Food Crisis – World Bank

2008 marks an era of crisises everywhere. With the aftershock of the subprime crisis, liquidity crisis, petrol price crisis, and political crisis (opposition parties all around the world are very successful: Taiwan, Pakistan, Zimbabwe, and Malaysia), a more severe problem is now the food crisis.

The food crisis, potentially the most lethal in comparison with all the other crisises mentioned above is threatening political stability everywhere. Yesterday, World Bank President Robert Zoellick called for a coordinated global response to combat the ever rising food prices which has caused shortages, hunger, and malnutrition all across the globe.

Severe weather in producing countries and a heighten increase in demand from developing countries have caused the prices of food to skyrocket by 80 percent since 2005 (Reuters). Last month, rice prices hit a 19-year high while wheat prices rose to a 28-year high.

Mr Zoellick said the global food crisis now requires the attention of every world leader in every country as the price of food is likely to remain high and volatile for quite some time. For starters, the World Bank will nearly double agriculture assistance to US$800 million in Africa while at the same time urging wealthy nations to help the UN’s Food Program meet some US$500 million in emergency food needs.

Furthermore, the World Bank estimates that over 33 countries will face social unrest because of soaring food and energy prices. Mr Zoellick said that the World Bank group can help combat the food crisis by:

First, backing emergency measures that support the poor while encouraging incentives to produce and harvest food.

Second, offerring access to technology and science to boost yields.

 Third, helping countries counter weather-related risk, such as drought

Fourth, facilitating land-titling, local currency financing, working capital, distribution and logistics, and support for services on which farmers rely.

According to Mr Zoellick, trade barriers on food hurt the poor and deterred farm production. He commented that, “if ever there was a time to cut distorting agriculture subsidies and open markets for food imports, is must be now.” All around the globe, rising food prices are increasing and governments are responding with price controls, export bans, and subsidies that are harmful in the long run.

Looking back in history, one can see that a food crisis would normally result in political instability, and social upheaval. Both the French Revolution and the Russian Revolution can be traced to extremely high food prices and shortages. As the world look at the available options to counter this problem, food prices continue to go North.

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