World Bank Official Warns Rising Food Costs Could Push 100 Million Into Poverty


Surging food prices could push 100 million deeper into poverty, World Bank President Robert Zoellick said Sunday at the close of the International Money Fund-World Bank spring meetings in Washington.

"Based on a very rough analysis, we estimate that a doubling of food prices over the last three years could potentially push 100 million people in low-income countries deeper into poverty," Zoellick said at a press conference. "This is not just a question of short-term needs, as important as those are; this is ensuring that future generations don't pay a price too."

Zoellick called for a "New Deal for Global Food Policy" similar to a 1930s program under U.S. President Franklin Roosevelt to tackle problems related to the Great Depression.

The World Bank estimates that food prices have gone up by 83 percent globally over the last three years. Wheat prices have risen by 120 percent in the last year and in just the last two months, the price of rice has risen by 75 percent. The World Banks says increased food prices is not a temporary phenomenon but is likely to persist in the medium term.

In the United States, food inflation is at its highest rate in 17 years, setting up an either-or equation for many of America's poor who must give up something in order to afford food. The impact is even greater in developing countries, where households spend far higher percentages of their income for food.

Food inflation has prompted riots in more than 30 countries, according to the faith-based anti-hunger group Bread for the World.

Haiti's prime minister was ousted last weekend after more than a week of riots over food prices that have increased by an average of 40 percent in less than a year. Some 20,000 textile workers in Bangladesh took to the streets last weekend to protest soaring food prices and demand higher wages.

Shopkeepers and unions in Burkina Faso staged a two-day general strike last week demanding cuts in the price of rice and other staples. Similar protests were reported in Egypt, Cambodia, the Ivory Coast and numerous other countries including most of sub-Saharan Africa.

Experts cite soaring commodity prices, rising fuel costs, growing population, weather-related disasters, competition from bio-fuels and the lowest level of grain stocks in decades as factors creating a "perfect storm" for a global food crisis.

Josette Sheeran, executive director the U.N. World Food Program, described seeing "a quiet tsunami of need."

One factor contributing to the rise in food prices, according to the World Bank, is increased production of bio-fuels. Last year Congress mandated a five-fold increase in bio-fuels in an effort to reduce dependence on foreign oil.

A fifth of America's corn crop is now used to produce ethanol, pushing up corn prices. As farmers plant more corn, they plant less of other crops. American soybean production dropped 19 percent last year, reducing the output of soybean oil.

Higher costs for cooking oil isn't a big deal for most Americans, but in countries where people grow most of their food but must buy oil for cooking it can be a major expense. Rising prices for cooking oil are forcing residents of Asia's largest slum in Mumbai, India, to ration every drop, according to the New York Times.

Reaction against America's commitment to ethanol is increasingly becoming a flashpoint for foreign leaders who claim bio-fuels are driving up food prices and starving people. According to The Telegraph, U.N. officials say the amount of corn it takes to fill a car tank is enough to feed a child for a year.

The International Monetary Fund, sister institution to the 185-nation World Bank, warned that social unrest related to rising food prices could even lead to war. "As we know, learning from the past, those kind of questions sometimes end in war," IMF managing director Dominque Strauss-Kahn said at the group's spring meeting Saturday in Washington.

If the world wants to avoid "these terrible consequences," he told reporters, rising food prices must be tackled.

Sen. Chuck Grassley, a Republican from Iowa who recently spoke at the New Baptist Covenant Celebration in Atlanta, termed recent criticism of ethanol by foreign officials "a big joke."

According to the New York Times, Grassley questioned why they were not also blaming a drought in Australia that reduced the wheat crop and the growing demand for meat in China and India.

"You make ethanol out of corn," Grassley said. "I bet if I set a bushel of corn in front of any of those delegates, not one of them would eat it."

President Bush responded to the World Bank warning on the dangers of soaring food prices by ordering the release of $200 million in emergency food aid for the worst affected countries.

Bob Allen is managing editor of EthicsDaily.com.

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