PDF _ RL34478 - Rising Food Prices and Global Food Needs: The U.S. Response
8-May-2008; Charles E. Hanrahan; 22 p.

Abstract: Rising food prices are having impacts across the world, but especially among poor people in low-income developing countries. Since 2000, a year of low food prices, wheat prices in international markets have more than tripled, corn prices have doubled, and rice prices rose to unprecedented levels in March 2008. Such increases in food prices have raised concerns about the ability of poor people to meet their food and nutrition needs and in a number of countries have lead to civil unrest. More than 33 countries, most of which are in Sub-Saharan Africa are particularly affected by food prices increases. The World Bank has estimated that more than 100 million people are being pushed into poverty as a result of food-price escalation.

A number of interrelated factors have been identified as causes of the rising food prices. Droughts in Australia and Eastern Europe and poor weather in Canada, Western Europe and Ukraine in 2007 have reduced available supplies. Reduced stocks have prompted many countries to restrict exports. Rising oil and energy prices have affected all levels of the food production and marketing chain from fertilizer costs to harvesting, transporting and processing food. Higher incomes in emerging markets like China and India have resulted in strong demand for food commodities, meat and processed foods and higher prices in world markets. Increased demand for biofuels has reduced the availability of agricultural products for food or feed use. Export restrictions in many countries have exacerbated the short supply situation.

One immediate consequence of the rise in global food prices is the emergence of a shortfall in funding for international food aid. The World Food Program has launched an urgent appeal for $755 million to address a funding gap brought on by high food and fuel prices. WFP indicates that without additional funding it would have to curtail feeding programs that meet the needs of more than 70 million people in 80 countries.

The United States has responded to the WFP appeal for food aid and its own food aid funding shortfall by announcing a release of $200 million from the Bill Emerson Humanitarian Trust (BEHT), a reserve of commodities and cash that can be used to meet unanticipated emergency food aid needs. Congress is considering an FY2008 emergency supplemental appropriation for emergency food aid requested by the Administration. The President announced on May 1, 2009 a request for Congress to appropriate an additional $770 million in FY2009 to deal with the international food situation.

In addition to near-term measures to meet food needs in low-income countries, aid agencies are focusing on medium- and long-term efforts to enhance food security and agricultural productivity. There have been calls for increasing the priority and allocation of resources to agricultural development in poor countries, particularly in Sub-Saharan Africa. The World Bank and USAID are two aid agencies that are promoting agricultural development and growth in low-income countries. Both indicate that African agricultural development should be a priority.

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Topics: General, International

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