UK Charity calls for radical change of approach to address food price crisis

World leaders must urgently agree a coordinated global action plan to address the food price crisis, international agency Oxfam made this statement in a report published ahead of an emergency UN Food Summit in Rome. The plan must include short and long-term responses and go beyond humanitarian aid.

?In countries where Oxfam works, we are seeing the negative impact of higher food prices on poor people, who already spend more than half their income on food,? said CEO of Oxfam GB, Barbara Stocking. ?This is a huge challenge to the leadership and legitimacy of the world?s multilateral institutions, but also a genuine opportunity for long-overdue reforms.?

Oxfam estimates that an extra $14.5bn is needed to scale up immediate assistance to at least 290 million people threatened by rising food prices. This amount is small when contrasted with the more than $1 trillion the US Federal Reserve and European Central Bank have injected into the financial system in the past six months to try to avert economic crisis.

Similarly, annual aid to agriculture, which currently stands at $4bn, is pittance compared to the $125bn that rich countries gave their farmers in 2006. Lack of investment is acknowledged as a cause of food insecurity, and yet aid to agriculture halved between 1980 and 2005. Increased support is essential to address chronic rural poverty and low yields, and help smallholders benefit from higher prices.

Oxfam?s report says that the response must go beyond top down humanitarian aid. Governments in poor countries should be supported to implement social protection schemes to help the poorest, such as minimum income guarantees, free seeds and fertilizers for poor farmers, and reduced VAT on food.

Longer-term, political changes are also needed. A priority is the urgent review of compulsory biofuels targets in rich countries to stop their inflationary impact. Recent estimates suggest that increased demand for biofuels accounts for 30 per cent of recent food price rises, while mounting scientific evidence shows biofuels are having an overall negative impact on climate change.

The crisis should also spur reform of the food aid system, with more aid being given as cash or purchased locally, rather than shipped from overseas. The OECD has estimated that an extra $750m a year could be released if rich countries gave food aid as cash rather than in kind.

Completing a global free trade deal along current lines would not help the situation. Developing countries need to be able to respond to shocks, but existing proposals at the WTO would instead lock in liberalisation, removing flexibility and further exposing poor countries to market volatility.

CEO Stocking added: ?An unprecedented level of coordination is required across agencies, governments and the private sector to address this crisis. The vast amount of money spent on averting the financial crisis shows what is possible when there is political will. The cost of failure will not just be measured in lost lives and human suffering, but also in lost credibility.?
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