From the World Bank World Food Watch

Global food prices continue to rise. The World Bank’s food price index increased by 15% between October 2010 and January 2011 and is only 3% below its 2008 peak. The last six months have seen sharp increases in the global prices of wheat, maize, sugar and edible oils, with a relatively smaller increase in rice prices. "Higher global wheat prices have fed into significant increases in local wheat prices in many countries. Higher maize, sugar, and oil prices have contributed to increase the costs of various types of food, though local maize prices have largely been stable in Sub- Saharan Africa. Local rice prices have increased in line with global prices in some large rice-consuming Asian countries. These food price rises create macro vulnerabilities, particularly for countries with a high share of food imports and limited fiscal space, as well as increases in poverty. Estimates of those who fall into, and move out of, poverty as a result of price rises since June 2010 show there is a net increase in extreme poverty of about 44 million people in low- and middle-income countries. In the immediate term, it is important to ensure that further increases in poverty are curtailed by taking measures that calm jittery markets and by scaling up safety net and nutritional programs. Investments in raising environmentally sustainable agricultural productivity, better risk-management tools, less food intensive biofuel technologies, and climate change adaptation measures are all necessary over the medium term to mitigate the impact of expected food price volatility on the most vulnerable."

How is this going to work out for the poor? 

• In China and India, economic growth continues high and the economies were not too badly hit by the global crisis of the last couple of years. Their people might do pretty well, especially since China has not been a big food importer. Of course this year's weather could make a difference.
• The major donor nations are dealing with continuing recession and the need to deal with budget deficits created by economic stimulus packages as well as by reductions in tax revenues. I don't expect them to meet pledges for donor assistance.
• Africa has a number of countries that have been doing well economically, and these too may be able to provide relative protection for their poor people.
• Of course in the United States and Europe people will change their food purchasing behavior, but we are wealthy enough that no one should go hungry if we pursue the right policies. Of course, we in the United States do let people go hungry here, so I should not be too optimistic that we will do better for the next couple of years/
• Egypt, where 85 percent of the population has been getting very highly subsidized wheat bread, where the economy may continue to suffer from the economic dislocations of the political troubles, and where a caretaker government will be faced with a lot of problems, the increase in grain prices may be a real problem.
• In a lot of countries with troubled economies and dependency on imported food, there may be real hunger stalking the streets.

There was a very good discussion of the food price problem on the Diane Rehm show yesterday.