Global meltdown to have a negative impact on food security

Font Size

Print

Feedback

Email

Discuss

Related Articles

Cadbury, Nestle lock horns over Pehli tarikh adWe have ample stock of food grains: FM

: Food security usually becomes the casualty in the event of any crisis, be it financial or political. It is not unusual for the recent global financial crisis to invite concerns from ogranisations like FAO and other food policy groups.

The global meltdown in the financial and equity markets follows hard on the heels of soaring food price and energy crisis caused primarily on account of intensified bio-fuel programme. The global commodity prices, though still ruling high, has marked a dip due to good harvest in the current season. According to the latest issue of FAO’s Crop Prospects and Food Situation report, global grain production this year is forecast to increase 4.9% to a record 2,232 million tonne. However, some 36 countries are still in need of external assistance as a result of crop failures, conflict or insecurity or continuing local high prices, the report noted.

Commodity prices have dipped in recent times as investors have apprehended recession. Wheat futures for December delivery closed at $5.1625 on Friday—down 62% from a record set in February. Corn futures dipped 53% from their all-time high and soybean futures registered 47% lower.

Commodity prices are currently declining, mainly on the expectation of favourable crop prospects but also due to the threat of a global recession. The FAO director-general, Jacques Diouf fears that borrowing, bank lending, official development aid, foreign direct investment and workers’ remittances may be compromised by a deepening financial crisis. The impact of the financial crisis may also be felt in developing countries at the macro level with potentially negative impact on agriculture and food security. The falling grain prices may cause lower investment in agriculture and shrinkage in crop area and reduced harvest in major exporting countries. Given the low grain stock, this situation can lead to another turn of record high food prices next year.

According to FAO, 923 million people were seriously undernourished in 2007. Oxfam estimated that soaring food prices had pushed an extra 119 million people into hunger. The former UN secretary general, Kofi Annan has rightly warned the world leaders that global financial crisis should not be used as an excuse for inaction in the worsening battle against wrenching hunger across the developing world. The world now has the responsibility of fulfilling the Millennium Developmental Goals (MDGs) by lifting nearly one billion people out of poverty, who do not have enough food to eat on a day-to-day basis.