Monday, 23 May 2011

MALNUTRITION: Cost of eating spikes for the Arab world

May 20 2011 : Olivia Ward
Let them eat bread. That refrain, from the authoritarian regime of President Hosni Mubarak, kept impoverished Egyptians from violent rebellion for decades. When food riots broke out in 2008, he contained them by promising to keep up the subsidies that were the barrier between malnutrition and starvation for one-third of the country’s 80 million people. The protests that brought down his regime were driven by hunger for democracy rather than bread. But as Egypt and other Arab countries remain volatile, there are fears that spiking grain prices could propel new discontent.
In the past week, wheat prices soared by 17 per cent, a worrying sign for those countries where it is a staple of the diet.
The Arab world buys about one-third of all the world’s traded wheat, says the World Bank, and that’s due to rise by 40 per cent over the next decade.

fo-wheat20“In the U.S., people eat a lot of bread,” says Rami Zurayk of American University of Beirut, an expert in land and water resources. “But imagine a country where they eat about three times that much."
That would be Tunisia, where the Food and Agriculture Organization reports a total of 216 kilograms of wheat a year consumed by every person.
It is the world’s highest level of wheat consumption, and it far outstrips the U.S. and Canadian total of around 80 kilos a year.
But it isn’t unique in the Arab countries, where poverty is persistent, and bread and wheat products the cheapest way of filling a family’s stomachs.
Algeria’s per capita consumption is 210 kilos per year, and Egypt’s 185.
But Egypt is also the world’s leading importer of wheat, and the new transitional government must cope with escalating prices, along with pressure to continue the subsidies that Mubarak began. It’s a practice that other Arab leaders adopted in the hope of keeping their countries tranquil.
“In Egypt the poor aren’t starving, but they live on bread and tea for breakfast, lunch and dinner,” says Bessma Momani, a senior fellow of the Centre for International Governance Innovation. “If you take that away, you will have mass starvation.”
A large number of Egyptians, and other Arab citizens, spend most of their income to feed their families, and those at the bottom of the economic food chain feel the pain the most.
The spiking wheat prices should be good news for producers like Canada — which supplies only a fraction of Egypt’s needs, but sends more than 2 million tonnes of wheat to the Arab region, with Iraq Canada’s biggest client.
The prices are a boon to “farmers with grain in their bins,” says the Canadian Wheat Board.
But it cautions, this year “extremely wet growing and harvest seasons across most of the Prairies resulted in below-average production and quality for wheat, durum and barley,” while production of six major grains dropped 20 per cent, with spring wheat grades the lowest since 2004.
For Arab countries that supply wheat to their people at subsidized prices, the picture is worse.
“The politics taking place today makes it hard for them to cut back or re-target their food subsidies,” says Julian Lampietti of World Bank, who led a 2009 study of Arab food security.
But he adds, although the impact on government budgets is significant in some countries, “it’s probably not unmanageable. The combination of high oil and food prices shows a different effect too.”
While oil-importing countries suffer most, producers may balance the books by taking in bigger oil profits. And, Lampietti says, “there is a lot that can be done to cut down the cost of food,” through better management, including a change in the way grain is procured, unloaded and distributed.
But he warns, “I think we are looking at a new normal in prices. They are more volatile and leveling off at higher levels than in the 1990s.”
“Food prices in the past haven’t gone up the way they have in the last two years,” says Evan Fraser of University of Guelph, author of Empires of Food. “We are experiencing an extraordinary series of shocks to the food system.”
Grain reserves were once believed to be the answer, but the expense of stockpiling, and the opposition of the International Monetary Fund — which pushed indebted countries to reduce reserves for “market efficiency” and import grain when needed — has frayed that safety net. So has real estate speculation that gobbled arable land for development.

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