Rising food prices curb aid to global poor

Around the world, the lives of some 850 million people are affected by some form of chronic hunger or malnutrition, according to UN estimates.

But much can be done through sustained development aid. As the Kenyan example suggests, programs that provide childhood nutrition, education, and agricultural know-how can pay big dividends. The returns on investment often exceed 20 percent a year, says Christopher Barrett, a Cornell University expert on global poverty and hunger.

"We're passing up very high-return investments, largely because people don't understand them," he says. Even when government support and private charity are tallied together, "we're nowhere near the number of dollars needed … to end chronic hunger."

The World Food Program, working in partnership with private aid groups, provided $3 billion in food aid to nearly 90 million people last year. The lion's share went to emergency and relief operations, while 28 percent of the aid recipients were in development projects.

"We've not been put in a position where we've had to shut down a program or reduce the rations," says Gregory Barrow, a London-based spokesman for the program. But prices "have risen to a point where they're going to have an impact … sooner or later."

In 2001, about $1.2 billion in US food aid went toward nonemergency programs overseas, according to a recent report by Congress's Government Accountability Office. By last year, that number had dropped to $698 million.

Moreover, for all food-aid programs funded by the US government, the volume of food delivered has declined 52 percent in the past five years. Rising transportation and operational costs were key reasons, the report said.

An alliance of nonprofit aid organizations, which partner with the government, hope that Congress's pending farm bill will make funding for long-term relief more secure. That might allow for better advance planning, so that less of the budget goes toward logistics.

Despite the jump in food prices, some development experts point to positive trends as well as challenges. Researchers are better at predicting famines than in the past. The current food-price shock has echoes of the 1970s – when oil prices, bad weather, and growing demand for grains all played a role, says Mr. Barrett at Cornell. But "we've got much better early warning systems in place."

Some experts also hope that higher food prices, and the biofuel boom, might open the door to new opportunities for farmers in developing nations.

Still, most of the 1 billion people living on a dollar a day stand to gain when food prices fall, Barrett says. Even poor farmers are hurt by rising prices, he says, because many buy more food than they sell.

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