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As this was being written world crude prices were reported to have
tumbled by six US dollars a barrel. In the local market commercial
rice prices have also dropped.
It was welcome news for Filipinos suffering from
the consequences of exorbitantly priced fuel and cereals—but we
are not out of the woods yet. In fact, experts predict things will
get worse before we see any chance of them getting better.
High oil prices have been grabbing the
headlines, but the bigger danger involves more basic commodities.
People can live without oil—and perhaps benefit the human race and
the planet by weaning themselves from their long dependence on
petroleum and other fossil fuels. Not so when it comes to food.
Wheat, rice and maize are the staples of six
billion human beings. Their prices have nearly doubled since last
year—and, as a BBC News primer points out, “they are not the
only foodstuffs trading at a high price on the international
commodity market.”
The primer, which is posted on the BBC News web
site, tries to answer why food prices are rising worldwide and what
can be done about it:
“What is going on?
“Prices are increasing sharply for some of the
most basic foodstuffs traded on international commodity markets.
“The price of wheat has doubled in less than a
year, while other staples such as corn, maize and soya are trading
at well above their 1990s averages. Rice and coffee prices are
running at 10-year highs, and in some countries, prices for milk and
meat have more than doubled.
“Why are we seeing these increases now?
“It could be the breakdown of the
‘Goldilocks era’ for global commodities—a period stretching
back more than 30 years, during which the price of basic foodstuffs
has been neither too high nor too low, but remained relatively
constant.
“For most of this period, the cost of staples
such as wheat, corn and soya has actually fallen in real terms. And
food buffer stocks are at all-time lows as countries saw no need to
accumulate them. But it seems this long period of stability is
coming to an end. Most commentators believe we are on the cusp of a
new era of volatility and rising prices which will last for some
time to come.
“Who are the winners and losers?
“The main losers are poor people who live in
cities in developing countries, who are facing higher prices for
imported food on low incomes. Food riots from Haiti to Indonesia are
causing increasing political instability. The World Bank says that
the high price of food could lead to developing countries missing
international poverty targets.
“The main gainers are farmers in rich and
emerging market nations like the US , Brazil , Argentina , Canada
and Australia , who are getting record prices for their harvests.
Some poor farmers are also benefiting from higher prices.
“What are the main causes?
“The first reason why prices are rising is
growth in the world’s population, which is expected to top nine
billion by the middle of the century. That is an incredible number
of mouths to feed and will put pressure on a range of resources,
including land, water and oil, as well as food supply.
“But lurking behind the headline figures for
population is an even more significant factor pushing up prices, and
that’s the economic miracle driving emerging economies such China
and India . To put it bluntly, rich people eat more than poor
people, and all this economic growth is generating a whole new tier
of middle-class consumers who buy more meat and processed food. The
[Food and Agriculture Organization] estimates that processed food
now accounts for 80 [percent] of food and beverage sales.”
“What other factors are involved?
“There is also the added environmental
pressure all these extra people are loading onto the planet, as well
as the impact of climate change.
“Desertification is accelerating in China and
sub-Saharan Africa , while more frequent flooding and changing
patterns of rainfall are already beginning to have a significant
impact on agricultural production.
“And global warming has played a significant
role in another driver of rising prices: the shift in agricultural
production from food to [bio-fuels].
“Ethanol production is on course to account
for some 30 percent of the US corn crop by 2010, dramatically
curtailing the amount of land available for food crops and pushing
up the price of corn flour on international commodity markets.
“What can be done about it?
“Many countries are subsidizing the price of
food, and the World Bank has called for targeted subsidies to help
the poor. And the UN’s World Food Program needs another $500
[million]… to make up the gap in emergency food aid.
“In the longer term, international aid
agencies have called for more money to support food production in
developing countries.
“So far, only a small part of foreign aid goes
to help farmers, but the World Bank says it [would] double its
assistance to African agriculture to $800 [million].
“The food crisis is also likely to complicate
the task of agreeing the next round of world trade talks, the Doha
round, which is focused on agriculture.
“Agencies like Oxfam also want protection for
small farmers in developing countries and agricultural marketing
boards against the demand of the rich countries that they fully open
their markets.”
dansoy26@yahoo.com
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