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Trade barriers blamed for food crisis

(China Daily)
Updated: 2008-06-04 08:23

ROME -- The United Nations Tuesday urged a summit on global food crisis to save nearly 1 billion people from the grip of hunger by lowering trade barriers and removing export bans.

United Nations Secretary General Ban Ki-moon speaks during a UN crisis summit on rising food prices at the Food and Agriculture Organisation (FAO) in Rome June 3, 2008. [Agencies]

"Nothing is more degrading than hunger, especially when (it's) man-made," UN Secretary General Ban Ki-moon told world leaders, who are likely to disagree over the link between biofuel production and high food prices.

Wealthy nations are spending billions of dollars on farm subsidies, wasteful and excess consumption of food, and on arms, said the head of the UN Food and Agriculture Organization (FAO), which is hosting the summit.

"Excess consumption by the world's obese costs $20 billion annually, to which must be added indirect costs of $100 billion resulting from premature death and related diseases," said FAO Director-General Jacques Diouf.

Ban estimated the "global price tag" to overcome the food crisis would be $15-20 billion a year and that food supply had to rise 50 percent by the year 2030 to meet the rising demand.

"Some countries have taken action by limiting exports or by imposing draft controls," he said. This "distorts markets and forces prices even higher".

The Rome summit will set the tone on food aid and subsidies for the G-8 summit in Japan in July, which is regarded as the concluding stages of the stalled talks under the WTO aimed at reducing trade distortions.

Countries are working on proposals at the WTO to cut tariffs and subsidies in agriculture as part of a global trade deal.

The cost of major food commodities has doubled over the last couple of years, with rice, corn and wheat reaching record highs. Some prices have hit their highest levels in 30 years in real terms, provoking protests and riots in some developing countries where people spend more than half their income on food.

The Organization for Economic Cooperation and Development (OECD) said in Paris Tuesday that average world food prices would retreat from their current peaks but would still be up to 50 percent higher in the coming decade than in the previous 10 years.

OECD chief Angel Gurria said high oil prices, "which are part and parcel of food prices", would not ease sharply either.

High oil prices have increased interest in biofuels, blamed by many for competing with food output for grains and oilseed and driving up prices. The US and Brazil, the world's biggest producer of ethanol from sugar cane, are expected to defend biofuels from such accusations at the summit.

The US will channel about a quarter of its corn crop into ethanol production by 2022 and the European Union plans to get 10 percent of auto fuel from bio-energy by 2020. Biofuel producers wrote to the Rome summit, arguing for diversifying energy sources via biofuels.

"A highly constrained supply of crude oil and petroleum products is wreaking havoc on all countries and markets across the globe, especially with respect to food," they wrote.

US Agriculture Secretary Ed Shafer said before the summit that biofuels accounted for only about 3 percent of the total food price rise. Charity Oxfam said it was closer to 30 percent.

Brazilian President Luiz Inacio Lula da Silva added rich countries' "intolerable protectionism" was the main cause of global food inflation. "Subsidies create dependency, break down entire production systems and provoke hunger and poverty. It is past time to do away with them."