Growing demand for biofuels, extreme weather and climate change, and increased financial activity through commodity futures markets are the main causes of high and volatile food prices, according to the 2011 Global Hunger Index report, The Challenge of Hunger: Taming Price Spikes and Excessive Food Price Volatility. These challenges are exacerbated by historically low levels of grain reserves, export markets for staple commodities that are highly concentrated in a few countries, and lack of timely, accurate information on food production, stock levels, and price forecasting, which can lead to overreaction by policymakers and soaring prices.
The report is being released in advance of World Food Day (October 16) for the sixth year by the International Food Policy Research Institute (IFPRI), Welthungerhilfe, and Concern Worldwide. “The poorest and most vulnerable people bear the heaviest burden when food prices spike or swing unpredictably,” said Klaus von Grebmer, lead author of the report and IFPRI Communications Director. “This report calls for action on several fronts to build resilience and mitigate the effects of volatility, particularly in countries where hunger is most severe.”
In order to identify hunger levels and hot spots, the Global Hunger Index scores countries based on three equally weighted indicators: the proportion of people who are undernourished, the proportion of children under five who are underweight, and the child mortality rate. According to the 2011 Index, 26 countries have levels of hunger that are alarming or extremely alarming, and all those with extremely alarming levels – Burundi, Chad, the Democratic Republic of Congo, and Eritrea – are in Sub-Saharan Africa.
“The current crisis in the Horn of Africa, while not unaffected by global prices, highlights the vulnerability of millions of poor people around the world to weather and other shocks, as well as the need to address the root causes of hunger,” said Tom Arnold, Chief Executive at Concern Worldwide. The report, however, provides a picture of the past, not the present, because up-to-the-minute data are still not available.
“This humanitarian tragedy also underscores one of the main motivations behind the Global Hunger Index – the need to provide information,” stressed Wolfgang Jamann, Secretary General at Welthungerhilfe. “Although information will not fill people’s stomachs, addressing the problem of hunger requires timely data about where and why hunger is occurring.”
To tame food price volatility and protect the poor against future shocks, the report makes several policy recommendations focused on the three levels of action:
- addressing the drivers of food price volatility;
- tackling global market characteristics affecting volatility, including building up stocks by coordinating international food reserves and sharing information on food markets; and
- building resilience for the future.
“To tackle the main drivers of excessive volatility, policymakers need to curtail biofuels subsidies and mandates, discourage the use of food crops in biofuels production, regulate financial activity in food markets, and reduce the incentives for potential excessive speculation in food commodities,” said Maximo Torero, co-author of the report and Director of the Markets, Trade, and Institutions Division at IFPRI. “They also need to invest in climate change adaptation and mitigation and safeguard smallholder farmers against extreme weather-related shocks.”
To build resilience to changing food prices, it is crucial to strengthen social protection systems, improve emergency preparedness, and invest in sustainable small-scale agriculture. Policymakers also need to improve livelihood opportunities for both the rural and urban poor, and strengthen the provision of basic services, such as education, healthcare, and sanitation.
“We already know a great deal about how to reduce vulnerability and effectively tackle poverty and hunger,” said Klaus von Grebmer. “Now is the time to apply this knowledge so that everyone, everywhere, has access to sufficient, safe, and nutritious food at all times so that they can live healthy and productive lives.”
Source: IFPRI, press release, 2011-10-11.