third guiding principle, perhaps the most important, appropriateness: understand the cause of the problem and make sure that the policy instrument being contemplated can deal with that cause. Unfortunately, the roots of the global food situation lie far beyond the scope of interest rates and cash reserves.
The writer is Chief Economist, Standard & Poor's Asia-Pacific. The views are personal.
(Business standard)
Monetary policy actions are relatively easy to specify when the growth rate and the inflation rate are both moving in the same direction. If, with reference to a "neutral" or "comfort" zone for the two indicators, implying a sustainable balance between the two, both are to move up, this constitutes overheating and the unexceptionable response by the central bank is to increase interest rates, reduce liquidity or do both. If, relative to the same reference zone, both are to move down, the appropriate response would be just the opposite -- enhance liquidity, decrease interest rates or do both.
It is when both these indicators move in opposite directions from the reference zone that complications arise. Obviously, a situation in which the inflation rate declines while growth accelerates will not be perceived as a problem warranting any kind of monetary policy response. But let's turn to the contrary situation, in which inflation is accelerating while the growth rate declines. This is what India -- for that matter, the rest of the world -- appears to be in at the moment. What should a central bank do? Address inflation and risk growth slowing down even more? Or, try and sustain growth but risk unleashing inflationary forces that might prove to be extremely difficult to rein in later on?
The choice depends entirely on the context. However, some general principles that should guide the choice can be laid down. Two principles provide a foundation for deciding on an appropriate response. First, the response should be based on the significance of the risks to the two indicators. If the risk that inflation will accelerate in the absence of appropriate monetary actions outweighs the risk that growth will decelerate if those actions are taken, they should be taken.
Second, the response should be sensitive to the probability of success. If potentially anti-inflationary measures are highly likely to reduce the growth rate while not very likely to have an impact on the inflation rate, they should not be implemented. Conversely, if potentially pro-growth measures are highly likely to exacerbate inflation while not having a very significant impact on growth, they should be resisted.
Let's now consider the three choices that confront the Reserve Bank of India -- tighten liquidity, ease liquidity or hold steady -- with reference to these principles. Tightening liquidity is being both recommended and widely anticipated as the likely outcome in the next policy announcement. In terms of the first principle, relative risks, while the risk that growth will decelerate even more is very much there, inaction by the central bank now could cause inflation to accelerate, requiring a much more heavy-handed response in the not too distant future. Gradual, calibrated steps are far more palatable.
However, on the second principle, the probability of success, the evidence appears to go against tightening for the moment. The dominant contributors to the recent inflationary surge are food items and minerals, especially iron ore. Both these categories are being significantly driven by global demand-supply mismatches, something which domestic monetary policy actions will not have much of an influence over. As far as minerals and metals are concerned, the global slowdown may have a favourable impact on prices in the coming weeks; more importantly, slower growth in China will almost certainly contribute to softening prices over the next year or so. In other words, if a tight monetary policy cannot have much impact on circumstances that are, in any case, likely to be transitory in nature, why do it when it will almost certainly exacerbate the growth slowdown?
Turning to the second option, easing liquidity, at this point, it is widely believed to be impossible. However, it is worth examining the case for and against, particularly because it would have been seen as a legitimate course of action had the inflation numbers been less intimidating. With reference to the principle of relative risks, the growth slowdown is real and, more importantly, the sectoral pattern is closely related to the interest rate cycle.
On the other hand, it could stimulate domestic demand pressure prices, reinforcing the global forces that are already so malignant. In terms of the principle of probability of success, the issue is essentially one of timing. Going by our understanding of response lags, an easy liquidity stance will probably have a quicker impact on inflation, through its influence on expectations, than it will have on growth.
So, if tightening liquidity does not convincingly satisfy the tests of appropriateness while easing liquidity somewhat more convincingly fails them, at least for the moment, the status quo emerges as a default option. However, this is not entirely satisfactory. If there is a concrete case for the holding course, even as the clamour to tighten liquidity, it must be brought into the discussion.
In terms of the principle of relative risks, non-intervention will very likely allow the growth deceleration to consolidate and widen across sectors through linkages and multipliers.
This will, in turn, ease pressure on prices of various products and services, offsetting the global inflationary forces to some extent. On top of this, if at least some of the commodity price patterns are transitory, as suggested above, the inflationary pattern should become more tolerable in a few months. With reference to the principle of probability of success, the eventual objective is to stabilise the economy in the zone around 8.5 per cent growth and 4.5 per cent inflation. Given this, if the current inflation surge is transitory, a status quo policy today provides a little more room to manoeuvre in the next couple of quarters as far as the growth slowdown is concerned.
The critical question, therefore, is whether the recent inflationary pattern is more likely to be transitory or persistent. With respect to minerals and their downstream products, global business conditions will eventually dictate prices. However, energy and food prices are being driven by factors other than purely cyclical. There are some important linkages between them, notably through the diversion of food crops to bio-fuels and the rising prices of fertilisers, which are contributing to lower yields globally. The point, however, is that if these are structural problems with long-term implications, how much impact can a short-term policy instrument, which is essentially what monetary policy is, have?
This leads us to a third guiding principle, perhaps the most important, appropriateness: understand the cause of the problem and make sure that the policy instrument being contemplated can deal with that cause. Unfortunately, the roots of the global food situation lie far beyond the scope of interest rates and cash reserves.
The writer is Chief Economist, Standard & Poor's Asia-Pacific. The views are personal.
(Business standard)
Somalia: Food Security Alert 10 Sep 2008 - Decreasing humanitarian access exacerbates already extreme food insecurity
Conflict and civil insecurity continue to escalate in Somalia, and increased attacks against humanitarian workers in the last three months have hampered response activities at a time of sharply increased needs. In the southern and central regions, where about 78 percent of the 3.25 million people in need of urgent humanitarian assistance are located, militia groups have targeted aid workers, severely limiting the size and scope of humanitarian services provided. Urban and rural households in these areas have already exhausted most coping mechanisms to respond to the current crisis, the result of below–normal April–June rains, crop failure, high food and fuel prices, and continued unrest. As a result, the country is facing an extreme humanitarian crisis, and indications are that the situation will continue to deteriorate with increasing rapidity through the end of 2008, and into 2009. Urgent food and non–food assistance is needed to respond to the crisis. Increased attacks targeting humanitarians and general civil insecurity have made it difficult for aid organizations to respond to the country's increasing needs. As of July 2008, at least 23 aid workers had been killed, 18 abducted, and countless others injured, including staff from the United Nations and World Food Program.
Violence is worst in and around Mogadishu, through which 80 percent of humanitarian supplies for the country pass. Piracy along Somalia's coastline has also led to delays in commercial and food aid shipments, as cargo ship operators fear the loss of their vessels and lives following hijackings over the past two years. As a result of the increased violence, various organizations have scaled back the number and/or size of their activities, or have pulled out of the country altogether. For example, Doctors Without Borders this month ceased operations at one of its clinics in Mogadishu due to increased threats to its staff.
While the ability of aid agencies and international donors to respond to the humanitarian crisis has been limited, the severity of the crisis continues to increase in severity. In southern and central regions, an estimated 180,000 children are acutely malnourished – of which 26,000 are severely malnourished – marking an 11 percent increase from January 2008. In addition, new areas of the country are now facing high levels of food insecurity, including key pastoral regions of the north (Sool, Nugaal, and Togdheer) (Figure 1). While usually low and stable compared to the rest of the country, nutrition indicators are now also deteriorating in these areas. In the meantime, local and imported food prices have increased by 700 percent in the last year, leading to increased urban and rural vulnerability, and new waves of population movement towards refugee camps in neighboring countries. While secondary rains are expected in mid–October, they will not alleviate the severity of the current crisis. Access to food, shelter, income, water, and basic services remains severely limited, and food and non–food assistance is needed until at least the end of the year. Stabilizing the security situation is a priority to ensure such needs are met. (reliefweb)
Violence is worst in and around Mogadishu, through which 80 percent of humanitarian supplies for the country pass. Piracy along Somalia's coastline has also led to delays in commercial and food aid shipments, as cargo ship operators fear the loss of their vessels and lives following hijackings over the past two years. As a result of the increased violence, various organizations have scaled back the number and/or size of their activities, or have pulled out of the country altogether. For example, Doctors Without Borders this month ceased operations at one of its clinics in Mogadishu due to increased threats to its staff.
While the ability of aid agencies and international donors to respond to the humanitarian crisis has been limited, the severity of the crisis continues to increase in severity. In southern and central regions, an estimated 180,000 children are acutely malnourished – of which 26,000 are severely malnourished – marking an 11 percent increase from January 2008. In addition, new areas of the country are now facing high levels of food insecurity, including key pastoral regions of the north (Sool, Nugaal, and Togdheer) (Figure 1). While usually low and stable compared to the rest of the country, nutrition indicators are now also deteriorating in these areas. In the meantime, local and imported food prices have increased by 700 percent in the last year, leading to increased urban and rural vulnerability, and new waves of population movement towards refugee camps in neighboring countries. While secondary rains are expected in mid–October, they will not alleviate the severity of the current crisis. Access to food, shelter, income, water, and basic services remains severely limited, and food and non–food assistance is needed until at least the end of the year. Stabilizing the security situation is a priority to ensure such needs are met. (reliefweb)
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