UN summit and global food crisis

The United Nations (UN) summit on global food crisis held in Rome could not come up with a communique as unfortunately none could be agreed upon. The summit ended up in trading of accusations between the crops for fuel supporters and crops for human food protagonists. Nonetheless, the leaders attending the summit did call for reducing trade barriers and ending commodity export bans.
The World Food Programme has estimated that it will require $500 million on top of what has already been pledged to fill the food gap. One would hope that the donor countries would step in and not only ensure that their pledges are translated into actual money but also that the needs of the global poor are met.
Ban Ki Moon, the UN Secretary General, put the nature of the crisis very cogently: "Nothing is more degrading than hunger, especially when man-made." He also added that to meet the world food demand, production would have to rise by 50 percent by 2020. What has amazed world governments is the fact that adverse weather conditions which have negatively impacted on the productivity of various grains, staples for a large number of global consumers, is only partly to blame for the crisis. The other factors that have had a major impact are all man-made as stated by Moon.
First and foremost is the increase in bio-fuel production and the United States was blamed for this during the summit meeting. In its own defence, the US claimed that its subsidies for the production of corn ethanol were not playing a significant role in the sharp increases in the price of food.
This triggered an angry rejoinder - a rejoinder that was supported by the figures released by the UN. Jacques Diouf, director general of the Food and Agriculture Organisation, stated that "nobody understands how 11 to 12 billion dollars a year subsidies in 2006 (a reference to the annual cost of US subsidies to produce ethanol from corn) and protective tariff policies have had the effect of diverting 100 million tonnes of cereals from human consumption, mostly to satisfy a thirst for fuel for vehicles."
The second major reason for the global food crisis is attributed to the rising cost of oil. Brazil's president, Luiz Inácio Lula da Silva, stated that "it offends me to see fingers pointed at biofuels, when the fingers are coated in oil and coal." Iranian President Ahmedinejad laid the blame for the rise in oil prices on the 'capitalists'.
However, figures from US government agencies and trading data indicate that hedge fund managers and speculators have reduced bets on higher oil prices by 80 percent since July last year when prices began to rise sharply and crude futures rose to record highs. So if it's not the hedge fund managers and the speculators then who is responsible for the oil price hike?
So far there is no consensus on the reason behind the oil price rise though some analysts are laying the blame on the heat wave currently in 18 US states - which they claim also reflects the potency of the hurricane season and with the refineries mostly situated on the US Gulf coast a bad hurricane year also affects the supply. But this fact should have impacted on the hedge fund managers and speculators calculations. Thus the reasons behind the oil price rise remain unclear.
The third reason for the global food crisis is in the decision of several countries to ban exports in an effort to continue to meet domestic demand. Some countries that have taken a decision to ban exports are Egypt (rice), Indonesia (medium grade rice), Vietnam (rice), Kazakhstan (wheat) and Malawi (maize with the exception of exports to Zimbabwe). The decision to ban exports was taken by these countries to avoid domestic shortages - a decision, that many in the developing world find justifiable.
The Food and Agriculture Organisation has identified 36 crisis countries, 21 of which are in Africa. It is heartening to know that Pakistan is not one of the fifteen countries. Be that as it may it is imperative that the government understands the extent of the global food crisis and focuses on domestic farm productivity in the forthcoming budget as a priority sector.