Call it crisis eclipse.
The global food crisis that dominated headlines earlier this year
has been overshadowed by this fall's financial crisis, but it
continues to exact a crippling toll on the world's poor. And,
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 it dramatically worse: credit for farmers
could dry up, meaning less money to buy fertilizer and seed, leading
in turn to greater global shortages of food.
Money for food aid could dry up as well. In June, governments and
donors pledged $12.3 billion for the food crisis. So far, only $1
billion has actually been disbursed, as lending institutions and
governments instead scramble to save ailing banks.
"My concern is that with the food crisis out of the headlines,
policymakers will assume it's not a problem. Another worry is that,
[with the financial crisis], there will simply be less money to
invest in agriculture. We've got to turn that around," says Robert
Ziegler, the director general of the International Rice Research
Institute (IRRI) in the Philippines.
Some factors contributing to the food crisis have ebbed, which
adds to the notion that the worst is over.
The price of oil, needed to transport food to markets, has
dropped from July highs of nearly $150 a barrel to around $50 today.
Corn, soybean, and wheat prices have fallen about 50 percent from
record highs earlier in the year. And many of the restrictions set
by grain-exporting governments like Vietnam, China and India - all
of whom feared shortages and effectively hoarded grain supplies,
causing prices to shoot up further - have now been eased, meaning
supplies have stabilized and prices have come down accordingly.
Lower prices haven't ended crisis
Still, a country like Cambodia helps illustrate that lower prices
have not ended the crisis. The price of rice - the country's staple
food - has gone down by about 7 percent since August. But observers
say that's not enough to offset the staggering 25 percent inflation
of the last year.
"Workers already spend about 70 percent of their income on food.
Prices have gone down, but they're still higher than other years. If
you look at people's income versus inflation, many more are poor
today," says Yang Saing Koma, president of the Cambodian Center for
Study and Development of Agriculture, a think tank in the country's
capital, Phnom Penh.
In fact, the Asian Development Bank estimates that 2 million more
Cambodians may have been pushed into poverty.
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
"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
"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. …