Global crisis grows as food prices soar

What's considered largely an irritation in the U.S. threatens worldwide social upheaval as hunger strains poor nations

April 13, 2008|By Laurie Goering, Tribune correspondent

NEW DELHI — To support his family of six, Raju sells plastic packets of chilled water to commuters on a busy New Delhi roadside. Like many Indians, he normally spends more than half of his monthly income to buy food.

But over the past year, as world food prices have soared and inflation began creeping up, the rice, lentils and wheat his family needs have begun to take as much as 70 percent of his meager monthly salary of $77. With the other 30 percent of the family's income committed to rent, they have had to give up buying vegetables -- meat and milk have never been affordable -- and will simply have to go hungry if prices rise any further.

"We're barely managing," said the 36-year-old, who goes by only one name.

With India's inflation hitting 7 percent, "I don't see any improvement coming," he said. "There will be riots if this gets worse."

As global food prices race upward, no place demonstrates the growing risks to the planet as much as India -- home to more than half of the world's hungry.

Worldwide, food prices have soared 45 percent over the past year as surging oil prices make growing and transporting food more expensive and as economic growth in emerging giants such as China and India leads to rising demand for food, according to the United Nations' Food and Agriculture Organization.

Ramped-up production of biofuels, particularly in the U.S., also is taking an increasing share of the world's food production, and droughts and floods possibly linked to global warming have slashed harvests in leading grain producers such as Australia.

In richer developed nations, where people spend an average of 10 to 15 percent of their disposable income on food, price hikes have been a growing irritation. But in the developing world, where most poor people spend at least half of their income to eat, rising costs threaten to create major social unrest.

In Haiti, at least five protesters were killed last week after hungry mobs tried to storm the presidential palace, and on Saturday lawmakers voted to dismiss the country's prime minister. Food riots have also flared across Africa's Sahel and in Mexico, Uzbekistan and Morocco. Egypt's government has put the army to work baking subsidized bread.

'No margin for survival'

All told, 33 countries around the world are at risk of social upheaval as a result of acute increases in food and energy prices, said Robert Zoellick, president of the World Bank, in a speech this month. In countries where buying food requires half to three-quarters of a poor person's income, "there is no margin for survival," he warned.

UN officials said Friday that the problems are likely to persist despite an expected increase in global cereal production over the next year.

"All indications we have is that this is not a short-term effect," Jacques Diouf, director general of the Food and Agriculture Organization, said at a news conference in Rome.

India, which has more malnourished people than anywhere else in the world -- even more than sub-Saharan Africa in both absolute and percentage terms -- is so far not counted among the countries most in danger.

Largely that's because its government runs the world's biggest food aid program, an $8.4 billion effort that pushes 15 million tons of subsidized wheat and rice a year to hundreds of millions of people. The United Nations' World Food Program, the world's biggest food relief aid agency, by comparison, ships just 5million tons of food a year to 73 million hungry people at a cost of $3.4 billion, WFP officials said.

India also enjoys an impressive economic growth rate of better than 8 percent a year, deep cash reserves of $300 billion and near-self-sufficiency in basic grains, all of which have helped insulate it from the world food price shock.

But India has the potential to play a big role in accelerating the world's developing food crisis. With its population and its per capita demand for food growing faster than its agricultural productivity, the nation of 1.1 billion is edging toward becoming a net importer of food, a reality that could turn the current spikes in international food prices into consistent highs for a decade or more as demand grows, analysts say.

India, the world's biggest rice producer after China, is also a major exporter of rice to Bangladesh, one of the poorest and most vulnerable nations in the world. Its decision late last month to ban exports of all but high-priced basmati rice could eventually hit hard at Bangladesh and other hungry neighbors, which may be forced to start importing food at prices higher than those they pay to India. So far Bangladesh has received a limited exemption from the export curb.

Inflation hurting Indians