Internet Edition. December 14, 2007, Updated: Bangladesh Time 12:00 AM 
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Unseen force behind rising food prices

Jessica Hanson

That sneaking suspicion you get every time you arrive at the grocery checkout counter is right: food generally costs more than it did just 12 months ago. According to a recent statement presented to the U.S. House Committee on Agriculture, the Consumer Price Index, a measure of average prices for household and consumer goods, is projected to rise from 3.5 percent to 4.5 percent by year's end. Prices are expected to remain high as global food production struggles to keep pace with the rising demand for commodities such as wheat and corn.

While governments and consumers decry the steady increase in food prices, groups like the United Nations Food and Agriculture Organization (FAO) are taking a harder look at some of the factors contributing to this rise-including the role of climate change. Changing climatic conditions, in particular the decline in water availability, are forcing farmers to continually adapt their agricultural production. According to the FAO, climate change has both environmental and socioeconomic outcomes for agriculture: changes in the availability and quality of land, soil, and water resources, for example, are later reflected in crop performance, which causes prices to rise.

Climate change has been attributed to greater inconsistencies in agricultural conditions, ranging from more-erratic flood and drought cycles to longer growing seasons in typically colder climates. While the increase in Earth's temperature is making some places wetter, it is also drying out already arid farming regions close to the Equator. This year's Intergovermental Panel on Climate Change (IPCC) assessment report states that "increases in the frequency of droughts and floods are projected to affect local production negatively, especially in subsistence sectors at low latitudes." The decline in production in the face of growing demand can drive up prices in markets that may lack the technology to fight environmental hazards to overall production.

Such has been the case in Australia, where the once-fruitful food-production regions of New South Wales have been subject to a severe drought for the last five years. There is evidence of shifting rainfall patterns in the region, and a growing number of Australians now view this as a repercussion of climate change. The crop failures, economic hardship in rural communities, and subsequent jump in food prices are forcing the country to reassess its approach to climate change and to consider increasing food imports, a move that would drive prices up further. Speaking on the issue last year, Mike Rann, the premier of South Australia, remarked, "what we're seeing with this drought is a frightening glimpse of the future with global warming."

By FAO estimates, the developing world will spend $52 billion between 2007 and 2008 on imports of wheat, corn, and other cereal crops. If current trends persist, these countries will also be worst affected by climate change's pressure on food production and pricing, while experiencing the effects of more varied and more severe environmental conditions.

Advances in technology make it unlikely that overall world food production will decline due to climate change, but agricultural capacity in large parts of Africa and Asia is expected to shift dramatically.

Climate-related changes in agricultural conditions will likely only increase developing countries' dependence on imported food, a pricey prospect considering rising global transportation costs. Meanwhile, as scientists continue to debate the connection between climate change and natural disasters, 2007 has been an active year for extreme weather. Latin America and the Caribbean have experienced multiple natural disasters in recent months, affecting key economic sectors including food and cash crop production.

From drought-ruined potato crops in Bolivia to the ravages of Hurricane Felix in Honduras and Guatemala, large-scale disasters often disrupt, if not destroy, food security, particularly for the poor. According to Ali Gurkan, head of the Food Outlook programme of the United Nations Food and Agriculture Organization (FAO), "Any unforeseen flood or crisis can make prices rise very quickly. I do not think we should panic but we should be very careful about what may happen."

Consider the region of Tabasco, home to Mexico's largest cacao crop as well as sugarcane and banana production. Devastating flooding in recent weeks has severely disrupted agricultural output, causing more than US$700 million in damages, according to the Mexican Insurance Industry Association. Although the disaster has not had international consequences for food prices since the crops were mainly for domestic consumption, the region's ability to produce safe and nutritious food for the Mexican market has been greatly compromised.

An official with the Tabasco Economic Ministry went so far as to state that, "One hundred percent of all the crops and agricultural fields have been lost because of flooding," driving up prices nationwide and destroying the livelihoods of the one-third of Tabasco residents that work in ranching and agriculture.

This begs the question: how can Mexico and other developing nations protect domestic food security in the wake of disaster? In response to the Tabasco flooding, the UN's World Food Programme (WFP) has delivered 100 metric tons of ready-to-eat High Energy Biscuits (HEBs) to the affected area, and as of November 6, the U.S. Agency for International Development had pledged $300,000 in emergency relief. But more than short-term food aid is needed.

Disasters not only reduce short-term domestic food supplies, they pose a major risk to future production.

The Sri Lankan fishing industry, for example, is still struggling to recover from the December 2004 Indian Ocean tsunami, which affected 1,300 kilometers of coastline and damaged or destroyed 75 percent of the country's fishing fleet. A compromised fisheries sector continues to be a large challenge to re-establishing post-tsunami food security in Sri Lanka and other countries where the deadly waves hit. The FAO (with assistance from Italy) is helping Sri Lanka's agricultural, forestry, and fisheries sectors over the medium and long term by providing new equipment and assistance in improving labor standards. Between May 2005 and August 2007, this program was able to help 39,800 people reconstruct their livelihoods and improve the nation's food security.

In the wake of disaster, rebuilding food production and distribution to help people gain access to safe and nutritious food without fear of hunger or starvation is the essence of food security. It is a goal for which there are no easy answers, yet one that must be achieved.

This sentiment was recently reiterated by WFP Executive Director Josette Sheeran, who noted that, "we must help people protect themselves and their families. It's a large order but with the support of the international community we can do it-we must do it."

(This story was produced by Eye on Earth, a joint project of the Worldwatch Institute and the blue moon fund. View the complete archive of Eye on Earth stories, or contact Staff Writer Alana Herro at aherro [AT] worldwatch [DOT] org with your questions, comments, and story ideas.)

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