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Food riots now occur in many countries. Left, Mexican women protesting
the rocketing cost of corn. Right, food rioting in Mozambique

This commentary is written to draw the attention of the public health nutrition community to the significance of the global food price crisis, its causes, consequences, as well as immediate and long-term remedies. Nutrition guidelines, priorities and policies, and even the principles that should guide our profession, need examination at a time in history when food economies change dramatically for reasons that are very likely to persist. As I prepared this commentary, I was impressed to find that my analysis and recommendations, which contradict current dominant political and economic ideology, are nevertheless not too far from the views of international financial institutions and relevant UN agencies in response to the crisis.

In 2007-2008, and then again last and this year, the price of staple foods, and in particular the various grains on which most of the people in the world depend, rocketed. In February this year, food prices reached an all-time high. In 2008, the UN Special Rapporteur on the right to food, Olivier de Schutter, stated: 'During the first three months of 2008, international nominal prices of all major food commodities reached their highest levels in nearly 50 years, while prices in real terms were the highest in nearly 30 years – and social unrest developed in more than 40 countries as a result' (1). This is already having a devastating effect on the nutritional status of hundreds of millions of people in impoverished countries.

Here follows a report carried by the BBC World Service on 11 March: 'Global food prices have hit record highs, and could rise even further, according to the United Nations. The UN's Food Price Index rose 2.2% in February to the highest level since the UN's Food and Agriculture Organization (FAO) began monitoring prices in 1990. [FAO] also warned that spikes in the oil price could make the "already precarious" situation in the food market even worse. Apart from sugar, FAO said all commodity groups had risen in price. Oil prices recently hit two-and-a-half year highs due to political unrest in North Africa and the Middle East. FAO said the volatility in the oil markets was adding to an already difficult and uncertain situation. The International Monetary Fund (IMF) said it was "extremely concerned" about the situation. The prices of cereals, such as wheat, rice and maize, have risen by 70% in the past year. Current pressures could push prices higher'.

As you know, current conventional economic theory says that there is an 'invisible hand' of self-correcting cycles of supply and demand. This notion may have had some utility when it was invented by Adam Smith over 200 years ago. Now it is more like Father Christmas or the man in the moon. All indicators point to the fact that food prices are unlikely to fall any time soon and may indeed rise much higher.

Rising food prices are inconvenient and even troublesome for people with plenty of disposable income. They are often a disaster for impoverished populations and communities. This year, once again, there have been serious civil disturbances and riots in many countries, two of which are pictured above. The triggers for the uprisings in North Africa that led to the overthrow of the Egyptian and Tunisian regimes, and severe civil disturbances in the whole North African region, for better or worse, were people rioting against the rocketing prices of staple foods, as well as against the basic, oppressive political and economic situation.

What is behind all this? I am not an expert in all aspects of food prices and availability; I am comforted by the fact that no one person really is. This commentary attempts to cover only some of the aspects with which I am familiar. One of these is the underlying and basic causes of malnutrition, ill-health and preventable deaths. Another is the impact of 'free market ideology' on food production and distribution, and thus on the cost of food, as well as on food insecurity, on equity and on nutrition. The impact of the latter on poverty and on the misery of children is what I want to highlight here.

We public health nutrition professionals can effectively do our jobs only when we understand and act at upon the underlying and basic social, economic and political determinants of nutrition at population and community levels. Otherwise we cannot do much more than apply band-aids to deep wounds.

The UN Food Price Index, from 1990 to date. The most notable features are
low and stable prices until 2007, followed by high and wildly fluctuating prices

The current crisis of food prices and availability is likely to get worse. It is one aspect of the linked energy, fuel, water, pollution, and climate crises, and the global financial boom and bust comparable at global level in recent history only with the Great Crash of the late 1920s and early 1930s. Individually and all together, these crises are worsening inequity and poverty, and destabilising counties and societies, all over the world. It is possible to understand any one of these crises only by taking account of its relationship with the others.

The graph above, produced by the Food and Agriculture Organization of the UN, shows that since the UN index was first published, staple food prices were generally stable between 1990 and 2006. The graph represents prices around the years 2002-2004 as 100. Another way to display the spectacular fluctuations in food prices is shown in the graph below. Thus, in February this year food prices overall stood at 237, meaning that they had overall more than doubled in seven years, with very sharp rises in 2007, 2009 and 2010, and a dip in the second half of 2008. The line at the top shows a slight drop since the all-time high in February, from 237 to 232 last month, May (3).

The crisis is not only of rising prices, it is also of fluctuating prices. Price instability, whether of money itself or of food, in itself destabilises societies. One reason why prices have soared is that for decades they were artificially low. Between 1974 and 2005 the price of food staples dropped by 75 per cent. Since then they have risen dramatically. City dwellers with little disposable income do not produce food, they buy it, and have been hard hit. Often, they now literally do not have the money for basic foods. But as shown by analyses made by the International Food Policy Research Institute, this is also now true of low-income farmers in impoverished countries who usually now are not net food producers, but net food buyers.

Prices of staple foods started booming in 2006, much later than the time of inflation of prices of other goods and commodities such as of oil and metals. Since then, food inflation has soared. In 2007 alone the costs of various food staples almost doubled. In some low-income countries the inflationary impact of rising food and fuel prices has been amplified by the pressure of increasing internal demand. Recently, food stocks in many countries have been down to less than half a month's reserve.

Higher fuel and food prices are now putting severe strain on the balance of payments of many countries. If these prices continue to rise, for some countries the strain will prove to be intolerable. Matters are made worse by ominously rising inflation. The fuel, finance and food crises have brought into sharper focus long-standing issues and problems, most of which have been known for some years, but which have not resulted in rational, equitable policies or effective actions (4,5).

Food prices are rising and fluctuating wildly for a number of reasons. Some of these are touched on above, including in Box 2. Supply and demand cannot explain the speed and severity of the phenomenon observed. Neither current prices nor the commodities futures markets (designed to bet on what food may be worth not now but later) reflect or relate to real supply and demand.

Scores of millions of new middle-class consumers in Asia, including China and India, with rising disposable incomes, are buying more meat, dairy products, and processed food. For instance, consumption of meat in China doubled between 1990 and 2005. This is one of the reasons why agribusiness has seemed a good bet to investors in the last few year – and has thus received a colossal influx of capital. The effect of this is inflationary. If, as a result, the reality turns out to be an 'agricultural bubble' of boom and bust of prices, similar to the fluctuations in value of shares and currencies, the consequences for farmers, as well as for consumers – and most of all for children –are predictably severe.

Protectionism: robbing the poor to pay the rich

We are supposed to be living in a world of free trade. The reality is different though. One of the causes of rising food prices is protectionism. Governments remain committed to subsidise agribusiness in Europe and the US. In the US, the latest farm bill is awash with subsidy payments to the corporations that control the agricultural sector, a typical example of special interest legislation. Protectionism, which has involved the dumping of cheap food surpluses on countries in the South, has had the effect of keeping the price of food in the shops artificially low, although the main effect has been to protect and swell the bottom lines of big corporations. Exports of food from countries in the North whose prices have been 'cheapened' distort markets. National food production in the South cannot compete, and the livelihoods of small and family farmers – including in Europe and the US – are undermined or even destroyed.

Protectionism in Europe and in the US, parts of the world that preach free trade and thus open up vulnerable countries to their cheap exports, cannot be justified. What's needed here is an end to protectionism of a type that feeds the rich and starves the poor – including in the home countries. This will require politicians in Europe and the US to be courageous.

Speculation: manipulating the markets

Last April, the World Bank warned that spikes and fluctuation in the prices of food are in part being driven by financial speculation (6). In May, the UN Conference on Trade and Development said the same. An UNCTAD director stated: 'The changing role of commodity markets, which are turning into financial markets, has enormous repercussions for the economy' (3).

Food is treated as just another commodity. The value of food is manipulated by speculators, including futures traders. Between 2003 and 2008, commodities contracts multiplied from $US 13 to $US 317 billion. Within this, agricultural commodities trading is reckoned to have soared from $US 3 to 55 billion, with no end in sight (3). Huge pension funds, largely in the US, and also the UK, are investing in what now seems to be the bull market of commodity futures.

This has happened because commodity investments generally increase in value when other assets decline. Low and declining food prices long kept agricultural production stagnant in much of the lower-income world. But now, high prices are attracting more and more capital to agribusiness, and also to processed food manufacturers, distributors and caterers. Many investors continue to believe that commodity markets are in the midst of a super-cycle – a long-term trend that will continue to drive prices higher for years to come. In theory, this should be a good thing – not for consumers, but for big producers and speculators who sell before bull markets become bear markets and prices drop. But high levels of speculative investment are always problematic. There is no guarantee that small farmers will benefit from productivity increases and high prices. Higher food prices will also raise the value of land in poor countries.

High levels of speculation in food are creating price volatility that is driving hundreds of millions of people into poverty and the threat of starvation. What is needed here, is limits on speculation, and stricter regulation of market manipulation.

Rising costs: the customer pays

There is no single reason for the food price crisis, but rather the various reasons are linked. Rises in the price of oil make it more expensive to operate farm machinery and to transport agricultural products, and raises the cost of fertilisers. Water, necessary for irrigation, is becoming scarce. Arable land is becoming more expensive. Agribusiness is diverting from food to biofuels production: one fifth of the US corn crop is now switched to produce ethanol (7). Around 450 pounds of maize can be converted into enough ethanol to fill the 25 gallon tank of an SUV – or used to provide enough calories to feed one person for a year. Disasters in Australia, West Africa, India and Bangladesh, perhaps in part an aspect of climate change, have reduced food production and made it more expensive.

Taken all together, the current food prices crisis has highlighted the fragility of the world's food system, and its vulnerability to shock (8). Without effective protection in the public interest, rising costs of food production are bound to increase the price of food in the shops.

The consequences of rising and fluctuating prices of staple and other foods are vast and various. Here follow some. I start with the nutritional consequences and then touch on broader consequences, which also impact on nutritional status, and focus special attention on children.

Consumers are now spending a larger share of their income on food. In some countries a large proportion of the more impoverished population groups simply do not have the necessary additional money. In any country, when food becomes more expensive, people tend to 'fill up' on energy-dense foods and to consume less nourishing food. Among vulnerable populations this will cause micronutrient malnutrition which, by itself, has serious nutrition and public health implications.

Rice accounts for around 60 per cent of the calories consumed in Asian countries, several of which import a substantial part of their grain needs. If biofuel production continues its current course, calorie availability in Asia could fall by close to 10 per cent. In these countries, nutritionally vulnerable groups are becoming increasingly food-insecure.

Within countries, impoverished urban communities are the most affected by high food prices, because they rely on food purchases for their food supplies. Rural communities are often at least partially self-sufficient in food. Thus it is among low-income urban communities and families, especially in Asia, where the proportion of undernourished under 5 year-olds is most likely to rise rapidly above the current 30 or so per cent. Some very low-income countries will become more dependent on food aid, at a time when the food tonnage available for aid is rapidly shrinking and, as a result, food aid is already declining.

Specific nutritional consequences of the food price crisis are:

• Reduced food energy intake. This results in low birth weight and the risk of serious wasting, which has long-term health, child development and welfare consequences.
• Reduced intake of micronutrients. This increases risk of clinical deficiency and of specific micronutrient deficiency diseases such as xerophthalmia and iron deficiency anaemia.
• Reduction in breastfeeding. This is a consequence of mothers needing to work, and also of inadequate nutrition of the mother during pregnancy and after the birth of her children.

It may – or may not – take several or many years for the impact on child development to become apparent. Also, adequacy of nutrition among young children cannot be separated from the adequacy of their mother's diet.

The cost of doing nothing to alleviate the impact of food price rises, and of working towards new systems of governance that will equitably stabilise food prices, would be very heavy indeed. To summarise, it will include increased low birth weight rates, decreased breastfeeding rates, increased malnutrition rates, increased under 5 mortality, and a heavy toll on child development. Populations on the margins of poverty will suffer more, and those already in poverty will be pushed towards destitution. What remains unknowable is just how great the damage will be.

Children will suffer most

Children will suffer most partly because the ability of families to look after their children and shield them from misfortune is being severely tested, often beyond endurance. Children's well-being is most compromised for the most vulnerable. These include girls in general, children of ethnic minority and female-headed households. They also include households with low maternal education, and entire communities with highly concentrated pockets of poverty.

Families seek to shield children from economic shocks. For instance, taking children out of school is normally a desperate last resort. When this happens, school and play time decrease, as child labour as a source of family income increases. Absence from school will be greatest in the most impoverished communities and families. Also, when mothers of young children are forced to earn money, child care becomes the responsibility of older children, thus also reducing their school attendance. Less schooling means loss of human capital needed for future sustained social and national development.

Where primary health care and other health services have been run down or are inaccessible, reliance on private care is the only option left. In low-income countries, out of pocket expenditures on health care may exceed 50 per cent of all available income, a far larger share than in richer countries. In such cases the health of children from impoverished families will suffer.

Other damage done as a result of increased poverty and misery, as well as declines in the general health of children and increasing under 5 mortality rates, include loss of property and savings, increased domestic violence and child neglect, abandonment of children by families no longer able to cope, consequent increase in the number of children without support, and an increase in the number of street children in danger of violence, abuse and exploitation (4,5).

In response to the food price crisis, beginning in 2007 governments of countries most affected that were able to do so, adopted various measures to improve access to food, mainly for their urban populations. Some subsidised basic foodstuffs, such as bread in Egypt. China, Cambodia, Vietnam, India and Pakistan cut their rice exports, to give priority to their own populations. The most impoverished countries, such as Haiti, suffered most heavily from price increases and riots, without being able to respond effectively (1).

What else can be done? Long-term the answers must be structural. The prevailing systems of political and economic governance that determine, among many other things, the price of food, are not working in the public interest. In the longer-term, for example, there is need to reduce and to 'forgive' unjust external debt and its servicing, and to scrap food import tariffs and food subsidies.

What can be done now

Here follow some shorter-term responses that can be used, even as patchwork or adjustments within current systems of governance. Actions by national governments working in close collaboration with civil society organisations, and with the support of the international community, are required in the short-term, as well as the medium and long-term. Collaboration between countries in the South will strengthen their capacity and resolve. What is politically and economically feasible will vary from country to country. (4,5).

Investments in agriculture need to be increased, including those that improve agricultural productivity of small farmers and, at the same time, also act on the economic and social determinants of rural poverty. Low income countries that are net food importers need balance of payments and/or budget support. Farmers in low-income countries need support in their access to appropriate, locally adapted seeds, fertiliser, animal feed and other inputs, as well as technical assistance. Mitigation and insurance schemes are needed to offset fluctuations in prices.

The following are among the many additional interventions proposed:

• Recognise the crisis and act soon. Governments must first protect the programmes that supply services to families and children.
• Impose adequate minimum wages, to be enforced by law, and create access to credit on preferential and protected terms.
• Ensure that children remain in school and continue to have access to available and affordable health services particularly immunisations.
• Support families to reallocate resources and consumption to protect spending on food and services for their children.
• Devise ways to support family recovery, so that families can resume provision-for and protection of their children.
• Protect programmes targeting the most vulnerable through reallocation of budgets to maintain them in operation.
• Rely on community-based groups that can reach the most vulnerable, usually extremely difficult for outsiders to target.
• Decentralise and devolve of responsibility for the delivery of health and other services to the local and community levels.
• Take concerted action for children and youth so that the negative impacts of rising food prices are at least minimised (9,10).
• Protect or restore 'safety nets' that protect vulnerable households in the face of rising prices and other crises.
• Reduce food sales taxes. (While not targeted at those in most need, this most helps those who spend a large proportion of their income on food).
• Give income support to the most impoverished communities and families, by cash transfers, or vouchers to help them purchase the food they need.
• Create employment, as a longer-term sustainable strategy that supports local economies and enables secure livelihoods.
• Supplement the food of mothers in the last trimester of pregnancy and during lactation.
• Promote exclusive breastfeeding until 6 months and continued breastfeeding with complementary food to 24 months.
• Improve or institute supply of and access to adequate primary health care services and to clean water.
• Carry out public awareness campaigns, especially on immunisation and sanitation.
• Subsidise vitamin and mineral supplementation, including of iodine, iron, vitamin A and zinc.
• Develop school feeding programmes in ways that also support local food production and ensure adequate nutritional quality.

All this said and done, assistance such as that listed above often does not provide the most vulnerable families and their children with adequate support. For children in families with extremely limited income-generating capacity, and for children without family support, additional and extra support is required. School drop-outs, street children, under-age children in the labour market, and children in exploitative situations, are difficult to target. There are no simple immediately available answers here (4,5).

Working towards equitable societies

So far, the responses mentioned are those that should and could be made beginning now, without changing the prevailing political and economic ideology. Above and beyond these, what is needed is a whole new social and political order, compatible with firmly regulated capitalist economies. The inequity and injustice now so evident in the world, the blatant failure of economic globalisation to deliver on its promises, and the truly scary prospects ahead, of which rising and fluctuating food prices are just one example, make it fairly likely that a change for the better will come. This will, however, require political determination, and sustained and effective pressure from relevant civil society organisations – including those concerned with public health and with nutrition. It will also require new and renewed systems of ideas, such as those summarised in Box 3, below.

Some policies that need agreement now, to be implemented as soon as possible and then permanently as part of a just and equitable social order, include the following: Examples of government programmes designed to protect children from economic and other crises have included subsidy of basic foods and medicines; and expanding ongoing nutrition programmes such as provision of school lunches and distribution of basic food baskets. Where these have been cut or axed, they need to be restored

Government have in the past provided safety nets through programmes that supply services to families and children. But many impoverished countries have narrow tax bases and rely on import tariffs and trade taxes. In such countries, revenue lost from tariff or trade tax reductions need to be accommodated without affecting the provision of health care services, especially for women and children.

Governments can increase public sector wages to compensate workers and pensioners for higher prices. (These are not a good example of targeting though, as public servants are rarely in the lower ranges of the income distribution).

Targeted transfer programmes can reach impoverished population groups more efficiently and effectively than the general tax decreases and price subsidies indicated above. However, the best of these programmes require detailed planning and significant administrative capacity; they can vary from school lunch programmes, to public works projects, to conditional cash transfer schemes, to provision of publicly supported or free crèches and day centres.

Other interventions that should protect and improve childrens' health and that are most needed in periods of economic and other crises include

• Increase access to medicines, including vaccination.
• Provide health cards that increase access to health care.
• Set aside the need for identity cards, family books or birth certificates for children to access health and nutrition services.
• Strengthen disease surveillance and growth monitoring systems.
• Encourage traditional health service providers. Encourage traditional health service providers.

More generally, governments, supported by international organisations and their own civil society organisations, need to make a renewed and strengthened commitment to do the following: (This will be most effectively done in partnership with the governments of similarly affected countries)

• Recognise the crisis and act soon. Governments must first protect the programmes that supply services to families and children.
• Support families to reallocate resources and consumption to protect spending on food and services for their children.
• Protect programmes targeting the most vulnerable through reallocation of budgets to maintain them in operation.
• Decentralise and devolve of responsibility for the delivery of health and other services to the local and community levels

Rises and fluctuations in the price of food are here to stay. This is a corollary of an ideology that treats food as a commodity whose value is determined by money markets that continue to drive the world's economy with minimal regulation. The negative impact of the unpredictable high prices of food on society, most of all in the South, is now evident. The most vulnerable populations and communities are, as usual, the most affected. These are mothers and their children who live in impoverished regions and countries.

Faced with the food and accompanying crises, I suggest that we, who work in public health nutrition, have at least two responsibilities: One, as professionals, we need to do all we can, working with the affected communities, to ensure that appropriate and better targeted services to vulnerable people are delivered with more efficiency. Two, as citizens, we need to join the forces fighting for changes in governance so that the principles of equity and human rights are assured and applied in society particularly to benefit children and families, communities and countries that have been marginalised even further by the ongoing food price crisis.

References

1. Golay C. The global food crisis and the right to food. Center for Technology and Innovation Management. Geneva: CETIM, December 2008.
2. Commission on the Social Determinants of Health. Closing the Gap in a Generation: Health Equity Through Action on the Social Determinants of Health. Geneva: World Health Organization, 2008.
3. Inman P. UN report calls for regulation to curb speculators pushing up food prices. The Guardian, 5 June 2011.
4. International Monetary Fund. Food and Fuel Prices – Recent Developments, Macroeconomic Impact, and Policy Responses. Prepared by the Fiscal Affairs, Policy Development and Review, and Research Departments. 30 June 2008.
5. Impact of the Asia crisis on children: Issues for social safety nets. A report sponsored by the Australian Government for APEC. August 1999.
6. Inman P. Food prices pushing millions into extreme poverty, World Bank warns. The Guardian, 14 April 2011.
7. International Herald Tribune. Editorial page, 2-3 August 2008.
8. The Challenges of Climate Change and Bioenergy. Declaration of the High Level Conference on World Food Security, Rome, 5 June 2008.
9. Escobal J. International Food Policy Research Institute 2020 focus brief, December 2007
10. Jones N et al, Qsquare working paper 46. University of Toronto, 2007.
11. Human Rights Council. Special Session on the rising food prices situation. 22 May 2008.

Acknowledgement and request

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Please cite as: Schuftan C. Food price crises: 'Free markets' cause inequity and hunger. [Commentary] World Nutrition, June 2011, 2, 6: 255-271. Obtainable at www.wphna.org

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The author states: Thanks to Geoffrey Cannon for his crisp editorial guidance.