FOOD PRICES CAN'T JUST BE SWEPT UNDER THE TABLE

Soaring food prices threaten more unrest and must prompt a global rethink about agriculture and investment

 Moroccan demonstrators confront a policeman during a protest on 12 January against unemployment and the cost of living. Photograph: Abdelhak Senna/AFP/Getty Images 

By Madeleine Bunting

January 15, 2011

The year started grimly with news of the food prices rising to the highest point since 1990, according to the Food and Agriculture Organisation. They have surpassed the 2008 prices that led to widespread rioting and unrest across the developing world; immediately, bloggers such as Duncan Green and Alex Evans were asking why there had been no riots. 

And just as they were posting, riots flared up in Algeria, with two killed and hundreds injured in the protests against soaring food prices. Across the border in Tunisia 14 were killed in clashes with the police. 

As the unrest spreads across northern Africa, Egypt is nervously trying to put measures in place to prevent any comparable violence, with extra supplies of meat being flown in from Kenya. An occupational hazard of blogging; no sooner have you posted, than somewhere in the world you have been outstripped by events.

Food prices are an issue likely to dominate the global news agenda this year. President Nicolas Sarkozy ~ in Washington this week in his new role as chairman of the G20 ~ has put volatile food prices high on his agenda of reform of global economic governance.

The French Prime Minister, François Fillon, said a priority was to find a collective response to "excessive volatility". France has asked the World Bank to undertake urgent research into the impact of rising food prices. This is continuing work initiated by its predecessors, South Korea, on improving global co-operation to resolve food security issues. 

L
ast year, cereal prices jumped by 47% and sugar and meat prices are at their highest for more than 20 years. There is plenty of argument about what is going on here. Extreme weather is playing its part; last summer's heat wave in Russia impacted on wheat prices.

Pakistan's crops were affected by floods, while "erratic" rainfall in Laos and Cambodia hit their harvests. This is the sort of picture environmentalists predict will be increasingly common in the future, as climate change disrupts harvests around the globe.

Another argument is that the real villains here are speculators. 

As Deborah Doane, from the World Development Movement, puts it in her blog: "The reality is that the same speculators that caused the global economic meltdown through their illustrious trade in sub-prime mortgages, are betting on our food system now too." She argues that investment funds are pouring into speculating on food prices.

Robert Zoellick, head of the World Bank, weighed into the argument in the Financial Times this week, and, in an excellent blog, Duncan Green analyses how wedded the World Bank remains to the untrammeled market as the most effective way to handle the situation and feed the world.

Another argument ~ one which was widely touted during the last food price spike ~ is that the diversion of land into biofuels is driving prices up. Although this time round, this argument has not had as much of an airing yet.

One final note, a key thing to watch out for in the food price story is how often this story can tip into a discussion about overpopulation. The fact that the two issues have very little (if anything) to do with each other does not stop the links being made.

It's a discredited Malthusian argument still used by an unholy alliance of some environmentalists and some right wing commentators. But the key issue with food is its distribution and marketing. 

During most famines, there is still plenty of food available, just not at a price local people can afford. It is estimated that half of all the food produced in sub-Saharan Africa rots unused because of the shortage of storage facilities, transport and marketing.

Meanwhile, as food security rises inexorably up the international agenda, it is timely that the UK's Department for International Development, USAid and the Indian government announced an initiative on Tuesday on agricultural research to improve disease and stress-resistance in crops, particularly in sub-Saharan Africa. 

But don't hold your breath ~ I heard an astonishing point from an expert: it takes on average 46 years for an innovation to get from the research lab to the field in Africa. 

At that rate, any promising discoveries in the next few years won't be making an impact until the middle of this century. So perhaps the next investment announcement could be on a major overhaul of agricultural extension systems  ~ that much neglected orphan of development policy.