Fallout: The Financial Crisis

The difficulties getting food to the poor

Marketplace Staff Nov 18, 2008
Fallout: The Financial Crisis

The difficulties getting food to the poor

Marketplace Staff Nov 18, 2008


Kai Ryssdal:
The global financial crisis is getting all the press, but there are problems elsewhere. They’re talking about one of them in Rome today.
The United Nations Food and Agriculture Organization is meeting on food security.
The word “security” there really means, is there enough of it at reasonable prices.
In a report earlier this month, the FAO said, not really and that amid all the talk of bailouts, nobody’s talking about food.
Joakim Von Braun is with the International Food Policy Research Institute in D.C. Dr. Von Braun good to have you with us.

Joakim Von Braun: Thank you.

Ryssdal: Earlier this year, we had a food crisis caused by high prices. This report out from the FAO the other day says those prices are down and commodities prices are in fact down. But it also says we’re going to have another food crisis next year, what’s going on?

Von Braun: Prices are down. They are not down to where they used to be two or three years ago. But now we have the second blow to poor people, and that is the financial crisis undercutting their possibilities to invest.

Ryssdal: So, what we have here is yet another trickle-down effect from the financial crisis on Wall Street?

Von Braun: Well, it’s trickling in big gushes. The financial crisis has just come when the world was trying to get ready to transfer capital to the developing world’s neglected agriculture because there were growth potentials. But now that has stopped. And small farmers, now that prices are down, they make no money. So, it’s a very messy situation, which will breed more hunger in the next year.

Ryssdal: Isn’t there a benefit though from lower prices? That is to say, on the consuming end, people are having to pay less to eat.

Von Braun: That benefit was very welcome this summer. The urban poor really benefited from the lower prices. But the next food crisis is pre-programmed because investment is now not forthcoming. The stocks are so low, that the needed productivity increases are not happening, and the world is continuing in a precarious situation, especially in Africa.

Ryssdal: You know, the response to the financial crisis has been all about stability. Making sure that there is no collapse. Is there a way for the international food community to make sure there that is no collapse before this crisis that you see forthcoming in the next year, year and a half?

Von Braun: Stabilization must come first. And the price bubble, which we had partly due to speculation earlier this year, was a very bad blow to poor people. Because during the food crisis, markets and trade did no longer function well. Lots of export stops. Countries didn’t trade with each other anymore — just at the time when trade was so essential.

Ryssdal: Joakim Von Braun is the director of the International Food Policy Research Institute in Washington. Dr. Von Braun, thanks very much for your time.

Von Braun: Thank you.

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