Soaring cereal tab continues to afflict poorest countries, UN agency warns

11 April 2008 – With food riots reported across the globe from the Philippines to Haiti, the United Nations agricultural agency warned today that the cereal import bill of the world’s poorest countries is forecast to rise by over 50 per cent in the current fiscal year.

“Food price inflation hits the poor hardest, as the share of food in their total expenditures is much higher than that of wealthier populations,” said Henri Josserand of the Global Information and Early Warning system of the UN Food and Agricultural Organization (FAO).

Citing FAO’s new Crop Prospects and Food Situation report, he noted that “food represents about 10 to 20 per cent of consumer spending in industrialized nations, but as much as 60 to 80 per cent in developing countries, many of which are net-food-importers.”

The report states that the rise of 56 per cent in 2007-2008 comes after the already harsh increase of 37 per cent in 2006-2007 that had been squeezing lowest-income households hard.

For low-income, food-deficit countries in Africa, the cereal bill is projected to increase by a colossal 74 per cent, due to the sharp rise in international cereal prices, freight rates and oil prices, according to FAO.

Food riots have already been reported in Egypt, Cameroon, Côte d’Ivoire, Senegal, Burkina Faso, Ethiopia, Indonesia, Madagascar, the Philippines and Haiti in the past month, the agency said.

In Pakistan and Thailand, army troops have been deployed to avoid seizing of food from the fields and from warehouses.

To help countries cope with the situation, FAO said it has launched an Initiative on Soaring Food Prices (ISFP), offering technical and policy assistance to help vulnerable farmers increase local food production. Field activities are starting in Burkina Faso, Mauritania, Mozambique and Senegal.

It is also working with Governments, the UN World Food Programme (WFP) and other partners to create strategies to alleviate the situation.

The FAO report, in addition, tentatively predicts that cereal production in 2008 could increase by 2.6 percent to a record 2,164 million tonnes, with the bulk of the increase in wheat.

“Should the expected growth in 2008 production materialize, the current tight global cereal supply situation could ease in the new 2008-09 season,” the report said.

But much will depend on the weather, FAO cautioned, recalling that at this time last year prospects for cereal production in 2007 were far better than the eventual outcome.


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