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News : International Last Updated: Apr 24, 2009 - 5:31:05 PM


UN's World Food Programme considers rationing food aid: Irish Minister "robustly" defends agriculture protections apparently oblivious to the rapid changes in world markets
By Michael Hennigan, Founder and Editor of Finfacts
Feb 25, 2008 - 5:36:15 AM

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WFP Executive Director Josette Sheeran, AC Milan and Brazilian soccer star, Kaka', and Evans and Ilham, two schoolchildren from Ghana at the "Fill the Cup" launch in Milan, Italy  - - A major international fundraising and awareness initiative to benefit millions of hungry school children worldwide was announced in early February 2008, by the world’s largest humanitarian agency – the United Nations World Food Programme (WEF).

“Fill the Cup” aims, literally, to fill a cup with food for all of the 59 million children who go to school hungry throughout developing countries around the world – boosting their chances for health, education and a more promising future.

“A child dies of hunger every six seconds. WHO has declared hunger and malnutrition the number-one threat to public health,” said Josette Sheeran, Executive Director of the World Food Programme.

The world's largest humanitarian agency, the UN's World Food Programme (WEF) agency, is planning to ration food aid because of spiralling agricultural commodity prices. Meanwhile, the Irish Minister of State for Trade and Commerce, John McGuinness "robustly defended" Irish agriculture interests in trade talks last week, apparently oblivious to the rapid changes in world markets.


The Financial Times reports that the WEF is holding crisis talks to decide what aid to halt if new donations do not arrive in the short term.

Josette Sheeran, WFP Executive Director, told the FT that the agency would look at "cutting the food rations or even the number or people reached" if donors did not provide more money.

"Our ability to reach people is going down just as the needs go up," she said.

WFP officials report that the agency's budget requirements were rising by several million dollars a week because of climbing food prices.

The FT says that the WFP crisis talks come as the body sees the emergence of a "new area of hunger" in developing countries where even middle-class, urban people are being "priced out of the food market" because of rising food prices.

The New York Times, in a report from Amman, the capital of Jordan today, says that even as it enriches Arab rulers, the recent oil-price boom is helping to fuel an extraordinary rise in the cost of food and other basic goods that is squeezing the region’s middle class and setting off strikes, demonstrations and occasional riots from Morocco to the Persian Gulf.

In Jordan, the cost of maintaining fuel subsidies amid the surge in prices forced the government to remove almost all the subsidies this month, sending the price of some fuels up 76 percent overnight. In a devastating domino effect, the cost of basic foods like eggs, potatoes and cucumbers doubled or more.


In Saudi Arabia, where inflation had been virtually zero for a decade, it recently reached an official level of 6.5 percent, though unofficial estimates put it much higher. Public protests and boycotts have followed, and 19 prominent clerics posted an unusual statement on the Internet in December warning of a crisis that would cause “theft, cheating, armed robbery and resentment between rich and poor.”

The Times says that inflation has many causes, from rising global demand for commodities to the monetary constraints of currencies pegged to the weakening American dollar. But one cause is the skyrocketing price of oil itself, which has quadrupled since 2002. It is helping push many ordinary people toward poverty even as it stimulates a new surge of economic growth in the gulf.

Egypt has extended food rationing system for the first time in two decades while Pakistan has reintroduced a ration card system.

Food prices have been fuelled by rising demand in the emerging Asian economies, the use of food crops in biofuel production and damaging weather conditions - from drought to floods, to snow in China.  On Friday, soyabean prices hit an all-time high of $14.22 a bushel while corn prices jumped to a fresh 12-year high of $5.25 a bushel.

The US Department of Agriculture, which in January said that US wheat stocks are at a 60-year low,  last week said that the 2008/09 outlook reflects "record current year prices for wheat, corn, and soybeans, and continued expansion in biofuels production. Record prices are forecast again in 2008/09 for wheat, corn, and soybeans, boosting expected producer returns and driving prospects for combined acreage for the three major field crops to the highest level since the mid 1980s."

Source: FAO

The UN's Food and Agriculture Organization (FAO) said in a report in early February that the cereal import bill for poor countries is projected to rise by 35 percent for the second consecutive year. The report also said:

Early prospects point to the possibility of a significant increase in world cereal production in 2008, mainly following expansion of winter grain plantings in Europe and the United States coupled with generally satisfactory weather conditions.

International prices of most cereals remain high and some are still on the increase. Continuing strong demand and dwindling stocks are providing the backdrop to a prevailing tight global cereal supply and demand situation in the current 2007/08 marketing season, keeping upward pressure on international markets.

Cereal imports of the LIFDCs (Low Income food Deficit Countries) as a group in 2007/08 are forecast to decline by about 2 percent but as a result of soaring international cereal prices and freight rates, the cereal import bill is projected to rise by 35 percent for the second consecutive year. A higher increase is projected for Africa. Prices of basic food have increased in many countries across the world mostly affecting vulnerable populations.

The aggregate level of world trade in cereals is expected to peak in 2007/08, driven mainly by a sharp rise in demand for coarse grains, especially for feed use in the EU.

In North Africa, early prospects for the 2008 winter cereal crops are mixed but in Southern Africa the overall outlook is satisfactory, despite severe localized floods. In Eastern Africa, another bumper cereal crop was gathered in 2007 but poor secondary crops are been harvested in Kenya and Somalia.

In Asia, early indications point to a 2008 aggregate wheat crop around last year’s record level. However, in several central Asian countries, particularly China, Mongolia, Afghanistan and Tajikistan, extreme cold weather has caused crop and livestock losses. In South America, overall prospects for the 2008 maize crop are satisfactory, but the outlook is uncertain in Argentina. In Bolivia, severe floods have resulted in crop and livestock losses.

AC Milan and Brazil soccer star footballer Kaka’, WFP Ambassador Against Hunger and the face of the "Fill the Cup" campaign in Italy.

Irish Concerns on WTO Trade talks "robustly defended"

Meanwhile, the Irish Minister of State for Trade and Commerce, John McGuinness TD met with the EU Trade Commissioner Peter Mandelson in Brussels last week, to discuss recent developments in the current round of WTO (World Trade Organization) talks on the Doha agenda. The Minister said that he "outlined clearly Irish concerns on the direction the talks are taking that affect Irish Business and Agriculture."

The Minister "emphasised to Commissioner Mandelson the necessity that negotiations deliver real and clearly positive outcomes for Ireland."

Pandering to the farm lobby that is keen to maintain supports for the average farmer's income of up to 80 percent from EU funds, may be expected in the Irish system of clientism, but the changing dynamics and opportunities at international level in recent years, should have some impact on the default script. 

After the meeting the Minister said “I am deeply concerned about the direction of the negotiations and I made this very clear to the Commissioner. Many aspects of what is now under discussion in Geneva are clearly unacceptable and would, if accepted, lead to an unbalanced outcome”. The Minister stressed the importance of the October 2005 offer and the limits of the Commission Mandate, and indicated that Ireland is not by any means alone in its concerns on these points.

Ireland, favours free trade for exports of goods and services but not in agriculture.

McGuinness said that "what is now on offer will seriously damage important agricultural sectors such as beef and dairy interests. At the same time, negotiations have not achieved anything like the ambitious expectations that the talks would deliver positive and tangible benefits for business."

"We will continue to strongly defend both our agriculture and business interests in future negotiations," McGuinness concluded

Negotiators at the trade talks in Geneva were reported last week to be making trade-offs between agriculture and industrial goods in the long-running Doha round as they seek to reach a deal to open up world trade this year.

At this stage countries are making demands not concessions but there is said to be an explicit linkage between the two sectors, which is a crucial step in reaching an overall deal.

India for example, has high tariffs on industrial imports - at an average above 30 percent.

A deal on cutting tariffs on industrial goods by developing countries and developed world countries reducing agricultural subsidies and market barriers, will have to be reached soon as approval of the US Congress before the election season hits high gear, is essential.

Finfacts Report: Ireland's 40-year bonanza of foreign aid from the European Union will amount to €41 billion by the time we become a net contributor in 2013

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