Food Crisis (group Presentation)

Introduction ■The years 2007–2008 saw dramatic rises

in world food prices, creating a global crisis and causing political and economical instability and social unrest in both poor and developed nations.

■ More than 6 billion people living in the world today. The total number of food insecure people who are malnourished or lacking critical nutrients is probably closer to 3 billion—about half of humanity

■ According to the U.S. Department of Agriculture, over 35 million people lived in food-insecure households, including 13 million children. Due to a lack of food adults living in over 12 million households could not eat balanced meals.

■ world hunger crisis continues to worsen as many of the

communities in which we work struggle with daily hunger and starvation.

■ The basic staples that feed the world wheat, rice and

corn continue their inexorable rise in cost and scarcity.

■ Food crisis result of biofuels, low cereal stocks, high oil

prices, speculation in food market and extreme weather events.

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■ experts have placed the blame on rising fuel costs, lower agricultural production, weather shocks, more meat consumption, and shifts to bio-fuel crops. ■ High prices threaten to increase malnutrition, already an underlying cause of death for over 3.5 million children a year.

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What we do know: ■ Wheat prices are up 120% ■ Rice prices have risen 75% ■ Poor families spend up to 80% of their budget on food ■ According to the World Bank, an estimated 100 million people have fallen into poverty in the last 2 years ■ Prices are expected to stay high through 2015 ■ 21 of 36 countries in a food security crisis are in SubSaharan Africa, according to the United Nations FAO ■ West Africa, the Horn of Africa, and fragile states are especially vulnerable

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WORLD POPULATION IS GROWING & FOOD DEMAND IS INCREASING.

In 1988 (20 Years Ago) world population stood at 5.2 Billion and currently It stands at over 6.5 Billion People.( a Significant Increase) meanwhile food demand has soared meeting Population Growth, but the Agricultural Industry has seen tremendous challenge over the last 5-10 years due to direct Competition from growing industrialization and the Renewable fuel market. The World Bank predicts that food demand will double by 2030, and

Look at the food they bought for one week and the number of persons in the family

Haiti food riot, April 2008

Haiti food riot, April 2008

Pakistani women buy subsidized flour in Lahore. The price of staple foods and fuel has risen drastically in the country in the last few months. Many people in Pakistan are now dependent on state subsidies.

In Manila, the capital of the Philippines, soldiers stand guard during the sale of government rice. With the price of rice soaring, the government is looking at ways to ensure none of its citizens starve.

Bangladesh: Food queues have become longer as prices have gone up. Fights over food frequently break out in the queues.

FACTOR OF FOOD CRISIS

WORLD POPULATION Growth

Food Prices Increase disaster

Biofuels

FACTOR OF FOOD CRISIS Distorted Global Rice Market

Fresh Water Shortage

Global Warming and Natural Disaster

WORLD POPULATION GROWTH.

World historical and predicted populations (in millions)

■ UP to 100 million people are being added to the world's

population each year ■ In Mexico, population has grown from 13.6 million in 1900 to 107 million in 2007. ■ U.S. population grew by 2.8 million between July 1, 2004, and July 1, 2005. ■ The world's population, on its current growth trajectory, is expected to reach nearly 9 billion by the year 2042

■The gradual change in diet among newly prosperous populations. ■utilization growth has been greatest in non-food usage. ■Increase the middle class grew ■1990 (9.7% in India & 8.6% in China) 2007 (30% and 70%)

■The corresponding increase in

affluence has also brought with it a change in lifestyle and eating habits, particularly a demand for greater variety, leading to greater demand for agricultural resources. ■This demand exacerbates dramatic increases in commodity prices, such as oil

Food Prices Increase The World Bank reports that global food prices rose 83% over the last three years .

■ The World Bank reports that global food prices rose 83% over the last three years and the FAO cites a 45% increase in their world food price index during just the past nine months.

■ The Economist’s comparable index stands at its highest point

since it was originally formulated in 1845. As of March 2008, average world wheat prices were 130% above their level a year earlier, soy prices were 87% higher, rice had climbed 74%, and maize was up 31%.

Eric Holt-Giménez and Loren Peabody, From Food Rebellions to Food Sovereignty: Urgent call to fix a broken food system, Institute for Food and Development Policy, May 16, 2008

■ The international prices for the major

food grains have decreased almost just as dramatically as they had increased. Expressed in US dollars per metric tonne, and based on prices at the time of writing, the prices of: ■ rice fell from its May 2008 peak by 59%; ■ maize fell from its June 2008 peak by 43%; ■ soybean fell from its July 2008 peak by 77%; ■ wheat fell from its February 2008 peak by 53%.

■ In addition, oil prices have also

declined dramatically. Expressed in US dollars per barrel, oil prices dropped by about 65% from their July peak in 2008 (based on the price of Brent crude oil).

■ Nevertheless, international grain prices remain high compared to their historical averages:

■ rice in March 2009 is 49% above its ten-year average;

■ maize in April 2009 is 43% above its ten-year average;

■ soybean in March 2009 is 36% above its ten-year average;

■ wheat in April 2009 is 31% above its ten-year average.

Figure 1. Rice prices, January 1989 to March 2009

Figure 2. Maize prices, January 1994 to April 2009

Figure 3. Soybean prices, January 1994 to March 2009

Figure 4. Wheat prices, January 1998 to April 2009

Figure 5. Oil prices, January 1998 to April 2009 Note: Oil prices refer to Brent, US dollars per barrel.

■ High food costs 'a global burden' ■ The Philippines is one of the

countries hardest hit by higher food prices ■ Almost two-thirds of people - 60% - in 26 countries say higher food and energy prices this year have affected them "a great deal", a BBC report has found.

■ The BBC World Service global study said that while all

nations had felt the burden of the higher costs, the problem was most acute in poorer countries. . ■ Elsewhere, the aid agency Oxfam said, more than 900 million people faced starvation because of soaring prices. ■ A report by the UK-based charity also found that spiralling inflation in the cost of basic foods such as rice and cereals had pushed an extra 119 million people into hunger this year.

■ The study found that many people in the

developing world have simply been forced to eat less this year owing to the higher cost of food. ■ This situation was most acute in the Philippines and Panama, where 63% of respondents said they had cut back on what they ate.

■ Kenya was the next most affected, with 61% saying

they were eating less, followed by Nigeria, at 58%. ■ Across all 26 countries, 43% of people said they had altered their diet ■ This was most apparent in Panama, with 71% switching to cheaper foods, followed by Egypt, 67%, Kenya, 64%, and again, the Philippines, 63%.

Biofuels ■ One systemic cause for the price

rise is held to be the diversion of food crops for making firstgeneration biofuels. ■ An estimated 100 million tones of grain per year are being redirected from food to fuel. ■ Land and resources available for food production were reduced correspondingly

■ Filling a tank of an average car

with Biofuel, amounts to as much maize as an African person consumes in an entire year.

■ A World Bank policy research

working paper released in July 2008 concluded that "...large increases in biofuels production in the United States and Europe are the main reason behind the steep rise in global food prices”.

■ On April 29, 2008, U.S. President

George W. Bush declared that "85% of the world's food prices are caused by weather, increased demand and energy prices", and recognized that "15% has been caused by ethanol” ■ On July 4, 2008 World Bank report estimated the rise in food prices caused by biofuels to be 75%.

■ Oil price increases since 2003 resulted in increased demand for biofuels. ■ Transforming vegetable oil into biodiesel is not very hard or costly so there is a profitable arbitrage situation if vegetable oil is much cheaper than diesel. ■ Farmers can switch to growing vegetable oil crops if those are more profitable than food crops. So all food prices are linked to vegetable oil prices, and in turn to crude oil prices.

■ A World Bank study concluded that oil prices and a weak dollar explain 2530% of total price rise between January 2002 until June 2008 ■ In Germany and Canada it is now much cheaper to heat a house by burning grain than by using fuel derived from crude oil. ■ With oil at $120/barrel a savings of a factor of 3 on heating costs is possible. When crude oil was at $25/barrel there was no economic incentive to switch to a grain fed heater

■ 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," report by Internal World Bank

■ The basket of food prices

examined in the study rose by 140% between 2002 and this February. ■ Report by Internal World Bank estimates that higher energy and fertilizer 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.

■ "It is clear that some biofuels have huge impacts on food prices," Dr David King, the government's former chief scientific adviser

■ The German Development Minister Heidemarie

Wieczorek-Zeul said in Washington at a World Bank meeting that “Increasing production of biofuels was 30 to 70 per cent responsible for the rapid rise in food prices.”

■ Thai Prime minister Samak Sundaravej, whose country

is a large producer and user of biofuels lashed out at the World Bank over its claim of biofuels causing food shortages

Fresh Water Shortages

■ Fresh water is a finite

resource ■ The amount of fresh water supply provided by the hydrological cycle does not increase. ■ Humans share the Earth with other creatures who also need water, therefore, a water shortage is also a crisis for wildlife

■ Two principal signs of

stress as the demand for fresh water outruns the supply (i) Rivers are running dry. (ii) Water tables are falling on every continent

Rivers are running dry ■ Many major rivers—including the

Colorado, Ganges, Indus, Rio Grande, and Yellow—are so overtapped that they now run dry for part of the year.

■ Freshwater wetlands have shrunk by about half worldwide.

■ In 1972, the Yellow River in China failed to reach the sea for the first time in history. That year it failed on 15 days;

■ every year since, it has run dry for a longer period of time, until in 1997, it failed to reach the sea for 226 days.

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■ The story is similar with all of

China’s rivers. China has almost one-quarter of the world’s population, but only 6 percent of its fresh water. ■ In addition, these rivers are replenished by the glaciers in the Himalayan Mountains— but these glaciers are all disappearing

ii. Water tables are falling on every continent

■Aquifer depletion is a new problem. ■Water tables are falling from the overpumping of groundwater in large portions of China, India, Iran, Mexico, the Middle East, North Africa, Saudi Arabia, and the United States. ■India has the highest volume of annual groundwater overdraft of any nation in the world.

■ In most parts of the country, water mining is taking place at twice the rate of natural recharge, causing aquifer water tables to drop by 3 to 10 feet per year. ■ This enormous shift from sustainable water use to overmining began when farmers changed from having oxen withdraw the water from a well, to using electric or diesel-driven motors.

Seventy percent of all the fresh water is used for irrigation ■ agriculture uses the largest

amount of freshwater (70%)

■ 40 percent of the world grain

harvest is produced on irrigated land, t herefore, a water shortage will become a food shortage

■ Countries are importing grain as a way to import

water. ■ It takes 1000 tons of water to grow one ton of grain. ■ On the other hand, exporters of grain are exporting water. (The U.S. annual grain exports of 90 million tons of grain represent 90 billion tons of water, an amount that exceeds the 67-billion-ton annual flow of the Missouri River. )

■ Producing one ton of grain requires 1000 tons of

water, but producing one ton of beef requires 15,000 tons of water, (and nearly that much is required to produce a ton of cotton).

■ Producing wheat or soybeans requires only 2% of the water required by beef.

water shortages -- creating higher food prices and food shortages everywhere.

Global Warming and Natural disaster ■ Several distinct weather and

climate change have to led to slow down in the growth of agricultural production. ■ The most influential is the extended drought in Australia ( Murray- Darling Basin) in 2006 ■ The drought has caused the annual rice harvest to fall by as much as 98% from pre-drought levels.

Rice Production in Thousand Tons (Australia)

■ Australia is historically the second-

largest exporter of wheat after United states, producing up to 25 million tons in a good year, the vast majority for export. ■ In year 2006 , the harvest was 9.8 million because of drought. ■ Other events that have negatively affected the price of food include 2006 heat wave in California’s San Joaquin Valley which killed larges number of farm animals

■ Unseasonable 2008 rains in Kerala, India, which destroyed swathes of grain. ■ Scientists have stated that the several of these incidents are consistent with the predicted effects of climate change. ■ In May 2008, the effects of Cyclone Nargis on Burma caused a spike in the price of rice. ■ Burma has historically been a rice exporter, though yields have fallen as government price control have reduced incentives for farmers.

■ The storm surge inundated rice paddies up to 30

miles(48km) inland in the Irrawaddy Delta, raising concern that the salt could make the fields infertile. ■ The FAQ had previously estimated that Burma would export up to 600,000 tons of rice in 2008. ■ But concerns were raised in the cyclone’s aftermath that Burma may be forced to import rice for the first time, putting further upward pressure on global rice prices.

Distorted Global Rice Market ■ World production of rice has risen

steadily from about 200 million tonnes of paddy rice in 1960 to 600 million tonnes in 2004. ■ Milled rice is about 68% of paddy rice by weight. ■ In the year 2004, the top four producers were China (26% of world production), India (20%), Indonesia (9%) and Bangladesh.

■ World trade figures are very different, as only about 5–

6% of rice produced is traded internationally. ■ The largest three exporting countries are Thailand (26% of world exports), Vietnam (15%), and the United States (11%), while the largest three importers are Indonesia (14%), Bangladesh (4%), and Brazil (3%).

■ Although China and India are the top two largest producers of rice in the world, both countries consume the majority of the rice produced domestically leaving little to be traded internationally.

■ In March to May 2008, the

price of rice rose greatly due to a rice shortage. ■ In late April 2008, rice prices hit 24 cents a pound, twice the price that it was seven months earlier. ■ On the 30th of April, 2008, Thailand announced the project of the creation of the Organisation of Rice Exporting Countries (OREC) with the potential to develop into a price-fixing cartel for rice.

■ Consumption of rice by country—2003/2004 (million metric ton)

■ Between 1961 and 2002, per

capita consumption of rice increased by 40%. ■ Rice is the most important crop in Asia. In Cambodia, for example, 90% of the total agricultural area is used for rice production. ■ U.S. rice consumption has risen sharply over the past 25 years, fueled in part by commercial applications such as beer production. ■ Almost one in five adult Americans now report eating at least half a serving of white or brown rice per day.

■ Japan is forced to import

more than 767,000 tons of rice annually from the United States, Thailand, and other countries due to WTO rules. ■ This is despite the fact that Japan produces over 100% of domestic rice consumption needs with 11 million tonnes produced in 2005 while 8.7 million tonnes were consumed in 2003-2004 period.

■ Japan is not allowed to re-

export this rice to other countries without approval. ■ This rice is generally left to rot and then used for animal feed. ■ Under pressure, the United States and Japan are poised to strike a deal to remove such restrictions. ■ It is expected 1.5 million tonnes of high-grade American rice will enter the market soon.

Effect From The Food Crisis Issues

1. Food price hike ■ This is due to the food

has been use as the alternative fuel and the rise of the energy cost. ■ The hike intend to increase the inflation level especially for the non OECD countries from 5%(2006) to 8.1% (2008)

■ April 24, 2008 “Press conference by world food

programmed executive director on food price crisis” confirm that food price hike 55% from June 2007 to Feb 2008 and 87% increase in the cost of rise in March. ■ This spike food price plunge household in developing country into serious poverty. – Developing countries spend 70% of income on food – Industrial country spend 18% of income on food

2. Increasing number of poverty ■ Food crisis tend to rise up the food price and cause the level of poverty line increase. The poorer family will become victims of the deep poverty ■ How it being measured

– Poverty level VS average poor house hold • (88% increase in poverty level with only 12% of family fall into deep poverty)

3. Healthy level decrease ■ How? Food price hike tend to change the fix income

household family to adapt with the changes. ■ Buy the cheaper food to survive or change the eating habits(reduce food consumption). ■ Lead to the less nutritious food and impact the body healthy. Because great mind come from the great body(healthy body) ■ Permanent malnourished

4. Risk to schooling ■ The intension to get more money to buy food is the top

priority of the poor families. ■ This lead to change mind set to go working at the younger age so that it can fill up their stomach rather than fill up their mind with education. ■ Education is not important for these poverty communities as they have to survive with their own life.

5. Inflation increase ■ Low-income countries face inflationary pressure and

rising import bills – both of which undermine economic growth and development. ■ FAO estimates that food import bills for developing countries rose by 25% in 2007 (Shapouri and Rosen, 2008). ■ Food aid is programmed by budget, not volume, rising prices depress supply. (demand is higher than supply)

Action By Individual Goverment

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Brazil ü Announced a temporary ban on the export of rice ü Protect domestic consumers

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Burkina Faso ü ü ü ü ü ü

Earlier food riots took place in on Broke in the country's second and third largest cities Food prices increase up to 65% Soldiers were mobilized throughout strategic points at its capital Over 100 people were arrested in one of the towns Government promised to lower taxes on food and to release food stocks.

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Cameroon Reduction in import taxes on foods Agreement with retailers § Retailer lower food prices, government reduced import taxes Announced two-year emergency program: § Double Cameroon's food production and achieve food selfsufficiency

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India Banned the export of rice

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Mexico Freeze prices of more than 150 consumer staples Attempt to control inflation

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Panama Government buying rice at the high market price and selling rice to the public at a lower subsidized price at food kiosks.

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Russia Pressured retailers to freeze food prices before key elections from October 2007 till May 1, 2008.

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United State of America US$200 million support poor farmers boost food production Congress to approve an extra $770 million funding for international food aid

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Japan Release of rice reserves onto the market As of May 16, lowered prices by 14% in a single week.

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Thailand Creation of the Organization of Rice Exporting Countries (OREC) Potential to develop a price-fixing cartel for rice

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Food and Agriculture Organization Jun, 2008 hosted a High-Level Conference on World Food Security $1.2 billion in food aid was committed for the 75 million people in 60 countries

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At the same month, a sustained commitment from the G8 was called for by some humanitarian organizations.

G8 Summit  Toyako, Japan Summit from 7 to 9 July 2008  discussed to step up an emergency assistance to the 850 million people who are suffering from hunger.

Increasing public investment in research and development on ecological and climate change-resilient farming Stopping funding for Genetic Engineering (GE) crops and prohibit patents on seed Phasing out the most toxic chemicals in agriculture and eliminating environmentally destructive agricultural subsidies Protecting domestic food production through trade agreements Dropping mandatory targets to increase the ratio of biofuels used in transport

Action Taken To Counter The Food Crisis Issues 2009

■ Food and Agriculture Organization of the United Nation (FAO) will organize a forum “ HOW TO FEED THE WORLD IN 2050” on 12 to 13 October 2009 in Rome.

– Will we be able to produce enough food at affordable prices or will rising food prices drive more of the world's population into poverty and hunger? – How much spare capacity in terms of land and water do we have to feed the world in 2050? – Are we investing enough in research and development for breakthroughs to be available in time? – Will new technologies be available to the people who will need them most - the poor? – How much do we need to invest in order to help agriculture adapt to climate change, and how much can agriculture contribute to mitigating extreme weather events?

News 19 Jully 2009: Leagues Reinforce Committement to Fight Against Global Hunger On the occasion, The EPFL representatives had the opportunity to review the outstanding impact of the Professional Football Against Hunger Campaign in raising awareness through football stadiums and media and reaching the hearts and minds the international community about the devastating problem of hunger.

World Food Day, 16 October 2009 Theme: "Achieving food security in times of crisis" With an estimated increase of 105 million hungry people in 2009, there are now 1.02 billion malnourished people in the world, meaning that almost one sixth of all humanity is suffering from hunger.