Oxfam Canada World Food Day 2008

Report
from Oxfam
Published on 10 Oct 2008 View Original
The High Cost of Eating

The battle against hunger suffered a serious setback this year, due to escalating food prices caused by increased demand and reduced production. The 850 million people who suffer chronic hunger have now been joined by hundreds of millions more, virtually all of them in poor countries.

Haiti has been experiencing food riots as people cannot afford the food they need. Judith Alexandre, a single mother in Haiti, used to make breakfast for her two children before setting off for work as a street vendor, but the steep increase in rice prices, a Haitian staple, has meant her children are having to skip their morning meal.

On average, food prices have risen by 83 percent, compared with three years ago, while the cost of rice, corn and other staples has risen as much as 300% in some countries. For poor families, many of which spend up to 70 per cent of their income on food, even small increases in food prices squeeze the household budget and often lead to pulling girls out of school to save on fees, or refusing to seek medical attention because of the cost.

When households reduce food consumption, it is often women and children that suffer most. In places where people are too poor to buy food at all, these developments have caused a humanitarian emergency. In Somalia, for example, nearly half of the population, or 3.25 million people, are now in need of emergency assistance. And in Ethiopia 4.6 to 6.4 million people have been driven into destitution in the past year, in addition to the 7.2 million who receive food aid every year.

The perfect storm

A number of factors have come together to create a 'perfect storm' of a food crisis:

Human-induced climate change is a major cause. Extreme weather events, including droughts, floods and storms, have become the norm, leading to significantly reduced crop yields. According to the Intergovernmental Panel on Climate Change, in some countries, yields from rain-fed crops could be halved by 2020.

The boom in biofuels, especially ethanol made from corn, is another primary cause. The International Monetary Fund estimates that last year biofuels accounted for almost half the increase in demand for major food crops. The OECD estimates that between 2005 and 2007, almost 60 per cent of the increase in consumption of cereals and vegetable oils was due to biofuels. Biofuels do not just consume food directly, they compete with it for land, water and other inputs, pushing prices up further.

A third cause is the rising cost of fossil fuels, which has driven up the cost of fertilizers and other inputs farmers need, as well as transport and storage costs. When poor farmers cannot afford such inputs, they plant and harvest less. World fertilizer prices went up by more than 200 percent in 2007, according to the International Center for Soil Fertility and Agricultural Development.

Changing dietary patterns is a fourth cause. As incomes increase in the larger developing countries, especially China and India, demand rises for meat and dairy products. These goods require vast amounts of grain to produce. Research varies on how much grain is require to produce the same amount of calories through livestock, both most fall in the range of about two to five times more grain, and up to 10 times more in the case of grain-fed beef in the United States.

Finally, lack of government investment in small-scale food production over past decades has made it harder for farmers to take advantage of higher prices and produce more food. Aid to agriculture has fallen by half since 1990, parallel to a shift in government strategy away from rural development toward export industries.

An opportunity

The food crisis presents an enormous challenge to the leadership and legitimacy of national governments and the world's multilateral institutions. But it is also a genuine opportunity to deliver long overdue reforms to the food and agriculture system to increase food production, favour small-scale farmers, and help them adapt to climate change.

Most poor people in developing countries make a living from agriculture, so in the longer term higher prices should encourage investment in agriculture and offer the possibility of better rural livelihoods. But only for those that survive the short term. At the moment, soaring prices are increasing inequality and undermining progress in tackling poverty.

What needs to be done:

- Provide urgent assistance to countries facing immediate food shortages.

- Increase Canada's development assistance and use more of it to help small-scale farmers produce more food with fewer inputs.

- Move quickly to reduce Canada's greenhouse gas emissions, and take leadership at the United Nations in forging a post-Kyoto deal that avoids catastrophic climate change.

- Redirect Canada's ethanol subsidies toward alterative fuels that do not drive up the price of food.

- Provide additional assistance to help poor countries adapt to climate change

- Implement aid programs in ways that minimize the burden on women's time, maximize women's say, and strengthen the clout of producer organizations and women's groups in the marketplace.

In Ethiopia, Oxfam has had success in developing cereal banks where small farmers "deposit" their harvest along with their neighbours and draw corresponding payments. The farmers in the cereal bank can sell into the market when prices are high and have a reliable store of grain all year round. Oxfam also work with partners to establish women-led enterprises that increase incomes and reduce environmental exploitation and pressure on the land.

And in Haiti, Oxfam is supporting subsidized community restaurants, soup kitchens and school canteens. In rural areas, Oxfam is organizing a cash-for-work canal cleaning project, improving and diversifying crops and vegetables, and improving market links for small farmers. It is through the community restaurant that Alexandre has found some relief. For just 13 cents, Alexandre and her children can have a daily subsidized hot meal, ensuring that not all of her money must be used for buying food.