Why are food prices rising around the world?

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Food prices have been rising around the world. What is behind this trend? Food has now become a commodity for price manipulation and criminal speculation. These articles help to explain the fraud, market manipulation, and forces behind this destabilizing phenomena.

THE EGYPTIAN TINDERBOX: HOW BANKS AND INVESTORS ARE STARVING THE THIRD WORLD

Ellen Brown

February 2nd, 2011

“What for a poor man is a crust, for a rich man is a securitized asset class.”

–Futures trader Ann Berg, quoted in the UK Guardian

Underlying the sudden, volatile uprising in Egypt and Tunisia is a growing global crisis sparked by soaring food prices and unemployment. The Associated Press reports that roughly 40 percent of Egyptians struggle along at the World Bank-set poverty level of under $2 per day. Analysts estimate that food price inflation in Egypt is currently at an unsustainable 17 percent yearly. In poorer countries, as much as 60 to 80 percent of people’s incomes go for food, compared to just 10 to 20 percent in industrial countries. An increase of a dollar or so in the cost of a gallon of milk or a loaf of bread for Americans can mean starvation for people in Egypt and other poor countries.

Follow the Money

The cause of the recent jump in global food prices remains a matter of debate. Some analysts blame the Federal Reserve’s “quantitative easing” program (increasing the money supply with credit created with accounting entries), which they warn is sparking hyperinflation. Too much money chasing too few goods is the classic explanation for rising prices.

The problem with that theory is that the global money supply has actually shrunk since 2006, when food prices began their dramatic rise. Virtually all money today is created on the books of banks as “credit” or “debt,” and overall lending has shrunk. This has occurred in an accelerating process of deleveraging (paying down or writing off loans and not making new ones), as the subprime housing market has collapsed and bank capital requirements have been raised. Although it seems counterintuitive, the more debt there is, the more money there is in the system. As debt shrinks, the money supply shrinks in tandem.

That is why government debt today is not actually the bugaboo it is being made out to be by the deficit terrorists. The flipside of debt is credit, and businesses run on it. When credit collapses, trade collapses. When private debt shrinks, public debt must therefore step in to replace it. The “good” credit or debt is the kind used for building infrastructure and other productive capacity, increasing the Gross Domestic Product and wages; and this is the kind governments are in a position to employ. The parasitic forms of credit or debt are the gamblers’ money-making-money schemes, which add nothing to GDP.

Prices have been driven up by too much money chasing too few goods, but the money is chasing only certain selected goods. Food and fuel prices are up, but housing prices are down. The net result is that overall price inflation remains low.

While quantitative easing may not be the culprit, Fed action has driven the rush into commodities. In response to the banking crisis of 2008, the Federal Reserve dropped the Fed funds rate (the rate at which banks borrow from each other) nearly to zero. This has allowed banks and their customers to borrow in the U.S. at very low rates and invest abroad for higher returns, creating a dollar “carry trade.”

Meanwhile, interest rates on federal securities were also driven to very low levels, leaving investors without that safe, stable option for funding their retirements. “Hot money” – investment seeking higher returns – fled from the collapsed housing market into anything but the dollar, which generally meant fleeing into commodities.

New Meaning to the Old Adage “Don’t Play with Your Food”

At one time food was considered a poor speculative investment, because it was too perishable to be stored until market conditions were right for resale. But that changed with the development of ETFs (exchange-traded funds) and other financial innovations.

As first devised, speculation in food futures was fairly innocuous, since when the contract expired, somebody actually had to buy the product at the “spot” or cash price. This forced the fanciful futures price and the more realistic spot price into alignment. But that changed in 1991. In a revealing July 2010 report in Harper’s Magazine titled “The Food Bubble: How Wall Street Starved Millions and Got Away with It,” Frederick Kaufman wrote:

The history of food took an ominous turn in 1991, at a time when no one was paying much attention. That was the year Goldman Sachs decided our daily bread might make an excellent investment. . . .

Robber barons, gold bugs, and financiers of every stripe had long dreamed of controlling all of something everybody needed or desired, then holding back the supply as demand drove up prices.

As Kaufman explained this financial innovation in a July 16 interview on Democracy Now:

Goldman . . . came up with this idea of the commodity index fund, which really was a way for them to accumulate huge piles of cash for themselves. . . . Instead of a buy-and-sell order, like everybody does in these markets, they just started buying. It’s called “going long.” They started going long on wheat futures. . . . And every time one of these contracts came due, they would do something called “rolling it over” into the next contract. . . . And they kept on buying and buying and buying and buying and accumulating this historically unprecedented pile of long-only wheat futures. And this accumulation created a very odd phenomenon in the market. It’s called a “demand shock.” Usually prices go up because supply is low . . . . In this case, Goldman and the other banks had introduced this completely unnatural and artificial demand to buy wheat, and that then set the price up. . . . [H]ard red wheat generally trades between $3 and $6 per sixty-pound bushel. It went up to $12, then $15, then $18. Then it broke $20. And on February 25th, 2008, hard red spring futures settled at $25 per bushel. . . . [T]he irony here is that in 2008, it was the greatest wheat-producing year in world history.

. . . [T]he other outrage . . . is that at the time that Goldman and these other banks are completely messing up the structure of this market, they’ve protected themselves outside the market, through this really almost diabolical idea called “replication” . . . . Let’s say, . . . you want me to invest for you in the wheat market. You give me a hundred bucks . . . . [W]hat I should be doing is putting a hundred bucks in the wheat markets. But I don’t have to do that. All I have to do is put $5 in. . . . And with that $5, I can hold your hundred-dollar position. Well, now I’ve got ninety-five of your dollars. . . . [W]hat Goldman did with hundreds of billions of dollars, and what all these banks did with hundreds of billions of dollars, is they put them in the most conservative investments conceivable. They put it in T-bills. . . . [N]ow that you have hundreds of billions of dollars in T-bills, you can leverage that into trillions of dollars. . . . And then they take that trillion dollars, they give it to their day traders, and they say, “Go at it, guys. Do whatever is most lucrative today.” And so, as billions of people starve, they use that money to make billions of dollars for themselves.

Other researchers have concurred in this explanation of the food crisis. In a July 2010 article called “How Goldman Sachs Gambled on Starving the World’s Poor – And Won,” journalist Johann Hari observed:

Beginning in late 2006, world food prices began rising. A year later, wheat price had gone up 80 percent, maize by 90 percent and rice by 320 percent. Food riots broke out in more than 30 countries, and 200 million people faced malnutrition and starvation. Suddenly, in the spring of 2008, food prices fell to previous levels, as if by magic. Jean Ziegler, the UN Special Rapporteur on the Right to Food, has called this “a silent mass murder”, entirely due to “man-made actions.”

Some economists said the hikes were caused by increased demand by Chinese and Indian middle class population booms and the growing use of corn for ethanol. But according to Professor Jayati Ghosh of the Centre for Economic Studies in New Delhi, demand from those countries actually fell by 3 percent over the period; and the International Grain Council stated that global production of wheat had increased during the price spike.

According to a study by the now-defunct Lehman Brothers, index fund speculation jumped from $13 billion to $260 billion from 2003 to 2008. Not surprisingly, food prices rose in tandem, beginning in 2003. Hedge fund manager Michael Masters estimated that on the regulated exchanges in the U.S., 64 percent of all wheat contracts were held by speculators with no interest whatever in real wheat. They owned it solely in anticipation of price inflation and resale. George Soros said it was “just like secretly hoarding food during a hunger crisis in order to make profits from increasing prices.”

An August 2009 paper by Jayati Ghosh, professor at the Centre for Economic Studies and Planning at Jawaharlal Nehru University in New Dehli, compared food staples traded on futures markets with staples that were not. She found that the price of food staples not traded on futures markets, such as millet, cassava and potatoes, rose only a fraction as much as staples subject to speculation, such as wheat.

Nomi Prins, writing in Mother Jones in 2008, also blamed the price hikes on speculation. She observed that agricultural futures and energy futures were being packaged and sold just like CDOs (collateralized debt obligations), but in this case they were called CCOs (collateralized commodity obligations). The higher the price of food, the more CCO investors profited. She warned:

[W]ithout strong regulation of electronic exchanges and the derivatives products that enable speculators to move huge proportions of the futures markets underlying commodities, putting a bit of regulation into the London-based exchanges will not alleviate anything. Unless that’s addressed, this bubble is going to take more than homes with it. It’s going to take lives.

What Can Be Done?

According to Kaufman, the food bubble has now increased the ranks of the world’s hungry by 250 million. On July 21, 2010, President Obama signed a Wall Street reform bill that would close many of the regulatory loopholes allowing big financial institutions to play in agriculture commodity futures markets, but Kaufman says the bill’s solutions are not likely to work. Wall Street innovators can devise new ways to speculate that easily dance around cumbersome, slow-to-pass legislation. Attempts to ban all food speculation are also unlikely to work, he says, since firms can pick up the phone and do their trades through London, or arrange over-the-counter (private) swaps.

As an alternative, Kaufman suggests a worldwide or national grain reserve, so that regulators can bring wheat into the market when needed to stabilize prices. He notes that we actually kept a large grain reserve in the Clinton era, before the mania for deregulation. President Franklin Roosevelt pledged to maintain a large grain reserve in his second Agricultural Adjustment Act in 1938.

Chris Cook, former director of a global energy exchange, maintains:

The only long term solution is to completely re-architect markets. Firstly, cutting out middlemen — which is a process already under way. Secondly, a new settlement between producer and consumer nations — a Bretton Woods II.

Speculative markets today are driven more by fear, says Cook, than by greed. Investors are looking for something safe that will give them an adequate return, which means something they can live on in retirement. They need these investments because their employers and the government do not provide an adequate safety net.

At one time, federal securities were a safe and adequate investment for retirees. Then federal interest rates plunged, and investors moved into municipal bonds. Now that market too is collapsing, due to threats of bankruptcy among bond issuers. Cities, counties and states floundering from the credit crisis have been denied access to the quantitative easing tools used to bail out the banks — although it was the banks, not local governments, that caused the crisis. See “The Fed Has Spoken: No Bailout for Main Street.”

Meanwhile, pensions are being slashed and social security is under attack. Arguably, along with the grain reserves institutionalized under Franklin Roosevelt, we need an Economic Bill of Rights of the sort he envisioned, one that would guarantee citizens at least a bare minimum standard of living. This could be done through job guarantees when people were able to work and social security when they were not. The program could be funded with government-created credit or government-bank-created credit, and this could be done without causing hyperinflation. To support that contention would take more space than is left here, but the subject has been tackled in my book Web of Debt. In the meantime, the credit needed to get local economies up and running again can be furnished through publicly-owned banks. For more on that possibility, see http://PublicBankingInstitute.org.

Source: http://www.webofdebt.com/articles/egyptian_tinderbox.php

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The 25 Countries Whose Governments Could Get Crushed By Food Price Inflation

Food inflation is now a reality for much of the world. It contributed to the overthrow of the Tunisian government, has led to riots across the Middle East and North Africa, driven up costs in China and India, and may only be getting started. Whether you blame a bad crop or bad monetary policy, food inflation is here. Nomura produced a research report detailing the countries that would be crushed in a food crisis. One, Tunisia, has already seen its government overthrown. Their description of a food crisis is a prolonged price spike. They calculate the states that have the most to lose by a formula including:

  • Nominal GDP per capita in USD at market exchange rates.
  • The share of food in total household consumption.
  • Net food exports as a percentage of GDP.

We’ve got the top 25 countries in danger here and the list, including a major financial center, may surprise you.

#1 Bangladesh

  • GDP per capita in USD: $497
  • Food as a percentage of total household consumption: 53.8%
  • Net food exports (as percentage of GDP): -3.3%

#2 Morocco

  • GDP per capita in USD: $2,769
  • Food as a percentage of total household consumption: 63.0%
  • Net food exports (as percentage of GDP): -2.1%

#3 Algeria

  • GDP per capita in USD: $4,845
  • Food as a percentage of total household consumption: 53.0%
  • Net food exports (as percentage of GDP): -2.8%

#4 Nigeria

  • GDP per capita in USD: $1,370
  • Food as a percentage of total household consumption: 73.0%
  • Net food exports (as percentage of GDP): -0.9%

#5 Lebanon

  • GDP per capita in USD: $6,978
  • Food as a percentage of total household consumption: 34.0%
  • Net food exports (as percentage of GDP): -3.9%

#6 Egypt

  • GDP per capita in USD: $1,991
  • Food as a percentage of total household consumption: 48.1%
  • Net food exports (as percentage of GDP): -2.1%

#7 Sri Lanka

  • GDP per capita in USD: $2,013
  • Food as a percentage of total household consumption: 39.6%
  • Net food exports (as percentage of GDP): -2.7%

#8 Sudan

  • GDP per capita in USD: $1,353
  • Food as a percentage of total household consumption: 52.9%
  • Net food exports (as percentage of GDP): -1.3%

#9 Hong Kong

  • GDP per capita in USD: $30,863
  • Food as a percentage of total household consumption: 25.8%
  • Net food exports (as percentage of GDP): -4.4%

#10 Azerbaijan

  • GDP per capita in USD: $5,315
  • Food as a percentage of total household consumption: 60.2%
  • Net food exports (as percentage of GDP): -0.6%

#11 Angola

  • GDP per capita in USD: $4,714
  • Food as a percentage of total household consumption: 46.1%
  • Net food exports (as percentage of GDP): -1.4%

#12 Romania

  • GDP per capita in USD: $9,300
  • Food as a percentage of total household consumption: 49.4%
  • Net food exports (as percentage of GDP): -1.1%

#13 Philippines

  • GDP per capita in USD: $1,847
  • Food as a percentage of total household consumption: 45.6%
  • Net food exports (as percentage of GDP): -1.0%

#14 Kenya

  • GDP per capita in USD: $783
  • Food as a percentage of total household consumption: 45.8%
  • Net food exports (as percentage of GDP): -0.8%

#15 Pakistan

  • GDP per capita in USD: $991
  • Food as a percentage of total household consumption: 47.6%
  • Net food exports (as percentage of GDP): -0.4%

#16 Libya

  • GDP per capita in USD: $14,802
  • Food as a percentage of total household consumption: 37.2%
  • Net food exports (as percentage of GDP): -1.7%

#17 Dominican Republic

  • GDP per capita in USD: $4,576
  • Food as a percentage of total household consumption: 38.3%
  • Net food exports (as percentage of GDP): -1.1%

#18 Tunisia

  • GDP per capita in USD: $3,903
  • Food as a percentage of total household consumption: 36.0%
  • Net food exports (as percentage of GDP): -1.1%

#19 Bulgaria

  • GDP per capita in USD: $6,546
  • Food as a percentage of total household consumption: 49.5%
  • Net food exports (as percentage of GDP): -0.1%

#20 Ukraine

  • GDP per capita in USD: $3,899
  • Food as a percentage of total household consumption: 61.0%
  • Net food exports (as percentage of GDP): 0.9%

#21 India

  • GDP per capita in USD: $1,017
  • Food as a percentage of total household consumption: 49.5%
  • Net food exports (as percentage of GDP): 0.3%

#23 Latvia

  • GDP per capita in USD: $14,908
  • Food as a percentage of total household consumption: 34.3%
  • Net food exports (as percentage of GDP): -1.1%

#24 Vietnam

  • GDP per capita in USD: $1,051
  • Food as a percentage of total household consumption: 50.7%
  • Net food exports (as percentage of GDP): 0.8%

#25 Venezuela

  • GDP per capita in USD: $11,246
  • Food as a percentage of total household consumption: 32.6%
  • Net food exports (as percentage of GDP): -1.0%

Source: http://www.businessinsider.com/governments-food-price-inflation-2011-1?slop=1


Who Benefits From High Food Prices?

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In this article way back in 2008 Nomi Prins rightly argues its market speculators like Goldman Sachs and cohorts that are behind the rise in food prices. As Monsanto and ADM post records profits, the poor the getter poorer, and food prices are increasing.

By Nomi Prins | Wed Jun. 18, 2008


Forget subprime. The next price bubble to watch is food speculation.

Last week, new consumer price data [1] released by the US Labor Department confirmed what most shoppers already suspected: Food prices, which took their biggest one-month leap in nearly two decades in April, rose even further in May. Energy costs, too, went up last month. The big question, though, is why?

At the financial leaders G8 summit [2] that wrapped up over the weekend, food and oil speculation were front and center.And G8 leaders aren’t the only ones expressing concern over traders profiting from the world’s pain. Major hedge-fund stars like George Soros and Michael Masters are also screaming moral foul on commodity speculation—a clear signal there’s more fire than smoke on the horizon.

US Food and Gas Expenditures as % of Income

As Masters told [3] a Senate committee last month, “Institutional investors have purchased over 2 billion bushels of corn futures in the last five years. [They] have stockpiled enough corn futures to potentially fuel the entire United States ethanol industry at full capacity for a year.”

Indeed, the current agricultural price bubble has produced record highs in soybeans and wheat as well. Against this backdrop, a clueless Congress passed US farmer and food-stamp aid within the recent farm bill, without addressing the possibility that speculation could be to blame, or that curtailing speculation could help alleviate the domestic and global food crisis. They should have looked toWall Street’s lead.

The latest grain and oilseed trading report from the Chicago Mercantile Exchange cited first quarter of 2008 trading volume up 32 percent over the last quarter of 2007. That’s extra money coming in from speculators, not corn or wheat farmers hedging their crop prices in case of bad weather.

Additionally, the hot new favorite among traders is betting on packages of energy and agricultural futures. Called CCO’s (collateralized commodity obligations), they are like their subprime cousins, CDO’s (collateralized debt obligations). Their performance is linked to rising commodity prices; the higher the prices, the more profit to the CCO.

There’s another group, besides the standard speculator crew, literally reaping extreme profits from the price squeezes—the crop equivalents of Exxon, multinational agricultural biotechnology corporations. Monsanto, which recently told the 12th Annual Goldman Sachs Agricultural Biotech Forum that its profits would double by 2012, is buzzing (PDF) [4]; the firm’s stock price doubled during the past year. ADM, the nation’s second-largest ethanol producer, saw its annual revenues increase by 64 percent. Even agriculture conglomerate Cargill’s third-quarter profits rose 86 percent.

Last week, a group of senators led by Carl Levin (D-Mich.) introduced the Close the London Loophole Act, which would curtail a situation that allows speculators to bypass all Commodity Futures Trading Commission regulations by trading on foreign exchanges.

But without strong regulation of electronic exchanges and the derivatives products that enable speculators to move huge proportions of the futures markets underlying commodities, putting a bit of regulation into the London-based exchanges will not alleviate anything. Unless that’s addressed, this bubble is going to take more than homes with it. It’s going to take lives.

Nomi Prins – Book TV: After Words: Nomi Prins, \”It Takes a Pillage\”


Poor Haitians Resort to Eating Dirt Mud Cakes

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Rising Food Costs Force Haiti’s Poor to Resort to Eating Dirt

PORT-AU-PRINCE, Haiti

It was lunchtime in one of Haiti’s worst slums, and Charlene Dumas was eating mud. With food prices rising, Haiti’s poorest can’t afford even a daily plate of rice, and some take desperate measures to fill their bellies. Charlene, 16 with a 1-month-old son, has come to rely on a traditional Haitian remedy for hunger pangs: cookies made of dried yellow dirt from the country’s central plateau.

The mud has long been prized by pregnant women and children here as an antacid and source of calcium. But in places like Cite Soleil, the oceanside slum where Charlene shares a two-room house with her baby, five siblings and two unemployed parents, cookies made of dirt, salt and vegetable shortening have become a regular meal.

Yolen Jeunky arranges dried mud cookies for sale in a bucket in Cite Soleil in Port-au-Prince, Nov. 29, 2007. (Ariana Cubillos/ AP Photo)

“When my mother does not cook anything, I have to eat them three times a day,” Charlene said. Her baby, named Woodson, lay still across her lap, looking even thinner than the slim 6 pounds 3 ounces he weighed at birth.

Though she likes their buttery, salty taste, Charlene said the cookies also give her stomach pains. “When I nurse, the baby sometimes seems colicky too,” she said.

Food prices around the world have spiked because of higher oil prices, needed for fertilizer, irrigation and transportation. Prices for basic ingredients such as corn and wheat are also up sharply, and the increasing global demand for biofuels is pressuring food markets as well.

A woman dries mud cookies in the sun on the the roof of Fort Dimanche, once a prison, in Port-au-Prince, Haiti, Nov. 29, 2007. Rising prices and food shortages are threatening Haiti’s fragile stability, and the mud cookies, made of dirt, salt and vegetable shortening, are one of very few options the poorest people have to stave off hunger. (Ariana Cubillos/ AP Photo)

The problem is particularly dire in the Caribbean, where island nations depend on imports and food prices are up 40 percent in places.

The global price hikes, together with floods and crop damage from the 2007 hurricane season, prompted the U.N. Food and Agriculture Agency to declare states of emergency in Haiti and several other Caribbean countries. Caribbean leaders held an emergency summit in December to discuss cutting food taxes and creating large regional farms to reduce dependence on imports.

At the market in the La Saline slum, two cups of rice now sell for 60 cents, up 10 cents from December and 50 percent from a year ago. Beans, condensed milk and fruit have gone up at a similar rate, and even the price of the edible clay has risen over the past year by almost $1.50. Dirt to make 100 cookies now costs $5, the cookie makers say.

The hand of a woman is covered in mud as she makes mud cookies on the roof of Fort Dimanche, Nov. 30, 2007. (Ariana Cubillos/ AP Photo)

Still, at about 5 cents apiece, the cookies are a bargain compared to food staples. About 80 percent of people in Haiti live on less than $2 a day and a tiny elite controls the economy.

Merchants truck the dirt from the central town of Hinche to the La Saline market, a maze of tables of vegetables and meat swarming with flies. Women buy the dirt, then process it into mud cookies in places such as Fort Dimanche, a nearby shanty town.

Carrying buckets of dirt and water up ladders to the roof of the former prison for which the slum is named, they strain out rocks and clumps on a sheet, and stir in shortening and salt. Then they pat the mixture into mud cookies and leave them to dry under the scorching sun.

The finished cookies are carried in buckets to markets or sold on the streets.

A reporter sampling a cookie found that it had a smooth consistency and sucked all the moisture out of the mouth as soon as it touched the tongue. For hours, an unpleasant taste of dirt lingered.

Assessments of the health effects are mixed. Dirt can contain deadly parasites or toxins, but can also strengthen the immunity of fetuses in the womb to certain diseases, said Gerald N. Callahan, an immunology professor at Colorado State University who has studied geophagy, the scientific name for dirt-eating.

Haitian doctors say depending on the cookies for sustenance risks malnutrition.

Yolen Jeunky prepares cookies made of dirt, water, salt and butter on the the roof of Fort Dimanche. (Ariana Cubillos/ AP Photo)

“Trust me, if I see someone eating those cookies, I will discourage it,” said Dr. Gabriel Thimothee, executive director of Haiti’s health ministry.

Marie Noel, 40, sells the cookies in a market to provide for her seven children. Her family also eats them.

“I’m hoping one day I’ll have enough food to eat, so I can stop eating these,” she said. “I know it’s not good for me.”

By JONATHAN M. KATZ Associated Press Writer
Jan 29, 2008
The Associated Press

Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

The cost of food: facts and figures

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Explore the facts and figures behind the rising price of food across the globe.

The World Bank has announced emergency measures to tackle rising food prices around the world.

World Bank head Robert Zoellick warned that 100 million people in poor countries could be pushed deeper into poverty by spiralling prices.

The crisis has sparked recent food riots in several countries including Haiti, the Philippines and Egypt.

The World Bank endorsed Mr Zoellick’s “new deal” action plan for a long-term boost to agricultural production.

Emergency help would include an additional $10m (£5m) to Haiti, where several people were killed in food riots last week, and a doubling of agricultural loans to African farmers.

Starvation risk

Mr Zoellick’s proposals were endorsed by the World Bank’s steering committee of finance and development ministers at a meeting in Washington.

We have to put our money where our mouth is now so that we can put food into hungry mouths
Robert Zoellick
World Bank head

The World Bank and its sister organisation, the IMF, have held a weekend of meetings that addressed rising food and energy prices as well as the credit crisis upsetting global financial markets.

The leader of the International Monetary Fund last week said hundreds of thousands of people were at risk of starvation because of food shortages.

Prices have risen sharply in recent months, driven by increased demand, poor weather in some countries that has ruined crops and reduced production area, thanks to an increase in the use of land to grow crops for transport fuels.

The price of staple crops such as wheat, rice and corn have all risen, leading to an increase in overall food prices of 83% in the last three years, the World Bank has said.

GLOBAL FOOD PRICE RISES
Wheat: 130%
Soya: 87%
Rice: 74%
Corn: 31%
Time: Year to March 2008
Source: Bloomberg

The sharp rises have led to protests and unrest in many countries, including Egypt, Ivory Coast, Ethiopia, the Philippines and Indonesia.

In Haiti, protests last week turned violent, leading to the deaths of five people and the fall of the government.

Restrictions on rice exports have been put in place in major producing countries such as India, China, Vietnam and Egypt.

Importers such as Bangladesh, the Philippines and Afghanistan have been hit hard.

Rich urged to act

“We have to put our money where our mouth is now so that we can put food into hungry mouths,” Mr Zoellick said. “It’s as stark as that.”

He called for more aid to provide food to needy people in poor countries and help for small farmers. He said the World Bank was working to provide money for seeds for planting in the new season.

He also urged wealthy donor countries to quickly fill the World Food Programme’s estimated $500m (£250m) funding shortfall.

Mr Zoellick’s “New Deal for Global Food Policy” also seeks to boost agricultural policy in poor countries in the longer-term.

On Saturday, the head of the IMF, Dominique Strauss-Kahn, warned of mass starvation and other dire consequences if food prices continued to rise sharply.

“As we know, learning from the past, those kind of questions sometimes end in war,” he said.

He said the problem could lead to trade imbalances that may eventually affect developed nations, “so it is not only a humanitarian question”.

Story from BBC NEWS:
http://news.bbc.co.uk/go/pr/fr/-/1/hi/business/7344892.stm

Published: 2008/04/14 11:02:54 GMT


Holy Szmolinsky – Monster Bunnies heading for North Korea

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Giant Rabbits Hit the Big Screen

By Michael Scott Moore in Berlin

A German breeder of huge hares has hit the big time. A short film about a plan to send monster bunnies to North Korea for food was part of the Berlin Film Festival. It seems that Communist functionaries ate the rabbits before they could benefit the poor.

A German pensioner who made headlines last year for breeding giant rabbits — and selling a batch to North Korea with the idea of easing hunger — is the subject of a short documentary by an American director in the the 2008 Berlin Film Festival. Director Julius Onah made the five-minute film — a clip can be seen by clicking on the video below — after reading about Karl Szmolinsky on SPIEGEL ONLINE. And in doing so, he learned that the rabbits may have been eaten by North Korean functionaries instead of the starving people for whom they were intended.

Szmolinsky is a 68-year-old German living in Eberswalde, near Berlin, who won a prize for breeding a 10.5-kilogram (23.1 pound) rabbit named Robert in 2006. Robert was the size of a small dog. When North Korean leaders saw photos of him they contacted Szmolinsky through a breeding federation, hoping to purchase a line of “German Giant Grays” to alleviate hunger in their hermetic Communist state.

Szmolinsky grew up in East Germany, and he agreed to help. He sold a dozen to the North Koreans at a cut rate — 80 euros instead of the going rate of 200 or 250 euros — and told SPIEGEL ONLINE in early 2007 that the 12 rabbits could produce 60 babies a year. Each animal, he estimated, would feed about eight people. “They’ll be used to help feed the population,” he said at the time. “I’ve sent them 12 rabbits so far; they’re in a petting zoo for now. I’ll be travelling to North Korea in April to advise them on how to set up a breeding farm. A delegation was here and I’ve already given them a book of tips.”

After reading about Szmolinsky during a visit to Germany in January 2007, Onah assembled a film crew. He visited Szmolinsky in the wake of worldwide publicity about his anti-hunger scheme, on a day when the rabbit breeder was fielding phone calls from complete strangers who objected to his deal with the North Koreans.

“We actually didn’t spend that much time talking about the rabbits,” said Onah. “We spent most of our time talking about conditions in East Germany, both before and after the fall of the Wall.” But concerned strangers had started complaining to Szmolinsky for sending live animals to North Korea, where animal-rights standards aren’t up to snuff.

The resulting short, called “Szmolinsky,” concentrates on the harassing phone calls.

Onah, 25, is a graduate student at New York University’s film school and he made “Szmolinsky” to fulfill a class assignment. The film is evocative but not detailed; Onah spent a total of four hours with Szmolinsky and only later learned what became of his project to feed North Korea.

“In April of ’07 Szmolinsky was supposed to go to North Korea himself and oversee the breeding of the rabbits,” Onah told SPIEGEL ONLINE. “But some time between January and April he found out that the rabbits he sent got eaten (by senior officials). All 12 of them. So he refused to cooperate (more…) with the North Koreans.”

Meanwhile the South Korean government has contacted Szmolinsky. “The South Koreans would like him to send his rabbits there,” said Onah, “and they sent this letter which even apologized for the behavior of their neighbors in the north.”

Szmolinsky himself attended the Berlinale premiere of the film with one of his giant rabbits on February 8. Onah said he might make a longer film about the story, given funding and time — he’s interested in the parallels between a divided Cold-War Germany and a divided Korean peninsula — but right now other projects are crowding his schedule.

Monster German Bunnies Rabbits Bunny

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Camel Burgers – “Where’s the Camel?”

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ALISON BEVEGE, The Northern Territory News Pty. Ltd. Copyright © January 30th, 2008

ONE Territory business has cooked up a solution to the feral camel problem and it smells a lot like dinner.

Central Australian meat producer Territory Camel is selling camel steaks and sausages throughout the Territory and is now planning to export to up to 26 countries.

Camel meat is said to taste a lot like beef but is very low in cholesterol.

It is also free of pesticide residues and chemicals.

Territory Camel managing director Garry Dann has been a pastoralist for years. Two years ago he restarted an abandoned abattoir 30km northwest of Alice Springs to process free-range beef and camel meat.

But he sees real growth prospects in the dromedaries. Mr Dann said he is seeking to gain tier 1 accreditation for the abattoir with the Australian Quarantine Inspection Service, which would enable him to export.

“Mainly to the Middle Eastern countries such as the UAE – they like camel there,” he said.

More than 600,000 feral camels roam the NT, causing environmental degradation and plaguing pastoralists who often call for culls.

But a full-grown male camel is worth $300 at the abattoir.

“It’s a great resource,” Mr Dann said.

“I don’t like seeing them shot and wasted – they’re good meat.”

Boning, packing and management of animals in the paddocks creates work for remote indigenous people.

Mr Dann is already employing remote indigenous people from Central Australia, including the southwest of the NT and the Anangu Pitjantjatjara Yankunytjatjara lands to bring camels in to process.

“Where in Alice a mob of 60-70 is a big mob, in the APY lands you get mobs of 700 to 1500 or better,” he said.

Mr Dann said if he gets tier 1 accreditation, he will move from processing about 40 camels per week to 200.

Territory Camel sells camel steaks, mince and sausages through consumer outlets in Darwin and also Alice Springs.

Company spokeswoman Sarah Debney said the biggest challengefor the company was creating consumer demand.

“Once a person has tried camel meat the yuck factor is dispelled,” she said.

“Camel meat tastes so similar to beef that even expert cattlemen have been tricked over a camel T-bone.”

Chinese Fried Rat or Was that Chicken?

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This dish looks really familiar. I am going to stick to beef, next time.