Rising price of rice keeps U.N. scrambling to feed world's hungry
From Kenya to Cambodia, the World Food Program's offices are struggling to meet their budgets in the face of price increases, sometimes having to suspend vital programs.
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But the growing number of export bans is creating new stresses in this system. Egypt, India, Cambodia, and Guinea have totally banned exports of rice and other staples. Pakistan and Kazakhstan have banned wheat exports and Russia raised taxes on exported wheat by 40 percent. China, Brazil, Argentina, and Vietnam have all added restrictions to limit export sales.Skip to next paragraph
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Such moves, while they often succeed in lowering local prices, can also lead to panic buying as people stock up in case of future shortages – and create even more shortages at home . In turn, that makes less available for export. It can be a vicious cycle.
"Governments are very nervous at the moment and feel they have to keep what they have for their own people – which ends up blocking the cost-efficient flow of food and limiting the playing field," says Menage.
The Burma effect
Rice prices shot up again in the wake of the May 3 cyclone that devastated one of Burma's (Myanmar's) prime rice growing regions.
In recent weeks, the WFP buying agents have been using every tool in the bag – cajoling, persuading, nagging, and calling in favors within various countries. In some cases, it's working.
In India, for example, WFP recently managed to get an exception to the commercial export ban announced in March. "We had one of our national procurement officers in India – with good connections with the Indian government – on this, trying to convince the government to allow us to purchase rice," says Menage.
Finally, India agreed, on humanitarian grounds, to let the WFP take 14,000 tons, at the old prices, which was then shipped to six different destinations in Africa, Latin America, and elsewhere in Asia.
Now, Menage's food-buying agents are in the process of negotiating with Pakistan to allow the WFP to export some wheat for Afghanistan. "It's a struggle, each time," Menage admits. "But there are solutions."
Sometimes of course, solutions are painful. Such was the case in Cambodia, where, finally, it was decided that to make its budget, the WFP school food program – which had not even begun because the school year was just starting – would be suspended. This cut allowed WFP's ongoing food-for-work program as well as the smaller but vital TB and HIV/AIDS programs to continue.
But, it meant that 1,344 participating schools in 12 rural provinces, which until this year had been providing a daily 6:30 a.m. breakfast of rice, canned fish, and yellow split beans to some 450,000 primary school children breakfast, had to stop offering meals. Elsewhere, in Kenya and Tajikistan, WFP school programs were being slashed in half.
"Of course the schools were very disappointed. This program has had an incredible impact on kids' school attendance – especially for girls – their punctuality and alertness. Kids were coming to school to eat," says Keusters.
In Cambodia, a subprogram, which provides take-home rations to the most vulnerable schoolchildren – about 22,000 kids – was spared. That was in part thanks to the Cambodian government, which provided WFP with an extra 3,000 tons of rice at below-market prices.
"We are keeping what we can alive," concludes Keusters. "We are all conscious that times are difficult, but we also know that our contribution is very important, and we can't let people down by panicking ourselves."
100 million hungry people
The UN's World Food Program spends close to $3 billion a year to feed some 73 million people in 80 countries around the globe. Last month, the World Bank warned that the current food crisis could push an additional 100 million people into severe hunger.
According to the US Commodity Futures Trading Commission, the price of rice over the past 12 months has soared 122 percent. For wheat, the increase has been 95 percent; for soybeans, 83 percent; and corn, 66 percent.
The WFP has put out an emergency appeal, announcing that it needs more than $500 million just to cover the increased cost of food aid it had already budgeted. The overall shortfall at the agency is currently $750 million.