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The Issue: High Food Prices

High Food Prices and Food Security Dr Hafez Ghanem Assistant Director General Economic and Social Development, FAO Study Days– EPP-ED Group Paris, 4 July 2008. The Issue: High Food Prices. Three Messages.

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The Issue: High Food Prices

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  1. High Food Prices and Food Security Dr Hafez GhanemAssistant Director General Economic and Social Development, FAOStudy Days– EPP-ED Group Paris, 4 July 2008

  2. The Issue: High Food Prices

  3. Three Messages • High prices are partly a reflection of a long run phenomenon of increasing demand for food products. • High prices are leading to an increase in hunger in the world, we estimate an additional 50 million hungry people. • International action is needed to increase investment and coordinate policies.

  4. Explanations for High Prices • Low Stock Levels • Bad weather (climate change?) • High oil prices • Increased demand from emerging countries • Bio-fuels • Financial crisis and speculation Prices are Expected to Remain High

  5. Low Level of Stocks

  6. Energy-food prices relationships at the aggregate level... simple correlation coefficient 1990-08 r=0.62 simple correlation coefficient 2004-08 r=0.77

  7. Cereal imports and exports from China and India

  8. Bio-fuels Demand is Increasing very Fast

  9. Food Prices Are Expected to Remain High

  10. Impact of High Prices • THE NUMBER OF HUNGRY POPLE IN THE WORLD IS INCREASING • Everybody is hurt but mostly the poor • Women in developing countries are more affected than men • Macro-economic implications for low income countries

  11. An Increase in Undernourishment

  12. The Poor are More Affected by Food Prices

  13. The Poor are Food Buyers

  14. Impact on household welfare of a 10 percent increase in maize prices in Malawi

  15. Women Are more Affected than Men

  16. Coordinated International Action is needed • Safety nets and food aid • Urgent support to farmers in developing countries • Increase investment in developing country agriculture • Improve international policy coordination

  17. Food Aid is Declining

  18. LDC Farmers Have no Incentive to Increase Production

  19. More Support to LDC Agriculture is Needed • To meet growing demands for food and biofuels production needs to rise, especially in developing countries. • Agriculture’s share in ODA fell from 17% to 4% over 25 years. • Only 4% of cropped land in Africa is irrigated. • Investment in R&D in developing countries is 0.6% of agricultural GDP compared to more than 5% in OECD.

  20. Diverse Policy Responses

  21. Thank you!

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