POVERTY: Food prices have been rising across the world

5 January 2011 World food prices at fresh high, says UN

Global food prices rose to a fresh high in December, according to the UN's Food and Agricultural Organisation (FAO).
Its Food Price Index went above the previous record of 2008 that saw prices spark riots in several countries.
Soaring sugar, cereal and oil prices had driven the rise, the report said.
The index, which measures monthly price changes for a food basket composed of dairy, meat and sugar, cereals and oilseeds, averaged 214.7 points last month, up from 206 points in November.
It stood at 213.5 points at the high of June 2008 - sparking violent protests in countries including Cameroon, Haiti and Egypt.
There were further riots over food prices in Mozambique in September last year.
However, despite high prices, FAO economist Abdolreza Abbassian said that many of the factors that triggered food riots in 2007 and 2008 - such as weak production in poor countries - were not currently present, reducing the risk of more turmoil.
But he added that "unpredictable weather" meant that grain prices could go much higher, which was "a concern".

'Tight situation'
The current spike in prices is being caused primarily by increases in the cost of sugar and, more importantly, cereals, according to the International Food Policy Research Institute.

Price rises from Nov 2010 to Dec 2010
Sugar - 6.7%
Cereals (including wheat, rice, corn) - 6.4%
Oils - 8%
The price of wheat in particular has risen sharply. This is because wildfires last year in Russia, which accounts for 11% of global exports, resulted in an export ban, the institute's director of markets, trade and institutions, Maximo Torero, told the BBC.
The recent floods in Australia, which also accounts for 11% of global exports, has compounded the problem, he said.
The price of corn has also risen, because of greater support for biofuels in the US and the increased price of oil, which makes biofuels more attractive.
Droughts in Argentina, the world's second biggest exporter of corn behind the US, have also pushed the price up, Mr Torero said.
"The situation is very tight. If we have more natural disasters, we could have a problem," he said.

Australian floods
Overall global food prices have risen by an average of more than 80% in the past 10 years, according to figures from the FAO released last year.
Analysts say that as well as environmental issues, fast-growing world population and the increased demand for biofuels has further put pressure on crop supplies.
"Rising food prices will have an effect almost all over the world but especially in poor countries where food and energy are the major things people spend their money on," said George Magnus, senior economic adviser to UBS.
"There's a risk, I wouldn't say a huge risk, but some risk of higher energy prices and higher food prices being very destabilising in some countries.
"We saw that in 2008 and in Mozambique last year and it's something to watch."

'Particularly worrisome'
The news came amid concerns about inflation in the prices of other key commodities.
Copper prices went into 2011 at record highs - in a rally driven by increased demand from the global economic recovery and that fact that most countries are holding low stockpiles.
And the International Energy Agency (IEA) said on Wednesday that the current high price of oil would threaten economic recovery in 2011.
Oil import costs for countries in the Organisation for Economic Co-operation and Development had risen 30% in the past year to $790bn (£508bn), it said.
Mr Magnus said that if oil returned above $100 a barrel this would be "particularly worrisome".
"It could make central bankers nervous, leave them thinking that inflation was getting out of hand and prompt them to raise interest rates faster than they should. That would damage an already fragile recovery," he said.
"And higher commodity prices could sap the world's ability to consume because more and more of our income will be going on energy and food."

http://www.bbc.co.uk/news/business-12119539

POVERTY: Fairtrade criticsm

Fairtrade is accused of doing less for coffee farmers than StarbucksFairtrade's requirements reflect 'whims of western consumers' rather than needs of those in developing world, says report

Simon Bowers The Guardian, Thursday 4 November 2010
Fairtrade is accused of failing coffee farmers in a new report.
Multinational companies such as Starbucks, Kraft and Nestlé do more for developing-world coffee farmers than the Fairtrade Foundation, according to a critical report from a free-market thinktank.
Describing Fairtrade as costly, opaque and substantially unproven, the 130-page report commissioned by the Institute of Economic Affairs (IEA) says: "Fairtrade requirements [on farmers] may well reflect the subjective views of western consumers and not the real needs of poor producers."
The report specifically attacks the Fairtrade Foundation's refusal to accept child labour and genetically modified technology, suggesting these strictures represent "the whims of western consumers" rather than the needs of farmers.
Consistent with the IEA's broader free-market agenda, the paper claims that open, subsidy-free international trade is the best way of advancing the interests of the world's poorest regions.
"Fairtrade rhetoric is often seen as an unreasonable smear campaign against high-end marketeers and retailers who resist the Fairtrade model," says the report by Dundee University lecturer Sushil Mohan.
"In 2000 activist groups … launched an attack on Starbucks for exploiting farmers. Yet, given its size, Starbucks is likely to have done far more than Fairtrade to improve the lot of coffee growers in the countries from which it purchases."
In response, the Fairtrade Foundation said the report was a "flawed, partial analysis". It added: "It is wrong to suggest Fairtrade does not offer a long-term strategy for development.
"In Mali, Fairtrade cotton farmers are earning 50% more than conventional farmers. Some 95% of the children of Mali's Fairtrade organic farmers go to school because farming communities receive more money. This is more than double the national average in the fourth most deprived nation on earth."
The IEA's scathing attack comes after the Fairtrade movement enjoyed one of its most successful periods last year, breaking into the mainstream chocolate market for the first time by signing up the Cadbury's Dairy Milk brand. The group also won a pledge from Starbucks in the UK to only use Fairtrade coffee for its espresso-based drinks.
Fairtrade-certified farming co-operatives receive a "social premium" of between 5% and 10% over the open-market price for their crops, as well as a minimum price guarantee should volatile commodity markets drop below a certain level.
However, the IEA argues that western shoppers looking to make ethical choices may well be duped over how much of the additional price paid for Fairtrade goods at the checkout actually reaches Fairtrade farmers.
It points to speculation that retailers and food groups may be preying on consumers' better nature in order to add their own mark-ups on Fairtrade goods.
The report is not the first time the IEA has attacked the Fairtrade movement and the opposition has been led by Philip Booth, the thinktank's editorial and programme director.
A prominent Catholic, Booth has objected to church literature pushing Fairtrade products. "I have been told [via the Catholic diocese of Arundel website] that not to buy Fairtrade products is a sin worse than theft, that not buying Fairtrade products is making a deliberate choice to take from the poor," he said.
http://www.guardian.co.uk/uk/2010/nov/04/multinations-development-fairtrade-report