Rising food prices increase squeeze on poor - Oxfam

Rising food prices are tightening the squeeze on populations already struggling to buy adequate food, demanding radical reform of the global food system, Oxfam has warned.

By 2030, the average cost of key crops could increase by between 120% and 180%, the charity forecasts.

It is the acceleration of a trend which has already seen food prices double in the last 20 years.

Half of the rise to come will be caused by climate change, Oxfam predicts.

It calls on world leaders to improve regulation of food markets and invest in a global climate fund.

"The food system must be overhauled if we are to overcome the increasingly pressing challenges of climate change, spiralling food prices and the scarcity of land, water and energy," said Barbara Stocking, Oxfam's chief executive.

Women and children

World food prices have already more than doubled since 1990, according to Food and Agricultural Organization (FAO) figures, and Oxfam predicts that this trend will accelerate over the next 20 years.

In its report, Growing a Better Future, Oxfam says predictions suggest the world's population will reach 9bn by 2050 but the average growth rate in agricultural yields has almost halved since 1990.

According to the charity's research, the world's poorest people now spend up to 80% of their incomes on food - with those in the Philippines spending proportionately four times more than those in the UK, for instance - and more people will be pushed into hunger as food prices climb.

The report highlights four "food insecurity hotspots", areas which are already struggling to feed their citizens:

• Guatemala, where 865,000 people are said to be at risk of food insecurity because of a lack of state investment in smallholder farmers who are highly dependent on imported food
• India, where people spend more than twice the proportion of their income on food than UK residents
• Azerbaijan, where wheat production fell 33% last year because of poor weather, forcing the country to import grains from Russia and Kazakhstan; food prices were 20% higher in December 2010 than the same month in 2009
• East Africa, where eight million people currently face chronic food shortages because of drought, with women and children among the hardest hit

Among the many factors continuing to drive rising food prices in the coming decades, Oxfam predicts that climate change will have the most serious impact.

Ahead of the UN climate summit in South Africa in December, it calls on world leaders to launch a global climate fund, "so that people can protect themselves from the impacts of climate change and are better equipped to grow the food they need".

The World Bank has also warned that rising food prices are pushing millions of people into extreme poverty.

In April, it said food prices were 36% above levels of a year ago, driven by problems in the Middle East and North Africa.

'Minority profiting'

In its report, Oxfam says a "broken" food system causes "hunger, along with obesity, obscene waste, and appalling environmental degradation".

It says "power above all determines who eats and who does not", and says the present system was "constructed by and on behalf of a tiny minority - its primary purpose to deliver profit for them".

It highlights subsidies for big agricultural producers, powerful investors "playing commodities markets like casinos", and large unaccountable agribusiness companies as destructive forces in the global food system.

Oxfam wants nations to agree new rules to govern food markets, to ensure the poor do not go hungry.

It said world leaders must:

• increase transparency in commodities markets and regulate futures markets
• scale up food reserves
• end policies promoting biofuels
• invest in smallholder farmers, especially women

"We are sleepwalking towards an avoidable age of crisis," said Ms Stocking. "One in seven people on the planet go hungry every day despite the fact that the world is capable of feeding everyone."

'Market works'

However, the report's emphasis on the importance of small farmers was challenged by Nicola Horlick, a leading British investment fund manager who has invested in farmland in Brazil, in a debate with Ms Stocking on the BBC's Today programme.

She said large mechanised farms still provided some job opportunities for local workers and created spin-off industries.

"You cannot rely on a whole lot of smallholders to feed the world - it's not going to work," she said.

"It is really important in my view that we have more investment going into farmland. There are huge tracts of farmland... that aren't being farmed."

She said the market worked because shortages increased potential profits from investing in food, which would in time being supply and demand back into balance.