by Charlie Edwards | Mar 31, 2008 | Climate and resource scarcity
Alex and I have recently posted on the WFP’s appeal for more funds as the price of food continues to rise. Last week the price of rice began to shoot upwards sparking fears of a major rice shortage in Asia. According to experts global rice stocks are at their lowest since 1976. However some commentators aren’t convinced and argue that despite the sharp increase the fundamental balance between supply and demand remains largely intact. But are their voices loud and frequent enough for prices to drop and calm to return.
Not at the moment… last week’s turbulence (trigged by Egypt and Cambodia which banned rice exports) saw rice stocks jump 30 per cent in international markets causing the Vietnamese Government to announced it would reduce rice exports this year to 3.5m tons, from a projection of between 4m and 4.5m tons. India meanwhile has raised its minimum export price to $1,000 (€635, £500) per ton, up from $650 per ton, in a bid to keep domestic prices low.
One possible consequence of this run on rice is an increase in social unrest (food riots have broken out in Egypt, Cameroon, and Burkina Faso in the past week) which has led donor organisations to ask for more funding to maintain food distribution programmes.
According to the WFP $50m would buy 189,000 tons of food last year in Afghanistan, which would feed 3.5m people. This year, the same amount would buy only 112,000 tons to feed 1.9m.
by Alex Evans | Mar 26, 2008 | Climate and resource scarcity, Economics and development
As Charlie noted earlier this week, the World Food Programme has again called for half a billion extra dollars to cope with higher food and transport costs. (The FT just doesn’t seem to tire of running this story: it first appeared on July 16 last year, and made the front page then as well.)
While no-one’s disputing the figure at this stage, it’s interesting that various voices in the aid system are wondering just where the $500 million figure comes from, and how it breaks down. How much of this would be spent on direct food aid, how much on the food vouchers that WFP says it wants to move to, and how much on cash transfers to poor people? And in which countries? (Apparently WFP will be setting out a fuller breakdown in April.)
WFP haven’t always taken care to make many friends in the aid system. Being the big boy on the block (and the US’s favourite humanitarian agency), they’ve always been at liberty to tell other agencies where to shove it when the delicate question of harmonised approaches to humanitarian aid arise. This was especially true during the process of the UN High Level Panel on System-wide Coherence, when WFP ruthlessly opposed calls for a greater leadership role for the UN Office for the Coordination of Humanitarian Assistance at global level, more co-ordination by Humanitarian Co-ordinators at country level, and more pooled funding through instruments like the CERF.
Now, though, there’s a window of opportunity for WFP’s funders to extract more cooperation from the agency – not least as the relatively importance of US funding to WFP looks set to decline. Clearly it’s essential that people receiving WFP food aid shouldn’t lose out because of rising costs, and WFP’s funders will need to move quickly to make sure that this doesn’t happen. But it might also be a good moment to renew the push for a more co-ordinated approach to UN humanitarian relief…
by Charlie Edwards | Mar 24, 2008 | Climate and resource scarcity
According to today’s FT:
The World Food Programme has launched an “extraordinary emergency appeal” to governments to donate at least $500m in the next four weeks to avoid rationing food aid in response to the spiralling cost of food. The WFP, the United Nations agency responsible for relieving hunger, said in a letter to donor countries that if fresh money did not arrive by May 1, it might cut “the rations for those who rely on the world to stand by them during times of abject need”.
Josette Sheeran, WFP executive director asked donors: “We urge your government to be as generous as possible in helping us to close this gap – which stood at $500m on February 25 and has been growing daily.”
The WFP’s funding gap is now about $600m-$700m, officials said, after a 20 per cent jump in food costs in the past three weeks, the rise in the oil price to about $100 a barrel, and a surge in shipping costs. The US is the largest WFP contributor, having donated about $1.1bn last year, mostly in food shipments. The European Union, with $250m, and Canada, with $160m, are the second- and third-largest donors.
by Charlie Edwards | Mar 19, 2008 | UK
So which political adviser and/or Whitehall official(s) have been talking with the FT’s resident ‘Rita Skeeter‘? In her notebook today she despairs of the British Prime Minister’s handling of the national security strategy:
Oh Gord! The new national security strategy that Gordon Brown, the prime minister, is due to announce on Wednesday – it is all about potential disasters – has proved a bit of a disaster itself. Its genesis has been marked by delays indecisiveness at the top, a total lack of funds and some glorious Whitehall squabbling.
The strategy, which will detail all kinds of threats from terrorism to pandemics and floods, is nearly six months late. The first draft was ready last October, but parts of Whitehall were distinctly unhappy. I am told that one section on flooding was written by a senior military man who did not bother to consult the flood supremos in the Department of the Environment, Food and Rural Affairs.
(Better gossip is that they forgot to include Britain’s nuclear deterrent in one draft)
Sue continues:
When the shouts of protest died down, a new version was produced in February this year – after due consultation. This did not upset anyone. Indeed it was so anodyne that some officials felt positively embarrassed. Advisers in Number 10 cut its length drastically. Mr Brown started writing his speech about it, which seems to have led to a series of further changes to the strategy itself as new ideas came to him. “It’s Gordon’s temperament,” sighed one Whitehall insider. “Only he can sort things out but he concentrates on matters of the moment and drops everything else. The result is that things big and small don’t get sorted quickly.”
So what will be included?
Right from the start there seems to have been no clear guidance from Mr Brown as to what the strategy was meant to achieve. It is expected to include plans for a new US-style national security council on which will sit the great and the good from the military and the intelligence services, but the council will report to a new cabinet committee, chaired by Mr Brown, and the old Cobra arrangements for dealing with emergencies will remain in place. All rather confusing, but the hope is that the council will make it easier to bang heads together and stop departments fighting their own corners. Hard to see how, say insiders. “Governments have always had to choose between spending on flood defences, for example, and armaments,” says one senior figure, adding that unlike the US security council, whose job is to prioritise spending, there will be no serious extra money for contingency planning.
Not sure that is quite the point. But what about Whitehall’s reaction to the document?
Some fear the new strategy will bring even more centralisation of power with Number 10, cutting other departments out of the action. There is even concern that top intelligence officials could become part of the prime minister’s team instead of serving the government as a whole. On this the fifth anniversary of the invasion of Iraq, the dangers of that should be all too apparent.
Looks like paranoia is setting into Whitehall.
by Alex Evans | Mar 18, 2008 | Climate and resource scarcity, Global system
As the dollar, together with US equity and bond markets, continue an apparently inexorable slide downards, everyone’s been piling into safety – and especially into commodities. But as David Roche comments, “With global equity market capitalisation almost 10 times the notional value of commodity derivatives, the rush to commodities by investors has been like squeezing a quart into a pint pot.”
Opinion has been split on how much of the buoyancy in commodity prices is due to this short term price bubble; Martin Wolf, for instance, argued a couple of weeks ago that “Speculation seems not to be that important. If it were, inventories would be soaring. But they are not.” Still, that was then, and this is now – after the collapse of Bear Stearns, when the flight to safety looks more like a panic rush.
David Roche’s argument, though, is that the commodities bubble will prove short term because global recession will take the heat out of demand for commodities – for “contrary to received wisdom, economic decoupling [between the US and emerging economies] is unlikely.” Well, he may well be right about the decoupling, at any rate; Nouriel Roubini has also been saying so for a while, and he’s been pretty accurate so far.
So if the world does hit a serious downturn, and if commodity prices do take a tumble as a result, does that mean we can all relax about food prices? Not for long. Here’s why.
(more…)
