High Food Prices and Food Security Dr Hafez GhanemAssistant Director General Economic and Social Development, FAOStudy Days– EPP-ED Group Paris, 4 July 2008
Three Messages • High prices are partly a reflection of a long run phenomenon of increasing demand for food products. • High prices are leading to an increase in hunger in the world, we estimate an additional 50 million hungry people. • International action is needed to increase investment and coordinate policies.
Explanations for High Prices • Low Stock Levels • Bad weather (climate change?) • High oil prices • Increased demand from emerging countries • Bio-fuels • Financial crisis and speculation Prices are Expected to Remain High
Energy-food prices relationships at the aggregate level... simple correlation coefficient 1990-08 r=0.62 simple correlation coefficient 2004-08 r=0.77
Impact of High Prices • THE NUMBER OF HUNGRY POPLE IN THE WORLD IS INCREASING • Everybody is hurt but mostly the poor • Women in developing countries are more affected than men • Macro-economic implications for low income countries
Impact on household welfare of a 10 percent increase in maize prices in Malawi
Coordinated International Action is needed • Safety nets and food aid • Urgent support to farmers in developing countries • Increase investment in developing country agriculture • Improve international policy coordination
More Support to LDC Agriculture is Needed • To meet growing demands for food and biofuels production needs to rise, especially in developing countries. • Agriculture’s share in ODA fell from 17% to 4% over 25 years. • Only 4% of cropped land in Africa is irrigated. • Investment in R&D in developing countries is 0.6% of agricultural GDP compared to more than 5% in OECD.