By Gerald Korson

Rising food prices force tough choices among poor

Many at risk of going hungry as World Food Program hit with $500 million deficit for its food-distribution program

Numbers don't lie: The retail prices of food and fuel has risen dramatically in the past several months. Most middle-class consumers in the United States might cope by adjusting their household budgets and driving a bit less, but for families at or below the poverty line, those extra dollars for milk, bread and fuel can tax an already limited income.

As hard as these inflated prices hit our domestic poor, however, their impact on the impoverished in the Third World is far greater -- a fact that has humanitarian agencies and industry analysts very concerned.

"A rise in food prices means, of course, that more people go hungry," said Siwa Msangi, a research fellow with the International Food Policy Research Institute (IFPRI). "It varies from country to country, but people below the poverty line already spend roughly 50 percent to 70 percent of their incomes on food."

The causes of the current crisis are many, and it is perhaps the confluence of several factors that make it all so acute (see sidebar). Many farmers switched last year from growing soybeans to growing corn to sell for ethanol production, creating shortages and raising prices in both commodities.

The resultant cost of animal feed and the inflated price of oil increase the farmers' overhead, which is passed along to consumers of grains, meats and dairy products. Throw in an emerging Asian middle class and some global warming, and you have a food crisis of international proportions.

It may not end anytime soon, either. On March 31, the Department of Agriculture predicted that U.S. farmers would plant 8 percent less corn and 18 percent more soybeans in 2008, reversing the previous year's trend that saw corn production at a historic high, according to The Associated Press. If that prognosis holds true, then corn prices will spike still higher in the foreseeable future.

Half a billion short

Jennifer Parmelee, a spokesperson for the U.N.'s World Food Program, said that when prices on staple foods increase, the impoverished of the world face some tough choices.

"If they're in the lower income levels, they start serving less nutritious food, and then finally they start skipping meals," she told Our Sunday Visitor. "When the price of wheat goes up 70 percent like it has in Afghanistan, what does that do to the household budget?"

WFP gets most of its food aid for distribution in the form of in-kind donations that are based upon a predetermined dollar value, Parmelee said. As the price of the commodity rises, the amount of food aid received decreases. To compensate for the shortfall in food expected this calendar year, the WFP has already projected a $500 million deficit -- a figure that may need to be adjusted upward throughout the year.

The WFP sent an "unprecedented" emergency appeal to major donors and heads of state in an effort to recoup the $500 million gap in its food distribution program," she said.

"We're hoping to get a generous response, because otherwise, by the end of May or early June, we'll have to take drastic last-resort measures and either cut food rations or even drop some people from the program," Parmelee said. "It's the most painful decision to have to make."

Catholic Relief Services, the international relief and development agency of the U.S. Conference of Catholic Bishops, is also feeling the effects of the food-price inflation. In a statement last month, CRS President Kenneth Hackett urged Congress to keep the $600 million "food-aid safebox" in the Senate version of the 2008 Farm Bill. The safebox funds are used for agricultural programs to help farmers increase crop volume and for setting up "food for work" projects, including school-meal programs that provide parents an incentive to ensure their children get an education.

Hackett said he supports the Senate mandate that the entire safebox be used for these two programs but emphasized that additional aid both for short-term humanitarian emergencies and for long-term development would still be needed.

"Tragically, every 3.6 seconds another person dies of starvation. This is unconscionable," Hackett said. "We won't break the cycle of hunger unless we attack the root causes."

Feed the world

Due to the nature of volatile markets, the food-price crisis has no simple solutions.

"In the medium to long term, one of the answers is stepped-up agricultural production, particularly in areas like Africa," Parmelee said.

She noted that The Rockefeller Foundation and the Bill and Melinda Gates Foundation have teamed to form the Alliance for a Green Revolution in Africa (AGRA), which intends to help Africans to improve agricultural techniques and crop yield and reduce reliance on imports from overseas. "It's an enormous task, and it's not going to bear fruit right away," she said. "But it has to be done."

For IFPRI's Msangi, the remedy may be in genetically engineered crops that can adapt to global warming.

"We're not facing just a crisis from food prices," he said. "We're facing a crisis from climate change. We need to be developing heat-tolerant, drought-tolerant, salt-tolerant traits that can be produced conventionally or by transgenic means."

Although many people are hesitant to use crop seeds that have been genetically modified, Msangi advocates an "evidence-based approach" to deciding upon their application.

"It may be that the precautionary principle may be keeping out a potentially beneficial technology," he said. "We need to be more flexible to meet these challenges.

"If there's demonstrated risk, then by all means, let's not use [transgenic seeds]," he added. "But there are people who really can benefit from them."

Cause and effect

Some of the primary causes of the worldwide rise in food prices:

Hike in crude oil prices triggers fuel increases, adding cost to transporting goods and operating farm equipment.

More U.S. farmers raising corn instead of soybeans in order to sell corn for use in ethanol production, thus reducing supply of both corn and soybeans and raising the price of corn, a major food crop in sub-Saharan Africa.

Increased cost of fuel (due to oil prices) and animal feed (due to corn prices) along with a rising middle class in India and China increases demand for meat and milk products.

Climate change and global warming: Cycles of drought and flooding, both of which can ruin crops, are intensifying around the world.

Fuel on the Hill

Are biofuels worth all the trouble? That's a question some researchers are beginning to ask as unintended side effects begin to be noticed.

Hikes in prices all along the food chain are being blamed in part on lower supplies of corn and soybeans brought on by farmers selling their crop for ethanol production rather than food for humans and farm animals.

"One of the things that makes biofuel attractive on paper is that we're reducing carbon emissions," said Siwa Msangi, a researcher with the International Food Policy Research Institute. "But what if you're clearing forests in order to raise the crop? Are we really saving energy, or are we putting more energy in than we're getting out of these biofuels?"

Policymakers on Capitol Hill and in the European Union, he said, need to rethink alternate-fuel policy based on hard evidence and push for the development of "second-generation" technologies that do not use food crops for fuel.

Gerald Korson writes from Indiana.