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	Gates Foundation increases Farm Aid by 50% as Food Crisis Deepens by Bloomberg   Apr 2008   The Bill & Melinda Gates Foundation will increase spending on farming projects by 50 percent this year as surging food prices threaten starvation and social unrest in poor countries.   The world"s largest charitable foundation will give grants for agricultural programs totaling about $240 million this year, up from $160 million last year, said Rajiv Shah, the foundation"s director of agricultural development.   "We are ramping up activity," Shah said from Seattle, where the foundation is based. “The focus will be on encouraging extra supply, which is one reason global food prices have climbed so high."   New funding from Gates for agriculture in poverty-stricken countries comes as food prices soar around the world. The Gates programs aim to increase farm productivity, a task that has received less attention from larger aid institutions.   The proportion of global development aid devoted to agriculture is 4 percent, according to figures from the World Bank. The share of World Bank financing devoted to farming dropped to 12 percent in 2007, from 30 percent in 1980.   “The strength of the foundation is that because it is not constrained by politics, it can afford to take a longer view on food supply," said Ruth Levine, a senior fellow at the Center for Global Development, an aid research group in Washington. “They are working on research and activities that have been very under-funded" by other groups, she said.   The foundation plans to put the additional funds into existing projects, including developing more resilient crops, training farmers and helping small producers gain greater access to markets for their goods, Shah said.   For the past two years, the group has invested in seeds that better resist disease and drought, particularly in Africa, where productivity lags behind other developing nations. The effort has already led to more disease-resistant maize varieties for East Africa and sweet potatoes fortified with extra vitamin A, Shah said.   Global food prices surged 57 percent last month from a year earlier, according to the United Nations, and the World Bank warns civil disturbances may be triggered in 33 countries.   Governments from Guatemala to the Philippines to Indonesia are seeking to combat food inflation by curbing exports or removing import duties on basic food staples such as rice. Brazil called for an end to farm subsidies in developed countries that create price distortions and leave millions of agricultural producers in poorer nations unable to compete.   African countries are expected to be among the most vulnerable to rising food prices. About 70 percent of the continent"s population works in farming, according to World Bank figures. Even so, Africa is dependent on foreign producers, importing a net $12.7 billion a year in food.   According to the Gates Foundation, 16 of the 18 most undernourished countries are in Africa.   “The challenge is to ensure that they can sell enough of their goods so that they have an economic incentive to use better techniques," Shah said. “We are helping them to meet formal food standards demanded by bigger food producing firms and also talking to these companies in order to link them up with smaller farmers."   The Gates crop-improvement program encompasses 16 African countries that aim to give farmers access to better-quality seeds through a network of 9,000 seed dealers.   Gates is also funding projects to provide information through radio broadcasts to help train farmers in Mali, Ghana, Malawi, Uganda and Tanzania.   “Almost no country has achieved a rapid ascent from hunger and poverty without raising agricultural productivity," the foundation says.
	Millions face starvation, but countries persist with plans to use grain for petrol by Moisés Naím, Mark Lynas Foreign Policy / New Statesman   July 2008   The Global Food Fight, by Moisés Naím. (Foreign Policy)   There are many culprits we can blame for higher food prices. But the poor is not one of them.   The spike in food prices is a global crisis, and it is destabilizing politics and economics everywhere.   Food prices have doubled in the past two years, and most signs indicate they will stay high. Not surprisingly, the poor will bear the heaviest burden. Household surveys show that the poor already devote half of their spending to food.   Inevitably, this percentage will rise sharply, cutting into what people have left for basic expenses like healthcare or shelter.   This crisis is undermining the progress that was made in lifting people out of poverty in the past 10 years. The World Bank estimates that high food prices will quickly force over 100 million people back below the poverty line.   The poor are not only being hurt by the food crisis more than anyone else, but they are also being blamed for it.   Donald Mitchell’s analysis of the food crisis, a World Bank’s expert on agricultural commodities, argues that while the poor, especially in Asia, are indeed eating more meat, this increased consumption is not the cause of the spike in food prices.   Take, for example, the global consumption of rice and wheat. Between 2000 and 2007, the global consumption of rice grew by 1 percent a year; consumption of wheat grew even more slowly. Meanwhile, meat consumption soared.   These trends seem contradictory because when you eat chicken or steak, you are essentially consuming grains, which are the main raw material used to raise these animals for human consumption.   In fact, the demand for both rice and wheat has not matched the increase in the world’s population – that is, consumers. If meat consumption in Asian countries explained today’s higher grain prices, then the demand for grains should be consistently high and countries like China and India would be unlikely to have surplus grain to export.   But, as Mitchell notes, the growth in demand for these grains in the past seven years was slower than the increase in demand between 1995 and 2000, when international prices were stable and Asian consumption had yet to boom. Moreover, China and India became net grain exporters in 2000, despite their growing populations and their rising meat consumption.   So what explains the fact that while meat consumption has gone up – the indicator most commonly used to blame poor Asian countries for their responsibility for higher food prices – the demand for grains has not kept pace? Technology, says Mitchell.   Innovations in animal genetics, nutrition, and production methods have revolutionized the efficiency of the production of chicken, pork, and beef. The meat produced per unit of grain feed has increased 40 percent in East Asia since 1990, for example. So then, why are the international prices of these commodities soaring?   One indirect way in which rising consumption in poor countries is contributing to higher food prices is through increased energy consumption. The higher demand for energy in poor countries has added to the pressure that led to record prices for oil and gas.   In turn, these high energy prices have pushed up food prices—not only because they have made the transportation of agricultural products more expensive, but mostly because they boost the cost of fertilizers produced with hydrocarbons. Weather anomalies, such as the severe drought in Australia, have also contributed to higher food prices.   So have speculators. In the past five years, the number of futures contracts for wheat (the commitment to buy or sell a given volume of wheat by a certain future date at a predetermined price) has quadrupled. Although a lot of idle money looking for quick returns has found its way to agricultural markets, the fact is that while speculators ride and accelerate existing market trends, they don’t create the underlying market fundamentals.   And one of the fundamental realities that financial speculators are exploiting is that the existing inventories of agricultural commodities are at record lows.   In the past 25 years, most countries gradually abandoned the policy of stocking grains and other agricultural commodities. Now that commodity markets are in turmoil, most countries lack significant cushions to absorb the impact of any sudden disruption in their ability to import grains.   Such disruptions can have many causes, some natural and others man-made. Climate change, for example, is already having a discernible effect on harvest cycles and crop yields.   But the most important catalysts of the current food crisis are government policies—especially in the United States—that encourage farmers to divert their production away from crops for human consumption and toward ethanol and other biofuels.   Recent studies point out that these government decisions are responsible for more than 50 percent of the recent increase in food prices and will account for more than 33 percent of food inflation in the next decade.   Of course, the explosion in food prices was an unintended consequence of policies geared to help American farmers. But it is also true that such unintended consequences could have been avoided if decisions had been based on a careful analysis of food markets rather than on the shortsighted promotion of special interests.   In any case, at least we now know that the culprits of the higher food prices are not consumers in poor countries but farmers in rich ones and the politicians they have in their pockets.   * Moisés Naím is editor in chief of Foreign Policy.   April 2008   Countries persist with plans to use grain for petrol, by Mark Lynas. (New Statesman)   World cereal stocks are at an all-time low, food-aid programmes have run out of money and millions face starvation. Yet wealthy countries persist with plans to use grain for petrol.   The irony is extraordinary. At a time when world leaders are expressing grave concern about diminishing food stocks and a coming global food crisis, our government brings into force measures to increase the use of biofuels - a policy that will further increase food prices, and further worsen the plight of the world"s poor.   What biofuels do is undeniable: they take food out of the mouths of starving people and divert them to be burned as fuel in the car engines of the world"s rich consumers.   This is, in the words of the United Nations special rapporteur on the right to food, Jean Ziegler, nothing less than a "crime against humanity". It is a crime the UK government seems determined to play its part in abetting. The Renewable Transport Fuel Obligation (RTFO), introduced on 15 April, mandates petrol retailers to mix 2.5 per cent biofuels into fuel sold to motorists. This will rise to 5.75 per cent by 2010, in line with European Union policy.   The UK is not uniquely implicated in this scandal: the EU, the United States, India, Brazil and China all have targets to increase biofuels use. But a look at the raw data confirms today"s dire situation.   According to the World Bank, global maize production increased by 51 million tonnes between 2004 and 2007. During that time, biofuels use in the US alone (mostly ethanol) rose by 50 million tonnes, soaking up almost the entire global increase.   Next year, the use of US corn for ethanol is forecast to rise to 114 million tonnes - nearly a third of the whole projected US crop. American cars now burn enough corn to cover all the import needs of the 82 nations classed by the UN"s Food and Agriculture Organisation (FAO) as "low-income food-deficit countries". There could scarcely be a better way to starve the poor.   The threat posed by biofuels affects all of us. Global grain stockpiles - on which all of humanity depends - are now perilously depleted. Cereal stocks are at their lowest level for 25 years, according to the FAO. The world has consumed more grain than it has produced for seven of the past eight years, and supplies, at roughly only 54 days of consumption, are the lowest on record.   The president of the World Bank, Robert Zoellick, has already warned that over 100 million people could be pushed deeper into poverty because of food price rises caused directly by this imbalance between supply and demand. Even consumers in rich countries are suffering. We now pay higher prices for our food in order to subsidise the biofuels industry, thanks to measures such as the renewable fuels directive.   This is not just a short-term price blip, but the beginnings of a major structural change in the world food market.   Weather plays a major role, too: the FAO"s latest food situation brief reports that, in 2007, "unfavourable climatic conditions devastated crops in Australia and reduced harvests in many other countries, particularly in Europe", while Southern Africa and the western United States have been hit hard by severe drought.   Rising oil prices also increase the cost of food, as fossil fuels are important throughout the agricultural process, from tractor diesel to fertiliser production.   The most important structural change, however, is the increasing interlinking of world energy and food markets. Once, food was just for people. Now rising demand for transport fuel - particularly in rich countries - is sucking supply away from the world food market and increasing the upward pressure on prices.   In the words of Josette Sheeran, executive director of the UN World Food Programme (WFP): "We are seeing food in many places in the world priced at fuel levels," with increasing quantities of food "being bought by energy markets" for biofuels.   Rising oil prices feed back into the process. With food and fuel markets intertwined, increases in the price of oil are shadowed by increases in the price of grain. The real-world result from this structural shift may be that millions of people starve in the next few years - unless policies promoting biofuels are urgently reversed.   This is not to suggest that government targets on biofuels are driven by some kind of malicious desire to starve the world"s poor.   The EU, meanwhile, persists in the erroneous belief that biofuels can help reduce greenhouse-gas emissions. The main reason for its speedy introduction of the replacement fuel initiative was as a sop to motor manufacturers who were lobbying hard against proposed higher fuel economy standards. With biofuels, the EU hoped, it could cave in to the car industry while still getting reduction in emissions.   Yet recent research suggests otherwise: two major studies published in Science magazine in February showed clearly that once the agricultural displacement effects of the new fuels on rainforests, peatlands and grasslands are taken into account, emissions are many times worse than from conventional mineral petrol. In other words, it would be better for the climate if we just went back to fossil fuels.   Biofuels are not a "necessary but painful" way of saving the climate; they are a calamitous mistake by almost every criterion, whether social, ethical or environmental.   The industry claims that "second-generation" biofuels, using by-products such as corn stalks and woodchip as a feedstock, will be able to redress the balance. But if this technological advance is achieved (and that is by no means certain) it could usher in an even worse scenario: the annihilation of the world"s forests.   If all plant life was seen as potentially convertible for transport fuel, there would be nothing to stop what was left of the planet"s biosphere from being strip-mined to keep rich motorists on the road. There is no simple solution. Much of the increased biofuel demand comes from the US, where Democratic and Republican politicians alike have talked themselves into a dead-end search for "energy security" - with US-grown corn top of the list.   But the UK and the EU can reverse some of the damage by immediately ditching their own biofuels policies and providing vital aid funding, principally through the WFP, to help prevent widespread starvation in the short term.   Politicians need to realise that there is no such thing as "sustainable biofuels", either now or in the future. As for investors, they need to realise that pouring money into biofuels is a bad bet: subsidies will be quickly withdrawn when policymakers face up to the reality of their ghastly error.   In the meantime, millions face starvation and death from increasing hunger and malnutrition. There is no time to lose.
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