South Africa and the rest of the southern hemisphere’s coming summer season could be crucial for global food security and social stability in a few months ahead. Low yields in the south on the back of crop failures in the United States and most other major producer countries of the northern hemisphere would have far-reaching implications for communities across the world.
The United Nations Food and Agriculture Organisation director general, Jose Graziano Da Silva, said last week that he would not characterise the current food price rise, caused mainly by the drought in the US, as a crisis yet. But it could reach crisis levels if harvests in the southern hemisphere were disappointing.
The present and third price surge in four years has come after drought in the United States and poor crops from Russia and the Black Sea bread-basket region.
The current increase in food prices have not yet reached the levels of 2007/08, when it led to violent protests in many countries, including Egypt, Cameroon and Haïti among others. This could, however, change dramatically if there should be another supply failure from the south.
Against the background of the European debt crisis and high-risk factors presently at play in the global financial system, any next crisis is likely to be much wider and deeper than that experienced in 2007/08. Austerity measures introduced in many European countries have already seen sometimes violent protests in countries such as Greece, Italy and Spain. Capacity of consumers to absorb food price shocks has been just about wiped out.
In the past year the global economy has experienced its worst economic growth since the beginning of the financial crisis in 2008. No country has gone untouched. Europe has seen a significant rise in debt with much slower growth. Even the strongest European governments have been seriously impacted by the crisis and many are responding with increased austerity measures.
Poverty in Europe
Consumer goods giant Unilever, stating that "poverty is returning to Europe", has started supplying consumables like shampoo, food sauces, washing powder and more in smaller packages. In line with trends in developing countries, the strategy is aimed at accommodating the shrinking wallets of its European customers.
Indicating that the Unilever strategy is on target, the company’s sales, after years of stagnation, rose by 1.1% during the first six months of 2012.
According to the latest European Commission review
of the employment and social situation in the EU, the share of households in Europe that have increased difficulties making ends meet has risen sharply since the end of 2011. Many of them have to rely on savings or take on debt to cope with the requirements of day-to-day life.
Da Silva called on the Group of 20 to agree on coordinated action to ease the worries about rising food prices since they account for most of the production of the crops responsible for the concerns. Between 85% and 95% of the crops most affected by the price rises, wheat and maize, are produced by the G20 countries.
The action should include avoiding unilateral export bans and encouraging substitution of foods, for instance the eating of beans in Latin American and of casava in Africa, Da Silva said.
Consultancy Africa Intelligence
(CAI), a South African-based research and strategy firm, last week also expressed concern that European countries responsible for more than 50% of all global official development assistance might increasingly cut back on aid to African countries.
“There is a growing food security crisis throughout Africa. Aid organisations like Save the Children have been very vocal that now is a critical time in Africa because of this devastating hunger crisis, particularly in West Africa where 1.5 million people are in urgent need of assistance.
“The charity also notes that it is not just Africa that is at risk but ‘that up to six million more people worldwide could go hungry as a direct result of the global economic crisis.’ It is a growing concern that as austerity measures increase and investment and trade in Europe fall, more and more of people most in need will go hungry by the end of 2013,” CAI reported.
As austerity measures, slow economic growth and high unemployment rates in Europe are increasingly putting consumers there under pressure, European governments could find in increasingly politically difficult to deliver aid to the developing world.