/ 2 March 2008

Food aid slashed as price of grain soars

Britain’s leading international aid agencies on Saturday called for emergency food programmes to be overhauled as the soaring price of grain and other staple crops threatens to bring further misery to many parts of the developing world.

The call came after it emerged that the United States is to slash the amount of food aid it gives to some of the poorest countries in the world. The US Agency for International Development (USAid) said rapidly rising prices of basic commodities, especially grains, have devoured an increasingly large part of its budget and left it with a $120-million black hole.

The past six months has seen a 41% surge in prices for wheat, corn, rice and other cereals. In the face of the spike in its costs, the US is now drafting plans to cut the number of poor countries it gives emergency aid to and also scale down the amount of food it gives.

Last week the UN’s World Food Programme held an emergency meeting after a sudden 25% jump in the price of wheat in a single day. The WFP warned that the planet’s poorest people were facing a drastic food crisis. It said it would have to cut some of its own programmes unless it received a $500-million cash boost this year.

British charities reacted to the news by saying it was time to rethink the approach to humanitarian relief efforts. Oxfam said the major international food aid programmes should expand their focus beyond buying and shipping largely US-produced food to distributing more cash to countries in need.

”A key assumption of US trade policy is that its farmers can sell any excess production abroad,” said Amy Barry, trade spokesperson for Oxfam. ”But food aid can have a negative impact. Food ends up being shipped much too late and it can end up displacing local agricultural production. Often it’s not necessarily a shortage of food that causes the crisis; it’s whether people can afford the food that’s there.”

Grain and cereal prices are rising because the booming market in biofuels has diverted production away from feeding people and into the energy sector. There has also been a ”perfect storm” of bad weather conditions and a rise in the price of oil — which has led to increased transport costs. At the same time, fast-emerging markets in China and India are using up food supplies at the expense of much poorer nations.

Fluctuating prices have also led financial speculators to enter the grain markets, again forcing up prices.

USAid officials have said they are now looking at all of the countries that emergency food is supplied to and will have to see what cuts can be made. The organisation helps some 40 countries and regions, including some of the most famine-struck parts of the world, like Somalia and Sudan.

The programme’s budget hole is expected to grow to $200-million by the end of the year. ”We’re in the process now of going country by country and analysing the commodity price increase on each country. Then we’re going to have to prioritise,” Jeff Borns, director of USAid’s Food for Peace programme told the Washington Post.

The cuts will have a particular impact on food relief efforts in Latin America, Central Asia and Africa. The US supplies about half the world’s food aid and any change to its operations could seriously threaten millions of lives. Currently about 800-million people worldwide receive some kind of help with food. Charities have estimated that US food aid may fall from 2,6-million tonnes last year to 2,2-million tonnes this year.

Oxfam and other famine relief charities, such as Save the Children, have increasingly come to the view that with food prices set to rise further, solving future humanitarian crises would be better approached by switching to cash or food vouchers. ”More and more people are going to be facing food shortages in the future,” Barry said. ”Given what is happening due to rising food prices we need to think about the impact this will have on people [in the developing world] who are spending up to 80 per cent of their incomes on food.”

There is little doubt over the massive implications the rise in basic food prices can have for international security. Last week three cities in the West African nation of Burkina Faso were hit by serious rioting after grain prices went up. Mobs burnt government buildings and looted stores. That incident followed on similar riots earlier this year in Senegal and Mauritania.

Last October there were food riots in India when hundreds of empty food ration stores were attacked by hungry crowds after supplies ran out. – Guardian Newspapers Limited 2008