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Financial crisis may worsen food crunch it eclipsed

Although commodity prices for a wide range of crops have fallen by as much as 50 percent from record highs in June, the financial crisis is expected to make food shortages dramatically worse.

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The problem is playing out across the globe: food prices rose by 24 percent in 2007, pushing 75 million more people into chronic hunger, estimates the United Nations' Food and Agricultural Organization (FAO). In 2008, food prices surged again by 51 percent, meaning that millions more are likely to join the 923 million people already suffering from malnutrition. World food prices have come down by a modest 6 percent since September, the FAO estimates, but that can't reverse the damage already wreaking its way across the globe.

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"Food prices are dropping, which is great, but its entirely too early to say that the food crisis is over," says Marcus Prior, a spokesman for the UN's World Food Program (WFP) in Nairobi, Kenya.

He points out that the food crisis is taking its greatest toll on sub-Saharan Africa, where 1 in 3 people were already estimated to be chronically hungry before the crisis. Last year, staggering food inflation added another 24 million people to the total of malnourished.

"We've seen people have to make decisions, taking their children out of school … so the children can help with work," says Mr. Prior, adding that Somalia, northern Kenya, northern Uganda and Ethiopia are among the hardest hit, because of conflict, drought, and successive harvest failures.

In Southern Africa, many subsistence farmers already suffer from high rates of HIV/AIDS. The food crisis has made them particularly vulnerable. "They can't produce as much because they're spending their resources on healthcare," says Richard Lee, a WFP spokesman in Zimbabwe.

Zimbabwe has emerged as a flashpoint, with the UN already feeding four million people there. Money is running out, and the UN fears a full-scale humanitarian crisis by January. "The problem in Zimbabwe is [lack of] access to any food," says Mr. Lee. "People in rural areas, some of them harvested nothing, some of them harvested very little. It's a very serious situation."

"The impact of the food crisis starts today," says Mr. Zeigler of IRRI. "If you consider a child under the age of 3, if they're malnourished for even three months, they're affected for a lifetime. It will affect an entire generation."

Financial crisis compounds woes

The financial crisis is now adding its own plague of threats.

Here in Cambodia, rice millers tend to borrow money from banks to pay farmers and to mill their rice. As banks seize up credit due to global recession fears, some mills are having trouble paying farmers, explains Mr. Koma.

Lending agencies respond to ongoing global food crisis

The United Nations estimates that $15 billion to $20 billion will be needed to address the food crisis affecting 923 million malnourished people worldwide. Only some $1 billion has been disbursed so far. Some of the largest pledges from lending agencies include:

• The Word Bank created a $1.2 billion rapid-financing facility and pledged to increase support for global agriculture and food from $4 billion to $6 billion in 2009.

• The UN World Food Program pledged an extra $1.2 billion a year toward helping 75 million people who are starving worldwide.

• The International Development Bank pledged to provide $1.5 billion in food aid across the next five years.

• The Asian Development Bank pledged $500 million to member nations most affected by food prices.

• The Islamic Development Bank pledged $1.5 billion for agriculture projects in poor countries.