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Rising food prices nearing danger point: World Bank

By Agence France-Presse
Saturday, February 19, 2011 18:19 EDT
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PARIS (AFP) – World Bank president Robert Zoellick warned leaders of the top global economies Saturday that the world is reaching a danger point where soaring food prices threaten further political instability.

“I mentioned that we are reaching a danger point,” Zoellick said, adding that he had urged G20 finance ministers and central bank chiefs meeting here to “put food first in 2011.”

Zoellick said rising prices would eventually result in increased food supplies but in the intervening couple of years, “there could be an awful lot of turmoil and governments could fall and societies could go into turmoil.”

Soaring food, fuel and other basic costs have been one of the key factors driving political unrest across the Middle East and North Africa which has forced the ouster of long-standing autocratic rulers in Egypt and Tunisia.

“We need to be sensitive and have a fingertip feel on what is happening in terms of food prices and its potential effect on social instability,” Zoellick told a conference call.

He said the international community needs to be ready to act quickly to help countries such as Tunisia to cope with economic shocks as they try to manage political transition.

The World Bank warned ahead of the two-day G20 meeting that food prices rose by 15 percent between October 2010 and January 2011, pushing another 44 million people into poverty.

France, which holds the presidency of the Group of 20 top developing and developed countries, has made reducing price volatility in basic commodities including food one of its key goals.

Zoellick said G20 ministers were receptive to some of the ideas the World Bank has proposed and that the meeting would provide further momentum for action.

“In sum, I’d say there is a list of items here that is very do-able and the best antidote to complaints that the G20 is a talk shop is to take real action. And action for the most vulnerable people is the best form of that.”

Zoellick said the situation is more concerning today than several years ago as there is increased demand from emerging markets and severe weather has reduced the ability of farmers to respond.

There have been proposals to slap limits on commodity trading to discourage speculative trading and reduce price volatility but the World Bank chief said “you counter volatility with better information” about the markets.

He said he also favoured a “code of conduct” for food export bans so as to ensure humanitarian food aid programmes are not affected.

Agence France-Presse
Agence France-Presse
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  • http://profiles.yahoo.com/u/EJCHJ2LWM3MGYUGHWB7ALWHE6M Kitty Antonik Wakfer

    “There have been proposals to slap limits on commodity trading to discourage speculative trading and reduce price volatility but the World Bank chief said “you counter volatility with better information” about the markets.”

    Maybe the author of this article should do some research on commodities futures trading (“commodity trading”) instead of reporting so vaguely as to leave readers with the belief (conclusions without basis in reality) that “speculation” necessarily leads to higher prices. I strongly recommend to the writer and readers, the non-technical but thorough article by Robert Murphy, “The Market Works Just in Time” – http://mises.org/daily/3027

  • Anonymous

    Stop the speculators. Once again regulators are asleep at the wheel. When are they going to clamp down on these greedy bastards on Wall St. that are wreaking havoc on the commodoties market. And let’s not forget the derivatives market. Somebody do something!!!!

  • http://profiles.yahoo.com/u/GCPX7DXZGK2H2CPNYRR5IS5A64 Turnip Mcgee

    Yeah. The price of food has nothing to do with it.

    We just want you ALL gone.

  • Anonymous

    Those who blame speculators for this are missing the larger point: the droughts, fires, floods and generally bad global weather have lead to poor harvests worldwide. Anyone paying attention to the news can see it. Fires and droughts in Russia last summer destroyed a considerable portion of their wheat crop, the Russian government declared a moratorium on grain exports, and worldwide grain prices went up because Russia is a major exporter. In another example from last summer, the rainy season in South Korea didn’t end until the middle of August, two months late. The rice crop was severely affected, and so South Korea has to have to make up the lack by importing even more than they usually do–but they’re competing with neighboring countries, which also had their rice crop damaged by rain. And everybody knows what’s happening with the weather in Australia, right?

    These rising food prices are not just the result of a speculative bubble, they are what happens when the supply is cut short.

  • Anonymous

    Perhaps the electric fiasco and the not so distant gas prices have people on edge. I have not read the article you are suggesting but speculation certainly impacted these two areas…and why not food? We are talking about vast sums of money and lulling articles of this is how it works until something changes are not necessarily welcomed warm fuzzies.

  • Anonymous

    Fuck you shill. And if you’re not a shill then you are a brainwashed drone. Sure climate change affects the supply of resources. SPECULATION on future commodities is one of the corner stones of the global economy. They profit from this, enormously. Yes, there is an enormous shortfall in global food, for a variety of reasons. The point is that a select few are leveraging that into a gigantic profit machine, while the little people die like flies.

    Actually as I think about this point I hope you are a corporate mouthpeice, because if you actually really believe what you posted, then you are already beyond screwed.

    Its all about money, and 99% have nowhere near enough. So wake up or look forward to being your future master’s compost.

    I will not be mulch. Oh and stop getting your talking points from TV (FOX. CNN, its all the same shit)

  • Anonymous

    Hey I have an idea. Let’s take away all that money from World Bank, IMF, Goldman Sachs. I’m talking about Trillions, if not tens of trillions. They are sitting on and continue collecting and using it kill massive amount of trees so I can get 20 junk mails in my mailbox that I throw away anyway, and also polluting the world with radioactive materials and creating sweatshops in China and Bangladesh so I can stare at the useless junk in Walmart.

    Let’s give the money to the farmers, because frankly…without food we all die. You can quit smoking, you can quit buying gas guzzling SUVs and you can quit buying useless junk from Walmart, but you can certainly not quit eating.

  • Anonymous

    1) I said it is not just the result of a speculative bubble. The “enormous shortfall in global food, for a variety of reasons” is what drives the speculation. Shortages always do this. Anyone who thinks capitalists shouldn’t take advantage of them are morally right, but practically irrelevant because capitalists are going to do whatever makes them more money regardless of what you or I feel about it. Blaming the wicked speculators does bugger-all to solve the basic problem.

    2) Oh, and by the way, I don’t live in the US and I don’t get my ‘talking points’ from FOX* or CNN. I live in a country like I wrote about. I saw firsthand what having crops destroyed by bad weather does to the prices of the goods the farmers bring to market. These are actual farmers selling real cabbages that they really grew, loaded on the backs of their trucks and brought to market themselves. Speculators had nothing to do with the local rise in food prices at all.

    3) ‘Fuck you shill’ yourself for backhandedly supporting global warming denialism. If you can’t see that climate change damaging the food supply is the fundamental source of the problem, you’re deluded. The speculators are merely the frosting on this nasty cake.

    *FOX News is not even available here.

  • Anonymous

    1. Capitalism and moralism are by definition non-starters. Capitalism has nothing to do with morality; if it did then maybe we would not all be in this mess now. I’m not making a strawman of speculators; they are very real and they DO drive the global engine ( to their profit and our demise).

    2. I don’t live in the U.S. either (anymore). Apologies for any unwarranted attacks (a cultural habit perhaps :) ). I too live in an area similar to what to you describe. The local has NOTHING to do with the game being played at international levels. Yes, in your area people NEED to eat, as do mine. My point is their ever increasing poverty is the result of concerted international policies that concentrate wealth and resources at the expense of the ‘little guy’. The little guy has no vote and more importantly, not enough money to matter.

    3. Yeah that was a bit over the top, and I apologize. I guess I’m too used to the heavy handed retarded dialogue these days. On this point I concede to you. The food chain IS the problem (among many others). It is all about resources and it is going to get ugly very very soon. Mostly for people that have no idea about what is coming or what is about to hit them. And that sucks, I think we can agree on that?

  • http://thesprint.blogspot.com Sprint

    Perhaps it is time to reconsider farm subsidies? Paying large farms vast sums of money not to grow crops seems counterproductive when commodity prices are rising to all time highs.

    For example: Corn is trading at $302/ton, which is over 75% higher than the price at this time last year and over 100% (double) the average price of corn for the last 30 years. Soybeans, wheat, sugar, beef, and cotton (just to name a few) are all currently trading close to 100% above their 30 year average, with nearly all of the increases coming in the last 4 years. Salt is currently over 300% higher than its 30 year average (although it is still lower than it was during the height of the “economic crisis”).

    The damage caused by this vast jump in the price of basic food products could be catastrophic to places where the people don’t have the opulent luxury of eating four course meals or even the option of grabbing a dollar cheese”burger” for a quick lunch. If what the World Bank is peddling is true, that the price increases are due to higher demand and severe weather in vulnerable nations, then why not allow the aptly named “Breadbasket” of the United States roar to life this summer? Subsidies were put in place to maintain a stable price in the market so that the market didn’t consume itself and drive the price of crops to unsustainably low levels for farmers. If the prices have risen due to increased demand and the supply is being artificially limited by subsidies, then the subsides have become a double edged sword, disemboweling both the agricultural capacity of the United States and those too poor to afford food all over the world.

    One of the problems is the agricultural lobby, its difficult to pass up getting paid to not produce anything. The average annual payout in farm subsidies over the last ten years is over 16Billion/yr (yes, with a B and a lot of zeros) (2009 numbers). With budget cuts and “austerity” becoming the new mantra for the government, and the global price of commodities flirting with their all time highs (many of which were set in 2009), keeping subsidies at their current levels seems…absurd.

    I am by no means an expert on this issue, and I welcome all criticism and feedback that can help me understand it better.

  • http://profiles.yahoo.com/u/LEUDUVF5EGJZRZETF3KV53P7BQ Thomas

    Think prices are bad, now? Wait till the oil companies get their whores in Washington to increase the the methanol in gas to 15%, and then raise the price even higher. Good-bye USA.

  • http://www.facebook.com/derek.spisak Derek Spisak

    Many years ago, I got an $800 electric bill in New Orleans (when normally it was $150 a month). Blackouts were rolling in California and the world was a twitter in the hype of fake shortages.

    I muttered to my partner at the time, I bet you Enron is gaming the system. Time unfortunately showed that the markets were being manipulated and they will prove soon (if we as a society get out of this ditch) that they are being manipulated now.

    Food prices in Alabama have shot up more than 10% in a month. This is planned.

    A little bit of inflation to be blamed on oil prices going up (thru dollar deflation and planned upheaval) will make the landing from the quadrillion derivative hangover easier for the public to swallow… and leave wall street and the people in Congress that do their bidding a richer and further away from the pain of the middle class.

  • Anonymous

    So “The Market Works Just in Time” ?

    No my friend i dissagree with you

    Frederick Kaufman, contributing editor of Harper’s Magazine. Author of the piece The Food Bubble: How Wall Street Starved Millions and Got Away With It from the July 2010 issue of the magazine.

    USA Reality – The Food Bubble.

    http://www.youtube.com/watch?v=NIIigxAR6yM

  • DesertSun59

    Nearly 7 billion people on the planet and still counting.

    EXPECT UNREST.

  • Anonymous

    you are absolutely right STOP ETHANOL. besides using a major food source for its production ethanol lowers MPG. how much energy is used to produce ethanol?

  • cannotvote

    Decentralise farming – return to the notion of small holdings, localised production, cut homogenised foods, etc…. reverse corporate farming, re introduce communal markets, disassemble packaged food production altogether – re educate! The 3 food groups FAT,CARBOHYDRATE, PROTEIN – there is nothing else!

  • Anonymous

    We have always had national disasters of all types in the past , and it has never destroy this nation as they USE these statements today to do.

    It does not even take a disaster anymore to cause prices to skyrocket , but only the invention of ONE.

    The government and corporations are using the FEAR factor to force their greedy , criminal policies down our throats while they steal the wealth and power from the people and this nation.

    Look how they have used economical disaster created by the criminals in the banking empire and 911 to put Fear into the hearts and minds of Americans while the forced every policy they have been wanting to for over 70 years down our throats.

    Now that they control the election , news media and the elected officials nothing is out of their reach..

    As we have seen from Bush , Cheney , Rove , Rumsfeld , Rice in their crimes (war crimes , illegal war & others) which Obama has not only put an iron curtain up to stop any and all prosecution , but has threatened other nations not to prosecute them.

    U.S. attorney-general Holder is a puppet for these corporate republicans every demand.

    If not where is the investigation , prosecuting of these war crimes and crimes coming from the judges of the U.S. Supreme court..

  • Anonymous

    The only concern these Global Monopolies have is not to push the button which makes the people of the world mad enough to demonstrate as they are in The middle east.
    They wish to know just how far they can push their greed and profit.
    They have NO respect for anyone except those which may add to their bank account.
    The Biggest problem is that our “Elected Officials” are in their back pocket.
    Just listen to Hillary’s speeches about the rights of People in foreign countries and then look at how they are destroying those of the people in this country.
    I do not see any of the Global Empires hurting , but in fact making the greatest profits in history and most paying not a d… penny in taxes to help the workers which have made their fortune.
    Does anyone see these greedy corporations and wealthy top 2 percent giving or suffering to help this economy

    NO because they are have making historical profits while the middle class is destroyed.
    After they take our jobs , benefits , homes and control your every more , they will give you a test in order for you to vote.

    You will need a certain amount of wealth , education to vote.
    Then you will still be using their electronic controlled voting machines to cast your vote.
    And we have seen in the past how this goes.

  • Anonymous

    The chief cause of the French Revolution was food costs. This could get ugly…

  • YeaSayer

    Speculation is fine as long as speculators are forced to back their positions with 100% hard collateral. Otherwise, it’s just AIG all over again.

  • Anonymous

    “Ordo ab Chao”, is the slogan of the 33rd degree of Freemasonry. (Order out of Chaos). Chaos is created and then cries go out for a solution. Laws are passed which could never have been passed without the chaos. The agenda is accomplished to give the powerful more power.

  • http://thesprint.blogspot.com Sprint

    Not necessarily, the French Revolution was caused by a number of factors: corruption in all levels of the clergy and government, extreme inequality among citizens, an unjust tax system, and fervor from the successful American revolution to name a few. High food costs happened to be one of the factors, albeit an important one.
    There are a number of similarities between the French Revolution and what is going on now in North Africa and the Middle East. The French Revolution got really ugly because the leadership was fragmented and weak and effectively devolved into mob rule (with the exception of Robespierre and Napoleon). Hopefully we don’t return to the days of mass public executions in the streets, but if food prices keep rising at the rate they have over the last year…you best protect ya neck.

  • Anonymous

    You’re gonna have to cut the population by 3/4 too, because those “horrible” things you talk about enable us to feed 4 times as many people as we would otherwise.

  • Anonymous

    Pretty good job, taking the person to task and then agreeing with them in the end.

    Tell me are you a charter member of the “Ready, Fire, Aim” club?

  • http://twitter.com/jgoetting Jason Goetting

    Gas prices, food prices, cost of housing, cost infrastructure, no jobs, or very little jobs and add to that low paying jobs. Is it just me or does the whole “world” seem like it’s falling apart? Poverty is the norm and if it’s not it’s fast becoming the norm throughout our blue planet. Couple this with ALL of our governments acting as though they are the employer. Thus far no form of government has led us to a better world, including the democratic ones. Our social needs appear to be so meaningless to those in charge, and I’m not sure if it’s the massive global corporations or the government or BOTH but the people running the show are running it into the ground!

  • Johnny Warbucks

    The golden boyz of Wall Street are at it again. They profit from the chaos and misery they create while millions die. It’s not rocket science, it’s not a miracle, it’s pure, unadulterated greed.

    Food speculation: ‘People die from hunger while banks make a killing on food’

    It’s not just bad harvests and climate change – it’s also speculators that are behind record prices. And it’s the planet’s poorest who pay

    http://www.guardian.co.uk/global-development/2011/jan/23/food-speculation-banks-hunger-poverty

  • Johnny Warbucks

    It’s not you, the whole world is falling apart and you can thank those psychopath mother fuckers on Wall Street for it. Of course, with a little help from their friends in the White House.

    http://www.guardian.co.uk/global-development/2011/jan/23/food-speculation-banks-hunger-poverty

  • Johnny Warbucks

    Overpopulation is a canard. An excuse to do as they may. There is enough for all of us to go around if we budgeted accordingly. However, in a world where only 1% hug 99% of the wealth, that can’t happen. Cut the fat at the top and the rest will be fine.

  • Johnny Warbucks
  • Anonymous

    He forgot to mention the biggest cause of rising food prices: the US depression and bail-out of Wall Street thieves which devalued the dollar so much that food prices around the world rose above what people in the Arab world could afford. Result: riots and governments falling.

  • maritimer

    This is most certainly manipulation by the “free market” to keep the masses under control. Yeah, there have been some crop failures to be sure. Governments and markets are taking advantage of those events to jack the prices around.

    Stock up on bulk commodities like rice and beans, stuff that keeps well, because you may need it soon. I was at the grocery today and a bag of shelled walnuts (about half a pound) was 10 bucks.

    Next they will go after the water supply. Just wait.

  • http://twitter.com/pdlussier Down Our Street

    Fairly upsetting hearing this, at this point, from the World Bank. Pure PR bull, no substance. Please read this brief piece:

    http://downmystreetandupyours.blogspot.com/2011/02/and-magically-world-bank-awakens.html

  • http://pulse.yahoo.com/_ZB3AVT3UIS5K6KKT7RIIFODGRI Patrick

    Maybe the author of this post should do some research on who wrote the article she is recommending.

  • Jaimie11

    And don’t forget QE is another cause of additional inflation pressures after the initial creation of money through debt.

  • Anonymous

    If commodities trading has nothing to do with prices then there should be no issue banning trading in commodities where there is no producer/consumer relationship.

    Of course, nobody in the commodities biz ever goes for that canard. They make way too much money from affecting commodities prices to admit that volatility, creating arbitrage between actual consumers and real producers, is the basis of their business model.

  • Jaimie11

    Yes, these natural occurrences do contribute significantly to scarcity and its pressures, but I wonder how much of that scarcity is being artificially created by government policies, both overt and covert. The US government, and other governments, has means to influence weather patterns delaying rainy seasons, creating nonproductive cloud cover that keeps heat in, or creating too much rain resulting in flooding.

    Google ‘weather modification’ – you’ll find two versions of S. 517 proposing to create a research board to oversee the use of weather control technology experimentally. It never was passed, but the experiments are still being undertaken without oversight or notification of citizens to be affected by them.

    Google ‘weather control’ also.

    http://www.govtrack.us/congress/billtext.xpd?bill=h109-2995

    http://thomas.loc.gov/cgi-bin/query/z?c109:s517:

    http://www.govtrack.us/congress/billtext.xpd?bill=s110-1807

    http://en.wikipedia.org/wiki/Weather_control#cite_note-24

  • Jaimie11

    “Let’s take away all that money from World Bank, IMF, Goldman Sachs.”

    Let’s ban them altogether – put them out of their criminal enterprises.

  • Jaimie11

    Hook, line, and sinker – you are caught in their lies and misinformation.

  • Anonymous

    Legalize hemp in America and stop using corn for ethanol. Hemp seed for bio-fuels. Hemp to make clothing and re-open textile mills in America. Hemp seed can also be a protein source. Of course big business would fight this tooth and nail. http://www.lightparty.com/Energy/Hemp2.html

  • http://pulse.yahoo.com/_U4CB4JMBKUBO6NL2RNREZDZUEA Freeky_Fried_Chicken

    Where is Monsanto in all of this?

  • dk504

    >>>>bank chiefs meeting here to “put food first in 2011.”<<<<
    Did he mean by put food 1st in '11, by, a dog whistle to Wall St to completely destroy the food markets?

    And just how are they going to do that? Besides lip services to give a slap on the wrist to Wall St. Commodities traders going berserk? In order to calm everything down immediately they have to stop play with pork bellies and corn and rice. Even here in America 30% increases in 2 weeks is hard for any middle class family to absorb with their 20% rise in healthcare prices. Oh yeah and the those who make less than $100,000 per family?
    We're screwed.

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