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Friday, 6 April 2012

6 April 2012

If you've already done your shopping for the holiday weekend, did you flinch as you saw the total cost at the supermarket check-out?

If you've filled up the car with petrol ahead of a weekend away, did you gasp as you saw the numbers on the pump climb ever closer to the £100 mark?

Food prices and fuel prices: both rising, not just in the UK but globally, and both with the potential to cause serious political, economic and social ructions in the months to come.

As you know, I'm just back from a reporting trip to southern Africa -- and one of the things that struck me most forcibly was how large the price of food and fuel loomed in the minds of everyone I met.

Every month, the United Nations Food and Agriculture Organisation publishes a tracker index of global food prices. The March figures, which were published yesterday, show prices largely unchanged from the previous month, but still five points higher than at the end of last year.

Figures for the UK, on the other hand, showed a big jump last month. According to the British Retail Consortium, food prices rose by 5.4 per cent in March compared to a year earlier -- and that came, of course, as most people's incomes barely rose at all.

Pick just about any conflict anywhere in the world, and I promise you that access to food and water will come very near the top of the list of reasons why.

To take just one recent example: are you puzzled about why there's been a coup in Mali, leading to what some are now calling a potential humanitarian catastrophe? Did you know that 3.5 million people there are facing food shortages after a prolonged drought?

According to a local official of the relief agency Christian Aid: "The food situation was … desperate, with the price of staple foods having already risen by 100 per cent over the last few months."

So let's try to track back a bit. Why are food prices rising? It's complicated (isn't everything these days?). But put together repeated crop failures in sub-Saharan Africa (and yes, climate change is a factor); rising oil prices caused by political instability in the Middle East (especially over Iran), which mean that fertilisers become more expensive, as does transport and agricultural machinery use; plus growing, and wealthier, populations in India and China, leading to more demand for food, and especially more demand for meat, which is resource intensive -- well, you begin to get the picture.

Some analysts argue that slowing population growth is essential to dealing with the food crisis. Others say that improving agricultural efficiency, and encouraging more small-scale farming aimed at meeting local needs, would be far more effective.

In December 2010, we broadcast an entire programme devoted to examining the development of agriculture in Africa -- it's still available via the "Special Reports" button on our website. Our reporter Charlotte Ashton won a Diageo Africa Business Reporting Award for her reports from Malawi and Ghana -- and I remember one of our contributors remarking that an enormous difference could be made if only a few more decent roads were built, to enable farmers to get their produce to market. Too often, the problem isn't so much growing the stuff as getting it to where people can buy it.

So perhaps, instead of those goats that charities encourage us to give as Christmas presents to help African farmers, we should buy a few metres of tarmac to help construct a few more roads …

The overall global food price picture is not yet as critical as it was a year ago. But the experts are predicting further price rises in the coming months, largely as a result of rising oil prices.

According to one analyst: "The food price index has an extremely high correlation to oil prices, and with oil prices up it's going to be difficult for food prices not to follow suit."

Which brings us back to the dispute over Iran's uranium enrichment programme, the single biggest factor in current oil price instability. It may seem a bit of a stretch -- but it could just be that resolving the Iran issue could have a real and direct impact on whether millions of hungry children get enough to eat.

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