High Food Prices and Food Security Dr Hafez Ghanem Assistant Director General Economic and Social Development, FAO Study Days– EPP-ED Group Paris, 4 July.

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Presentation transcript:

High Food Prices and Food Security Dr Hafez Ghanem Assistant Director General Economic and Social Development, FAO Study Days– EPP-ED Group Paris, 4 July 2008

The Issue: High Food Prices

Three Messages High prices are partly a reflection of a long run phenomenon of increasing demand for food products. High prices are leading to an increase in hunger in the world, we estimate an additional 50 million hungry people. International action is needed to increase investment and coordinate policies.

Explanations for High Prices Low Stock Levels Bad weather (climate change?) High oil prices Increased demand from emerging countries Bio-fuels Financial crisis and speculation Prices are Expected to Remain High

Low Level of Stocks

Energy-food prices relationships at the aggregate level... simple correlation coefficient r=0.62 simple correlation coefficient r=0.77

Cereal imports and exports from China and India

Bio-fuels Demand is Increasing very Fast

Food Prices Are Expected to Remain High

Impact of High Prices THE NUMBER OF HUNGRY POPLE IN THE WORLD IS INCREASING Everybody is hurt but mostly the poor Women in developing countries are more affected than men Macro-economic implications for low income countries

An Increase in Undernourishment

The Poor are More Affected by Food Prices

The Poor are Food Buyers Share of dollar-day poor households UrbanRuralAll Bangladesh, Pakistan Vietnam, Guatemala Ghana Malawi Madagascar,

Impact on household welfare of a 10 percent increase in maize prices in Malawi Per capita expenditure quintiles 12345All Rural Urban Total

Women Are more Affected than Men

Coordinated International Action is needed Safety nets and food aid Urgent support to farmers in developing countries Increase investment in developing country agriculture Improve international policy coordination

Food Aid is Declining

LDC Farmers Have no Incentive to Increase Production

More Support to LDC Agriculture is Needed To meet growing demands for food and biofuels production needs to rise, especially in developing countries. Agriculture’s share in ODA fell from 17% to 4% over 25 years. Only 4% of cropped land in Africa is irrigated. Investment in R&D in developing countries is 0.6% of agricultural GDP compared to more than 5% in OECD.

Diverse Policy Responses

Thank you!