Biofuels, commodity futures mkt threaten global food security

Rising demand for biofuels and surging trade in commodity futures have led to high food prices, threatening food security worldwide, Global Hunger Index (GHI) said today.

"Growing demand for biofuels, extreme weather and climate change and increased financial activity through commodity futures markets are the main causes of high and volatile food prices," the GHI 2011 report said.

The report, 'The Challenge of Hunger: Taming Price Spikes and Excessive Food Price Volatility' has been published jointly by International Food Policy Research Institute (IFPRI), Concern Worldwide and Welthungerhilfe.

It said the challenge of hunger is aggravated due to low grain reserves and concentration of export markets for staple commodities in a few countries.

"Lack of timely and accurate information on food production, stock levels and price forecasting, which can lead to over-reaction by policymakers and soaring prices are the other exacerbating factors," the report said.

It added, "Price increases and price volatility have been shown to cut into poor households’ spending on a range of essential goods and services and to reduce the calories they consume."

Volatile prices affect poor people's nutrition by causing them to shift to cheaper, lower quality and less nutritious foods, GHI said.

The report also pointed out that although world has made some progress in reducing hunger, the proportion of hungry people remains too high.

"Twenty-six countries have levels of hunger that are alarming or extremely alarming. Among the world's regions, South Asia and Sub-Saharan Africa continue to suffer from the highest levels of hunger. These results represent extreme suffering for millions of poor people," it said.

To address the problem of rising food prices, the report suggests revising biofuel policies, regulating financial activity on food markets and, adapting to and mitigating climate change.

GHI report is the sixth in an annual series and it presents a multidimensional measure of global, regional, and national hunger.