Food Crisis Changing Structures, Triggers, & Panic Reactions Steve Wiggins Overseas Development Institute

World Food System More Food, Lower Price, Less Variation

Structural Change: Slowing Growth of Cereals Production

Food Prices: Triggers Harvest failures: Australia, Russia, Ukraine  P Oil   Biofuels 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 10 20 30 40 50 60 70 80 US Ethanol Production Crude Oil price, US$ barrel (right axis) US Ethanol Production Million Gallons Source: FO Lichts

Harvest failures: Australia, Russia, Ukraine

 P Oil   Biofuels

Food Prices: Panic Export restrictions e.g. India, rice Re-stocking in a tight market e.g. Oman, 200kt rice from Vietnam, not 100kt Speculation on commodity futures

Export restrictions

e.g. India, rice

Re-stocking in a tight market

e.g. Oman, 200kt rice from Vietnam, not 100kt

Speculation on commodity futures

What needs to be done? Loosen the system if it can’t handle small changes in supply, heaven help us with a more variable climate Stocks , physical & virtual Agricultural development Modest increases will be sufficient: 2% a year Deal with hunger & malnutrition Before somebody else takes advantage

Loosen the system

if it can’t handle small changes in supply, heaven help us with a more variable climate

Stocks , physical & virtual

Agricultural development

Modest increases will be sufficient: 2% a year

Deal with hunger & malnutrition

Before somebody else takes advantage