Oxfam calls for radical change of approach to the food price crisis

Campaigns and Advocacy, Media Releases article written on the 03 Jun 2008

World leaders must urgently agree on a coordinated global action plan to address the food price crisis, said international agency Oxfam today in a report published ahead of an emergency UN Food Summit in Rome. The plan must include short and long-term responses and go beyond humanitarian aid.
Oxfam Australia’s Executive Director Andrew Hewett said that in countries where Oxfam works, the organisation is seeing the negative impact of higher food prices on poor people, who already spend more than half their income on food.
“This is a huge challenge to the leadership and legitimacy of the world’s multilateral institutions, but also a genuine opportunity for long-overdue reforms,” said Mr Hewett as he welcomed the attendance of Australia’s Foreign Minister Stephen Smith at the Food Summit in Rome.
Oxfam estimates that an extra US$14.5 billion (AUS$14.7 billion) is needed to scale up immediate assistance to at least 290 million people threatened by rising food prices. This amount is small when contrasted with the more than US$1 trillion (AUS$1.05 trillion) the US Federal Reserve and European Central Bank have injected into the financial system in the past six months to try to avert economic crisis.
Similarly, annual aid to agriculture, which currently stands at US$4 billion (AUS$4.2 billion), is a pittance compared to the US$125 billion (AUS$131.2 billion) that rich countries, particularly the European Union and the United States, gave their own farmers in 2006. Lack of investment is acknowledged as a cause of food insecurity, yet aid to agriculture halved between 1980 and 2005. On the eve of the conference, the Australian Government has stated that it will focus on rural development assistance to lift productivity in key staple crops.
Oxfam’s report says that the response must go beyond top down humanitarian aid. Governments in poor countries should be supported to implement social protection schemes to help the poorest, such as minimum income guarantees, free seeds and fertilizers for poor farmers, and reduced tax on food.
Longer-term, political changes are also needed. A priority is the urgent review of compulsory biofuels targets in rich countries to stop their inflationary impact. Recent estimates suggest that increased demand for biofuels accounts for 30 per cent of recent food price rises, while mounting scientific evidence shows biofuels are having an overall negative impact on climate change.
The crisis should also spur reform of the food aid system, with more aid being given as cash or purchased locally, rather than shipped from overseas. The OECD has estimated that an extra US$750 million (AUS$787 million) a year could be released if rich countries gave food aid as cash rather than in kind.
Completing a global trade deal along current lines would not help the situation. Developing countries need to be able to respond to shocks, but existing proposals at the WTO would instead lock in undiluted liberalisation. The Australian Government should play a leading role in progressing the Doha round of trade talks in a way that allows poor countries flexibility and doesn’t expose them to market volatility.
“An unprecedented level of coordination is required across agencies, governments and the private sector to address this crisis. The vast amount of money spent on averting the financial crisis shows what is possible when there is political will. The cost of failure will not just be measured in lost lives and human suffering, but also in lost credibility,” said Mr Hewett.
For more information contact:
Australia – Melany Markham +61 407 515 559, melanym@oxfam.org.au
Rome – Alexander Woollcombe +32 473562260, alexander.woollcombe@oxfaminternational.org

Notes to editors:
• The report – The time is now: How world leaders should respond to the food price crisis.
• *The 290m people estimated to be at risk are the poorest people in the 53 most affected countries – the 49 Least Developed Countries, and Tajikistan, Zimbabwe, Occupied Palestinian Territories and Kenya. The figure of US$14.5bn is based on these people requiring an average of $50 per capita in 2008. The $50 required is an estimate based on Oxfam’s experience and studies around the world of what people need to so they have enough to eat.