International Financial Institutions Warn About Food Crisis But Offer No Policy Changes


Escalating food, energy and commodity prices were top of the agenda when the World Bank and International Monetary Fund met this month in Washington for their annual Spring meetings.

World Bank President Robert Zoellick warned that the world was "one shock away from a full-blown crisis" due to food price spikes. Zoellick affirmed that the increases are "the biggest threat to the poor in the world" and noted that food prices have been a catalyst to the social unrest in recent Arab uprisings.

The Development Committee, the direction-setting body of the boards of governors of the World Bank and the IMF, highlighted "high and volatile international food prices and their impact on vulnerable populations, as well as the longer term risks they pose to growth and poverty reduction."

Last year alone, 44 million people globally were pushed into poverty, many becuase of rising food prices.

According to the FAO's latest Food Price Index, food prices are 37 percent above those in March 2010, with rising costs pushing millions into extreme poverty. People living in poverty  spend more of their money on food, particularly on staple foods, which have seen some of the highest increases.

With less than five years left to meet the Millennium Development Goals--such as the crucial goal to eradicate extreme hunger and poverty, including halving the proportions of people living on less than US$1 a day and those who suffer from hunger--world leaders are right to be alarmed. Food is essential to life and, therefore, one of the most basic and fundamental of human rights.

Rather than because of a shortage of food, the current food crisis was triggered in large part due to market speculation in agricultural commodities, a factor that President Nicolas Sarkozy described as "extortion" and "pillaging." France, which will host the 2011 G-20 Summit in November, has made addressing the food crisis by combating price volatility a priority for the meeting in Cannes.

As recently as January, however, the World Bank--an agency with a long track record of controversial, aggressive and mixed-success agricultural and economic prescriptions--argued that "free markets can still feed the world," proposed nine measures for the G20 to adopt. Oxfam's Duncan Green points out that the World Bank has a "myopic focus on maintaining the integrity of trade and markets."

The UN Special Rapporteur on the Right to Food, Olivier de Schutter, also likened this volatility and instability to a "speculative bubble," noting that a causal factor was the "deregulation in important commodity derivatives markets beginning in 2000." A 2010 report by the World Development Movement, a British NGO, called this banking speculation "the great hunger lottery."

The recommendations issued by the World Bank also prompted a response from de Schutter, who wrote that the measures "tackle only the symptoms of the global food system's weaknesses, leaving the root causes of the crises untouched." In fact, there can be no sustainable solutions to the food crisis if these are not grounded in human rights.

Regrettably, despite the World Bank's spot-on assessment of the poor and vulnerable bearing the brunt of the food crisis, the outcomes of the Spring meeting show that the Bretton Woods institutions continue to ignore calls from the human rights community to reassess their own approach to agriculture policies and market regulation and to change the rules of the game.

This is despite repeated pleas from civil society for a new trade and development model to address the ongoing food crisis, especially as current policies have perpetuated land grabbing, food price speculation, and irrational, non-transparent and unjust market outcomes. They have also contributed to the kind of profiteering that has gambled away the human right to food in favor of its commoditization--all at the cost of making food economically unaccessible to the world's poorest.