WATCHING THE NUMBERS
There’s plenty of numbers-watching going on in Washington D.C. and other world capitals these days. Mainly, the numbers with currency symbols in front of them, the numbers in government budgets. Holding the line on spending is a top priority while the world continues to be mired in a global economic mess. The new Congress in Washington promises to be particularly vigilant, with a keen eye on shrinking some of those numbers.
Here’s some other numbers that emerged this week that governments need to be watching very closely:
- $1.026 trillion. That’s the global cost of importing food in 2010, according to estimates of the United Nations’ Food and Agriculture Organization highlighted by various news reports.
- 15%. That’s the increase of this food import bill, which is up from $893 billion last year.
- $1.031 trillion. That was the global cost of importing food in 2008, when soaring prices and sudden shortages triggered rioting in dozens of countries, from Haiti to Egypt and beyond, and added 100 million people to the desperate ranks of the chronically hungry. Notice that we’re getting close to that cost again.
- $921 billion. That was the FAO’s estimate for the global food import bill in June this year. Then prices started rising globally, making it more expensive for countries to import food.
Prices began rising because of these numbers:
- 2.1%. That’s the forecast decline in world cereal production in the 2010-2011 season from the previous season. That, in turn, is a reversal of June’s forecast of a 1.2% rise. The decline, says the FAO report, is due mainly to a weather restricted crop in the former Soviet Union states and “disappointing” yields in Europe, the U.S. and Canada. It also said, “Rarely have markets exhibited this level of uncertainty and sudden turns in such a brief period of time.”
- 7.2%. That’s the expected drop in global cereal stocks, instead of a rise of 0.9% as previously forecast.
With these ominous numbers in the foreground, the FAO turned a wary eye to plantings for the 2011-2012 season. “For major cereals, production must expand substantially to meet utilization and to reconstitute world reserves and farmers are likely to respond to the prevailing strong prices by expanding plantings. Cereals, however, may not be the only crops farmers will be trying to produce more of, as rising prices have also made other commodities attractive to grow, from soybeans to sugar and cotton. This could limit individual crop production responses to levels that would be insufficient to alleviate market tightness.”
Then the FAO alarm-sounders came to the significance of all these numbers: “Against this backdrop, consumers may have little choice but to pay higher prices for their food. With the pressure on world prices of most commodities not abating, the international community must remain vigilant against further supply shocks in 2011 and be prepared.”
Prepared for what? For more turmoil in the developing world, where the price rises, and the increasing food import bills, really slam the poor. That was a main accelerant of the rioting in 2007-2008, which shook many governments and toppled one, in Haiti.
It also gave impetus to the creation of the Global Agriculture and Food Security Program, a multi-donor trust fund known awkwardly as GAFSP, and the Obama administration’s Feed the Future initiative – both of which seek to create the conditions for the poorest farmers of the world, particularly in Africa, to be as productive as possible, to feed themselves and their communities and hopefully have surpluses to boost their incomes. These locally grown surpluses will reduce the food import bills of some of the world’s poorest countries and hopefully hold down prices and diffuse tension that’s always close to the surface in places with widespread chronic hunger.
So, adding up all these numbers, here’s one number the new Congress shouldn’t cut:
- $3.5 billion. That’s the administration’s three-year request for funding Feed the Future. It was the amount the U.S. pledged to the greater global effort of $22 billion to end hunger through agriculture development. The U.S. and other countries should honor their commitments.
But a hard line on the budget numbers threatens to erode these programs. Already, funding has been slow to meet GAFSP ambitions. Earlier this month, the program announced its second round of grants: $97 million to help small farmers increase productivity and income in three countries, Ethiopia, Niger and Mongolia. Good for those countries, but not for the other 17 nations that applied for funding but were turned away due to a lack of GAFSP resources.
That’s not being very vigilant. Or wise.
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